B-141644, FEBRUARY 9, 1960, 39 COMP. GEN. 566

B-141644, FEBRUARY 9, 1960, 39 COMP. GEN. 566

CONTRACTS - ADVERTISING - NECESSITY - AMENDED CONTRACTS - MILITARY HOUSING CONSTRUCTION TO AMEND EXISTING MILITARY FAMILY HOUSING CONTACTS, UNDER WHICH CONSTRUCTION IS VIRTUALLY COMPLETED, TO INCLUDE CONSTRUCTION OF A HEALTH CENTER OR OTHER COMMUNITY FACILITIES, WHICH ADDITIONAL FACILITIES MAY NOT BE REGARDED AS IN INSEPARABLE PART OF THE ORIGINAL CONTRACT WORK AND WOULD ENLARGE THE SCOPE OF THE CONTRACT, WOULD BE CONTRARY TO THE ADVERTISING REQUIREMENT IN SECTION 403 OF THE HOUSING AMENDMENTS ACT OF 1955, 42 U.S.C. 1594 (A), NOTWITHSTANDING THAT SUCH AMENDMENT WOULD NOT INCREASE THE COST LIMITATION FOR THE HOUSING UNITS.

TO THE SECRETARY OF DEFENSE, FEBRUARY 9, 1960:

BY LETTER OF JANUARY 7, 1960, THE GENERAL COUNSEL OF YOUR DEPARTMENT REQUESTED OUR OPINION CONCERNING A QUESTION ARISING IN THE ADMINISTRATION OF THE " CAPEHART" MILITARY HOUSING PROGRAM. BEFORE CONSIDERING THE REQUEST BY YOUR GENERAL COUNSEL, WE INVITE YOUR ATTENTION TO THE ACT OF JULY 3, 1894, AS AMENDED, 31 U.S.C. 74, WHICH, IN PART, AUTHORIZES THE COMPTROLLER GENERAL TO RENDER ADVANCE DECISIONS ONLY AT THE REQUEST OF DISBURSING OFFICERS OR THE HEAD OF AN EXECUTIVE DEPARTMENT OR OTHER ESTABLISHMENT NOT UNDER ANY OF THE EXECUTIVE DEPARTMENTS. SEE 26 COMP. GEN. 993. HOWEVER, IT IS UNDERSTOOD THAT THE MATTER IS OF SOME URGENCY AND CONSEQUENTLY, TO AVOID DELAY, THE REQUEST IN THIS INSTANCE WILL BE TREATED AS THOUGH IT HAD COME FROM YOU.

THE " CAPEHART" MILITARY HOUSING PROGRAM IS AUTHORIZED BY TITLE VIII OF THE NATIONAL HOUSING ACT, AS AMENDED, 12 U.S.C. 1748 ET SEQ., WHICH PROVIDES THAT THE MILITARY DEPARTMENTS MAY CONTRACT WITH BUILDERS FOR THE CONSTRUCTION OF FAMILY HOUSING. THE COST OF SUCH CONSTRUCTION IS FINANCED BY MORTGAGES INSURED BY THE FEDERAL HOUSING COMMISSIONER. SECTION 701 (C) OF THE HOUSING ACT OF 1959, PUBLIC LAW 86-372, 73 STAT. 682, 12 U.S.C. 1748B (3) (B) AMENDED TITLE VIII TO PROVIDE THAT " THE PROPERTY OR PROJECT MAY INCLUDE SUCH NONDWELLING FACILITIES AS THE COMMISSIONER DEEMS ADEQUATE TO SERVE THE OCCUPANTS.' THE GENERAL COUNSEL ASKS WHETHER, IN VIEW OF THIS AMENDMENT, CONTRACTS ON WHICH CONSTRUCTION IS VIRTUALLY COMPLETED NOW MAY BE AMENDED TO INCLUDE CONSTRUCTION OF HEALTH CENTERS OR OTHER COMMUNITY FACILITIES IN THOSE CASES WHERE TO DO SO WOULD NOT CAUSE THE AVERAGE LIMITATION OF $16,500 PER HOUSING UNIT TO BE EXCEEDED.

