B-167565, FEB. 17, 1970

B-167565: Feb 17, 1970

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

PURCHASER WHO CLAIMS THAT AGENT INSERTED BID FOR HOUSING PROJECT SUBSTANTIALLY HIGHER THAN HAD BEEN AUTHORIZED IS ADVISED THAT DEPOSIT REFUND CLAIM IS CLAIM FOR CONSIDERATION OF DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT RATHER THAN GAO. SAUL FINEBERG: REFERENCE IS MADE TO YOUR LETTER DATED JULY 22. WHICH WAS ISSUED BY THE FEDERAL HOUSING ADMINISTRATION (FHA) FOR THE SALE BY PUBLIC OFFERING OF THE SOUTHMOOR MANOR APARTMENTS. WHEN BIDS WERE OPENED UNDER THE SUBJECT PROJECT ON NOVEMBER 19. IT WAS DETERMINED THAT YOU HAD SUBMITTED THE HIGHEST. YOU WERE ADVISED BY THE FHA OF THAT DETERMINATION. YOU HAVE REQUESTED OUR CONSIDERATION OF YOUR CLAIM UNDER THE AUTHORITY OF OUR OFFICE SET FORTH IN 31 U.S.C. 71.

B-167565, FEB. 17, 1970

CONTRACTS--BID DEPOSIT REFUND--HOUSING PROJECTS DECISION CONCERNING CLAIM FOR REFUND OF DEPOSIT SUBMITTED WITH HIGH BID FOR PURCHASE OF SOUTHMOOR MANOR APARTMENTS, WICHITA FALLS, TEXAS. PURCHASER WHO CLAIMS THAT AGENT INSERTED BID FOR HOUSING PROJECT SUBSTANTIALLY HIGHER THAN HAD BEEN AUTHORIZED IS ADVISED THAT DEPOSIT REFUND CLAIM IS CLAIM FOR CONSIDERATION OF DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT RATHER THAN GAO. B-156202, MARCH 9, 1965.

TO MR. SAUL FINEBERG:

REFERENCE IS MADE TO YOUR LETTER DATED JULY 22, 1969, AND SUBSEQUENT CORRESPONDENCE CONCERNING YOUR CLAIM FOR REFUND OF THE DEPOSIT YOU SUBMITTED WITH YOUR BID UNDER PROJECT 113-42060, WHICH WAS ISSUED BY THE FEDERAL HOUSING ADMINISTRATION (FHA) FOR THE SALE BY PUBLIC OFFERING OF THE SOUTHMOOR MANOR APARTMENTS, WICHITA FALLS, TEXAS. WHEN BIDS WERE OPENED UNDER THE SUBJECT PROJECT ON NOVEMBER 19, 1969,IT WAS DETERMINED THAT YOU HAD SUBMITTED THE HIGHEST, RESPONSIVE OFFER AND ON NOVEMBER 22, 1969, YOU WERE ADVISED BY THE FHA OF THAT DETERMINATION. SUBSEQUENTLY, YOU INFORMED FHA OFFICIALS THAT YOUR AGENT FOR THE TRANSACTION HAD INSERTED A BID SUBSTANTIALLY IN EXCESS OF THE AMOUNT YOU HAD AUTHORIZED, AND IN VIEW THEREOF YOU REFUSED TO CLOSE THE SALE. PURSUANT TO PROVISION 14 OF THE SALES CONTRACT THE FHA RETAINED YOUR BID DEPOSIT AS LIQUIDATED DAMAGES. YOU HAVE REQUESTED OUR CONSIDERATION OF YOUR CLAIM UNDER THE AUTHORITY OF OUR OFFICE SET FORTH IN 31 U.S.C. 71, ET SEQ.

