National Archives and Records Administration--Damage to Revolving Fund Records Caused by Building Failure
Highlights
The Federal Property and Administrative Services Act of 1949, as amended, governs the interagency occupancy agreement between the General Services Administration (GSA) and the National Archives and Records Administration (NARA) for the Washington National Records Center building. Consistent with the Act and our past decisions involving GSA and the Federal Buildings Fund, we find that the interdepartmental waiver rule applies and GSA is not required to reimburse NARA for property damage. 57 Comp. Gen. 130 (1977). Operating reserves in NARA's records center revolving fund are available to cover the costs of repairing water damage to records that NARA stores for its federal agency customers caused by a building failure.
B-308822, National Archives and Records Administration--Damage to Revolving Fund Records Caused by Building Failure, May 2, 2007
Decision
Matter of: National Archives and Records Administration—Damage to Revolving Fund Records Caused by Building Failure
DIGEST
The Federal Property and Administrative Services Act of 1949, as amended, governs the interagency occupancy agreement between the General Services Administration (GSA) and the National Archives and Records Administration (NARA) for the Washington National Records Center building. Consistent with the Act and our past decisions involving GSA and the Federal Buildings Fund, we find that the interdepartmental waiver rule applies and GSA is not required to reimburse NARA for property damage. 57 Comp. Gen. 130 (1977). Operating reserves in NARA's records center revolving fund are available to cover the costs of repairing water damage to records that NARA stores for its federal agency customers caused by a building failure.
DECISION
The General Counsel of the National Archives and Records Administration (NARA) has requested an advance decision under 31 U.S.C. sect. 3529 on whether the General Services Administration (GSA) should bear the cost of repairing damage caused by a GSA building failure to records and property maintained by the NARA Federal Records Center Program. Letter from Gary M. Stern, General Counsel, NARA, to Susan Poling, Managing Associate General Counsel, GAO, Jan. 3, 2007 (Stern Letter). As we explain below, the Federal Property and Administrative Services Act of 1949, as amended, governs the interagency occupancy agreement between GSA and
Our practice when rendering decisions is to obtain the views of the relevant federal agency to establish a factual record and to elicit the agency's legal position on the matter. GAO, Procedures and Practices for Legal Decisions and Opinions, GAO-06-1064SP (
BACKGROUND
On
Immediately following the pipe rupture, GSA procured emergency services to remove the waterlogged records, to repair the broken water pipe, and to specially clean Vault 6.[2] Roach Letter. Also, B.M.S. Catastrophe (BMS), a disaster recovery company, provided recovery and freeze-drying services to salvage the waterlogged records. Stern Letter; Roach Letter.
DISCUSSION
At issue here is the application of the so-called interdepartmental waiver rule and its statutory exception. The interdepartmental waiver rule—the general rule governing interagency property damage claims—is that where one federal agency damages property of another federal agency, funds available to the former may not be used to pay claims for damages to the latter. 65 Comp. Gen. 910, 911 (1986); 46 Comp. Gen. 586, 587 (1966). The rule is based on the concept that property of the various agencies is not the property of separate entities but rather of the government as a single entity, and there can be no reimbursement by the government for damages to or loss of its own property. 46 Comp. Gen. at 586--87.
A major exception to the interdepartmental waiver rule is where reimbursement for damages has been provided for in an interagency agreement under the Economy Act (31 U.S.C. sect. 1535) or similar statutory authority, such as a reimbursable or revolving fund. 65 Comp. Gen. at 911. The rule may not apply, for example, where the agency suffering damages is operated out of a revolving fund. See, e.g., B-302962, June 10, 2005 (NARA should collect amounts sufficient to repair damages to facilities financed by the Records Center Revolving Fund, whether that damage is caused by NARA's federal agency customer, the customer's contractor, or NARA's own contractors, and should deposit those amounts into the revolving fund); 65 Comp. Gen. 910 (1986) (Soil Conversation Service may pay for repairs to a boat borrowed from the Bureau of Land Management under an Economy Act agreement which provided that the Service return the boat in as good condition as when received); 3 Comp. Gen. 74 (1923) (agency borrowing equipment from the Reclamation Fund may pay depreciation costs). With most revolving fund activities, Congress intends that the activity operate like a self-sufficient business, charging rates to recover its costs of operations. B-302962,
When considering exceptions to the interdepartmental waiver rule, we look to the statute that establishes and governs the interagency relationship. See, e.g., 9 Comp. Gen. 263 (1930) (
The Federal Property and Administrative Services Act authorizes GSA to operate, maintain, and protect federal buildings, 40 U.S.C. sect. 582(a), and to assign space to executive agencies, 40 U.S.C. sect. 584(a). Like most federal agencies,
Under the Act, GSA imposes a charge on
necessary expenses of real property management and related activities not otherwise provided for, including operation, maintenance, and protection of federally owned and leased buildings; . . . contractual services incident to cleaning or servicing buildings, and moving; repair and alteration of federally owned buildings . . . maintenance, preservation . . .
Transportation, Treasury, Housing and Urban Development, the Judiciary, the District of Columbia, and Independent Agencies Appropriations Act, 2006, Pub. L. No. 109-115, 119 Stat. 2396, 2479--82 (
Notwithstanding that GSA activities here operate out of a revolving fund, which suggests a business-like operation, and that its charges are to approximate commercial charges, neither those charges nor GSA's responsibilities are identical to those of a commercial landlord.[3] Some of the expenditures that go into a commercial rental charge for space that are not applicable to GSA are taxes, depreciation, interest on a long-term debt, and profit, as well as liability insurance. 57 Comp. Gen. 130 (1977). In circumstances similar to the case at issue, we recognized that the Federal Property and Administrative Services Act did not impose on GSA all of the responsibilities of a commercial landlord, and on that basis we held that GSA was not required to reimburse the Department of Defense (DOD) for damage to furniture, furnishings, or equipment caused by a building failure.
The purpose behind requiring rental rates to approximate commercial charges was twofold: the first, not relevant here, was to encourage agencies to consolidate or reduce space requirements. The second was to generate extra funds to be used by GSA to finance construction of new buildings. 57 Comp. Gen. at 132, and references cited therein. Requiring GSA to reimburse another agency for damages it incurred or reduce the rental charges to cover the damages would reduce amounts available to finance new construction, undermining one of the purposes of the Act.
The circumstances of this case are very similar. Here, another federal agency—NARA—housed in a GSA building has suffered water damage from a building failure and is seeking recovery from the Federal Buildings Fund to repair the personal property damage. Consistent with our past decisions involving GSA and the Federal Buildings Fund, we find that the interdepartmental waiver rule, not its exception, applies and that GSA is not required to reimburse
CONCLUSION
The Federal Property and Administrative Services Act of 1949, as amended, governs the interagency occupancy agreements between GSA and
Gary L. Kepplinger
General Counsel
[1] Like most
[2] Under the Federal Property and Administrative Services Act of 1949, discussed infra, GSA is responsible for repairing, and did repair, the WNRC building. See 40 U.S.C. sect. 582(a).
[3] We do not address whether in fact