B-34528 May 22, 1943

B-34528 May 22, 1943

The Honorable, The Secretary of Commerce.

My dear Mr. Secretary:

I have you letter of May 14, 1943, as follows:

"The War Department desires to use a portion of the Civil Aeronautics Administration's share of Hangar No. 6 located on the Washington National Airport, and the Administrator of the Civil Aeronautics has no objection. Hangar No. 6 was used jointly by American Airlines and the Civil Aeronautics Administration. American Airlines subleased almost all of its hangar space in Hangar No. 6 to the War Department. The Civil Aeronautics Administration has made available its space to the War Department at considerable inconvenience to the Airport and, naturally, some expense to Washington National Airport was involved. The War Department is willing to pay for the space at standard rates under a lease arrangement.

"The question submitted for your decision is whether rental of such space at the Washington National Airport by the Administrator to the War Department is within the principles of your prior decisions holding that payment of rental by one Government department or agency for premises under control of another such department or agency is unauthorized.

"The Administrator has acquired authority over the Washington National Airport under the Act of Congress entitled 'Administration of Washington National Airport,' Act of June 29, 1940, Public No. 647. This Act, in Section 3, provides as follows:

"'The Administrator is empowered to lease, upon such terms as he may deem proper, space or property within or upon the airport for purposes essential or appropriate to the operation of the airport.'

"This authority to lease indicates that the Airport is intended as a quasi-business enterprise. Under this Section, it has been the practice of the Administrator of Civil Aeronautics to lease hangar space and floor space in the Terminal Building to airlines and others doing business at the Airport. The contracts with Eastern, Pennsylvania-Central, and American Airlines provide for leasing of space similar to that in question at a rate of 18 cents per square foot per annum. Following the policy of siding the war effort, the airlines have subleased a large portion of their hangars to the War Department. Where the airlines have subleased space to the War Department, they have charged 19 cents per square foot per annum; the additional one cent charge is to cover cost of insurance which they must carry to fulfill the terms of their contracts.

"It should therefore be pointed out that if the Administrator were to resort to leasing Civil Aeronautics Administration space to an airline, in order that it in turn might sublease to the War Department, the Government would be charged at the excess rate of one cent per square foot per annum.

"It should be further pointed out that the Airport is run as a business institution and that operating expenses and 'profit' are of utmost concern. If you render a favorable decision, that War Department will pay its bills rendered by the Washington National Airport from Engineers' Funds 30330, Procurement No. 31-05, Authority No. 0905-23.

"In this respect the situation existing at the Washington National Airport is to be distinguished from the usual case where one Government agency may decide to rent space to another inasmuch as the Washington National Airport is intended to be self-supporting, and under the terms of the Act the Administrator is empowered to lease space upon such terms as he may deem proper. All facilities at the Washington National Airport are at present leased out under terms so as to assure the Administrator of an income which will in time carry the Washington National Airport as a self- supporting function. To lease space at the Washington National Airport, which is at a premium, to another Government agency without charge would, in effect, disrupt and impede the plan to make it a self-supporting enterprise and would appear to be contrary to the intent of Congress. It is therefore felt that the general rule that payment of rent by one Government department or agency for premises under control of another such department or agency does not apply to the facts hereinabove stated. It is believed that the Washington National Airport is not such a Government agency as would preclude payment to it by another Government agency for reasonable rental otherwise proper, for the occupancy of the property for Army purposes.

"Contract for the leasing of this space is being held up pending you decision, and for this reason it is requested that you reply to the questions presented as soon as possible."

As indicated in your letter it has been held consistently that payment of rent by one Government department or agency for premises under the administrative control of another department or agency is unauthorized. 21 Comp. Dec. 528; 22 id. 684; 20 Comp. Gen. 581; id. 699. The reasons underlying this rule are obvious--the ownership of public property is in the Government and not in a department or branch thereof having possession of the property (22 Comp. Dec. 390). Also, a so-called contract between two agencies of the Government would result in the anomalous situation of a one-party agreement, the Government, represented by the agencies involved, being both the contractor and contractee. It is a fundamental principle of law that one cannot make a valid and subsisting contract with himself. Government property, moreover, usually is not acquired for the purpose of obtaining revenue; and as between different branches of the Government, their operation generally is not for profit and there is no authority to demand a return or compensation based on the use of property or facilities by another branch of the Government. 25 Comp. Dec. 682.

However, the foregoing rule does not necessarily preclude agreements or arrangements between Government agencies in all cases. See 16 Comp. Gen. 887, and 20 id. 701. Upon the basis of the representations contained in your submission, it seems reasonable to conclude that the status of the Washington National Airport is such as not to come within the foregoing rule to the extent that there is involved "space or property within or upon the airport." While the Washington National Airport is a Government agency, it appears that by the act of June 29, 1940, 54 Stat. 686, cited by you, the Administrator of Civil Aeronautics expressly is authorized to lease space or property within the airport, thus indicating a congressional intention that it produce revenue, and since its transactions in that respect are not dissimilar to those of private enterprises, the general rule that payment by one government department or establishment for the use of promises under the control of another department or agency is unauthorized, need not be held applicable to the present matter, particularly in view of the circumstances related in your letter.

Accordingly, this office will not object to a mutual arrangement between the Administrator of Civil Aeronautics and the War Department for the use by the latter of the hangar space involved, or to otherwise proper payments by the War Department, in accordance with such arrangement, from available funds.

Respectfully,

LINDSAY C. WARREN Comptroller General of the United States