B-149565, JULY 31, 1962, 42 COMP. GEN. 69

B-149565: Jul 31, 1962

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SALES ARE REQUIRED TO BE MADE IN ACCORDANCE WITH LAWS RELATING TO THE SALES OF VESSELS. MAKE IT MANDATORY UPON THE MARITIME ADMINISTRATION TO OBTAIN COMPETITION THROUGH ADVERTISEMENT AND THERE IS NO AUTHORITY TO DISPOSE OF SURPLUS VESSELS ON A NEGOTIATED BASIS. 1962: WE HAVE YOUR LETTER OF JULY 27. IS INTERESTED IN PURCHASING 150 LIBERTY SHIPS IN MOBILE AREA AT PRICE OF $38. EACH PER VESSEL AS IS WHERE IS FOR SCRAPPING PURPOSES. WILL POST 10 PERCENT DEPOSIT AND BALANCE ON REMOVAL OF VESSELS ON A 20 DAY EACH OR ACCUMULATIVE PERIOD FOR REMOVAL. ON CONFIRMATION OF ACCEPTANCE AND BASIC AGREEMENT WE WILL FORWARD CHECK FOR NECESSARY DEPOSIT AND MAKE ARRANGEMENTS AS TO BALANCE OF PAYMENT. UPON YOUR ADVICE WILL SEND REPRESENTATIVE TO WASHINGTON TO FINALIZE AGREEMENT.

B-149565, JULY 31, 1962, 42 COMP. GEN. 69

MARITIME MATTERS - VESSELS - SALES - ADVERTISING REQUIREMENT IN THE DISPOSAL OF SURPLUS VESSELS UNDER SECTION 203 (I) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, 40 U.S.C. 484 (I), SALES ARE REQUIRED TO BE MADE IN ACCORDANCE WITH LAWS RELATING TO THE SALES OF VESSELS; THEREFORE, THE REQUIREMENTS FOR ADVERTISING, COMPETITIVE SEALED BIDS, AND COMPETITIVE SALES AFTER ADVERTISEMENT IN SECTION 508 OF THE MERCHANT MARINE ACT, 1936, 46 U.S.C. 1158, AND SECTION 5 OF THE MERCHANT MARINE ACT, 1920, 46 U.S.C. 864, MAKE IT MANDATORY UPON THE MARITIME ADMINISTRATION TO OBTAIN COMPETITION THROUGH ADVERTISEMENT AND THERE IS NO AUTHORITY TO DISPOSE OF SURPLUS VESSELS ON A NEGOTIATED BASIS.

TO THE ADMINISTRATOR, MARITIME ADMINISTRATION, JULY 31, 1962:

WE HAVE YOUR LETTER OF JULY 27, 1962, REQUESTING TO BE ADVISED WHETHER WE WOULD OBJECT TO YOUR ADMINISTRATION'S ENTERING INTO NEGOTIATIONS WITH CANAVERAL INTERNATIONAL CORPORATION FOR THE SALE OF 150 LIBERTY SHIPS ON THE BASIS OF A TELEGRAPHIC PURCHASE OFFER MADE BY THE CORPORATION JULY 24, 1962.

THE TELEGRAM READS AS FOLLOWS:

MIAMI BEACH, FLA. 24 1225 P EST. MARITIME ADMINISTRATION, ATTN MARITIME ADMINISTRATOR MR. ALEXANDER WASH DC

CANAVERAL INTERNATIONAL CORP. IS INTERESTED IN PURCHASING 150 LIBERTY SHIPS IN MOBILE AREA AT PRICE OF $38,000, EACH PER VESSEL AS IS WHERE IS FOR SCRAPPING PURPOSES. WILL POST 10 PERCENT DEPOSIT AND BALANCE ON REMOVAL OF VESSELS ON A 20 DAY EACH OR ACCUMULATIVE PERIOD FOR REMOVAL. ON CONFIRMATION OF ACCEPTANCE AND BASIC AGREEMENT WE WILL FORWARD CHECK FOR NECESSARY DEPOSIT AND MAKE ARRANGEMENTS AS TO BALANCE OF PAYMENT. THIS OFFER EXPIRES FRIDAY, JULY 27, 1962. UPON YOUR ADVICE WILL SEND REPRESENTATIVE TO WASHINGTON TO FINALIZE AGREEMENT. HENRY DUBBIN CANAVERAL INTERNATIONAL CORP.

THE MARITIME ADMINISTRATION IS AUTHORIZED TO DISPOSE OF SURPLUS VESSELS OF CERTAIN TYPES (INCLUDING LIBERTY SHIPS) UNDER THE PROVISIONS OF SECTION 203 (I) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED, 40 U.S.C. 484 (I). SUCH VESSELS ARE TO BE DISPOSED OF, HOWEVER, IN ACCORDANCE WITH THE PROVISIONS OF THE MERCHANT MARINE ACT, 1936, AS AMENDED, AND OTHER LAWS AUTHORIZING THEIR SALE.

THE LAWS AUTHORIZING THE SALE OF SUCH VESSELS BY THE MARITIME ADMINISTRATION ARE SECTION 508 OF THE MERCHANT MARINE ACT, 1936, AS AMENDED, 46 U.S.C. 1158, AND SECTION 5 OF THE MERCHANT MARINE ACT, 1920, AS AMENDED, 46 U.S.C. 864. SECTION 508 REQUIRES SALES "AFTER APPRAISEMENT AND DUE ADVERTISEMENT, AND UPON COMPETITIVE SEALED BIDS.' SECTION 5 REQUIRES SALES "AT PUBLIC OR PRIVATE COMPETITIVE SALE AFTER APPRAISEMENT AND DUE ADVERTISEMENT.' IT IS THUS MANDATORY UPON THE MARITIME ADMINISTRATION TO OBTAIN COMPETITION THROUGH DUE ADVERTISEMENT BEFORE IT MAY DISPOSE OF SURPLUS VESSELS UNDER EITHER SECTION 508 OR SECTION 5.

THE TERMS OF THE OFFER MADE BY CANAVERAL INTERNATIONAL CORPORATION CLEARLY CONTEMPLATE A NEGOTIATED SALE WITHOUT PUBLIC ADVERTISEMENT AND COMPETITION. AS INDICATED ABOVE WE ARE OF THE OPINION THAT THE MARITIME ADMINISTRATION DOES NOT HAVE AUTHORITY UNDER SECTION 508 AND SECTION 5 TO DISPOSE OF SHIPS ON SUCH A NEGOTIATED BASIS.