B-159559, FEB. 12, 1968

B-159559: Feb 12, 1968

Additional Materials:

Contact:

Shirley Jones
(202) 512-8156
jonessa@gao.gov

 

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

SINCE RYUKYU ELECTRIC POWER CORPORATION IS NOT AN INSTRUMENTALITY OF THE UNITED STATES AND APPROPRIATED FUNDS ARE NOT INVOLVED. SOLICITATION OF BIDS FROM AMERICAN FIRMS ONLY IS NOT REQUIRED. TO POWER RESERVE: RECEIPT IS ACKNOWLEDGED OF YOUR LETTERS DATED JANUARY 25 AND FEBRUARY 6. YOU STATE IT IS YOUR UNDERSTANDING THAT THE RYUKYU ELECTRIC POWER CORPORATION RECENTLY REQUESTED PROPOSALS FROM MANUFACTURERS IN JAPAN TO DESIGN AND CONSTRUCT A STEAM TURBINE ELECTRIC POWER GENERATING SYSTEM FOR OKINAWA. THAT MANUFACTURERS IN THE UNITED STATES WERE NOT ASKED TO SUBMIT PROPOSALS FOR THE SYSTEM. THE RYUKYU ISLANDS ARE NOT TERRITORIES OR POSSESSIONS OF THE UNITED STATES. THE POWERS OF THIS GOVERNMENT THEREIN ARE DERIVED SOLELY FROM THE PEACE TREATY WITH JAPAN.

B-159559, FEB. 12, 1968

BIDS - FOREIGN V. DOMESTIC FIRMS - RYUKYU ISLANDS DECISION TO POWER RESERVE CONCERNING LEGALITY OF RYUKYU ELECTRIC POWER CORPORATION ACTION IN SOLICITING BIDS FROM ONLY AMERICAN OR OKINAWAN FIRMS FOR A POWER GENERATING SYSTEM ON OKINAWA. SINCE RYUKYU ELECTRIC POWER CORPORATION IS NOT AN INSTRUMENTALITY OF THE UNITED STATES AND APPROPRIATED FUNDS ARE NOT INVOLVED, SOLICITATION OF BIDS FROM AMERICAN FIRMS ONLY IS NOT REQUIRED.

TO POWER RESERVE:

RECEIPT IS ACKNOWLEDGED OF YOUR LETTERS DATED JANUARY 25 AND FEBRUARY 6, 1968. YOU STATE IT IS YOUR UNDERSTANDING THAT THE RYUKYU ELECTRIC POWER CORPORATION RECENTLY REQUESTED PROPOSALS FROM MANUFACTURERS IN JAPAN TO DESIGN AND CONSTRUCT A STEAM TURBINE ELECTRIC POWER GENERATING SYSTEM FOR OKINAWA, AND THAT MANUFACTURERS IN THE UNITED STATES WERE NOT ASKED TO SUBMIT PROPOSALS FOR THE SYSTEM. YOU FURTHER STATE YOUR UNDERSTANDING THAT REQUESTS FOR PROPOSALS FOR POWER NEEDS FOR THE RYUKYU ISLANDS "BY LAW" CAN BE SUBMITTED ONLY TO ORGANIZATIONS IN THE UNITED STATES OR OKINAWA. YOU THEREFORE QUESTION THE LEGALITY OF THE CORPORATION'S ACTION IN SOLICITING BIDS FROM FOREIGN MANUFACTURERS, AND YOU ASK THAT WE REVIEW SUCH QUESTION.

