B-7067, NOVEMBER 25, 1939, 19 COMP. GEN. 523

B-7067, NOVEMBER 25, 1939, 19 COMP. GEN. 523

CONTRACTS FOR MANAGEMENT OF PROPERTY ACQUIRED BY FEDERAL HOUSING ADMINISTRATION - ADVERTISING REQUIREMENTS AND PROPRIETY OF VARIOUS PROVISIONS THE "PERSONAL SERVICES" CONTRACTS EXCEPTED FROM THE ADVERTISING FOR BIDS REQUIREMENTS OF SECTION 3709, REVISED STATUTES, EMBRACE CONTRACTS "BY WHICH THE INDIVIDUAL CONTRACTED WITH RENDERS HIS PERSONAL SERVICE TO THE GOVERNMENT THROUGH ITS AGENTS, THUS HIMSELF BECOMING THE SERVANT OF THE GOVERNMENT," AND NOT SUCH AS EMBRACE "PERSONAL SERVICES WHICH HE SHALL EMPLOY.' CONTRACTS FOR THE MANAGEMENT AND OPERATION OF PROPERTY ACQUIRED BY THE FEDERAL HOUSING ADMINISTRATION BY REASON OF DEFAULT UNDER MORTGAGES INSURED BY IT, AND WHICH INVOLVE PERSONAL SERVICES OF EMPLOYEES OF THE CONTRACTOR, ARE NOT CONTRACTS FOR PERSONAL SERVICES SUCH AS ARE EXCEPTED FROM THE ADVERTISING FOR BIDS REQUIREMENTS OF SECTION 3709, REVISED STATUTES. WHERE IT IS ADMINISTRATIVELY DETERMINED, IN CONNECTION WITH PROPERTY ACQUIRED BY THE FEDERAL HOUSING ADMINISTRATION BY REASON OF DEFAULT UNDER MORTGAGES INSURED BY IT, THAT, UNDER THE NATIONAL HOUSING ACT, AS AMENDED, A MANAGEMENT CONTRACT WOULD BE IN THE BEST INTEREST OF THE UNITED STATES, IT MAY BE CONSIDERED THAT THERE HAS BEEN COMPLIANCE WITH THE ADVERTISING FOR BIDS REQUIREMENTS OF SECTION 3709, REVISED STATUTES, IF BIDS ARE ASKED ONLY OF THOSE FOUND TO BE RESPONSIBLE, COMPETENT, CAPABLE, ADEQUATELY EQUIPPED AND PREPARED TO RENDER SUCH SERVICES TO THE ADMINISTRATION SATISFACTORILY IN THE CITY OR TOWN WHERE SUCH PROPERTY MAY BE LOCATED, THE CONTRACT TO BE AWARDED TO THE LOWEST OF SUCH SELECTED BIDDERS. IN VIEW OF THE PROVISIONS OF SECTION 207 (1) OF THE NATIONAL HOUSING ACT, AS AMENDED, CONTRACTS FOR THE MANAGEMENT AND OPERATION OF PROPERTY ACQUIRED BY THE FEDERAL HOUSING ADMINISTRATION BY REASON OF DEFAULT UNDER MORTGAGES INSURED BY IT PROPERLY MAY CONTAIN ANY TERMS OR PROVISIONS THAT WOULD AID IN ACCOMPLISHING THE EFFICIENT MANAGEMENT OF SUCH PROPERTY IN THE INTEREST OF THE UNITED STATES, WHETHER OR NOT CUSTOMARILY CONTAINED IN SUCH CONTRACTS RELATIVE TO PRIVATE PROPERTIES, PROVIDED THE TERMS OF SAID CONTRACTS DO NOT CONTRAVENE ANY PROVISION OF LAW NOT EXCEPTED BY THE PROVISIONS OF THE SAID ACT. SINCE SECTION 207 (1) OF THE NATIONAL HOUSING ACT, AS AMENDED, DISPENSES WITH THE ADVERTISING REQUIREMENTS OF SECTION 3709, REVISED STATUTES, IN THE PURCHASE OF SUPPLIES OR SERVICES ON ACCOUNT OF PROPERTY ACQUIRED UNDER SAID SECTION 207 WHEN THE AMOUNT INVOLVED DOES NOT EXCEED $1,000, CONTRACTS FOR THE MANAGEMENT AND OPERATION OF PROPERTY ACQUIRED BY THE FEDERAL HOUSING ADMINISTRATION BY REASON OF DEFAULT UNDER MORTGAGES INSURED BY IT PROPERLY MAY PROVIDE THAT THE CONTRACTOR'S AUTHORITY TO MAKE REPAIRS OR PURCHASES WOULD BE LIMITED TO $150 FOR ANY ONE ITEM; THAT IT MIGHT MAKE REPAIRS OR PURCHASES OF ANY ITEM OVER $150 BUT NOT EXCEEDING $1,000 IF IT OBTAINED THREE WRITTEN BIDS AND SUBMITTED THEM IN SUPPORT OF ITS MONTHLY ACCOUNTING; AND THAT ANY ITEM OVER $1,000 WOULD BE LET DIRECTLY BY THE ADMINISTRATOR SUBJECT TO THE PROVISIONS OF SECTION 3709, REVISED STATUTES.

