B-154459, OCT. 30, 1964

B-154459, OCT. 30, 1964

TO THE HONORABLE ROGER L. STEVENS, CHAIRMAN OF THE BOARD OF TRUSTEES, JOHN F. KENNEDY CENTER FOR THE PERFORMING ARTS:

REFERENCE IS MADE TO LETTER OF OCTOBER 7, 1964, FROM THE GENERAL COUNSEL FOR THE JOHN F. KENNEDY CENTER FOR THE PERFORMING ARTS, REQUESTING ADVICE AS TO THE PROPRIETY OF NEGOTIATING THE CONTRACTUAL ARRANGEMENTS FOR THE DESIGN AND OPERATION OF THE RESTAURANT FACILITIES IN THE JOHN F. KENNEDY CENTER FOR THE PERFORMING ARTS ON THE ASSUMPTION THAT THE BOARD OF THE CENTER IS NOT IN THIS INSTANCE SUBJECT TO ANY LAWS REQUIRING ADVERTISING OF GOVERNMENT CONTRACTS.

THE GENERAL COUNSEL STATES THAT THE GENERAL SERVICES ADMINISTRATION IS ACTING AS AGENT FOR THE TRUSTEES OF THE JOHN F. KENNEDY CENTER FOR THE PERFORMING ARTS, HEREAFTER REFERRED TO AS THE BOARD, FOR THE DESIGN AND CONSTRUCTION OF THE CENTER. TENTATIVE BUILDING PLANS ARE TO BE SUBMITTED TO THE GENERAL SERVICES ADMINISTRATION THIS MONTH AND WORKING DRAWINGS ARE TO BE COMPLETED BY APRIL 1, 1965, AT WHICH TIME IT IS PLANNED TO ADVERTISE FOR BIDS.

IN CONNECTION WITH THE BUILDING OF THE CENTER, IT IS STATED THAT RESTAURATEURS INTERESTED IN DESIGNING AND OPERATING THE CENTER'S RESTAURANT FACILITIES SHOULD BE CONTACTED IMMEDIATELY SO THAT THE CENTER MAY BENEFIT FROM THE BEST DESIGN AND MOST ECONOMICAL COSTS IN CONNECTION WITH THE CONSTRUCTION AND OPERATION OF A RESTAURANT CONSISTENT WITH THE HIGH STANDARDS REQUIRED. IT APPEARS THAT SUCH RESTAURATEURS ARE NOT INTERESTED IN COMPETITIVE BIDDING AND DO NOT CONSIDER IT FEASIBLE UNDER THE CIRCUMSTANCES; HOWEVER, THEY ARE WILLING, AND THE BOARD WOULD PREFER, TO NEGOTIATE WITH A SELECTED GROUP OF RESTAURATEURS AND MAKE THE NECESSARY CONTRACTUAL ARRANGEMENTS ON A NEGOTIATED BASIS.

FOR MANY YEARS THIS OFFICE HAS ADHERED TO THE VIEW THAT THE OPERATION OF A CONCESSION UTILIZING GOVERNMENT-OWNED FACILITIES CONSTITUTES A VALUABLE PRIVILEGE FOR WHICH THE GOVERNMENT SHOULD BE COMPENSATED, AND THAT CONTRACTUAL OR OTHER ARRANGEMENTS RELATING TO THE ESTABLISHMENT AND OPERATION OF SUCH ACTIVITIES SHOULD BE SUBJECT TO STATUTORY PROVISIONS GOVERNING THE AWARD OF PUBLIC CONTRACTS. SEE 7 COMP. GEN. 806; 19 ID. 887. THIS POSITION WAS BASED UPON THE BUDGETARY PRINCIPLE THAT AS GREAT CARE WOULD BE TAKEN IN SECURING FOR THE GOVERNMENT THE MAXIMUM IN RECEIPTS AS IN KEEPING EXPENDITURES TO A MINIMUM, AND THE CONCLUSION THEREFROM THAT THE ADVERTISING REQUIREMENTS OF SECTION 3709 OF THE REVISED STATUTES SHOULD BE OBSERVED AS WELL WHERE THE GOVERNMENT WAS SELLER AS WHERE IT WAS BUYER. A-19335, NOVEMBER 15, 1927. BY THE ACT OF AUGUST 2, 1946, 60 STAT. 809, THAT SECTION (41 U.S.C. 5) WAS AMENDED TO PROVIDE SPECIFICALLY THAT "SALE AND CONTRACTS OF SALE" SHOULD BE GOVERNED BY ITS PROVISIONS.

THE VIEW IS EXPRESSED IN THE LETTER OF OCTOBER 7, 1964, THAT THE CONCLUSION ENUNCIATED IN OUR DECISION OF SEPTEMBER 1, 1961, B-145878, REGARDING THE AUTHORITY OF THE REGENTS OF THE SMITHSONIAN INSTITUTION TO NEGOTIATE CONTRACTUAL ARRANGEMENTS FOR THE OPERATION OF CAFETERIA SERVICES IN THE MUSEUM OF HISTORY AND TECHNOLOGY, IS APPLICABLE TO THE INSTANT CASE. IN THAT DECISION WE STATE, IN PERTINENT PART, AS FOLLOWS:

"* * * IN THE ABSENCE OF ANY LIMITATIONS IN THE AUTHORIZING ACT UPON THE POWERS AND AUTHORITY OF THE REGENTS WITH RESPECT TO THE COMPLETED BUILDING, WE CONCLUDE THAT THE REGENTS HAVE PLENARY AUTHORITY TO ENTER INTO WHATEVER LEASES OR CONCESSION AGREEMENTS THEY MAY DEEM PROPER FOR THE ACCOMMODATION OF THE PUBLIC FOR WHOSE BENEFIT THE MUSEUM IS PROVIDED, AND ARE NOT IN THAT RESPECT SUBJECT TO ANY LAWS REQUIRING ADVERTISING OF GOVERNMENT CONTRACTS.'

