B-230027, Jul 30, 1990

B-230027, Jul 30, 1990

MISCELLANEOUS TOPICS - Federal Administrative - Legislative Matters - Government corporations - Federal procurement regulations/laws - Applicability MISCELLANEOUS TOPICS - Federal Administrative/Legislative Matters - Government corporations - Board members - Authority DIGEST: In response to the Chairman, House Committee on Government Operations, we conclude that the Pennsylvania Avenue Development Commission (PADC) is subject to the Federal Property Act and the Federal Acquisition Regulation. In addition, we are unaware of any court decision holding that the role of the Mayor of the District of Columbia, as one of 15 members of the PADC, is unconstitutional since the Mayor is not appointed by the President pursuant to Article II, section 2, clause 2, of the Constitution.

The Honorable John Conyers, Jr.

Chairman, Committee on Government

Operations

House of Representatives

Dear Mr. Chairman:

This is in response to your letter of June 6, 1990, requesting our legal opinion on various aspects of the competition for the construction of the International Culture and Trade Center (ICTC) conducted by the Pennsylvania Avenue Development Corporation (PADC).

Specifically, you ask (1) whether, for the purposes of this competition, PADC was subject to the Federal Property and Administrative Services Act and the Federal Acquisition Regulation (FAR), (2) whether the competition was conducted in accordance with the relevant laws and regulations, and (3) whether the vote cast by the Mayor of Washington, D.C., a PADC board member, to select a developer was valid under the Constitution. Our responses to these questions are set forth below. A lawsuit has been filed challenging the selection of the developer for the ICTC. Saratoga Development Corp. v. United States, No. 90-0474 (filed Mar. 1, 1990). Since it is our policy not to comment on matters pending in court, we can provide only limited information in response to your questions.

With regard to your first question, while we have no decisions on point, it appears to us that PADC is subject to the procurement statutes and regulations governing federal contracts insofar as the competition for selecting a developer for the ICTC is concerned. The Pennsylvania Avenue Development Corporation is a wholly owned government corporation, 31 U.S.C. Sec. 9101(3)(H) and 40 U.S.C. Sec. 872 (1988), and thus is subject to coverage under the Federal Property and Administrative Services Act of 1949, as amended, which includes wholly owned government corporations within its coverage. 40 U.S.C. Sec. 72(a) (1988). Nothing in the legislation establishing PADC appears to exempt it from coverage under the Property Act nor does the Property Act itself provide PADC with an exemption. PADC is merely given the power to enter into and perform such contracts as may be deemed necessary or appropriate to the conduct of activities authorized in the legislation establishing PADC. 40 U.S.C. Sec. 875(7) (1988).

Similarly, the Office of Federal Procurement Policy Act (OFPPA), 41 U.S.C. Sec. 401-424 (1988), under which the Federal Acquisition Regulation (FAR) is promulgated, specifically includes within its coverage wholly owned government corporations. 41 U.S.C. Sec. 403(1)(D) (1988). Thus, PADC, as a wholly owned government corporation, is subject to the FAR because PADC is subject to the OFPPA.

The development of the International Culture and Trade Center (ICTC) was authorized by the Federal Triangle Development Act of 1987, Pub. L. 100- 113, 101 Stat. 735-747, codified at 40 U.S.C. Sec. 1101-1109 (1988). This Act, which gave the PADC the authority to select a developer for the ICTC, states with regard to the selection process that "the Corporation in accordance with its policies and procedures for a development competition, shall select a person to develop the Federal Triangle property." U.S.C. Sec. 1104(a)(1) (1988). The Act provides further that the PADC shall "conduct a competition for selection of a person to develop the Federal Triangle property. Such competition shall be conducted in accordance with the existing policies and procedures of the corporation for a development competition." 40 U.S.C. Sec. 1104(a)(3) (1988). According to PADC, these provisions exempt the ICTC development competition from the Property Act and FAR, although PADC also submits that the competition met all Property Act and FAR requirements.

