B-153818, APR. 17, 1964

B-153818, APR. 17, 1964

TO ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO A LETTER DATED MARCH 25, 1964, WITH ENCLOSURES, FROM THE ACTING ADMINISTRATOR, RELATIVE TO CONTRACT NO. SFRE-/S/-851, DATED MAY 27, 1959, ENTERED INTO ON BEHALF OF THE UNITED STATES AND THE STATE OF CALIFORNIA BY THE DEPARTMENT OF THE ARMY AND THE CALIFORNIA DEPARTMENT OF PUBLIC WORKS, DIVISION OF HIGHWAYS, FOR THE GRANTING OF AN EASEMENT FOR RIGHTS-OF-WAY THROUGH A PORTION OF THE BENICIA ARSENAL MILITARY RESERVATION IN SOLANO COUNTY, CALIFORNIA, IN CONNECTION WITH THE PROPOSED CONSTRUCTION BY THE STATE OF A BRIDGE, BRIDGE APPROACHES AND OTHER HIGHWAY FACILITIES.

THE REQUEST FOR EASEMENT WAS CONSIDERED UNDER THE PROVISIONS OF PUBLIC LAW 85-767, 72 STAT. 885, WHICH REVISED, CODIFIED AND REENACTED THE FEDERAL LAWS RELATING TO HIGHWAYS AS "TITLE 23, UNITED STATES CODE; " AND MORE PARTICULARLY SECTION 317 OF TITLE 23 WHICH PERMITS FEDERAL AGENCIES HAVING JURISDICTION OVER LANDS OR INTERESTS IN LANDS OWNED BY THE UNITED STATES TO AGREE TO THE APPROPRIATION OF ANY PART OF THE LANDS OR INTERESTS IN SUCH LANDS DETERMINED TO BE REASONABLY NECESSARY FOR THE RIGHT-OF-WAY OF ANY HIGHWAY, OR AS A SOURCE OF MATERIALS FOR THE CONSTRUCTION OR MAINTENANCE OF ANY SUCH HIGHWAY ADJACENT TO SUCH LANDS OR INTERESTS IN LANDS, UNDER CONDITIONS WHICH THEY DEEM "NECESSARY FOR THE ADEQUATE PROTECTION AND UTILIZATION OF THE RESERVE.'

THE STATE OF CALIFORNIA UNDERTOOK TO PERFORM A CONSIDERABLE AMOUNT OF RELOCATION AND OTHER CONSTRUCTION WORK IN ORDER TO OBTAIN THE REQUESTED EASEMENT FOR RIGHTS-OF-WAY THROUGH THE BENICIA ARSENAL MILITARY RESERVATION. AN EASEMENT WAS EXECUTED AND PLACED IN ESCROW ON SEPTEMBER 2, 1959, AND THE EASEMENT STATES IN PART THAT "AS A CONDITION TO THIS GRANT, THE GRANTEE IS REQUIRED TO FAITHFULLY PERFORM THE TERMS OF THAT CERTAIN CONTRACT SFRE-/S/-851.' THE CONTRACT WAS MODIFIED IN CERTAIN RESPECTS ON MAY 13, 1960, AND THE DEPARTMENT OF THE ARMY SUBSEQUENTLY DECIDED TO DISCONTINUE THE OPERATION OF THE BENICIA ARSENAL. IT WAS DETERMINED THAT AS THE RESULT OF SUCH DECISION THERE SHOULD BE DELETED VARIOUS MAJOR ITEMS OF WORK FROM THE REQUIREMENTS OF THE CONTRACT AS PREVIOUSLY AMENDED. THE DEPARTMENT OF THE ARMY THEN ATTEMPTED TO NEGOTIATE A CONTRACT AMENDMENT WHICH WOULD OBLIGATE THE STATE OF CALIFORNIA TO PAY TO THE UNITED STATES THE SUM OF $934,492.74 AS THE MONETARY VALUE OF THE ITEMS OF CONSTRUCTION TO BE DELETED FROM THE CONTRACT REQUIREMENTS. THE DIVISION OF HIGHWAYS REFUSED TO EXECUTE THE PROPOSED AMENDMENT NO. 2 TO THE CONTRACT AND A DECISION IN THE MATTER WAS LEFT TO YOUR ADMINISTRATION WHEN THE BENICIA ARSENAL PROPERTY WAS REPORTED EXCESS TO THE NEEDS OF THE DEPARTMENT OF THE ARMY AND DETERMINED TO BE SURPLUS PURSUANT TO THE APPLICABLE PROVISIONS OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, 63 STAT. 377, AS AMENDED.