CONCERNING SUCH QUESTION THERE IS FOR CONSIDERATION THE PROVISIONS OF THE HOUSING AMENDMENTS ACT OF 1955, 42 U.S.C. 1594 (A), WHICH AUTHORIZE CONTRACTS FOR THESE MILITARY HOUSING PROJECTS TO BE ENTERED INTO ONLY ON THE BASIS OF THE SUBMISSION OF BIDS AFTER ADVERTISING AND OF 12 U.S.C. 1748B WHICH PROVIDES THAT THE MAXIMUM AMOUNT OF THE MORTGAGE MAY NOT EXCEED THE LESSER OF (1) THE COMMISSIONER'S ESTIMATED REPLACEMENT COST, (2) AN AVERAGE OF $16,500 PER FAMILY UNIT, OR (3) THE BID OF THE ELIGIBLE BIDDER.

THE ADDITION OF THE FACILITIES IN QUESTION REPRESENT NOT ONLY AN ENLARGEMENT OF THE SCOPE OF THE WORK UNDER THE PRESENT CONTRACTS BUT ALSO THE ADDITIONAL FACILITIES WOULD NOT BE SUCH INSEPARABLE PARTS OF THE WORK ORIGINALLY CONTRACTED FOR AS TO MAKE IT REASONABLY IMPOSSIBLE OF PERFORMANCE BY OTHER THAN THE ORIGINAL CONTRACTORS.

THE SITUATION HERE INVOLVED IS QUITE SIMILAR TO THAT CONSIDERED IN 30 COMP. GEN. 34. IN THAT CASE A CONTRACT HAD BEEN AWARDED FOR THE CONSTRUCTION OF A HOSPITAL AND IT WAS PROPOSED TO AMEND THE CONTRACT TO COVER THE CONSTRUCTION OF QUARTERS FOR THE NURSING STAFF AND HOSPITAL EMPLOYEES IN THE EVENT ADDITIONAL FUNDS WERE PROVIDED IN AN APPROPRIATION BILL PENDING AT THE TIME. ALTHOUGH BIDS TO CONSTRUCT SUCH QUARTERS HAD BEEN SOLICITED AT THE SAME TIME AS THOSE FOR CONSTRUCTION OF THE HOSPITAL, IT WAS HELD THAT THE PROPOSED MODIFICATION WOULD BE IN VIOLATION OF THE REQUIREMENTS OF SECTION 3709, REVISED STATUTES, 41 U.S.C. 5.

THE DECISION IN THAT CASE WAS BASED ON THE RULE STATED IN 5 COMP. GEN. 508, AS FOLLOWS:

* * * IN GENERAL, AN EXISTING CONTRACT MAY NOT BE EXPANDED SO AS TO INCLUDE ADDITIONAL WORK OF ANY CONSIDERABLE MAGNITUDE, WITHOUT COMPLIANCE WITH SECTION 3709, REVISED STATUTES, UNLESS IT CLEARLY APPEARS THAT THE ADDITIONAL WORK WAS NOT IN CONTEMPLATION AT THE TIME OF THE ORIGINAL CONTRACTING AND IS SUCH AS INSEPARABLE PART OF THE WORK ORIGINALLY CONTRACTED FOR AS TO RENDER IT REASONABLY IMPOSSIBLE OF PERFORMANCE BY OTHER THAN THE ORIGINAL CONTRACTOR. THE APPARENT PROBABILITY THAT THE ADDITIONAL WORK MAY BE DONE MORE CONVENIENTLY OR EVEN AT LESS EXPENSE BY THE ORIGINAL CONTRACTOR, BECAUSE OF BEING ENGAGED UPON THE ORIGINAL WORK, OR OTHERWISE, IS NOT CONTROLLING OF THE MATTER AS TO WHETHER THE PROVISIONS OF SECTION 3709 ARE FOR APPLICATION. * * *

IN VIEW OF THE CONCLUSION REACHED IN THE CASES REFERRED TO ABOVE, THERE APPEARS TO EXIST NO PROPER BASIS FOR MODIFYING THE CONTRACTS CONSIDERED HEREIN TO COVER THE CONSTRUCTION OF THE ADDITIONAL FACILITIES.