B-153483, JUN. 4, 1964

B-153483, JUN. 4, 1964

TO STERN, HUTNER AND BAXTER:

REFERENCE IS MADE TO YOUR LETTERS OF APRIL 8 AND 17, 1964, ON BEHALF OF ADLER-BUILT INDUSTRIES, INC., PROTESTING THE ACCEPTANCE OF ANY BID ON A TRACT OF LAND ORIGINALLY DESIGNATED AS TRACT 41 IN THE OPA LOCKA AIR COMPLEX AND READVERTISED FOR SALE, AFTER RESUBDIVISION, UNDER INVITATION NO. N-FA-528 ISSUED BY THE GENERAL SERVICES ADMINISTRATION (GSA), UTILIZATION AND DISPOSAL SERVICE, ATLANTA, GEORGIA.

TRACT 41, CONSISTING OF APPROXIMATELY 40 ACRES IN THE 246-ACRE RED ROAD FRONTAGE PROPERTY IN THE OPA LOCKA AIR COMPLEX, WAS FIRST ADVERTISED FOR SALE IN 1963 UNDER INVITATION NO. N-FLA-528. ADLER- BUILT INDUSTRIES WAS HIGH BIDDER ON THE TRACT. WHILE THE PUBLIC OFFERING WAS PENDING, HOWEVER, CONVEYANCE OF 87 ACRES OF THE PROPERTY WAS MADE TO DADE COUNTY FOR PARK AND RECREATIONAL AND EXPRESSWAY PURPOSES. ACCORDINGLY, WITH THE INTENT AND PURPOSE OF ENABLING THE GOVERNMENT TO ATTAIN THE FULL BENEFIT OF THE LOCATION OF THE NEW PARK, THE REMAINING 159 ACRES OF RED ROAD FRONTAGE PROPERTY, INCLUDING TRACT 41, WERE WITHDRAWN FROM THE PUBLIC SALE, RESUBDIVIDED, AND READVERTISED FOR SALE UNDER THE SAME INVITATION NUMBER 1964. ADLER-BUILT INDUSTRIES' PROTEST AGAINST THE READVERTISEMENT WAS DENIED BY OUR DECISION OF MARCH 23, 1964, B-153483, WHICH UPHELD THE GSA DETERMINATION THAT THE ACTION TAKEN WAS IN THE INTEREST OF THE UNITED STATES, AS WITHIN THE AUTHORITY RESERVED TO GSA UNDER SECTION 203 (E) (2) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, 40 U.S.C. 484 (E) (2), AND UNDER THE INVITATION FOR BIDS.

IN THE CURRENT PROTEST, YOU STATE THAT UNDER THE SECOND INVITATION THE HIGHEST BID RECEIVED BY THE GOVERNMENT ON ALL OF THE PROPERTY OFFERED FOR SALE, INCLUDING PROPERTY ADJACENT TO ORIGINAL TRACT 41, IS ONLY $6,000 PER ACRE IN CONTRAST TO ADLER-BUILT INDUSTRIES' BID UNDER THE ORIGINAL INVITATION OF $8,000 PER ACRE FOR TRACT 41, SUBSEQUENTLY INCREASED TO $8,100 PER ACRE. IN BRIEF, YOU CONTEND THAT THE GOVERNMENT IS SELLING THE TRACT AT AN UNCONSCIONABLY LOW PRICE. THEREFORE, YOU CONTEND THAT UNDER THE PRINCIPLE THAT CONTRACT AWARDS SHOULD BE MADE IN THE GOVERNMENT'S INTEREST, OUR OFFICE SHOULD OVERRULE GSA AND REQUIRE IT TO NEGOTIATE WITH ADLER-BUILT INDUSTRIES WHICH DESIRES TO OBTAIN TRACT 41 AT A FAIR PRICE TO THE GOVERNMENT

THE SECOND INVITATION OFFERED FOR SALE APPROXIMATELY 368 ACRES OF LAND SUBDIVIDED INTO TRACTS NUMBERED FROM 101 TO 132 AND, LIKE THE FIRST INVITATION, IT RESERVED TO THE GOVERNMENT THE RIGHT TO REJECT ANY OR ALL OFFERS. THE BIDS RECEIVED ON PARCELS 101-107 WERE CONSIDERED BY GSA AS TOO LOW, AND, THEREFORE, THE GOVERNMENT EXERCISED ITS RIGHT TO REJECT ALL SUCH BIDS.

AS TO PARCELS 108-132, WHICH CONSISTED OF 159.375 ACRES OF THE 246 ACRE RED ROAD FRONTAGE PROPERTY (INCLUDING THE ORIGINAL TRACT 41), THE HIGH BID, IN THE AMOUNT OF $960,110 ON THE PROPERTY AS AN ENTITY, WAS SUBMITTED BY THE GRATIGNY-RED HOLDING CORPORATION, SOME OF WHOSE OFFICERS AND DIRECTORS ARE REPORTED TO SERVE ALSO AS OFFICERS AND DIRECTORS OF ADLER- BUILT INDUSTRIES. SINCE SUCH BID DID NOT EQUAL THE GOVERNMENT ESTIMATE OF THE VALUE OF THE PROPERTY, THE CORPORATION WAS GIVEN AN OPPORTUNITY TO INCREASE ITS BID. THIS RESULTED IN A BID OF $1,000,000 WHICH APPROXIMATED THE APPRAISED FAIR MARKET VALUE OF $1,012,000. ACCORDINGLY, ON APRIL 13, 1964, GRATIGNY-RED HOLDING CORPORATION WAS AWARDED THE PROPERTY.