In our opinion, the above-quoted provisions of the Federal Triangle Development Act do not exempt the ICTC competition from the Property Act and FAR requirements that ordinarily apply to PADC procurements. Nothing in the statutory language expresses or implies such an exemption; nor does the legislative history suggest that one was intended. The legislative history explains the above provisions by stating that "the Corporation has already handled numerous design-build competitions, and has the policies, procedures, staff and consultants necessary to conduct a competition among developers." S. Rep. No. 100 139, 100th Cong., 1st Sess. 10-11 (1987). The language and legislative history of the Federal Triangle Development Act indicate that the ICTC competition was to be conducted in accordance with PADC's normal procedures. As noted previously, PADC is generally subject to the Property Act and FAR; thus, its normal procedures should be consistent with the Property Act and FAR. Indeed, PADC states that it did comply with these requirements.

Your second question relates to whether the PADC improperly deleted two source selection criteria without notifying offerors and receiving best and final offers prior to voting to select a developer.

The general rule is that where the government relaxes its requirements, either before or after receipt of proposals, it is required to issue a written amendment to afford all offerors an opportunity to respond to the revised requirements. AT&T Communications, 65 Comp.Gen. 412 (1986), 86-1 CPD Para. 247. However, we have held that since various other factors may be involved and the selection of an awardee may have been the same even if the agency had properly amended the solicitation, the agency's failure to amend and request best and final offers does not necessarily mean the competition must be set aside. AT&T Communications, 65 Comp.Gen. 412, supra; BRC Associates, Inc., B-237156, Feb. 2, 1990, 90-1 CPD Para. 145; Development Associates, Inc., B-233221, Feb. 10, 1989, 89-1 CPD Para. 140.

With respect to the ICTC competition, PADC denies charges that it deleted one of the source selection criteria relating to affirmative action. While acknowledging the deletion of criteria relating to financing, PADC states that it had reserved the option to do so, invited all developers to address this issue, and received no challenges to its authority to delete the financing criteria. These matters are the subject of factual and legal disputes that are part of the pending litigation.

Your final question concerns the constitutionality of the vote of the mayor of the District of Columbia cast in selecting a developer in this competition. As you may know, it is our longstanding policy not to rule upon the constitutionality of laws enacted by the Congress. However, in the interest of being responsive to your request, we offer the following comments on this question.

The mayor of the District of Columbia is one of 15 members of the Board of Directors of the Pennsylvania Avenue Development Corporation, who are vested with the powers and management of the PADC. 40 U.S.C. Sec. 872(c) (1988). The other Directors include four Cabinet officials, the Administrator of General Services, the chairman of the District of Columbia City Council, and eight other persons appointed by the President "from private life."

As you have pointed out, President Reagan, at the time he signed the Federal Triangle Development Act, questioned the authority of the mayor under this Act to vote as a member of the PADC "on any Commission matter that would bind the United States" since only officers of the United States, appointed pursuant to article II, section 2, clause 2 of the Constitution, are empowered to exercise significant authority under the laws of the United States.

The appointments clause has been discussed at length in Buckley v. Valeo, 424 U.S. 1 (1976), and subsequent cases. For example, in Buckley the court held that "any appointee exercising significant authority pursuant to the laws of the United States is an Officer of the United States, and must, therefore, be appointed in the manner prescribed by" article II, section 2, clause 2 of the Constitution. Id. at 126. However, we are not aware of any decision addressing the role of the mayor under the PADC statute, and we do not know whether a court would conclude that the mayor's role involves the exercise of significant federal authority. note that in Techworld Development v. D.C. Preservation League, 648 F. Supp. 106 (D.D.C. 1986), the court addressed the appointments clause application to District of Columbia city council and found that its action in closing a street was not the exercise of significant federal authority which may only be exercised by one appointed pursuant to the appointments clause.

We trust the above information is of assistance to you. As arranged with your office, we plan no further distribution of this opinion until 5 days after the date of this letter. We will then make copies available to others upon request.