CONGRESS CREATED THE FHA AS A GOVERNMENT AGENCY TO PERFORM CERTAIN COMMERCIAL OPERATIONS AND AS AN INCIDENT TO PERFORMING THOSE OPERATIONS IT WAS GIVEN AUTHORITY TO SUE AND TO BE SUED. SEE SECTION 1 OF TITLE I OF THE NATIONAL HOUSING ACT, 48 STAT. 1246, AS AMENDED BY THE ACT OF AUGUST 23, 1935, 49 STAT. 684, 722; 12 U.S.C. 1702. THE AUTHORITY GRANTED UNDER THIS PROVISION OF LAW IS SIMILAR IN EFFECT TO THE EXTRAORDINARY AUTHORITY TO DETERMINE AND PRESCRIBE OBLIGATIONS FOUND IN MANY GOVERNMENT CORPORATION CHARTERS, AND ALTHOUGH THE FEDERAL HOUSING ADMINISTRATION IS NOT SPECIFICALLY CHARTERED AS A CORPORATION, FOR THE PURPOSE OF THE GOVERNMENT CORPORATION CONTROL ACT, IT IS DEFINED IN 31 U.S.C. 846 AS A "WHOLLY OWNED GOVERNMENT CORPORATION." IN 27 COMP. GEN. 429 (1948) OUR OFFICE ADVISED THE FHA (FORMERLY THE PUBLIC HOUSING ADMINISTRATION) THAT CLAIMS AGAINST THE AGENCY SHOULD NOT BE FORWARDED FOR SETTLEMENT PURPOSES TO THIS OFFICE FOR THE FOLLOWING REASONS:

"IT WAS NOT INTENDED UNDER THE REGULATION (PROMULGATED PURSUANT TO THE GOVERNMENT CORPORATION CONTROL ACT 31 U.S.C. 841) TO REQUIRE THE SUBMISSION TO THIS OFFICE OF CLAIMS AGAINST GOVERNMENT CORPORATIONS. FACT, SUCH A REQUIREMENT WOULD APPEAR TO BE INCONSISTENT WITH THE STATUTORY AUTHORITY GIVEN TO THE VARIOUS CORPORATIONS GENERALLY (1) TO SUE AND TO BE SUED IN THEIR OWN NAMES AND (2) TO SETTLE THEIR OWN CLAIMS OR TO HAVE THEIR FINANCIAL TRANSACTIONS TREATED AS FINAL AND CONCLUSIVE, AND, ALSO, TO BE INAPPROPRIATE IN ANY CASE WHERE SUCH SUBMISSION WAS NOT DIRECTED BY SPECIFIC PROVISION OF LAW. * * *" BASED ON THIS RATIONALE WE HAVE DECLINED TO CONSIDER A CLAIM AGAINST THE FHA FOR RETURN OF A PREPAYMENT PENALTY COLLECTED IN CONNECTION WITH THE REFINANCING OF AN FHA INSURED MORTGAGE. B-156202, MARCH 9, 1965.

ON NOVEMBER 9, 1965, BY OPERATION OF THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT ACT, APPROVED SEPTEMBER 9, 1965 (79 STAT. 667), THE FHA WAS TRANSFERRED TO THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD). SECTION 5 (A) OF THE ACT TRANSFERRED TO AND VESTED IN THE SECRETARY OF HUD ALL OF THE FUNCTIONS, POWERS AND DUTIES OF THE FEDERAL HOUSING COMMISSIONER AND THE FHA WHICH EXISTED PRIOR TO NOVEMBER 9, 1965. PURSUANT TO THE AUTHORITY CONFERRED ON THE SECRETARY BY SECTION 7D OF THE ACT HE AUTHORIZED EACH OFFICER, EMPLOYEE AND ORGANIZATIONAL UNIT OF THE FHA TO EXERCISE THE FUNCTIONS, POWERS AND DUTIES VESTED IN, OR DELEGATED OR ASSIGNED TO, THE OFFICE OR POSITION OR OFFICER OR EMPLOYEE OR ORGANIZATIONAL UNIT HAVING THE SAME TITLE IMMEDIATELY PRIOR TO THE EFFECTIVE DATE OF THE ACT. SEE INTERIM ORDER II, EFFECTIVE JANUARY 18, 1966 (31 F. R. 815).

SINCE THE AUTHORITY GRANTED THE FHA HAS NOT BEEN MODIFIED BUT MERELY RELOCATED WITHIN HUD THROUGH OPERATION OF THE REFERENCED STATUTE, WE BELIEVE THAT THE HOLDING SET FORTH IN B-156202, CITED ABOVE, IS APPLICABLE TO THE SUBJECT CASE AND ACCORDINGLY OUR OFFICE IS WITHOUT AUTHORITY TO CONSIDER YOUR CLAIM.