A COMPARISON OF THE RESULTS UNDER THE TWO INVITATIONS SHOWS THAT THE HIGH BIDS ON THE 246-ACRE RED ROAD FRONTAGE UNDER THE FIRST INVITATION TOTALLED $897,721, OR APPROXIMATELY $3,650 PER ACRE. UNDER THE SECOND INVITATION, 159 ACRES OF THE RED ROAD FRONTAGE SOLD FOR $1,000,000, OR $6,274 PER ACRE. THAT AMOUNT, WHEN ADDED TO THE AMOUNT OF $378,450 PAID TO THE GOVERNMENT BY DADE COUNTY FOR THE OTHER 87 ACRES OF THE RED ROAD FRONTAGE WHILE THE FIRST PUBLIC OFFERING WAS PENDING, TOTALS $1,378,450 FOR THE 246 ACRES, OR AN INCREASE OF NEARLY ONE-HALF MILLION DOLLARS OVER THE TOTAL AMOUNT OF $897,721 OFFERED FOR THE SAME PROPERTY UNDER THE ORIGINAL INVITATION. FURTHER, THE SALE UNDER THE SECOND INVITATION ENABLED THE GOVERNMENT TO DISPOSE OF THE ENTIRE RED ROAD FRONTAGE, INCLUDING NOT ONLY THE CHOICE 40-ACRE TRACT DESIRED BY ADLER-BUILT INDUSTRIES BUT ALSO OTHER LESS VALUABLE PROPERTY.

THE ABSTRACT OF BIDS SHOWS THAT THE ADLER FIRM DID NOT SUBMIT A BID ON THE PORTION OF THE PROPERTY FORMERLY INCLUDED IN TRACT 41, WHICH COMPRISED LOTS 18 THROUGH 23 AND A PART OF LOTS 17 AND 24. THE AGGREGATE AMOUNT OF THE HIGHEST INDIVIDUAL BIDS ON LOTS 18-23 WAS APPROXIMATELY $137,000, OR AN AVERAGE OF SLIGHTLY UNDER $4,000 PER ACRE. THE AGGREGATE OF THE HIGHEST LOT BIDS ON THE REMAINING 19 LOTS OF THE 159 ACRES INVOLVED WAS IN THE NEIGHBORHOOD OF $175,000, AVERAGING LESS THAN $1,500 PER ACRE. THERE FIGURES APPEAR TO JUSTIFY THE CONCLUSION THAT THE PART OF THE PROPERTY INCLUDED IN FORMER TRACT 41 WAS OF SUBSTANTIALLY HIGHER VALUE THAN THE REMAINING PART. EVEN IF ADLER HAD BID $324,000--- THE AMOUNT OF ITS HIGHEST OFFER FOR TRACT 41 -- ON LOST 19 THROUGH 23, THE BEST AVAILABLE BIDS ON THE REMAINING LOTS WOULD HAVE BROUGHT THE TOTAL PRICE AVAILABLE FOR THE 160 ACRES TO ONLY ABOUT HALF THE AMOUNT REALIZED FROM THE SALE TO THE GRATIGNY-RED COMPANY. IN THE ABSENCE OF ANY INDICATION THAT THE APPROXIMATELY 120 ACRES OUTSIDE OF TRACT 41 COULD HAVE BEEN SOLD FOR MORE THAN $675,000 THERE SEEMS TO BE NO BASIS FOR YOUR CONTENTION THAT SALE OF THE ENTIRE 160 ACRES FOR $1,000,000 WAS NOT IN THE BEST INTEREST OF THE GOVERNMENT. ACCORDINGLY, WE FIND NO BASIS TO DISTURB THE AWARD, AND YOUR PROTEST IS DENIED.

OUR CONCLUSION UPHOLDING THE ADVERTISED SALE RENDERS UNNECESSARY ANY DECISION ON YOUR REQUEST THAT OUR OFFICE REQUIRE GSA TO NEGOTIATE WITH YOU FOR THE PURPOSE OF TRACT 41. YOU ARE ADVISED, HOWEVER, THAT NEGOTIATION UNDER THE AUTHORITY CONTAINED IN SECTION 203 (E) (3) (F) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, 40 U.S.C. 484 (E) (3) (F), IS SUBJECT GENERALLY TO THE REQUIREMENT IN SECTION 203 (E) (6) OF THE ACT THAT WRITTEN JUSTIFICATION FOR SUCH ACTION BE PRESENTED IN ADVANCE OF THE SALE TO THE APPROPRIATE CONGRESSIONAL COMMITTEES. IN THE CIRCUMSTANCES INVOLVED HERE, THERE WOULD APPEAR TO BE NO JUSTIFICATION FOR THE REQUESTED NEGOTIATION OF THE SALE OF TRACT 41.