IN DETERMINING WHETHER THE ABOVE-QUOTED LANGUAGE IS APPLICABLE TO THE INSTANT CASE, THERE IS FOR CONSIDERATION THE LEGISLATION AUTHORIZING THE CENTER. THE JOHN F. KENNEDY CENTER ACT, APPROVED JANUARY 23, 1964, PUB.L. 88-260, 78 STAT. 4, FORMERLY DESIGNATED THE NATIONAL CULTURAL CENTER ACT, PUB.L. 85-874, 72 STAT. 1698, ESTABLISHED IN THE SMITHSONIAN INSTITUTION A BUREAU, DIRECTED BY A BOARD KNOWN AS THE TRUSTEES OF THE JOHN F. KENNEDY CENTER FOR THE PERFORMING ARTS, WHOSE DUTY IT IS TO MAINTAIN AND ADMINISTER SUCH CENTER, AND TO EXECUTE SUCH OTHER FUNCTIONS AS ARE VESTED IN THE BOARD BY THE ACT. PURSUANT TO SECTION 3 OF THE JOHN F. KENNEDY CENTER ACT THE BOARD SHALL CONSTRUCT FOR THE SMITHSONIAN INSTITUTION, WITH FUNDS RAISED BY VOLUNTARY CONTRIBUTIONS, A BUILDING TO BE DESIGNATED AS THE JOHN F. KENNEDY CENTER FOR THE PERFORMING ARTS; AND PURSUANT TO SUBSECTION 5 (A) OF THE ACT THE BOARD IS AUTHORIZED TO SOLICIT AND ACCEPT FOR THE SMITHSONIAN INSTITUTION AND TO HOLD AND ADMINISTER GIFTS, BEQUESTS, OR DEVISES OF MONEY, SECURITIES OR OTHER PROPERTY OF WHATSOEVER CHARACTER FOR THE BENEFIT OF THE CENTER. UNDER SUBSECTION 5 (C) OF THE ACT, ACTIONS OF THE BOARD, INCLUDING ANY PAYMENT MADE OR DIRECTED TO BE MADE BY IT FROM ANY TRUST FUNDS, SHALL NOT BE SUBJECT TO REVIEW BY AN OFFICER OR AGENCY OTHER THAN A COURT OF LAW. SECTION 8 OF THE ACT AUTHORIZES FEDERAL FUNDS TO BE APPROPRIATED TO THE BOARD FOR USE IN ACCORDANCE WITH THE ACT IN THE MAXIMUM AMOUNT OF $15,500,000 TO MATCH FUNDS RAISED FROM VOLUNTARY CONTRIBUTIONS. PURSUANT TO SECTION 8 OF THE ACT, FUNDS IN THE AMOUNT OF $15,500,000 WERE APPROPRIATED IN THE DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES APPROPRIATION ACT, 1965, APPROVED JULY 7, 1964, PUB.L. 88 356, 78 STAT. 273, 289.

AS NOTED ABOVE, THE BOARD, WHICH IS A BUREAU WITHIN THE SMITHSONIAN INSTITUTION, IS AUTHORIZED TO SOLICIT AND ACCEPT VOLUNTARY CONTRIBUTIONS FOR THE SMITHSONIAN INSTITUTION AND IS TO CONSTRUCT THE CENTER FOR THE SMITHSONIAN INSTITUTION WITH SUCH FUNDS. THE FUNDS AUTHORIZED BY CONGRESS TO BE APPROPRIATED TO THE BOARD ARE FOR USE IN ACCORDANCE WITH THE ACT AND THERE IS NOTHING IN THE ACT OR ITS LEGISLATIVE HISTORY INDICATING THAT BY SUCH AUTHORIZATION CONGRESS INTENDED THAT THE CENTER WOULD BE CONSTRUCTED FOR OTHER THAN THE SMITHSONIAN INSTITUTION. SINCE THE CENTER IS TO BE CONSTRUCTED FOR THE SMITHSONIAN INSTITUTION IT BECOMES AS MUCH THE PROPERTY OF THE INSTITUTION AS THE MUSEUM OF HISTORY AND TECHNOLOGY. VIEW OF OUR DECISION REGARDING THE NEGOTIATION OF LEASES OR CONCESSION AGREEMENTS FOR THE OPERATION OF CAFETERIA SERVICES IN THE MUSEUM OF HISTORY AND TECHNOLOGY, WE CONCLUDE THAT THE BOARD HAS AUTHORITY TO ENTER INTO WHATEVER LEASES OR CONCESSION AGREEMENTS THEY MAY DEEM PROPER FOR THE DESIGN AND OPERATION OF THE RESTAURANT FACILITIES IN THE JOHN F. KENNEDY CENTER FOR THE PERFORMING ARTS, AND ARE NOT IN THAT RESPECT SUBJECT TO ANY LAWS REQUIRING ADVERTISING OF GOVERNMENT CONTRACTS.