COMPTROLLER GENERAL BROWN TO THE FEDERAL HOUSING ADMINISTRATOR, NOVEMBER 25, 1939:

THERE HAS BEEN RECEIVED YOUR LETTER OF NOVEMBER 8, 1939, AS FOLLOWS:

RE: PROJECT NO. 1085-00001

MANHASSETT VILLAGE CORPORATION

AND

PROJECT NO. 112-00002

STEVENS PARK.

UNDER SECTION 207 OF THE NATIONAL HOUSING ACT, THE FEDERAL HOUSING ADMINISTRATOR INSURES MORTGAGES GIVEN BY PRIVATE CORPORATIONS WHICH ARE REGULATED OR RESTRICTED BY THE ADMINISTRATOR AS TO RENTS, CHARGES, CAPITAL STRUCTURE, RATE OF RETURN, AND METHODS OF OPERATION ( SEC. 207 (B) (2) (. SUCH MORTGAGES COVER RENTAL PROPERTIES OF CONSIDERABLE SIZE, SINCE UNDER THE TERMS OF THE ACT, THE MORTGAGE MAY BE AS HIGH AS $5,000,000.00. THE LARGEST MORTGAGE INSURED TO DATE INVOLVES $3,000,000.00 AND PROVIDES HOUSING FOR 1,100 FAMILIES.

TWO CASES ARE INVOLVED IN THE PRESENT QUESTION, ONE INVOLVES A MORTGAGE OF $1,600,000.00 AND CONSISTS OF 354 FAMILY UNITS; THE OTHER A MORTGAGE OF $405,000.00 AND 96 FAMILY UNITS. THE BORROWER IN EACH CASE HAS HAD SOME DIFFICULTY IN OBTAINING OCCUPANCY AND WE ANTICIPATE THE POSSIBILITY THAT IN THE VERY NEAR FUTURE IT MAY BE UNABLE TO MEET MORTGAGE CHARGES AND THE MORTGAGEE MAY THEREFORE BE COMPELLED TO COLLECT UPON THE ADMINISTRATOR'S CONTRACT OF MORTGAGE INSURANCE, EITHER BY ASSIGNING THE MORTGAGE TO THE ADMINISTRATOR OR FORECLOSING AND CONVEYING THE PROPERTY TO THE ADMINISTRATOR AS PROVIDED BY SECTION 207 (G) OF THE ACT. IN SUCH EVENT, THE ADMINISTRATOR WOULD BE UNDER THE NECESSITY OF PROVIDING FOR THE MANAGEMENT AND OPERATION OF THE PROPERTY IN ORDER TO PRODUCE THE BEST POSSIBLE INCOME THEREFROM AT THE LEAST POSSIBLE OPERATING EXPENSE.

