B-144856, FEBRUARY 7, 1961, 40 COMP. GEN. 455

B-144856: Feb 7, 1961

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IS NOT IMPROPER AS THE SURRENDER OF A VESTED RIGHT OR MODIFICATION OF A CONTRACT PREJUDICIAL TO THE UNITED STATES IN VIEW OF THE SPECIFIC STATUTORY AUTHORITY FOR THE CONVEYANCE AND THE FACT THAT THE TITLE TO THE PROPERTY IS STILL IN THE UNITED STATES AND THE SCHOOL DISTRICT HAS NOT PAID THE PURCHASE PRICE AGREED TO IN THE CONTRACT. 1961: REFERENCE IS MADE TO LETTER DATED JANUARY 17. WERE CONVEYED FOR EDUCATIONAL PURPOSES TO THE VALLEJO UNIFIED SCHOOL DISTRICT. WE ARE ADVISED THAT ON MAY 1. NOTICES OF REVERTER WERE ISSUED TO THE SCHOOL DISTRICT COVERING 53.415 ACRES OF THE 69.64 ACRES. ARE INFORMED THAT IT IS UNDERSTOOD THAT SUCH FAILURE OF THE SCHOOL DISTRICT WAS DUE TO ITS INABILITY TO FINANCE ITS PROPOSED EDUCATIONAL PROGRAM.

B-144856, FEBRUARY 7, 1961, 40 COMP. GEN. 455

CONTRACTS - SALE OF SURPLUS PROPERTY - CANCELLATION - CONVEYANCE AUTHORITY THE CANCELLATION OF A CONTRACT BETWEEN GENERAL SERVICES ADMINISTRATION AND A STATE SCHOOL DISTRICT FOR THE PURCHASE OF SURPLUS FEDERAL PROPERTY SO THAT THE LAND MAY BE ASSIGNED TO THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE FOR CONVEYANCE TO THE SCHOOL DISTRICT, UNDER THE AUTHORITY IN SECTION 203 (K) (1) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, 40 U.S.C. 484 (D) (1), FOR SUCH CONVEYANCES FOR EDUCATIONAL PURPOSES, IS NOT IMPROPER AS THE SURRENDER OF A VESTED RIGHT OR MODIFICATION OF A CONTRACT PREJUDICIAL TO THE UNITED STATES IN VIEW OF THE SPECIFIC STATUTORY AUTHORITY FOR THE CONVEYANCE AND THE FACT THAT THE TITLE TO THE PROPERTY IS STILL IN THE UNITED STATES AND THE SCHOOL DISTRICT HAS NOT PAID THE PURCHASE PRICE AGREED TO IN THE CONTRACT.

TO THE ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION, FEBRUARY 7, 1961:

REFERENCE IS MADE TO LETTER DATED JANUARY 17, 1961, FROM THE FORMER ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION, CONCERNING THE ACQUISITION OF LAND BY THE VALLEJO UNIFIED SCHOOL DISTRICT, A POLITIC SUBDIVISION OF THE STATE OF CALIFORNIA.

THE LETTER DISCLOSES THAT BY QUITCLAIM DEED, DATED JULY 25, 1957, EXECUTED ON BEHALF OF THE UNITED STATES BY THE SECRETARY OF HEALTH, EDUCATION, AND WELFARE, THROUGH HIS REGIONAL DIRECTOR, PURSUANT TO THE POWERS AND AUTHORITY CONFERRED BY THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED, 40 U.S.C. 484 (K), THREE PARCELS OF SURPLUS REAL PROPERTY IN VALLEJO, CALIFORNIA, COMPRISING 69.64 ACRES, WERE CONVEYED FOR EDUCATIONAL PURPOSES TO THE VALLEJO UNIFIED SCHOOL DISTRICT. THIS PROPERTY HAD BEEN EARLIER ASSIGNED TO THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE BY GENERAL SERVICES ADMINISTRATION FOR CONVEYANCE TO THE DISTRICT IN ACCORDANCE WITH THE PROVISIONS OF THE CITED ACT.

