B-117919, JUL. 21, 1955

B-117919, JUL. 21, 1955

TO THE HONORABLE SECRETARY OF COMMERCE:

I HAVE YOUR LETTER OF APRIL 5, 1955, WITH ENCLOSURES, SUPPLEMENTING LETTER DATED OCTOBER 29, 1954, WITH REFERENCE TO OFFICE DECISION TO YOU DATED FEBRUARY 5, 1954, CONCERNING THE PROVISIONS OF CONCESSIONAIRE LEASE AGREEMENT NO. CCA-NA-762, ENTERED INTO JANUARY 1, 1953, BY THE ADMINISTRATOR OF CIVIL AERONAUTICS WITH AIR TERMINAL SERVICES, INC., PROVIDING FOR THE CONSTRUCTION AND OPERATION OF A "TERRACE LOUNGE" AT THE WASHINGTON NATIONAL AIRPORT. YOU REQUEST FURTHER CONSIDERATION OF THE MATTER IN THE LIGHT OF THE MEMORANDUM FORWARDED WITH YOUR LETTER.

FOR THE REASONS SET FORTH IN THE DECISION OF FEBRUARY 5, 1954, TO THE EXTENT THE AGREEMENT OF JANUARY 1, 1953, PROVIDED THAT THE COSTS OF FURNISHING AND INSTALLING THE FACILITIES AND EQUIPMENT REQUIRED FOR THE PROPOSED LOUNGE WERE TO BE AMORTIZED FROM THE ANTICIPATED RECEIPTS OF OPERATION, THE AGREEMENT WAS FOUND TO BE IN CONTRAVENTION OF THE PROVISIONS OF 40 U.S.C. 303B WHICH HIBITS,"EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED BY LAW," THE LEASING OF BUILDINGS AND PROPERTIES OF THE UNITED STATES FOR OTHER THEN A MONEY CONSIDERATION AND THE INCLUSION IN SUCH LEASES OF ANY PROVISION FOR THE ALTERATION, REPAIR, OR IMPROVEMENT OF THE BUILDINGS OR PROPERTIES AS A PART OF THE RENTAL CONSIDERATION.

IN THE MEMORANDUM ACCOMPANYING YOUR LETTER OF APRIL 5, 1955, IT IS URGED THAT THE CONSTRUCTION OF THE LOUNGE BUILDING WAS UNDERTAKEN AND COMPLETED BY AIR TERMINAL SERVICES IN GOOD FAITH AND IN RELIANCE UPON THE APPARENT STATUTORY AUTHORITY OF THE ADMINISTRATOR OF CIVIL AERONAUTICS TO ENTER INTO THE AGREEMENT. ALSO, WITH RESPECT TO THE DRAFT OF A PROPOSED SUBSTITUTE AGREEMENT TRANSMITTED WITH THE LETTER OF OCTOBER 29, 1954, IT IS RECOGNIZED THAT, INASMUCH AS THE CONSTRUCTION AND INSTALLATION OF THE LOUNGE FACILITIES AND EQUIPMENT IS AN ACCOMPLISHED FACT, THE RESULTING SITUATION IS NOT NOW AMENABLE TO CORRECTION BY REVISING THE TERMS OF THE AGREEMENT AND, FURTHERMORE, THE REVISIONS PROPOSED ARE NOT IN THE BEST INTERESTS OF THE GOVERNMENT.

AFTER CAREFUL CONSIDERATION OF ALL THE CIRCUMSTANCES INVOLVED IN THIS MATTER, YOU ARE ADVISED THAT WE WILL INTERPOSE NO FURTHER OBJECTION TO THE LEASE AGREEMENT IN QUESTION. IN THE ABSENCE OF SPECIFIC STATUTORY AUTHORITY, HOWEVER, APPROPRIATE PROCEDURES SHOULD BE ESTABLISHED BY YOUR DEPARTMENT, IF NOT ALREADY ADOPTED, WHEREBY THE RECEIPTS FROM THE OPERATION OF CONCESSIONS AT THE WASHINGTON NATIONAL AIRPORT WILL NOT BE UTILIZED FOR SIMILAR PURPOSES IN THE FUTURE.