B-143735, OCT. 11, 1960

B-143735, OCT. 11, 1960

TO MR. PAUL RICOTTONE:

REFERENCE IS MADE TO YOUR LETTERS OF AUGUST 1 AND SEPTEMBER 6, 1960, PROTESTING THE FAILURE OF GENERAL SERVICES ADMINISTRATION TO ADVERTISE FOR BIDS PRIOR TO RENEWAL OF THE LEASES FOR THE QUARTERS OCCUPIED OVER A PERIOD OF YEARS BY SELECTIVE SERVICE BOARD NO. 25 AT 107 WEST 7TH STREET, WALSENBURG, COLORADO.

THE FACTS AS REPORTED BY THE ADMINISTRATOR OF GENERAL SERVICES ARE AS FOLLOWS:

LEASE NO. WA6PB-51785/DN) WAS ENTERED INTO AUGUST 26, 1948, FOR ONE ROOM CONTAINING APPROXIMATELY 384 SQUARE FEET FOR A TERM BEGINNING SEPTEMBER 1, 1948, AND ENDING JUNE 30, 1949, AT A MONTHLY RENTAL OF $30, WITH AN ANNUAL RENEWAL OPTION IN FAVOR OF THE GOVERNMENT AT THE SAME RENTAL NOT TO EXTEND THE OCCUPANCY BEYOND JUNE 30, 1950. STANDARD FORM 1036 ATTACHED TO THE LEASE SHOWS THAT THE LEASE WAS AWARDED TO THE LOWEST ACCEPTABLE BIDDER FOLLOWING AN EXHAUSTIVE PERSONAL CANVASS. THE LEASE WAS AMENDED BY SUPPLEMENTAL AGREEMENT NO. 1 OF APRIL 11, 1949, TO PROVIDE FOR THE FURNISHING OF ADDITIONAL FACILITIES AND SERVICES BY THE LESSOR AND THE RENT WAS INCREASED TO $42.50 PER MONTH. THE LEASE, AS AMENDED, WAS RENEWED FOR THE FISCAL YEAR BEGINNING JULY 1, 1949, BUT IT WAS CANCELLED EFFECTIVE AS OF THE CLOSE OF BUSINESS AUGUST 31, 1949, BECAUSE RENT FREE SPACE WAS OBTAINED IN THE CHAMBER OF COMMERCE BUILDING UNDER LEASE NO. WA69PB-124.

LEASE NO. WA69PB-124 WAS TERMINATED AUGUST 14, 1950, WHEN LOCAL BOARD NO. 25 WAS MOVED INTO RENT FREE QUARTERS IN THE COUNTY COURTHOUSE UNDER LEASE NO. GS-08B-136 WHICH WAS TERMINATED AT THE REQUEST OF THE COUNTY COMMISSIONERS, EFFECTIVE MAY 31, 1951.

LEASE NO. GS-08B-218 WAS ENTERED INTO MAY 31, 1951, AS A RESULT OF ADVERTISING BY CIRCULAR LETTERS SENT TO SIX DEALERS. FOUR BIDS WERE RECEIVED AND AWARD WAS MADE TO THE OWNER OF THE PREMISES AT 107 WEST 7TH STREET AS LOW BIDDER FOR AN INITIAL TERM FROM JUNE 1, 1951, TO JUNE 30, 1952, AT A MONTHLY RENTAL OF $42, WITH ANNUAL RENEWAL OPTIONS AT THE SAME RENTAL THROUGH JUNE 30, 1954. THIS LEASE WAS

(THERE IS MISSING MATERIAL AT THIS POINT.) PROVIDE FOR THE FURNISHING OF JANITOR SERVICE BY THE LESSOR AT AN INCREASE IN THE RENTAL OF $8 PER MONTH. THE TWO ANNUAL RENEWAL OPTIONS WERE EXERCISED.

LEASE NO. GS-08B-1116 WAS ENTERED INTO MAY 25, 1954, FOR THE TERM JULY 1, 1954, TO JUNE 30, 1956, AT A MONTHLY RENTAL OF $50 WITHOUT FORMAL ADVERTISING. THERE WAS NO RENEWAL OPTION IN THIS LEASE.

LEASE NO. GS-08B-1202 WAS ENTERED INTO MAY 31, 1956, FOR THE TERM JULY 1, 1956, TO AUGUST 31, 1957, AT A MONTHLY RENTAL OF $50 AND THE RENEWAL OPTION EXTENDING THE TERM THROUGH AUGUST 31, 1958, WAS EXERCISED.

THE CURRENT LEASE, GS-08B-2316, WAS ENTERED INTO JULY 30, 1958, FOR THE TERM SEPTEMBER 1, 1958, TO AUGUST 31, 1959, AT A MONTHLY RENTAL OF $50 AND THE RENEWAL OPTIONS EXTENDING THE TERM THROUGH AUGUST 31, 1961, WERE EXERCISED.