WE ARE ADVISED THAT ON MAY 1, 1959, THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE NOTIFIED THE GENERAL SERVICES ADMINISTRATION THAT, IN ACCORDANCE WITH THE PROVISIONS OF THE SAID DEED AND PURSUANT TO AUTHORITY CONTAINED IN SECTION 203 (K) (2) OF THE 1949 ACT, 40 U.S.C. 484 (K) (2), NOTICES OF REVERTER WERE ISSUED TO THE SCHOOL DISTRICT COVERING 53.415 ACRES OF THE 69.64 ACRES, COMPRISING TWO OF THE THREE SITES CONVEYED ON JULY 25, 1957, BECAUSE OF THE FAILURE OF THE SCHOOL DISTRICT UTILIZE FULLY THE TWO PARCELS FOR THE PURPOSES FOR WHICH THEY HAD BEEN TRANSFERRED. ARE INFORMED THAT IT IS UNDERSTOOD THAT SUCH FAILURE OF THE SCHOOL DISTRICT WAS DUE TO ITS INABILITY TO FINANCE ITS PROPOSED EDUCATIONAL PROGRAM. THE FORMER ADMINISTRATOR STATES THAT AS A RESULT OF THE NOTICES OF REVERTER, THE SCHOOL DISTRICT, BY DEEDS EXECUTED AUGUST 3, 1959 AND NOVEMBER 17, 1959, RESPECTIVELY, RECONVEYED THE 53.415 TO THE UNITED STATES; THAT ON JUNE 8, 1959, THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE REPORTED THIS PROPERTY TO THE GENERAL SERVICES ADMINISTRATION AS EXCESS IN ACCORDANCE WITH THE PROVISIONS OF THE 1949 ACT; AND THAT ON JULY 2, 1959, THE PROPERTY WAS DETERMINED TO BE SURPLUS TO THE REQUIREMENTS OF THE GOVERNMENT.

THE LETTER CONTINUES:

ON DECEMBER 21, 1959, THE SCHOOL DISTRICT ADOPTED A RESOLUTION, NUMBER 449, DATED DECEMBER 21, 1959, AUTHORIZING ITS SUPERINTENDENT OF SCHOOLS TO NEGOTIATE WITH GSA FOR THE PURCHASE FOR $79,000 CASH OF APPROXIMATELY 36 ACRES OF SURPLUS LAND. ONE PARCEL (NUMBER 3), CONSISTING OF 25.51 ACRES, WAS TO BE PURCHASED FOR $58,000 AND THE OTHER PARCEL (NUMBER 5) CONSISTING OF 10,129 ACRES, WAS TO BE PURCHASED FOR $21,000. THIS RESOLUTION WAS TRANSMITTED TO THE GSA REGIONAL OFFICE WITH A COVERING LETTER FROM THE SCHOOL DISTRICT ON JANUARY 20, 1960. PARCEL NUMBER 3 WAS A PORTION OF THE 53.415 ACRES WHICH HAD BEEN RECONVEYED TO THE GOVERNMENT BY THE SCHOOL DISTRICT IN 1959. BY LETTER DATED MAY 20, 1960, GSA ACCEPTED THE DISTRICT'S OFFER TO PURCHASE THE SAID TWO PARCELS PURSUANT TO SECTION 203 (E) (3) (H) OF THE 1949 ACT. AT THAT TIME STATUTORY AUTHORITY EXISTED FOR THE ASSIGNMENT OF THE PROPERTY TO DHEW AND CONVEYANCE THEREOF BY THAT AGENCY TO THE DISTRICT UNDER THE PROVISIONS OF SECTION 203 (K) (1) OF THE ACT. WE UNDERSTAND, HOWEVER, THAT THE SCHOOL DISTRICT DID NOT THEN HAVE THE NECESSARY FUNDS WITH WHICH TO COMMENCE SCHOOL CONSTRUCTION AND THUS COULD NOT QUALIFY FOR SUCH A CONVEYANCE UNDER THE REGULATIONS OF DHEW.