SECTION 207 (1) OF THE ACT, AS AMENDED JULY 1, 1939, PROVIDES AS FOLLOWS:

"NOTWITHSTANDING ANY OTHER PROVISIONS OF LAW RELATING TO THE ACQUISITION, HANDLING, OR DISPOSAL OF REAL AND OTHER PROPERTY BY THE UNITED STATES, THE ADMINISTRATOR SHALL ALSO HAVE POWER, FOR THE PROTECTION OF THE INTERESTS OF THE HOUSING FUND, TO PAY OUT OF THE HOUSING FUND ALL EXPENSES OR CHARGES IN CONNECTION WITH, AND TO DEAL WITH, COMPLETE, RECONSTRUCT, RENT, RENOVATE, MODERNIZE, INSURE, MAKE CONTRACTS FOR THE MANAGEMENT OF, OR ESTABLISH SUITABLE AGENCIES FOR THE MANAGEMENT OF, OR SELL FOR CASH OR CREDIT OR LEASE IN HIS DISCRETION, ANY PROPERTY ACQUIRED BY HIM UNDER THIS SECTION; AND NOTWITHSTANDING ANY OTHER PROVISION OF LAW, THE ADMINISTRATOR SHALL ALSO HAVE POWER TO PURSUE TO FINAL COLLECTION BY WAY OF COMPROMISE OR OTHERWISE ALL CLAIMS ASSIGNED AND TRANSFERRED TO HIM IN CONNECTION WITH THE ASSIGNMENT, TRANSFER, AND DELIVERY PROVIDED FOR IN THIS SECTION, AND AT ANY TIME, UPON DEFAULT, TO FORECLOSE ON ANY PROPERTY SECURED BY ANY MORTGAGE ASSIGNED AND TRANSFERRED TO OR HELD BY HIM: PROVIDED, THAT SECTION 3709 OF THE REVISED STATUTES SHALL NOT BE CONSTRUED TO APPLY TO ANY CONTRACT FOR HAZARD INSURANCE, OR TO ANY PURCHASE OR CONTRACT FOR SERVICES OR SUPPLIES ON ACCOUNT OF SUCH PROPERTY IF THE AMOUNT THEREOF DOES NOT EXCEED $1,000.00.'

IN PRIVATE BUSINESS,"CONTRACTS FOR THE MANAGEMENT OF " PROPERTY OF THIS TYPE PROVIDE THAT THE MANAGING AGENT, IN RETURN FOR STATED COMPENSATION WHICH IS GENERALLY A PERCENTAGE OF GROSS COLLECTIONS, SHALL COLLECT RENTS, HIRE AND DISCHARGE EMPLOYEES, EFFECT PURCHASES OF EQUIPMENT AND MAKE REPAIRS (WHERE THE SAME DO NOT EXCEED A STATED AMOUNT) AT ITS DISCRETION, AND MAY DEDUCT ITS COMPENSATION, SALARIES OF EMPLOYEES, AND COSTS OF EQUIPMENT AND REPAIRS FROM ITS COLLECTIONS, REMITTING THE NET RENTS TO THE OWNER AT A STATED TIME FOLLOWING THE CLOSE OF EACH MONTH, AND BILLING THE OWNER FOR ANY DEFICIENCY IN THE SOMEWHAT UNLIKELY EVENT THAT INCOME DOES NOT EQUAL EXPENSE. THERE IS ATTACHED HERETO, A BLANK FORM OF MANAGEMENT CONTRACT, WHICH IS THE BASIC FORM APPROVED BY US FOR USE BY OWNERS OF THESE PROJECTS WHILE THE PROJECT IS OPERATED AS A PRIVATE BUSINESS, I.E., PRIOR TO DEFAULT. THIS FORM IS, OF COURSE, SUBSTANTIALLY THE SAME AS THE MANAGEMENT CONTRACT GENERALLY USED BY CAREFUL AND PRUDENT OWNERS OF REAL PROPERTY.

THE QUESTIONS SUBMITTED FOR YOUR CONSIDERATION ARE:

1. CAN THE ADMINISTRATOR, WHEN AND IF THE PROJECT IS TRANSFERRED TO HIM PURSUANT TO THE MORTGAGE INSURANCE CONTRACT, RETAIN AS MANAGING AGENT, WITHOUT RESORTING TO PUBLIC BIDDING UNDER SECTION 3709 OF THE REVISED STATUTES, AN INDIVIDUAL OR A FIRM EXPERIENCED IN THIS TYPE OF OPERATION?

