TITLE: B-309181, Interagency Agreements--Use of an Interagency Agreement between the Counterintelligence Field Activity, Department of Defense, and GovWorks to Obtain Office Space, August 17, 2007
BNUMBER: B-309181
DATE: August 17, 2007
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B-309181, Interagency Agreements--Use of an Interagency Agreement between the Counterintelligence Field Activity, Department of Defense, and GovWorks to Obtain Office Space, August 17, 2007
Decision
Matter of: Interagency Agreements--Use of an Interagency Agreement between
the Counterintelligence Field Activity, Department of Defense, and
GovWorks to Obtain Office Space
File: B-309181
Date: August 17, 2007
DIGEST
Without a delegation from the General Services Administration or
independent statutory authority to enter into a lease, neither GovWorks (a
Department of the Interior franchise fund) nor the Counterintelligence
Field Activity (CIFA) of the Department of Defense (DOD) had authority to
obtain office space through a third-party lease. Unless ratified by an
appropriate government official, the agreement for office space is
unenforceable against the government. GovWorks and CIFA cannot circumvent
federal statutory and regulatory requirements on leasing by bundling the
lease agreement in a contract for services. Without ratification, all
payments made under this third-party lease are improper payments, and DOD
and GovWorks should take appropriate action to resolve them.
There is no evidence to suggest that CIFA violated the Antideficiency Act.
Although CIFA and GovWorks entered into an agreement to obtain office
space through a third-party lease without requisite authority, CIFA does
have an appropriation that is otherwise available for the purpose of
leasing office space--the Operation and Maintenance, Defense-wide
appropriation. CIFA recorded these costs as obligations of this
appropriation and transferred funds to GovWorks to pay for them. There is
no indication, however, that CIFA recorded or transferred amounts in
excess of or in advance of the appropriation. The conclusion that neither
CIFA nor GovWorks violated the Antideficiency Act does not diminish or
excuse CIFA's and GovWorks's disregard of federal statutes and policy,
involving the government in an unauthorized transaction and millions of
dollars of improper payments.
DECISION
The Inspector General (IG) for the Department of the Interior requests our
decision under 31 U.S.C. sect. 3529 regarding a transaction involving the
Department of Defense's (DOD) Counterintelligence Field Activity (CIFA)
and GovWorks, a Department of the Interior (Interior) franchise fund, for
acquisition of space to consolidate CIFA's activities.[1]
The IG asked whether either CIFA or GovWorks had the authority to obtain
office space to consolidate CIFA's activities, and, if not, whether CIFA
and/or GovWorks violated the Antideficiency Act, 31 U.S.C. sect. 1341. For
the reasons stated below, we conclude that neither CIFA nor GovWorks had
independent authority to obtain office space.[2] CIFA desired additional
office space, identified the desired space, negotiated terms for the
space, and then directed GovWorks to sign a contract with the third party
that included all the terms of the lease. GovWorks was acting as CIFA's
agent in entering into the contract. Using an interagency agreement and a
contract with a third party, CIFA and GovWorks circumvented federal laws
and regulations with regard to obtaining office space through a lease.
Neither had authority to enter into the multiyear lease that is at the
heart of this transaction. Their actions resulted in a void contract, and
payments made under it constitute improper payments. CIFA and GovWorks
must take appropriate steps to resolve them.
Neither CIFA nor GovWorks violated the Antideficiency Act. Although CIFA
and GovWorks entered into an agreement to obtain office space through a
third-party lease without requisite authority, CIFA does have an
appropriation that is otherwise available for the purpose of leasing
office space--the Operation and Maintenance, Defense-wide appropriation.
CIFA recorded these costs as obligations of this appropriation and
transferred funds to GovWorks to pay for them. There is no indication,
however, that CIFA recorded or transferred amounts in excess of or in
advance of the appropriation. The conclusion that neither CIFA nor
GovWorks violated the Antideficiency Act does not diminish or excuse
CIFA's and GovWorks's disregard of federal statutes and policy, involving
the government in an unauthorized transaction and millions of dollars of
improper payments.
Our practice when rendering decisions is to obtain the views of the
relevant federal agency to establish a factual record and to elicit the
agency's legal position in the matter. GAO, Procedures and Practices for
Legal Decisions and Opinions, GAO-06-1064SP (Washington, D.C.: Sept.
2006), available at www.gao.gov/legal.htm. In this regard, Interior and
DOD responded to questions from our office. Letter from David L.
Bernhardt, Solicitor of the Interior, to Thomas H. Armstrong, Assistant
General Counsel, GAO, Apr. 20, 2007 (Bernhardt Letter); Letter from Roger
F. Pitkin, Acting Deputy General Counsel (Fiscal), DOD, to Thomas H.
Armstrong, Assistant General Counsel for Appropriations Law, GAO, May 29,
2007. Interior provided the requested information but declined to provide
its legal views in response to the questions we asked. Bernhardt Letter.
BACKGROUND
Interior established GovWorks as a franchise fund pursuant to authority of
Public Law 104-208, div. A, title I, sect. 113, 110 Stat. 3009,
3009-200--01 (Sept. 30, 1996), and the Government Management Reform Act of
1994 (GMRA), Public Law 103-356, title IV, sect. 403, 108 Stat. 3410, 3413
(Oct. 13, 1994). Congress authorized certain agencies to establish
franchise funds, like GovWorks, to provide "common administrative support
services" to federal agencies more efficiently than through other means.
Pub. L. No. 103-356, sect. 403.
In 2003, CIFA began investigating its options to obtain larger office
space to collocate many of its activities. Devaney Letter, exhibit 17.
CIFA is a field activity and combat support agency within DOD. The
Secretary of Defense established CIFA--
"to develop and manage DoD Counterintelligence (CI) programs and
functions that support the protection of the Department, including CI
support to protect DoD personnel, resources, critical information,
research and development programs, technology, critical infrastructure,
economic security, and U.S. interests, against foreign influence and
manipulation, as well as to detect and neutralize espionage against the
Department."
DOD Directive 5105.67 (Feb. 19, 2002). As of May 2003, contractor
employees comprised almost 90 percent of the CIFA workforce and worked at
various locations in the Washington metropolitan area. Bernhardt Letter,
tab 3, B1. A presidential directive requiring CIFA and the Foreign
Terrorist Tracking Task Force, a component of the Federal Bureau of
Investigation, to share and exchange data to combat the Global War on
Terrorism placed strain on CIFA operations and its ability to consolidate
its operations in the space capacity it had then. Devaney Letter, exhibit
19 at 2.
In February 2003, the Office of the Assistant Secretary of Defense,
Command, Control, Communications, and Intelligence, and GovWorks entered
into an interagency agreement to address CIFA's need to consolidate its
workforce and work space issues. Interagency Agreement, Feb. 7, 2003. The
agreement stated that CIFA needed "to consolidate CIFA programs and to
provide space for multiple activities that are operated, sustained and
controlled by Contractor personnel for" CIFA. Id. To achieve the
consolidation, the agreement directed GovWorks to contract for the
services of a Section 8(a) small business[3] in an indefinite delivery,
indefinite quantity (IDIQ) contract for facility acquisition. Id. The
agreement further stated that the contractor "shall oversee a traditional
commercial lease for Consolidation activities that include the negotiation
and execution of a lease to provide contractor operations." The Director
of CIFA and a financial officer for the Washington Headquarters Service
(WHS) signed the agreement for DOD.[4] Id.
On April 30, 2003, CIFA executed a Military Interdepartmental Purchase
Request (MIPR) for "funding provided to consolidate CIFA programs and to
provide space for multiple activities." Devaney Letter, exhibit 7. This
MIPR transferred to GovWorks $4,070,311 of the Operation and Maintenance,
Defense-wide appropriation for fiscal year 2003. Id. GovWorks accepted
this MIPR on May 1, 2003. Pitkin Letter, addendum.
In a letter dated May 28, 2003, from CIFA Director to GovWorks, CIFA
approved a proposal submitted to GovWorks by a contractor, TKC
Communications, Inc. (TKC), "to provide CIFA with a variety of critical
management support functions including, but not limited to, the provision
of contractor collocation space." Devaney Letter, exhibit 17. The Director
explained that CIFA was in urgent need of "management support services
including, among other things, commercial space in close proximity to
CIFA's GSA leased offices." Id. Such space was necessary to "collocate the
personnel and equipment of multiple contractors already providing
technical support to CIFA." Id. CIFA directed GovWorks to accept this
proposal and enter into a contract with TKC on CIFA's behalf. Id.
On June 12, 2003, GovWorks awarded contract number 1435-04-03-RC-70941[5]
(Contract 70941) to TKC.[6] Devaney Letter, exhibit 4. The contract stated
that TKC would provide services, including office space and facilities
management services, not to exceed $100 million. Id. On the same day,
GovWorks executed Task Order 73001 for "Monthly Rent and Other Direct
Costs for a Monthly Facilities Lease." Bernhardt Letter, tab 1, C2.
Task Order 73001 incorporated by reference the lease that TKC signed for
office space in Crystal City, Virginia, at Crystal Square 5 as well as the
terms and conditions of the proposal that TKC had submitted to GovWorks
and that CIFA had approved on May 28, 2003. See Bernhardt Letter, tab 1,
C2; Devaney Letter, exhibit 3 at 2 (Lease). The lease is for a term of 10
years and 7 months with varying annual rents that exceed $6 million. Lease
at 2. The proposal and lease contain identical termination clauses, which
require the government to provide 12 months' notice to terminate the lease
and, in the event of early termination, to pay termination fees consisting
of unamortized costs on the improvements made to the leased space by the
property owner. Devaney Letter, exhibit 2 at 28 (proposal of TKC); Lease
at 20. These termination fees range from $14 million to $180,000 depending
upon the date of termination. Devaney Letter, exhibit 2 at 11--13; Lease,
exhibit E. TKC agreed to provide other facilities management services
including facilities and asset management, modifying the existing CIFA
facility database and various facilities-related matters including access
control, accounting for building occupants, emergency evacuation and
response procedures, and procedures for power failure. Devaney Letter,
exhibit 2 at 6.
Attached to Task Order 73001 was a schedule for 10 years of rent on the
facility lease and 10 years of operating expenses. Id. The annual rent
listed on the schedule gradually increases over the 10-year period from
$6.6 million to over $9 million per year. The total amount in the contract
for rent is approximately $90 million and for "operating expenses" is
approximately $9 million. Id.
From 2003 until the present, CIFA has executed various MIPRs transferring
to GovWorks funds from the Operation and Maintenance, Defense-wide
appropriation to pay for lease costs on the Crystal Square 5 office space
and for GovWorks's administrative fee. Devaney Letter, exhibits 8--13; see
also Bernhardt Letter, tab 5. DOD states that the space is currently
occupied by both CIFA employees and contractor personnel. Pitkin Letter,
addendum. As of 2006, 297 employees and 783 contractor personnel occupied
the space at Crystal Square 5, and CIFA had paid more than $26 million in
lease costs.[7] Id.
Both the Interior IG and the DOD IG audited the transactions between
GovWorks and CIFA that resulted in the lease of property at Crystal Square
5. Interior IG Report at 6--7; DOD IG Report at 49--65. Both IGs concluded
that neither CIFA nor GovWorks was authorized to enter into a lease
agreement without a delegation of leasing authority from GSA, and they
found that GSA has not provided a delegation for this lease arrangement.
Interior IG Report at 6; DOD IG Report at 50--51. DOD IG contacted the
Director of Leasing Policy and Performance Division of GSA to determine
whether GSA would ratify the lease agreement. The Director declined to do
so. DOD IG Report at 50. Both IGs also opined that, because both CIFA and
GovWorks acted beyond the scope of their authorities, payments on the
lease could result in an Antideficiency Act violation. Interior IG Report
at 7; DOD IG Report at 52--53. The DOD IG noted that, in addition to
acting beyond the scope of its authority, CIFA failed to comply with DOD
policy requiring the WHS to coordinate with GSA for leases that exceed
certain threshold amounts. Id. at 50.
DISCUSSION
Authority to Lease
According to the IG reports, both GovWorks and CIFA described the
interagency agreement and Contract 70941 as agreements obligating the
government to an IDIQ service contract and not to a lease. Interior IG
Report at 6; DOD IG Report at 49. Although GovWorks and TKC may have
styled their contract as an IDIQ contract, we look beyond the label of the
contract to the actions of the parties and the terms of the contract to
determine its legal effect. See B-302358, Dec. 27, 2004. It is clear from
its terms that, through this contract, GovWorks obtained office space at
Crystal Square 5 for CIFA. The costs of space are clearly outlined in the
contract between GovWorks and TKC (Contract 70941) as well as TKC's
proposal and TKC's lease for the Crystal Square 5 space, both of which
were incorporated into the contract in Task Order 73001. Almost 90 percent
of the costs of Contract 70941 are for office space at Crystal Square 5;
the remaining costs are for facility management services. CIFA sought
parties to enter into the lease and negotiated the terms of the lease.
CIFA engaged GovWorks to obtain office space on its behalf. In our view,
Contract 70941 and Task Order 73001 clearly attempt to obligate the
government to a long-term lease agreement for office space. Neither CIFA
nor GovWorks can circumvent statutory and regulatory requirements on lease
authority by bundling the lease with facility management services in an
IDIQ contract. Either CIFA or GovWorks had to have some legal authority to
enter into a 10-year lease for office space.
Accordingly, we turn to the Interior IG question regarding whether CIFA
and/or GovWorks had the authority to lease office space. GSA holds general
leasing authority for government agencies. Section 1 of the Reorganization
Plan No. 18 of 1950, 5 U.S.C. app. 1, 40 U.S.C. sect. 301 note,
transferred from federal agencies to the Administrator of GSA authority
for "all functions with respect to acquiring space in buildings by lease .
. . ." The Administrator has authority to enter into a lease on behalf of
the government for a period not to exceed 20 years. 40 U.S.C. sect. 585.
The Administrator may delegate this authority to an official in GSA or to
the head of another federal agency. 40 U.S.C. sect. 121(d). Without
specific statutory authority and absent GSA's delegation of authority, a
federal agency may not enter into a lease on its or the government's
behalf. B-202206, June 16, 1981.
Our research found no statutory authority that would allow GovWorks to
obligate the United States to a lease nor has GovWorks or the Solicitor of
Interior on behalf of GovWorks asserted such authority. Congress, however,
has authorized DOD to lease real property in certain limited situations.
For example, the military departments have authority to lease structures
and real property in foreign countries that are needed for military
purposes for terms of up to 10 years (15 years in Korea). 10 U.S.C.
sect. 2675.
Also, the Secretary of Defense is authorized to lease facilities under 10
U.S.C. sect. 2661(b), and DOD has indicated that this authority could
apply to acquiring space for contractor personnel required to be
collocated with DOD employee personnel. Pitkin Letter at 1. Section
2661(b) provides, in relevant part: "The Secretary of Defense . . . may
provide for . . . [t]he leasing of buildings and facilities."
Nevertheless, there is no need to dwell on this potential source of
authority. CIFA in fact failed to follow agency policy and procedures in
leasing under this statute. The Secretary of Defense has delegated his
leasing authority to WHS. DOD Directive 5110.4, para. E2.1.1.20 (Oct. 19,
2001). In the event that an acquisition of space has a projected annual
rent beyond a threshold amount determined annually by GSA, WHS is required
to request GSA to coordinate congressional notification before the lease
may be executed. DOD Instruction 5305.5 (June 14, 1999). The annual rent
threshold amount for fiscal year 2003, the year this lease was executed,
was $2.21 million. See www.gsa.gov (last visited on July 16, 2007). The
annual rent for Crystal Square 5 exceeded $6 million. See Bernhardt
Letter, tab 1, C2. There is no evidence that WHS sought GSA coordination
of congressional notification before GovWorks entered into the contract
for office space. Accordingly, even if the Secretary's authority under
section 2661(b) might otherwise apply, this authority was not properly
exercised here.
Regardless, DOD could not have used section 2661(b) for this lease,
because it was a lease for 10 years and 7 months and section 2661(b) does
not provide the authority to enter into a multiyear agreement. A lease
under authority of section 2661(b) would have had to have been structured
differently; instead of a 10-year lease, a section 2661(b) lease would
have had to have been structured as a 1-year lease with options to renew
for future years. See Leiter v. United States, 271 U.S. 204 (1926).
For GovWorks or CIFA officials to have authority to enter into this
10-year lease, GSA would have had to delegate its leasing authority. As
noted in both IG Reports, GSA has stated that it did not delegate
authority to CIFA or GovWorks. Interior IG Report at 6; DOD IG Report at
50. GSA regulations set out various standing delegations that may give an
agency authority to enter into a lease independent of GSA, including (1)
categorical space delegations, (2) agency special purpose delegations, and
(3) a delegation of authority under a program known as "Can't Beat GSA
Leasing." 41 C.F.R. sect. 102-72.30. None of them apply to this
transaction, however.
Categorical space delegation applies to specific types of space outlined
in 41 C.F.R. sect. 102-73.155. None of these types apply to CIFA's use of
the Crystal Square 5 space. The agency special purpose delegations are
standing delegations of authority from the Administrator to specific
federal agencies to lease their own special purpose space. 41 C.F.R. sect.
102-73.160. Both DOD and Interior have special purpose delegations, 41
C.F.R. sections 102-73.180,[8] 102-73.200;[9] however, none of the special
purpose delegations would allow either CIFA or GovWorks to enter into a
lease for office space to consolidate CIFA's operations.
Under the third type of delegation, the "Can't Beat GSA Leasing" program,
GSA has delegated to the heads of all federal agencies the authority to
enter into a lease for up to 20 years as long as the annual rent is below
threshold amounts determined annually by GSA. 41 C.F.R. sect.
102-72.30(b). As noted above, the annual rent of the lease in question far
exceeded the annual threshold amounts. Accordingly, neither CIFA nor
GovWorks could have entered into this leasing arrangement pursuant to a
standing delegation under the "Can't Beat GSA Leasing" program.
Consequently, because neither CIFA nor GovWorks had authority to enter
into the lease transaction, the government is not bound by the contract.
See B-306353, Oct. 26, 2005, and cases cited therein. It is axiomatic that
the United States cannot be bound beyond the actual authority conferred
upon its officials by statute or regulation. Id. Where, as here, a
government official with no authority purports to commit the government to
a transaction, the contract is void ab initio and unenforceable. See
B-204002, Mar. 31, 1982. It has long been recognized that an authorized
government official possessing knowledge of the facts may give effect to
an unauthorized act of another government official by subsequently
ratifying the action. B-306353, Oct. 26, 2005. Only GSA has the requisite
multiyear leasing authority to ratify the contract between GovWorks, on
behalf of CIFA, with TKC for lease of office space. See 40 U.S.C.
sect. 585. According to the DOD IG report, GSA's Director of Leasing
Policy and Performance refused to ratify the contract in question, and we
have no indication that GSA has changed its position in this regard.
Payments made by the government pursuant to void or otherwise
unenforceable contracts are improper payments that should be recovered
from the contractor. See 62 Comp. Gen. 337, 338--39 (1983) (the Department
of Labor must recover payments made on contract provisions that were
unenforceable because they violated a federal statute). See also Sutton
v. United States, 256 U.S. 575, 579--80 (1921) (the War Department could
recover payments to a contractor made on an unauthorized agreement). Thus,
absent a ratification of the contract by GSA, GovWorks and CIFA should
take appropriate action to resolve the improper payments made under this
contract.[10] Furthermore, all payments for rent due under the contract
must cease to prevent future improper payment of government funds.
Application of the Antideficiency Act
The Interior IG also asked whether CIFA and/or GovWorks violated the
Antideficiency Act by entering into a lease without proper authority. The
Antideficiency Act prohibits a government official or employee from making
an expenditure or an obligation that exceeds or is in advance of available
appropriations. 31 U.S.C. sect. 1341(a). See also B-302710, May 19, 2004.
The appropriation used to make the lease payments, the Operations and
Maintenance, Defense-wide appropriation, is available for lease payments.
This appropriation is available for "expenses . . . necessary for the
operation and maintenance of activities and agencies of the Department of
Defense . . . as authorized by law." See, e.g., Pub. L. No. 107-248, title
II, 116 Stat. 1519, 1522--23 (Oct. 23, 2002). The DOD Financial Management
Regulation directs DOD's components to obligate an account within the
Operation and Maintenance appropriation for leases of real property. DOD
Federal Management Regulation 7000.14-R, vol. 2A, ch. 1, para. 0106, at
1-128--29.
While there is no authority for the underlying lease transaction, and,
consequently, the lease is not enforceable against the government, CIFA
and GovWorks did intend to commit the government to pay for the lease
costs. An agency accounting records should reflect the agency's actions.
In that regard, CIFA recorded these costs as an obligation of the
Operation and Maintenance, Defense-wide appropriation. Notwithstanding the
fact that the obligation was not enforceable against the government,
CIFA's actions from an Antideficiency Act perspective, burdened the
appropriation to the same extent. From the date that CIFA and GovWorks
entered into the interagency transaction, CIFA has transferred to GovWorks
funds from this appropriation to pay for lease costs. There is no
evidence, however, that CIFA transferred or recorded amounts in excess of
or in advance of the Operation and Maintenance, Defense-wide appropriation
for any fiscal year since CIFA began occupying the space in 2003. Thus,
neither CIFA nor GovWorks violated the Antideficiency Act.
This conclusion does not in any way diminish or excuse CIFA's or
GovWorks's violation of law. The record in this case suggests that
officials of both agencies acted in disregard of both statute and policy,
effectively circumventing the statutory and regulatory framework for
obtaining office space by lease, and DOD and Interior should take
appropriate steps to address the accountability of those CIFA and GovWorks
officials involved in this unauthorized transaction.
CONCLUSION
Regardless of how CIFA and GovWorks label the contract between GovWorks
and TKC, the agreement, by its very terms, committed the government to a
long-term lease for a period of approximately 10 years. GovWorks and CIFA
cannot circumvent federal statutory and regulatory requirements on leasing
by bundling the lease agreement in a contract for services. Because they
did not have specific statutory authority to lease space or a delegation
of leasing authority from GSA, neither CIFA nor GovWorks has authority to
enter into an agreement or contract to lease the Crystal Square 5 office
space. Thus, the contract for office space with TKC is not legally binding
on the government unless ratified by an appropriate government official.
Without ratification, all payments made under this lease are improper
payments, and GovWorks should take appropriate action to resolve such
improper payments.
There is no evidence to suggest that either CIFA or GovWorks violated the
Antideficiency Act. Although CIFA and GovWorks entered into an agreement
to obtain office space through a third-party lease without requisite
authority, CIFA does have an appropriation that is otherwise available for
the purpose of leasing office space--the Operation and Maintenance,
Defense-wide appropriation. CIFA recorded these costs as obligations of
this appropriation and transferred funds to GovWorks to pay for them.
There is no indication, however, that CIFA recorded or transferred amounts
in excess of or in advance of the appropriation. The conclusion that
neither CIFA nor GovWorks violated the Antideficiency Act does not
diminish or excuse CIFA's and GovWorks's disregard of federal statutes and
policy, involving the government in an unauthorized transaction and
millions of dollars of improper payments.
Gary L. Kepplinger
General Counsel
------------------------
[1] Letter from Earl E. Devaney, Inspector General, Office of the
Inspector General, Department of the Interior, to David M. Walker,
Comptroller General of the United States, Jan. 22, 2007 (Devaney Letter).
This request arose out of the Inspector General's report on an audit of
transactions between DOD and Interior. U.S. Department of the Interior
Office of Inspector General, FY 2005 Department of the Interior Purchases
Made on Behalf of the Department of Defense, Report No. X-IN-MOA-0018-2005
(Jan. 9, 2007), available at www.doioig.gov/upload/2007-G-0002.txt (last
visited on July 16, 2007) (Interior IG Report). The Inspector General for
the Department of Defense also audited many of these transactions and
reported results in U.S. Department of Defense Office of Inspector
General, FY 2005 DoD Purchases Made Through the Department of the
Interior, Report No. D-2007-044 (Jan. 16, 2007), available at
www.dodig.osd.mil/Audit/reports/07report.htm (last visited on July 16,
2007) (DOD IG Report).
[2] In response to the Interior IG request, we issued two other
decisions--B-308969, May 31, 2007, relating to obligation of funds under
an indefinite delivery, indefinite quantity contract, and B-308944, July
17, 2007, relating to GovWorks's use of expired DOD funds.
[3] Section 8(a) of the Small Business Act established a program that
authorizes the Small Business Administration (SBA) to enter into contracts
with other agencies and award contracts to eligible subcontractors on a
noncompetitive basis. 15 U.S.C. sect. 637(a). Under this program, SBA
grants a preference to small businesses "owned and controlled by socially
and economically disadvantaged individuals." Id.
[4] WHS is a DOD field activity established to provide operational support
and administrative services to specified DOD components, including
facilities management and space acquisition for all DOD-occupied
administrative space in the National Capital Region. DOD Directive 5110.4,
para. 5.3.7 (Oct. 19, 2001).
[5] GovWorks, on behalf of CIFA, entered into two contracts with TKC on
June 12, 2003. The second contract, contract number 1435-04-03-RC-73024,
appears to be for "transitional services" for the amount of $1,615,439.01.
This decision only addresses Contract 70941.
[6] The award names SBA as the prime contractor and TKC as the Section
8(a) subcontractor. Bernhardt Letter, tab 1, C1. Although nominally a
prime contractor, SBA serves essentially as a conduit between the
contracting agency and the small disadvantaged business. See B-225175,
Feb. 4, 1987 (SBA is not responsible for reprocurement costs for defective
goods delivered by a defaulting Section 8(a) small business contractor).
The only sense in which SBA is expected to perform the contract is by
subcontracting the work to eligible firms. Id.
[7] Other agencies and DOD components presently occupy Crystal Square 5
space and pay CIFA for use of the space. This decision does not address
the appropriateness of others' occupying and paying for the space in
question.
[8] GSA has delegated to DOD the authority to lease the following special
purpose space: the Civil Air Patrol Liaison Offices, armories, a film
library in the vicinity of Washington, D.C., mess halls, ports of
embarkation and debarkation, post exchanges, the Postal Concentration
Center in Long Island, N.Y., recreation centers, reserve training space,
service clubs, and testing laboratories. 41 C.F.R. sect. 102-73.180.
[9] GSA has delegated to Interior the authority to lease the following
special purpose space: space in buildings and land incidental thereto used
by field crews of the Bureau of Reclamation, the Bureau of Land
Management, and the Geological Survey in areas where no other government
agencies are quartered; and National Parks/Monuments Visitors Centers that
are not general office or administrative space. 41 C.F.R. sect.
102-73.200.
[10] In resolving the issue of an improper payment, GovWorks may consider
whether it may waive collection of some or all of the payments on the
basis of the equitable theories of quantum meruit or quantum valebant.
See, e.g., 62 Comp. Gen. 337, 339 (1983). These theories require four
findings. First, the contract would have been a permissible procurement
had the proper procedures been followed. Second, the government must have
received and accepted a benefit. Third, the claimant must have acted in
good faith. Fourth, the amount to be paid must not exceed the reasonable
value of the benefit received. See B-271163, May 22, 1996.