B-136214, JUN. 13, 1958

B-136214: Jun 13, 1958

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GENERAL SERVICES ADMINISTRATION: REFERENCE IS MADE TO YOUR LETTER OF MAY 16. MAY BE OBLIGATED TO PAY THE DIRECT EXPENSE INCURRED FOR FEES OF APPRAISERS EMPLOYED TO DETERMINE THE FAIR MARKET VALUE OF REAL PROPERTY AT THE TIME SUCH PROPERTY IS REPORTED EXCESS TO GENERAL SERVICES ADMINISTRATION BY EXECUTIVE AGENCIES PURSUANT TO SECTION 202 (A) OF THE SAID ACT. THAT SECTION PROVIDES THAT THE EXTENT TO WHICH A TRANSFEREE AGENCY SHALL MAKE REIMBURSEMENT FOR EXCESS PROPERTY WHICH IS TRANSFERRED TO IT SHALL BE DETERMINED BY THE ADMINISTRATOR OF GENERAL SERVICES. IT IS STATED IN THE LETTER THAT THE BUREAU OF THE BUDGET HAS PROPOSED AS A GENERAL POLICY THAT. SUCH PROPERTY BE SOLD AS SURPLUS UNLESS IT CAN BE UTILIZED WITHIN THE GOVERNMENT FOR A PURPOSE WHICH IS ROUGHLY COMMENSURATE WITH ITS VALUE.

B-136214, JUN. 13, 1958

TO HONORABLE FRANKLIN FLOETE, ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO YOUR LETTER OF MAY 16, 1958, REQUESTING ADVICE AS TO WHETHER THE PROCEEDS SET ASIDE FROM THE DISPOSAL OF SURPLUS REAL PROPERTY PURSUANT TO SECTION 204 (B) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED, MAY BE OBLIGATED TO PAY THE DIRECT EXPENSE INCURRED FOR FEES OF APPRAISERS EMPLOYED TO DETERMINE THE FAIR MARKET VALUE OF REAL PROPERTY AT THE TIME SUCH PROPERTY IS REPORTED EXCESS TO GENERAL SERVICES ADMINISTRATION BY EXECUTIVE AGENCIES PURSUANT TO SECTION 202 (A) OF THE SAID ACT. THAT SECTION PROVIDES THAT THE EXTENT TO WHICH A TRANSFEREE AGENCY SHALL MAKE REIMBURSEMENT FOR EXCESS PROPERTY WHICH IS TRANSFERRED TO IT SHALL BE DETERMINED BY THE ADMINISTRATOR OF GENERAL SERVICES, WITH THE APPROVAL OF THE DIRECTOR OF THE BUREAU OF THE BUDGET.