OUR OPINION HAS BEEN REQUESTED AS TO WHETHER THE GENERAL SERVICES ADMINISTRATION IS AUTHORIZED TO RELEASE THE STATE OF CALIFORNIA FROM THE CONTRACT, TO MODIFY THE EASEMENT DOCUMENT TO ELIMINATE THE CONDITION REQUIRING THE COMPLETION OF THE CONTRACT, AND TO DELIVER THE EASEMENT DOCUMENT TO THE STATE, ALL WITHOUT THE PAYMENT OF ANY CONSIDERATION; OR WITH A REQUIREMENT FOR PAYMENT OF AN AMOUNT LESS THAN THAT CLAIMED BY THE DEPARTMENT OF THE ARMY, REPRESENTING "THE INCREASE IN DISPOSAL VALUE OF THE REMAINDER OF THE ARSENAL," WHICH WOULD HAVE BEEN EFFECTED IF ALL OF THE REQUIRED RELOCATION AND REPLACEMENT WORK UNDER THE CONTRACT HAD BEEN COMPLETED. IT IS REPORTED THAT THE INCREASE IN DISPOSAL VALUE WOULD HAVE BEEN FROM $70,000 TO $100,000, BASED ON A ROUGH ESTIMATE.

IT IS THE POSITION OF THE STATE OF CALIFORNIA AND THE BUREAU OF PUBLIC ROADS, DEPARTMENT OF COMMERCE, THAT UNDER THE CONDITIONS EXISTING AFTER THE BENICIA ARSENAL MILITARY RESERVATION BECAME SURPLUS THE EASEMENT COULD BE GRANTED WITHOUT CONSIDERATION AND THAT THERE IS, THEREFORE, AUTHORITY TO RELEASE THE STATE FROM FURTHER PERFORMANCE UNDER THE CONTRACT.

THE ACTING ADMINISTRATOR EXPRESSES THE OPINION THAT THERE CAN BE NO DOUBT THAT THE CONTRACT WAS VALID WHEN MADE AND THAT IT WAS ALSO PROPER TO MAKE PERFORMANCE OF THE CONTRACT AN EXPRESS CONDITION OF THE GRANT OF THE EASEMENT. HENCE, THERE IS INVOLVED THE QUESTION AS TO WHETHER THERE SHOULD BE APPLIED THE RULE THAT, WITHOUT COMPENSATION BENEFIT TO THE UNITED STATES, AGENTS AND OFFICERS OF THE GOVERNMENT ARE NOT AUTHORIZED TO DISPOSE OF THE MONEY OR PROPERTY OF THE UNITED STATES, TO MODIFY EXISTING CONTRACTS, OR TO SURRENDER OR WAIVE CONTRACT RIGHTS THAT HAVE VESTED IN THE UNITED STATES. ON THAT POINT, OUR ATTENTION HAS BEEN INVITED TO 40 COMP. GEN. 455, IN WHICH WE CONCLUDED THAT WE WERE NOT REQUIRED TO OBJECT TO A PROPOSED CANCELLATION OF A CONTRACT BETWEEN YOUR ADMINISTRATION AND THE VALLEJO UNIFIED SCHOOL DISTRICT, A POLITICAL SUBDIVISION OF THE STATE OF CALIFORNIA, COVERING THE SALE OF A 25.51-ACRE PARCEL OF LAND SO THAT THE LAND COULD BE ASSIGNED TO THE DEPARTMENT OF HEALTH, EDUCATION AND WELFARE FOR CONVEYANCE BY THAT DEPARTMENT TO THE SCHOOL DISTRICT PURSUANT TO THE AUTHORITY CONTAINED IN SECTION 484 (K) (1) (C) OF TITLE 40, UNITED STATES CODE. THERE WAS FOLLOWED IN THAT DECISION THE PRECEDENT ESTABLISHED IN A PRIOR CASE INVOLVING A PROPOSED CONVEYANCE OF CERTAIN AIRPORT PROPERTY TO THE CITY OF NEW YORK WITHOUT MONETARY CONSIDERATION AFTER THE CITY HAD ENTERED INTO A CONTRACT WITH THE UNITED STATES TO PURCHASE THE PROPERTY.