WHILE YOU ARE NOT ENTITLED TO A DECISION AS TO THE LEGALITY OF THE LEASES OR THE RENEWALS THEREOF IT MAY BE STATED FOR YOUR INFORMATION THAT IT HAS BEEN HELD BY THIS OFFICE THAT WHERE ADVERTISING IS REQUIRED BY LAW IT IS NOT COMPATIBLE WITH SUCH REQUIREMENT TO EFFECT NEW CONTRACTS BY RENEWALS UNDER OPTION PROVISIONS WITHOUT OBTAINING COMPETITION FOR THE RENEWAL PERIODS. 20 COMP. GEN. 572. IT IS RECOGNIZED, HOWEVER, THAT LEASES DIFFER FROM ORDINARY CONTRACTS FOR SUPPLIES, SERVICES, ETC., IN THAT SOME OF THE PRINCIPAL FACTORS FOR CONSIDERATION MAY BE THE LOCATION, CONDITION OF THE PREMISES, AND GENERAL ADAPTABILITY FOR THE USE CONTEMPLATED. THESE ELEMENTS ARE PROPERLY FOR CONSIDERATION IN ADDITION TO PRICE.

THE LAST FOUR LEASES HAVE BEEN FOR APPROXIMATELY 616 NET SQUARE FEET OF SPACE ON THE GROUND FLOOR OF THE VALENCIA BUILDING LOCATED AT 7TH AND MAIN STREETS, WALSENBURG, COLORADO. IN THE STATEMENT AND CERTIFICATE OF AWARDS ATTACHED TO EACH OF THE LAST THREE LEASES IT IS STATED THAT THE LEASE WAS ENTERED INTO WITHOUT ADVERTISING, UNDER AUTHORITY OF SECTION 302 (C) (3) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED, 41 U.S.C. 252 (C) (3). AT THE SAME TIME THESE LEASES WERE ENTERED INTO THIS STATUTORY PROVISION AUTHORIZED THE NEGOTIATION OF CONTRACTS WITHOUT ADVERTISING WHERE THE AGGREGATE AMOUNT DID NOT EXCEED $1,000.

AS TO LEASE NO. GS-08B-1116, THE ONLY ONE WHERE THE AGGREGATE RENTAL EXCEEDED THE STATUTORY LIMITATION OF $1,000, THE ADMINISTRATOR OF GENERAL SERVICES CONCEDES THAT THE NEGOTIATION OF THIS LEASE AT AN AGGREGATE RENTAL OF $1,200 WAS NOT AUTHORIZED BY SECTION 302 (C) (3) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED. EXPLAINS, HOWEVER, THAT THE REGIONAL OFFICE APPARENTLY CONSIDERED THAT THE LEASE COULD HAVE BEEN NEGOTIATED UNDER THIS STATUTORY PROVISION SINCE THE ANNUAL RENTAL WAS LESS THAN $1,000 AND IT IS INDICATED THAT STEPS HAVE BEEN TAKEN TO CORRECT THIS MISINTERPRETATION. ACCORDINGLY, SINCE THE TERM OF THIS LEASE EXPIRED OVER FOUR YEARS AGO NO USEFUL PURPOSE WOULD BE SERVED IN FURTHER QUESTIONING THE ACTION TAKEN IN THIS INSTANCE. MOREOVER, THE ADMINISTRATOR REPORTS THAT PRIOR TO NEGOTIATION OF ALL OF THE INVOLVED LEASES OR THE EXERCISE OF THE RENEWAL OPTIONS THEREUNDER APPROPRIATE CANVASSES WERE MADE FOR THE PURPOSE OF DETERMINING WHETHER CONTINUED OCCUPANCY OF THE PREMISES WOULD BE IN THE BEST INTERESTS OF THE UNITED STATES. SUCH PROCEDURE IN INSTANCES AS HERE INVOLVED HAS BEEN ACCEPTED BY OUR OFFICE AS MEETING THE ADVERTISING REQUIREMENTS WHERE THE SURVEY INCLUDES ALL SUITABLE AVAILABLE QUARTERS AND THE LEASE OR RENEWAL IS SUPPORTED BY A STATEMENT OF THE CONTRACTING OFFICER OR OTHER ADMINISTRATIVE OFFICIAL THAT OCCUPANCY OF THE PREMISES SELECTED WILL BE IN THE BEST INTERESTS OF THE UNITED STATES. 16 COMP. GEN. 931.

IN CONCLUSION THE ADMINISTRATOR REPORTS THAT SPACE OTHER THAN THAT PRESENTLY OCCUPIED IN WALSENBURG WHICH HAS BEEN AVAILABLE IS SUBSTANDARD AND OLD; THAT IT DOES NOT MEET THE NEEDS OF THE AGENCY; AND THAT IT IS BELIEVED THAT THE BEST INTERESTS OF THE GOVERNMENT HAVE BEEN SERVED WITH RESPECT TO OCCUPANCY OF THE INVOLVED QUARTERS.

FOR THE FOREGOING REASONS WE WOULD NOT BE JUSTIFIED IN OBJECTING TO THE EXECUTION OF THE INVOLVED LEASES OR THE RENEWALS THEREOF.