IT IS STATED IN THE LETTER THAT THE BUREAU OF THE BUDGET HAS PROPOSED AS A GENERAL POLICY THAT, INSTEAD OF EXCESS REAL PROPERTY BEING TRANSFERRED BY GENERAL SERVICES ADMINISTRATION FROM ONE GOVERNMENT AGENCY TO ANOTHER WITHOUT REIMBURSEMENT, SUCH PROPERTY BE SOLD AS SURPLUS UNLESS IT CAN BE UTILIZED WITHIN THE GOVERNMENT FOR A PURPOSE WHICH IS ROUGHLY COMMENSURATE WITH ITS VALUE, AND THAT THE BUREAU OF THE BUDGET HAS DISAPPROVED CERTAIN PROPOSED TRANSFERS OF EXCESS PROPERTY BY GSA TO REQUESTING AGENCIES WITHOUT REIMBURSEMENT AND HAS RECOMMENDED THAT REIMBURSEMENT BE MADE THEREFOR. IT IS STATED FURTHER THAT, IN VIEW OF THE POLICY AND RECOMMENDATIONS OF THE BUREAU OF THE BUDGET, GENERAL SERVICES ADMINISTRATION HAS FOUND IT ADVISABLE TO DETERMINE THE HIGHEST AND BEST USE OF ALL EXCESS REAL PROPERTY REPORTED TO IT, AND THAT SUCH DETERMINATION CAN BEST BE ACCOMPLISHED AFTER APPRAISALS OF THE PROPERTY BY COMMERCIAL APPRAISERS IN ACCORDANCE WITH THE PROCEDURE NOW USED FOR APPRAISALS OF REAL PROPERTY WHICH GENERAL SERVICES ADMINISTRATION PROPOSES TO LIQUIDATE AS SURPLUS. THE VIEW IS EXPRESSED IN YOUR LETTER THAT APPRAISALS MADE PROMPTLY WHEN PROPERTY IS REPORTED TO BE EXCESS HAVE A TWO -FOLD ADVANTAGE IN THAT THEY INSURE NEITHER AN UNDUE IMPAIRMENT NOR AN UNDUE AUGMENTATION OF THE FUNDS OF THE HOLDING AGENCY AND THE TRANSFEREE AGENCY, RESPECTIVELY, AND THEY SAVE TIME AND EXPENSE OF MAINTENANCE AND PROTECTION IF IT IS FOUND THAT THE PROPERTY SHOULD BE DISPOSED OF AS SURPLUS RATHER THAN TRANSFERRED TO OTHER GOVERNMENT AGENCIES. ALSO, THE OPINION IS EXPRESSED THAT SUCH PROMPT APPRAISAL WILL RESULT IN AN OVER- INCREASING AND EXPEDITIOUS DISPOSAL OF GOVERNMENT-OWNED REAL PROPERTIES AS SURPLUS AND THE PURCHASE OF OTHER PROPERTIES BETTER ADAPTED TO THE PARTICULAR NEEDS OF GOVERNMENT AGENCIES.

AS STATED IN YOUR LETTER, SECTION 204 (B) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED (40 U.S.C. 485), AUTHORIZES YOUR ADMINISTRATION TO SET ASIDE IN A SEPARATE FUND IN THE TREASURY ALL PROCEEDS OF DISPOSITIONS OF SURPLUS REAL AND RELATED PERSONAL PROPERTY AND TO PAY THEREFROM "THE DIRECT EXPENSES INCURRED FOR THE DISPOSITIONS OF SURPLUS PROPERTY UNDER THIS ACT FOR FEES OF APPRAISERS * * * AND FOR SURVEYING," EITHER DIRECTLY OR BY REIMBURSEMENT TO THE APPROPRIATION INITIALLY BEARING SUCH EXPENSES.

WE PERCEIVE NO BASIS FOR CONCLUDING THAT THE FEES OF APPRAISERS FOR APPRAISING PROPERTY WHEN IT IS REPORTED TO YOUR ADMINISTRATION AS EXCESS MAY PROPERLY BE REGARDED AS "DIRECT EXPENSES INCURRED FOR THE DISPOSITIONS OF SURPLUS PROPERTY" WITHIN THE MEANING OF THE QUOTED STATUTORY PROVISION. AT THE TIME WHEN PROPERTY IS REPORTED AS EXCESS, IT IS NOT KNOWN WHETHER THE PROPERTY EVER WILL BE DECLARED SURPLUS AND SOLD AS SUCH; AND IN MANY INSTANCES IT NEVER IS SO DECLARED AND SOLD. USE OF THE PROCEEDS OF THE SALE OF SURPLUS PROPERTY TO PAY EXPENSES INCURRED BEFORE THE PROPERTY IS DECLARED AS SURPLUS APPEARS TO BE UNAUTHORIZED BY THE PLAIN LANGUAGE OF THE STATUTE AND THERE IS NOTHING IN THE LEGISLATIVE HISTORY OF THE PERTINENT AMENDMENT (68 STAT. 1051, APPROVED AUGUST 31, 1954) WHICH INDICATES THAT THE LEGISLATIVE INTENT WAS OTHERWISE.

FOR THE REASONS ABOVE SET OUT, THE QUESTION PRESENTED IS ANSWERED IN THE NEGATIVE.