B-134511, MAY 20, 1964, 43 COMP. GEN. 738

B-134511: May 20, 1964

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THE SUBSEQUENT RECOVERY OF COSTS FROM THE USING AGENCIES IS CONSIDERED WITHIN THE AUTHORITY OF SECTION 211 (D) OF THE ACT. WHICH UNDER THE TERMS OF THE PROPOSED LEASES WILL BE REMOVED BY THE GOVERNMENT UPON EXPIRATION OF THE LEASES. 1964: REFERENCE IS MADE TO YOUR LETTER OF APRIL 13. PAYMENTS BY REQUISITIONING AGENCIES SO SERVED SHALL BE AT PRICES FIXED BY THE ADMINISTRATOR AT LEVELS WHICH WILL RECOVER SO FAR AS PRACTICABLE ALL SUCH ELEMENTS OF COST: PROVIDED. THE DECISIONS OF OUR OFFICE GENERALLY HAVE HELD THAT APPROPRIATED FUNDS MAY NOT BE USED FOR THE PERMANENT IMPROVEMENT OF PRIVATELY OWNED PROPERTY BY AN AGENCY OF THE UNITED STATES WITHOUT EXPRESS STATUTORY AUTHORITY THEREFOR. THE RULE FOLLOWED IN THOSE DECISIONS IS BASED LARGELY ON POLICY RATHER THAN POSITIVE LAW AND EXCEPTIONS HAVE BEEN MADE WHERE.

B-134511, MAY 20, 1964, 43 COMP. GEN. 738

LEASES - REPAIRS AND IMPROVEMENTS - TEMPORARY - MOTOR POOL ACTIVITIES THE INITIAL FINANCING OF TEMPORARY SERVICE FACILITIES AND EQUIPMENT ON PREMISES LEASED FOR MOTOR POOL ACTIVITIES FROM THE GENERAL SUPPLY FUND PROVIDED FOR IN SECTION 109 OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED, AND THE SUBSEQUENT RECOVERY OF COSTS FROM THE USING AGENCIES IS CONSIDERED WITHIN THE AUTHORITY OF SECTION 211 (D) OF THE ACT, 40 U.S.C. 491 (D), WHICH PROVIDES FOR THE USE OF THE GENERAL SUPPLY FUND FOR THE OPERATION OF MOTOR POOLS AND THE RECOVERY OF OPERATION COSTS FROM THE USER AGENCIES, IN VIEW OF THE NEED OR DESIRABILITY OF LEASING PREMISES FOR MOTOR POLL ACTIVITIES, AND THE TEMPORARY NATURE OF THE FACILITIES, WHICH UNDER THE TERMS OF THE PROPOSED LEASES WILL BE REMOVED BY THE GOVERNMENT UPON EXPIRATION OF THE LEASES.

TO THE ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION, MAY 20, 1964:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 13, 1964, ASKING WHETHER CERTAIN SERVICING FACILITIES AND EQUIPMENT MAY BE PLACED ON PREMISES LEASED FOR CAR POOL PURPOSES AND, IF SO, WHETHER THE COST OF SUCH FACILITIES AND EQUIPMENT MAY BE INITIALLY CHARGED TO THE GENERAL SUPPLY FUND AND SUBSEQUENTLY RECOVERED FROM THE USING AGENCIES.

THE MATTER PRESENTED FOR DECISION INVOLVES CONSIDERATION OF SECTION 211 (D) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED BY SECTION 2 OF THE ACT OF SEPTEMBER 1, 1954, 68 STAT. 1126, 40 U.S.C. 491 (D), WHICH PROVIDES, IN PART, AS FOLLOWS:

(D) THE GENERAL SUPPLY FUND PROVIDED FOR IN SECTION 109 SHALL BE AVAILABLE FOR USE BY OR UNDER THE DIRECTION AND CONTROL OF THE ADMINISTRATOR FOR PAYING ALL ELEMENTS OF COST (INCLUDING THE PURCHASE OR RENTAL PRICE OF MOTOR VEHICLES AND OTHER RELATED EQUIPMENT AND SUPPLIES) INCIDENT TO THE ESTABLISHMENT, MAINTENANCE, AND OPERATION (INCLUDING SERVICING AND STORAGE) OF MOTOR VEHICLE POOLS OR SYSTEMS FOR TRANSPORTATION OF PROPERTY OR PASSENGERS, AND TO THE FURNISHING OF SUCH MOTOR VEHICLES AND EQUIPMENT AND RELATED SERVICES PURSUANT TO SUBSECTION (B). PAYMENTS BY REQUISITIONING AGENCIES SO SERVED SHALL BE AT PRICES FIXED BY THE ADMINISTRATOR AT LEVELS WHICH WILL RECOVER SO FAR AS PRACTICABLE ALL SUCH ELEMENTS OF COST: PROVIDED, THAT THE PURCHASE PRICE OF MOTOR VEHICLES AND OTHER EQUIPMENT SPECIFIED IN THIS SUBSECTION SHALL BE RECOVERED ONLY THROUGH CHARGE FOR THE COST OF AMORTIZATION * * *.

AS POINTED OUT IN YOUR LETTER, A SIMILAR QUESTION PREVIOUSLY HAS BEEN CONSIDERED BY US IN DECISION OF MARCH 10, 1958, B-134511, CONCERNING THE PROVISION FOR EQUIPMENT AND FACILITIES ON GOVERNMENT OWNED LAND NEEDED IN THE OPERATION OF CAR POOLS. WE HELD THEREIN THAT WE WOULD NOT OBJECT TO THE "USE OF THE GENERAL SUPPLY FUND FOR THE PAYMENT OF EXPENSES INCURRED IN THE ERECTION OR REPAIR OF FENCES, GASOLINE PUMPS WITH NECESSARY STORAGE TANKS, PARKING FACILITIES, INCLUDING HARD SURFACING AND VARIOUS TYPES OF TEMPORARY SERVICE STATION AND STORAGE FACILITIES.' CONSEQUENTLY, THERE NOW NEEDS TO BE CONSIDERED ONLY THE QUESTION WHETHER THE FACILITIES AND EQUIPMENT MAY BE PLACED ON LEASED PREMISES. WITH RESPECT TO THIS MATTER, THE DECISIONS OF OUR OFFICE GENERALLY HAVE HELD THAT APPROPRIATED FUNDS MAY NOT BE USED FOR THE PERMANENT IMPROVEMENT OF PRIVATELY OWNED PROPERTY BY AN AGENCY OF THE UNITED STATES WITHOUT EXPRESS STATUTORY AUTHORITY THEREFOR. THE RULE FOLLOWED IN THOSE DECISIONS IS BASED LARGELY ON POLICY RATHER THAN POSITIVE LAW AND EXCEPTIONS HAVE BEEN MADE WHERE, AMONG OTHER THINGS, THE IMPROVEMENT OF PRIVATE PROPERTY IS DETERMINED TO BE ABSOLUTELY ESSENTIAL TO THE SUCCESSFUL ACCOMPLISHMENT OF THE AUTHORIZED PURPOSES OF THE APPROPRIATIONS. SEE B-141839, MARCH 12, 1963, 42 COMP. GEN. 480, AND CASES CITED THEREIN. ALSO, WE HAVE HELD THAT THE RULE AGAINST THE ERECTION OF IMPROVEMENTS ON LEASED LAND DID NOT PROHIBIT THE ERECTION ON LEASED PREMISES OF NECESSARY TEMPORARY STRUCTURES AND FACILITIES WHERE SUCH STRUCTURES REMAIN THE PROPERTY OF THE GOVERNMENT AND THE GOVERNMENT RESERVES THE RIGHT TO REMOVE THEM AT THE EXPIRATION OF THE LEASE. SEE 15 COMP. GEN. 761; 20 ID. 927; AND 35 ID. 715.

IT IS STATED IN YOUR LETTER THAT IT IS OFTEN NECESSARY TO LEASE COMMERCIAL SPACE FOR MOTOR POOL ACTIVITIES BECAUSE SUITABLE GOVERNMENT OWNED SPACE IS NOT AVAILABLE OR SUCH SPACE IS TOO INCONVENIENT OR COSTLY FOR MOTOR POOL USE. IN MANY SUCH INSTANCES INVOLVING LEASED PREMISES, SERVICES MUST BE FURNISHED BY COMMERCIAL SERVICE STATIONS AT A MUCH HIGHER COST THAN THE SAME SERVICES WOULD COST IF FURNISHED UNDER GOVERNMENT OPERATION.

IT IS FURTHER EXPLAINED THAT---

IN CARRYING OUT THE CONGRESSIONAL INTENT OF PROVIDING FOR AN ECONOMICAL AND EFFICIENT SYSTEM FOR TRANSPORTATION OF GOVERNMENT PERSONNEL AND PROPERTY, GSA IS CONSTANTLY INVESTIGATING POSSIBILITIES FOR GREATER ECONOMY, EFFICIENCY, AND SERVICE. AS A RESULT, GSA WOULD NOW LIKE TO FINANCE THE TEMPORARY SERVICING FACILITIES PROVIDED ON LEASED PREMISES FROM THE GENERAL SUPPLY FUND AND RECOVER THE COST OF SUCH FACILITIES FROM THE USING AGENCIES. SUCH FACILITIES WOULD ALL BE TEMPORARY, AND WOULD NOT INVOLVE NONREMOVABLE IMPROVEMENTS. THE LEASE WOULD HAVE CERTAIN SAFEGUARDS PERMITTING REMOVAL OF GOVERNMENT-OWNED PROPERTY AT THE EXPIRATION OF THE LEASE. THERE WOULD NOT BE A RELINQUISHMENT OF GOVERNMENT OWNERSHIP, NOR A GIVING AWAY OF GOVERNMENT PROPERTY.

THE SERVICING FACILITIES REFERRED TO ABOVE ARE ALL TEMPORARY IN NATURE, AND WOULD NOT BE CONSIDERED PERMANENT IMPROVEMENTS OR FIXTURES TO THE REALTY. THEY CONSIST MAINLY OF TEMPORARY-TYPE BUILDINGS BOLTED TOGETHER, AND AT A MINIMUM INCLUDE A WASHRACK, LUBRICATING RACK, AND GASOLINE STORAGE TANK AND PUMP. AT SOME OF THE FACILITIES, NONPERMANENT HARD SURFACING, FENCES, AND REMOVABLE SHEDTYPE STRUCTURES WOULD BE CONSTRUCTED FOR OPERATIONAL AND PROTECTIONAL PURPOSES.

IN VIEW OF THE REPORTED NEED OR DESIRABILITY OF USING LEASED PREMISES IN MOTOR POOL ACTIVITIES, THE TEMPORARY NATURE OF THE FACILITIES THAT WOULD BE PLACED THEREON, AND THE AUTHORITY CONTAINED IN SECTION 211 (D) QUOTED ABOVE PERMITTING USE OF THE GENERAL SUPPLY FUND WITH RECOVERY TO BE MADE FROM USER AGENCIES, YOU ARE ADVISED THAT THERE APPEARS NO LEGAL OBJECTION TO THE FINANCING ARRANGEMENTS AND USE OF LEASED PREMISES IN THE MANNER DISCUSSED HEREIN.