THE RYUKYU ISLANDS ARE NOT TERRITORIES OR POSSESSIONS OF THE UNITED STATES, AND THE POWERS OF THIS GOVERNMENT THEREIN ARE DERIVED SOLELY FROM THE PEACE TREATY WITH JAPAN, UNDER WHICH THIS COUNTRY HAS THE RIGHT TO EXERCISE ALL POWERS OF ADMINISTRATION, LEGISLATION AND JURISDICTION PENDING THE PLACING OF THE ISLANDS UNDER THE TRUSTEESHIP SYSTEM OF THE UNITED NATIONS. THE RYUKYU ELECTRIC POWER CORPORATION (REPC) WAS CHARTERED AND ESTABLISHED BY THE UNITED STATES CIVIL ADMINISTRATION OF THE RYUKYU ISLANDS UNDER CIVIL ADMINISTRATION ORDNANCE NO. 129, DATED FEBRUARY 26, 1954, TO ACQUIRE, MAINTAIN AND OPERATE ELECTRIC POWER SYSTEMS IN THE RYUKYU ISLANDS FOR THE GENERATION, TRANSMISSION, DISTRIBUTION AND SALE OF POWER FOR THE USE AND BENEFIT OF THE RYUKYUAN PEOPLE, FOR AGRICULTURAL AND INDUSTRIAL DEVELOPMENT, AND FOR OTHER PURPOSES. WHILE REPC HAS BEEN STATED TO BE AN INSTRUMENTALITY OF THE UNITED STATES CIVIL ADMINISTRATION OF THE RYUKYU ISLANDS (SUPPLEMENTAL APPROPRIATION ACT OF 1958, 71 STAT. 432), ITS STATUS IN THIS RESPECT ARISES FROM THE POSITION OF THE ADMINISTRATION AS THE GOVERNING BODY OF THE RYUKYUAN PEOPLE, AND WE DO NOT BELIEVE THAT IT FOLLOWS THAT THE CORPORATION IS NECESSARILY AN INSTRUMENTALITY OF THE UNITED STATES.

WE ARE UNABLE TO FIND ANYTHING TO INDICATE THAT THE CORPORATION SHOULD BE REGARDED AS A CORPORATION OF THE UNITED STATES GOVERNMENT THAT WOULD BE SUBJECT TO THE FEDERAL PROCUREMENT STATUTES IN SUPPLYING ITS NEEDS. NOTE THAT REPC IS NOT NAMED AS BEING EITHER A WHOLLY OWNED GOVERNMENT CORPORATION OR A MIXED-OWNERSHIP GOVERNMENT CORPORATION UNDER THE GOVERNMENT CORPORATION CONTROL ACT, AS AMENDED, 31 U.S.C. 846 AND 856. THE ABSENCE OF A CITATION BY YOU TO THE LAW TO WHICH YOU REFER REQUIRING REPC TO SOLICIT PROPOSALS FOR SUPPLYING THE ELECTRICAL POWER NEEDS OF THE RYUKYU ISLANDS FROM ONLY AMERICAN OR OKINAWAN ORGANIZATIONS WE ARE UNABLE TO DETERMINE ITS APPLICABILITY OR NONAPPLICABILITY TO THE SUBJECT PROCUREMENT.

IT IS PRESUMED THAT THE TRANSACTIONS TO WHICH YOU REFER ARE IN CONNECTION WITH THE CONTEMPLATED INCREASE IN CAPACITY OF THE REPC FACILITIES WHICH WAS REFERRED TO IN OUR DECISION TO THE SECRETARY OF THE ARMY OF JUNE 19, 1967, B-159559, CONCERNING A PROPOSED CONTRACT BETWEEN REPC AND THE DEPARTMENT OF THE ARMY FOR THE PURCHASE OF ANTICIPATED INCREASED POWER REQUIREMENTS OF THE ARMED SERVICES ON OKINAWA. A COPY OF THAT DECISION IS ENCLOSED, AND YOUR ATTENTION IS DIRECTED IN PARTICULAR TO THE THIRD PARAGRAPH THEREOF WHICH INDICATES THAT THE PLANT WILL BE FINANCED ENTIRELY FROM RESOURCES OF REPC AND PRIVATE SOURCES. IN THOSE CIRCUMSTANCES IT WOULD APPEAR THAT NO EXPENDITURES OF APPROPRIATED FUNDS OF THE UNITED STATES WOULD BE INVOLVED (OTHER THAN PAYMENTS BY THE ARMY FOR ELECTRICAL SERVICES FURNISHED TO IT AS REFERRED TO IN THE ENCLOSED DECISION) AND REVIEW OF THE ACTIONS COMPLAINED OF BY YOU WOULD THEREFORE PROBABLY BE BEYOND THE PROPER FUNCTIONS OF THIS OFFICE. HOWEVER, IF YOU WILL IDENTIFY THE LAW WHICH YOU BELIEVE REQUIRES THE SOLICITATION OF PROPOSALS FROM AMERICAN ORGANIZATIONS, WE WILL BE GLAD TO GIVE THE MATTER FURTHER CONSIDERATION.