ON JUNE 9, 1960, THE SCHOOL DISTRICT APPLIED TO DHEW FOR TRANSFER TO IT OF PARCEL NUMBER 3 PURSUANT TO SECTION 203 (K) (1) OF THE 1949 ACT, SUCH APPLICATION HAVING BEEN MADE PURSUANT TO RESOLUTION NUMBER 461, DATED MAY 2, 1960, ADOPTED BY THE GOVERNING BOARD OF THE SCHOOL DISTRICT. AS THE RESULT OF A REFERENDUM, ON JULY 7, 1960, THE SCHOOL DISTRICT WAS AUTHORIZED TO FLOAT A BOND ISSUE TO RAISE THE FUNDS REQUIRED TO COMMENCE SCHOOL CONSTRUCTION AND TO MEET THE REQUIREMENTS OF DHEW. WE UNDERSTAND THE BONDS WERE ISSUED AND THE REQUIRED FUNDS WERE OBTAINED. ON JUNE 13, 1960, DHEW REQUESTED GSA TO ASSIGN THE PROPERTY TO THAT AGENCY FOR CONVEYANCE TO THE DISTRICT. ON SEPTEMBER 9, 1960, DHEW WAS ADVISED BY GSA THAT BECAUSE OF THE OFFER AND ACCEPTANCE HEREINBEFORE REFERRED TO, A BINDING CONTRACT HAD BEEN ENTERED INTO BETWEEN THE SCHOOL DISTRICT AND THE GOVERNMENT FOR THE PURCHASE OF PARCELS 3 AND 5 FOR $79,000 AND THE DISTRICT WAS OBLIGATED TO CONSUMMATE THE PURCHASE OF THE PROPERTY FROM THE GOVERNMENT. ACCORDINGLY, THE REQUESTED ASSIGNMENT WAS DECLINED. EXCEPTION HAS BEEN TAKEN BY THE SCHOOL DISTRICT TO GSA'S POSITION.

A DECISION IS REQUESTED AS TO WHETHER WE WOULD INTERPOSE ANY OBJECTION TO THE CANCELLATION OF THE CONTRACT BETWEEN THE GENERAL SERVICES ADMINISTRATION AND THE SCHOOL DISTRICT WITH RESPECT TO THE 25.51-ACRE PARCEL OF LAND SO THAT THE PROPERTY MAY BE ASSIGNED TO THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE FOR CONVEYANCE BY SUCH AGENCY TO THE SCHOOL DISTRICT UNDER THE APPLICABLE PROVISIONS OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED. THE FORMER ADMINISTRATOR IS OF THE OPINION THAT IF AUTHORITY TO TAKE SUCH ACTION EXISTS THE SCHOOL DISTRICT IS AND SHOULD BE OBLIGATED TO ACQUIRE THE 10.129-ACRE PARCEL FOR THE $21,000 PRICE AGREED UPON AND THAT AS A CONDITION OF ANY SUCH CANCELLATION THE SCHOOL DISTRICT SHOULD BE REQUIRED TO CONSUMMATE THE TRANSACTION WITH RESPECT TO THIS PARCEL. HE STATES THAT THE REGIONAL OFFICE OF GSA HAS ADVISED THAT THE SCHOOL DISTRICT STILL DESIRES TO PURCHASE THE 10.129 ACRES AND HAS AGREED TO PAY THE $21,000 THEREFOR.

AS INDICATED IN THE FORMER ADMINISTRATOR'S LETTER WE HELD, IN B 81135, DATED DECEMBER 15, 1948, THAT CERTAIN AIRPORT PROPERTY COULD BY CONVEYED TO THE CITY OF NEW YORK WITHOUT MONETARY CONSIDERATION IN ACCORDANCE WITH A REQUEST OF THE ADMINISTRATOR OF CIVIL AERONAUTICS, PURSUANT TO SECTION 16 OF THE FEDERAL AIRPORT ACT OF 1946, 60 STAT. 170, 49 U.S.C. 1115 (1952 USED.), AFTER THE CITY HAD ENTERED INTO A CONTRACT TO PURCHASE THE PROPERTY FROM THE GOVERNMENT PURSUANT TO THE SURPLUS PROPERTY ACT OF 1944, 58 STAT. 765, 50 U.S.C. APP. 1611 NOTE (1946 USED.). WE STATED THEREIN THAT THE PRINCIPLE THAT NO OFFICER OF THE GOVERNMENT HAS AUTHORITY TO GIVE AWAY OR SURRENDER A VESTED OR MODIFY THE TERMS OF A CONTRACT IF SUCH ACTION IS PREJUDICIAL TO THE UNITED STATES WAS NOT FOR APPLICATION WHERE STATUTORY AUTHORITY EXISTS FOR THE TRANSFER OF PROPERTY WITHOUT COMPENSATION AND THE APPROPRIATE DETERMINATION REQUIRED (BY THE STATUTE) TO MAKE SUCH TRANSFER HAS BEEN MADE.