AS INDICATED BY THE ACTING ADMINISTRATOR AND IN A CONFERENCE HELD IN THIS OFFICE ON APRIL 8, 1964, ATTENDED BY REPRESENTATIVES OF YOUR ADMINISTRATION AND THE BUREAU OF PUBLIC ROADS, IT APPEARS THAT IT IS NOT THE PRACTICE OF THE ADMINISTRATIVE AGENCIES OF THE GOVERNMENT TO REQUIRE MONETARY CONSIDERATION FOR THE GRANTING OF EASEMENTS FOR RIGHTS-OF-WAY OVER FEDERAL LANDS UNDER THEIR JURISDICTION; AND THAT RELOCATION OR REPLACEMENT WORK SUCH AS THAT WHICH NOW REMAINS UNCOMPLETED UNDER THE ARMY CONTRACT WITH THE STATE OF CALIFORNIA WOULD NOT HAVE BEEN REQUIRED AS A CONDITION TO THE GRANTING OF THE REQUESTED EASEMENT FOR RIGHTS-OF-WAY IF THE STATE HAD REQUESTED THE EASEMENT AFTER THE DECISION TO DISCONTINUE OPERATION OF THE BENICIA ARSENAL HAD BEEN MADE.

IT REMAINS OUR OPINION THAT, AS INDICATED IN 40 COMP. GEN. 455, BEFORE FINAL ACTION HAS BEEN TAKEN WITH RESPECT TO A PROPOSED DISPOSITION OF SURPLUS FEDERAL REAL PROPERTY, A CONTRACT FOR THE SALE OF SUCH PROPERTY MAY BE CANCELED OR MODIFIED FOR THE PURPOSE OF TRANSFERRING THE PROPERTY TO THE PROSPECTIVE GRANTEE ON MORE FAVORABLE TERMS WHERE STATUTORY AUTHORITY EXISTS FOR THE TRANSFER WITHOUT CONSIDERATION AND THE APPROPRIATE ADMINISTRATIVE DETERMINATION REQUIRED (BY THE STATUTE) TO MAKE SUCH TRANSFER HAS BEEN MADE. THE SAME CONCLUSION WOULD SEEM TO BE REQUIRED IN A SITUATION WHERE, AS HERE, STATUTORY AUTHORITY EXISTS FOR THE APPROPRIATION OF GOVERNMENT OWNED LAND OR ANY INTEREST THEREIN FOR HIGHWAY CONSTRUCTION PURPOSES, WITHOUT REQUIRING A MONETARY CONSIDERATION THEREFOR.

IN THE PARTICULAR CIRCUMSTANCES, AND CONSIDERING THAT THE APPLICABLE STATUTORY PROVISIONS DO NOT SPECIFICALLY PROHIBIT THE IMPOSITION OF A REQUIREMENT FOR THE PAYMENT OF A SPECIFIED AMOUNT AS A CONDITION FOR GRANTING AN EASEMENT FOR RIGHTS-OF-WAY OVER LANDS OWNED BY THE UNITED STATES, WE BELIEVE THAT IT WOULD BE ENTIRELY WITHIN YOUR DISCRETION EITHER TO RELEASE THE STATE OF CALIFORNIA FROM FURTHER OBLIGATION UNDER CONTRACT NO. SFRE-/S/-851, OR TO REDUCE THE AMOUNT OF THE GOVERNMENT'S CLAIM UNDER THE CONTRACT FROM $934,492.74 TO AN AMOUNT WHICH WOULD REPRESENT A REASONABLE ESTIMATE OF THE PROBABLE INCREASE IN DISPOSAL VALUE OF THE BENICIA ARSENAL MILITARY RESERVATION WHICH WOULD HAVE BEEN EFFECTED IF ALL OF THE CONTRACT RELOCATION AND REPLACEMENT WORK HAD BEEN COMPLETED BY THE STATE OF CALIFORNIA. AS REQUESTED, WE ARE RETURNING THE ADMINISTRATIVE FILE OF THE CASE.