IT SEEMS CLEAR THAT THE CONTRACT UNDER DISCUSSION, ALTHOUGH PERHAPS NOT A CONTRACT FOR PERSONAL SERVICES WITHIN THE MEANING OF SECTION 3709 OF THE REVISED STATUTES, INVOLVES TO A HIGH DEGREE THE ELEMENT OF PERSONAL QUALIFICATIONS AND IS NOT OF SUCH A NATURE AS TO BE SUBJECT TO RIGID SPECIFICATIONS. FURTHER, THERE EXISTS IN THE COMMUNITY IN QUESTION (AND IN PRACTICALLY EVERY OTHER COMMUNITY IN WHICH THESE PROJECTS ARE OR WILL BE LOCATED) A REAL-ESTATE BOARD OR OTHER ORGANIZATION OF REAL-ESTATE MEN WHICH FIXES STANDARD FEES WHICH MAY BE CHARGED BY MANAGING AGENTS. MAXIMUM IS, THEREFORE, PROVIDED WHICH WOULD LIMIT THE ADMINISTRATOR AND MAKE CERTAIN THAT THE INTERESTS OF THE GOVERNMENT ARE PROTECTED BY SETTING AN UPPER LIMIT TO COMPENSATION THAT COULD BE PAID IN ANY CASE. IT IS THOUGHT, HOWEVER, THAT RETAINING AN AGENT BY NEGOTIATION WILL RESULT IN SUBSTANTIALLY LOWER FEES THAN THE MAXIMUM DESCRIBED ABOVE. IT IS PROPOSED, THEREFORE, TO OBTAIN INFORMAL WRITTEN PROPOSALS FROM THREE MANAGEMENT COMPANIES THOUGHT BY THE ADMINISTRATOR TO BE QUALIFIED BY EXPERIENCE AND ABILITY TO OPERATE A PROJECT OF THIS TYPE AND TO SELECT THE MOST FAVORABLE PROPOSAL. IT MAY BE FOUND, HOWEVER, THAT THREE SUCH COMPANIES CANNOT BE FOUND, IN WHICH EVENT THE BEST SELECTION POSSIBLE UNDER THE CIRCUMSTANCES WILL BE MADE AND SUPPORTING EXPLANATORY DATA OBTAINED.

2. CAN THE ADMINISTRATOR ENTER INTO A CONTRACT FOR THE MANAGEMENT OF THE PROJECT CONTAINING TERMS PARALLELING THOSE CUSTOMARILY CONTAINED IN MANAGEMENT CONTRACTS FOR PROPERTIES OF THIS TYPE IN PRIVATE BUSINESS?

THE FORM OF CONTRACT ATTACHED HERETO AND DESCRIBED ABOVE WOULD BE APPROPRIATELY AMENDED SO THAT (A) THE AUTHORITY OF THE AGENT TO MAKE REPAIRS OR PURCHASES WOULD BE LIMITED TO $150.00 FOR ANY ONE ITEM; (B) THE AGENT WOULD BE PERMITTED TO MAKE REPAIRS OR PURCHASES OF ANY ITEM OVER $150.00 BUT NOT EXCEEDING $1,000.00 PROVIDED IT OBTAINED THREE WRITTEN BIDS AND SUBMITTED THE SAME IN SUPPORT OF ITS MONTHLY ACCOUNTING, AND (C), ANY ITEM OVER $1,000.00 WOULD BE LET DIRECTLY BY THE ADMINISTRATOR SUBJECT TO THE PROVISIONS OF SECTION 3709 OF THE REVISED STATUTES. THE AGENT WOULD BE AUTHORIZED TO HIRE AND DISCHARGE ALL EMPLOYEES AND CHARGE THEIR SALARIES AGAINST COLLECTIONS, PROVIDED, HOWEVER, THAT THE CONTEMPLATED NUMBER OF EMPLOYEES WOULD BE ENUMERATED IN A SCHEDULE WHICH COULD NOT BE EXCEEDED WITHOUT THE ADMINISTRATOR'S WRITTEN CONSENT.

THE ONLY OTHER PLAUSIBLE MANNER IN WHICH THIS PROJECT COULD BE OPERATED WOULD BE FOR THE ADMINISTRATOR TO INSTALL A MANAGER AND A COMPLETE STAFF OF EMPLOYEES WHO WOULD ALL BE EMPLOYEES OF THE FEDERAL HOUSING ADMINISTRATION.

IT IS THE CONSIDERED OPINION OF THE REPRESENTATIVES OF THIS ADMINISTRATION CHARGED WITH THE DUTY OF SUPERVISING THESE PROJECTS THAT SUCH TYPE OF MANAGEMENT WOULD NOT BE AT ALL PRACTICAL. THE PRIMARY DUTY OF THE MANAGEMENT IS TO OBTAIN OCCUPANCY AND IN THIS RESPECT LOCAL MANAGEMENT COMPANIES OFFER THE ADVANTAGE OF THEIR PECULIAR KNOWLEDGE OF LOCAL PREFERENCES AND THEIR ACCESS TO SOURCES OF NEW TENANTS. FURTHER, IT WOULD SEEM OBVIOUS THAT IT IS NOT FEASIBLE TO HIRE THE NECESSARY EMPLOYEES UNDER THE VARIOUS REGULATIONS APPLYING TO GOVERNMENT EMPLOYEES, SUCH AS CLASSIFICATION, VACATION AND SICK LEAVE, PAYMENTS SEMI-MONTHLY AND OTHER INCIDENTS OF GOVERNMENT EMPLOYMENT TO WHICH THE TYPE OF EMPLOYEES NECESSARY ARE NOT AT ALL ACCUSTOMED.

IT SEEMS OBVIOUS MOREOVER THAT IF A MANAGEMENT CONCERN IS EMPLOYED UNDER CONTRACT, IT MUST HAVE COMPLETE JURISDICTION OVER ALL EMPLOYEES OF THE PROJECT IN ORDER TO PERMIT EFFICIENT OPERATION.

WITH REFERENCE TO YOUR FIRST QUESTION, IT IS TO BE OBSERVED THAT SECTION 3709, REVISED STATUTES, IS BY ITS TERMS SPECIFICALLY MADE APPLICABLE TO CONTRACTS FOR SERVICES AS WELL AS CONTRACTS FOR SUPPLIES, EXCEPTING ONLY CONTRACTS FOR PERSONAL SERVICES. WHILE A CONTRACT SUCH AS THE SUBMISSION SUGGESTS WOULD INVOLVE TO A HIGH DEGREE THE ELEMENTS OF PERSONAL QUALIFICATIONS, YET, AS SUGGESTED, IT COULD NOT BE REGARDED AS A CONTRACT FOR PERSONAL SERVICES WITHIN THE MEANING OF SAID SECTION 3709, REVISED STATUTES. A CONTRACT FOR PERSONAL SERVICES HAS BEEN DEFINED AS "ONE BY WHICH THE INDIVIDUAL CONTRACTED WITH RENDERS HIS PERSONAL SERVICE TO THE GOVERNMENT THROUGH ITS AGENTS, THUS HIMSELF BECOMING THE SERVANT OF THE GOVERNMENT.' 15 OP. ATTY. GEN. 235, 243. AND, AGAIN SPEAKING WITH REFERENCE TO WHAT CONSTITUTES PERSONAL SERVICES WITHIN THE MEANING OF SECTION 3709, REVISED STATUTES, IT WAS SAID, BY THE THEN ATTORNEY GENERAL IN ANOTHER OPINION (15 OP. ATTY. GEN. 546) THAT "MOREOVER, I UNDERSTAND THE PERSONAL SERVICE MENTIONED IN THAT SECTION TO BE PERSONAL SERVICE WHICH HE SHALL EMPLOY.' THE "PERSONAL SERVICES" REFERRED TO IN THE STATUTE WOULD SEEM TO RELATE PRIMARILY TO SERVICES THAT ARE PERFORMED PERSONALLY BY THE CONTRACTOR AND NOT SERVICES PERFORMED BY OTHERS EMPLOYED BY A CONTRACTOR OR EVEN BY SUCH OTHERS AND THE CONTRACTOR JOINTLY.

A CONTRACT OF THE KIND HERE UNDER CONSIDERATION WOULD MOST LIKELY INVOLVE IN ITS PERFORMANCE THE SERVICES TO SOME EXTENT OF EMPLOYEES OF THE CONTRACTOR, EVEN IF THE CONTRACT BE WITH AN INDIVIDUAL OR A PARTNERSHIP--- IN FACT, IT APPEARS TO BE SO RECOGNIZED IN THE DISCUSSION IN YOUR LETTER-- - AND IF THE CONTRACTOR WERE A CORPORATION THE SERVICES WOULD OF NECESSITY BE REQUIRED TO BE PERFORMED BY OFFICERS OR EMPLOYEES OF THE CORPORATION. IT FOLLOWS, THEREFORE, THAT SUCH A CONTRACT COULD NOT BE REGARDED AS A CONTRACT FOR PERSONAL SERVICES WITHIN THE MEANING OF SECTION 3709, REVISED STATUTES. ACCORDINGLY, THE PROVISIONS OF SAID SECTION 3709 ARE FOR APPLICATION IN A CASE SUCH AS HERE PRESENTED, UNLESS, WHICH PRESUMABLY IS UNLIKELY, THE SERVICES WOULD NOT EXCEED $1,000 IN AMOUNT, IN WHICH EVENT THE PROVISO CONTAINED IN SECTION 207 (1), QUOTED IN YOUR LETTER, DISPENSING WITH THE REQUIREMENTS OF SECTION 3709, REVISED STATUTES, IN THE PURCHASE OF SUPPLIES OR SERVICES ON ACCOUNT OF PROPERTY ACQUIRED UNDER SAID SECTION 207 WHERE THE AMOUNT OF SUCH SERVICES OR SUPPLIES DOES NOT EXCEED $1,000, WOULD RENDER SUCH COMPLIANCE UNNECESSARY.

HOWEVER, IT IS RECOGNIZED THAT IN SUCH MATTERS, IF HANDLED BY MEANS OF MANAGEMENT CONTRACTS, THE INTERESTS OF THE GOVERNMENT MAY REQUIRE THE SERVICES OF AN EFFICIENT AND RESPONSIBLE CONTRACTOR, AND THAT IT WOULD NOT BE TO THE GOVERNMENT'S INTERESTS TO ENTRUST SUCH CONTRACTS TO INDIVIDUALS OR CONCERNS LACKING EXPERIENCE, FACILITIES, OR RESPONSIBILITY. ACCORDINGLY IN A CASE WHERE IT IS ADMINISTRATIVELY DETERMINED THAT, UNDER THE STATUTE, A MANAGEMENT CONTRACT WOULD BE IN THE BEST INTERESTS OF THE UNITED STATES, IT MAY BE CONSIDERED THAT THERE HAS BEEN COMPLIANCE WITH SAID SECTION 3709, REVISED STATUTES, IF IN ANY GIVEN CASE BIDS BE ASKED OF ONLY THOSE PERSONS OR CONCERNS FOUND TO BE RESPONSIBLE, COMPETENT, CAPABLE, ADEQUATELY EQUIPPED AND PREPARED TO RENDER SUCH SERVICES TO THE ADMINISTRATION SATISFACTORILY IN THE CITY OR TOWN WHERE SUCH PROPERTY MAY BE LOCATED, THE CONTRACT, IF THE BID BE OTHERWISE PROPER, TO BE AWARDED TO THE LOWEST OF SUCH SELECTED BIDDERS.

AS TO THE SECOND QUESTION, THAT IS, WHETHER SUCH CONTRACTS MAY CONTAIN TERMS PARALLELING THOSE CUSTOMARILY CONTAINED IN SUCH CONTRACTS FOR PROPERTIES OF THE SAME TYPE IN PRIVATE BUSINESS, IT IS TO BE NOTED THAT THE SECTION QUOTED IN THE SUBMISSION PROVIDES IN PART:

(1) NOTWITHSTANDING ANY OTHER PROVISIONS OF LAW RELATING TO THE ACQUISITION, HANDLING, OR DISPOSAL OF REAL AND OTHER PROPERTY BY THE UNITED STATES, THE ADMINISTRATOR SHALL ALSO HAVE POWER, FOR THE PROTECTION OF THE INTEREST OF THE HOUSING FUND, TO * * * MAKE CONTRACTS FOR THE MANAGEMENT OF * * * ANY PROPERTY ACQUIRED BY HIM UNDER THIS SECTION; * * * IT IS REASONABLE TO PRESUME THAT BY THE LANGUAGE USED, THE CONGRESS INTENDED THAT THERE SHOULD BE IMPLIED THE POWER TO PROVIDE IN SUCH CONTRACTS ANY TERMS AND PROVISIONS REASONABLY NECESSARY TO ACCOMPLISH THE PURPOSES SOUGHT TO BE ACCOMPLISHED, NAMELY, THE EFFICIENT MANAGEMENT OF SUCH PROPERTY IN THE INTERESTS OF THE UNITED STATES. ACCORDINGLY, ANY TERMS OR PROVISIONS THAT WOULD AID IN ACCOMPLISHING THAT PURPOSE, WHETHER OR NOT CUSTOMARILY CONTAINED IN SUCH CONTRACTS RELATIVE TO PRIVATE PROPERTIES, WOULD BE PROPER, PROVIDED, OF COURSE, THEY DO NOT CONTRAVENE ANY PROVISION OF LAW NOT EXCEPTED BY THE PROVISIONS OF THE ACT.

YOUR LETTER FURTHER STATES THAT THE CONTRACT WOULD PROVIDE THAT THE AUTHORITY OF THE AGENT TO MAKE REPAIRS OR PURCHASES WOULD BE LIMITED TO $150 FOR ANY ONE ITEM; THAT THE AGENT WOULD BE PERMITTED TO MAKE REPAIRS OR PURCHASES OF ANY ITEM OVER $150 BUT NOT EXCEEDING $1,000 PROVIDED IT OBTAINED THREE WRITTEN BIDS AND SUBMITTED THE SAME IN SUPPORT OF ITS MONTHLY ACCOUNTING; AND THAT ANY ITEM OVER $1,000 WOULD BE LET DIRECTLY BY THE ADMINISTRATOR SUBJECT TO THE PROVISIONS OF SECTION 3709, REVISED STATUTES. IN VIEW OF THE PROVISIONS OF SECTION 207 (1) OF THE ACT THAT, FOR THE PROTECTION OF THE INTERESTS OF THE HOUSING FUND, THE ADMINISTRATOR SHALL HAVE POWER TO PAY OUT OF THAT FUND ALL EXPENSES OR CHARGES IN CONNECTION WITH PROPERTY ACQUIRED UNDER SECTION 207 OF THE ACT AND THE FURTHER PROVISO OF SECTION 207 (1) DISPENSING, AS HEREINABOVE STATED, WITH THE REQUIREMENTS OF SECTION 3709, REVISED STATUTES, IN THE PURCHASE OF SUPPLIES OR SERVICES ON ACCOUNT OF PROPERTY ACQUIRED UNDER SAID SECTION 207 WHEN THE AMOUNT OF SUCH SERVICES OR SUPPLIES DOES NOT EXCEED $1,000, THIS OFFICE WOULD NOT BE REQUIRED TO OBJECT TO THE PROPOSED PROVISIONS RELATING TO REPAIRS OR PURCHASES IN CONNECTION WITH SUCH PROPERTIES, PROVIDED IT BE ADMINISTRATIVELY DETERMINED THAT SUCH EXPENDITURES ARE FOR THE PROTECTION OF THE HOUSING FUND AND, WITH RESPECT TO PURCHASES NOT EXCEEDING $1,000, ATTENTION IS INVITED TO THE DECISION 5 COMP. GEN. 41.