SECTION 203 (K) (1) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED, 40 U.S.C. 484 (K) (1), PROVIDES IN PERTINENT PART AS FOLLOWS:

(1) UNDER SUCH REGULATIONS AS HE MAY PRESCRIBE, THE ADMINISTRATOR IS AUTHORIZED, IN HIS DISCRETION, TO ASSIGN TO THE SECRETARY OF HEALTH,EDUCATION, AND WELFARE FOR DISPOSAL SUCH SURPLUS REAL PROPERTY, INCLUDING BUILDINGS, FIXTURES, AND EQUIPMENT SITUATED THEREON, AS IS RECOMMENDED BY THE SECRETARY OF HEALTH, EDUCATION, AND WELFARE AS BEING NEEDED FOR SCHOOL, CLASSROOM, OR OTHER EDUCATIONAL USE, OR FOR USE IN THE PROTECTION OF PUBLIC HEALTH, INCLUDING RESEARCH.

(A) SUBJECT TO THE DISAPPROVAL OF THE ADMINISTRATOR WITHIN 30 DAYS AFTER NOTICE TO HIM BY THE SECRETARY OF HEALTH, EDUCATION, AND WELFARE OF A PROPOSED TRANSFER OF PROPERTY FOR SCHOOL, CLASSROOM, OR OTHER EDUCATIONAL USE, THE SECRETARY OF HEALTH, EDUCATION, AND WELFARE, THROUGH SUCH OFFICERS OR EMPLOYEES OF THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE AS HE MAY DESIGNATE, MAY SELL OR LEASE SUCH REAL PROPERTY, INCLUDING BUILDINGS, FIXTURES, AND EQUIPMENT SITUATED THEREON, FOR EDUCATIONAL PURPOSES TO THE STATES AND THEIR POLITICAL SUBDIVISIONS AND INSTRUMENTALITIES, AND TAX-SUPPORTED EDUCATIONAL INSTITUTIONS, AND TO OTHER NONPROFIT EDUCATIONAL INSTITUTIONS WHICH HAVE BEEN HELD EXEMPT FROM TAXATION UNDER SECTION 101 (6) OF TITLE 26.

(C) IN FIXING THE SALE OR LEASE VALUE OF PROPERTY TO BE DISPOSED OF UNDER SUBPARAGRAPH (A) AND SUBPARAGRAPH (B) OF THIS PARAGRAPH, THE SECRETARY OF HEALTH, EDUCATION, AND WELFARE SHALL TAKE INTO CONSIDERATION ANY BENEFIT WHICH HAS ACCRUED OR MAY ACCRUE TO THE UNITED STATES FROM THE USE OF SUCH PROPERTY BY ANY SUCH STATE, POLITICAL SUBDIVISION, INSTRUMENTALITY, OR INSTITUTION.

IT IS CLEAR FROM THE QUOTED PROVISIONS OF LAW THAT STATUTORY AUTHORITY EXISTS FOR THE SECRETARY OF HEALTH, EDUCATION, AND WELFARE TO CONVEY SURPLUS REAL PROPERTY TO THE POLITICAL SUBDIVISION OF A STATE, SUBJECT TO THE DISAPPROVAL OF THE ADMINISTRATOR OF GENERAL SERVICES. AS WAS THE CASE IN B-81135, THE DEED TO THE PROPERTY IN THE INSTANT CASE PRESUMABLY HAS NOT BEEN DELIVERED BY THE GENERAL SERVICE ADMINISTRATION TO THE SCHOOL DISTRICT, NOR HAS THE PURCHASE PRICE AGREED TO IN THE CONTRACT BEEN PAID BY THE SCHOOL DISTRICT. THUS, TITLE TO THE LAND STILL IS IN THE UNITED STATES.

IN VIEW OF THE FOREGOING, WHAT WE SAID IN B-81135 WOULD SEEM TO BE EQUALLY APPLICABLE TO THE INSTANT CASE. THEREFORE, YOU ARE ADVISED THAT WE WOULD INTERPOSE NO OBJECTION TO THE CANCELLATION OF THE CONTRACT BETWEEN THE GENERAL SERVICES ADMINISTRATION AND THE SCHOOL DISTRICT WITH RESPECT TO THE 25.51-AREA PARCEL OF LAND SO THAT THE LAND MAY BE ASSIGNED TO THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE FOR CONVEYANCE BY SUCH AGENCY TO THE SCHOOL DISTRICT UNDER THE APPLICABLE PROVISION OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED.