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The Court by an order of June 19, 1953, confirmed the agreementAnd it being represented to the Court that the said Gernot P. Rasmussen and E. Doris Rasmussen have tendered to the Clerk of this Court the sum of $300.00, the said sum representing the salvage value of the aforesaid buildings and improvements, it is accordingly * * *
And it is further ordered that the said Gernot P. Rasmussen and E. Doris Rasmussen shall have the right to remove any or all of the buildings and improvements located upon this parcel, but such removal shall not be carried out until after final judgment not subject to further appeal.
After the vesting of the fee simple title in the United States Mr. and Mrs. Rasmussen continued to live on the premises, as lessees or tenants. With events leading to the eventual abandonment of the Burke Airport project and the introduction of H.R. 10045 which, as amended, became Public Law 85–825, the occupancy of the premises by the Rasmussens has continued to the present time. It further appears that the improvements on the land have not been removed and the right of removal granted the Rasmussens still exists.
Public Law 85–825, approved August 28, 1958, under which ihe Rasmussens seek to repurchase their former property, states:
That (a) no tract of real property acquired by the Secretary of Commerce under the Act of September 7, 1950 (64 Stat. 770), for the construction of the Burke Airport, Fairfax County, Virginia, shall, during the ninety-day period which begins on the date of enactment of this Act, be disposed of except pursuant to section 13(h) of the Surplus Property Act of 1944 (50 App. U.S.C. 1622(h)) or section 203(k) of the Federal Property and Administrative Services Act of 1949 (40 U.S.C. 484(k)).
(b) Where arrangements satisfactory to the Administrator of General Services have not been made within the ninety-day period provided in subsection (a) for the disposal of any tract of real property, or part thereof, pursuant to such section 13(h) or 203(k), then within the next ninety days the former owner of such tract (or if he is dead, his spouse, or if there is no surviving spouse, his children) shall have the right to repurchase such tract, or part thereof, from the United States at a price determined by the Administrator of General Services Administration to be equal to the current fair market value.
While Public Law 85–825 grants former owners of property acquired by the United States for the construction of the Burke Airport the right to repurchase within a ninety-day period which expired several months ago, it appears the delay in effecting the sale under the act is due to administrative difficulty in determining the value of the Government's interest to be sold; thus the right to repurchase may be considered as being held in abeyance.
The problem involved is stated in your letter as follows:
Since the Rasmussens' right of removal is still in effect, the interest which the Government has to sell in this case is the land and buildings and improvements thereon, subject to the right of removal of the buildings and improve ments. Should the Rasmussens remove the buildings and improvements prior to the termination of such right or prior to the time they can be deemed to have abandoned the buildings and improvements, then all the Government would have to sell would be the land but, until such termination or abandonment and in the absence of removal, the buildings and improvements are charged with Rasmussens' right to remove them and the Government can sell them only subject to the right of removal.
In this and similar cases it is proposed “that the former owners who reserved salvage rights be required to pay the current fair market value for the land, plus the estimated cost of removing the improvements, returning them to the present site and restoring them to the condition they are now in.”
The right which the Rasmussens acquired under the stipulation and court order of June 19, 1953, for which they paid the salvage value of $300, was “the right to remove any or all of the buildings and improvements located upon this parcel.” Their property interest in the buildings and improvements is at most a contingent one, dependent upon the condition precedent of physical detachment and removal of the buildings and improvements from the premises. Until physical detachment and removal occurs the buildings and improvements are a part of the property of the United States. Cf. Western Maryland Dairy v. Maryland W. & E. Co., 126 A. 135; Esbjornsson v. Buffalo Insurance Co., 89 N.W.2d 893.
As stated in your letter the interest which the Government has to sell in this case is the land and buildings and improvements thereon, subject to the right of removal of the buildings and improvements. That was the interest of the United States during the ninety-day period within which Public Law 85–825 granted the Rasmussens a right to repurchase. That is the current interest of the United States; and we are of the view that is the property interest the Rasmussens must purchase in the exercise of their right to repurchase under Public Law 85-825.
The sale price of the property, equal to the current fair market value, is by Public Law 85–825 for determination by the Administrator of General Services Administration. Without intending to indicate the formula previously stated should be rejected since as stated by you the determination of current fair market value is left to your discretion, we suggest, for your consideration, in cases such as the Rasmussens', where under Public Law 85–825 the property will be purchased as a unit (land with standing buildings and improvements attached), that the price be determined on the basis of the fair market value of the property as a unit, less the current fair market value of the right of removal.
The latter formula is viewed as in consonance with the spirit of Public Law 85–825 and as properly equating the interests of the United States and the Rasmussens.
BidsPatented Articles—Awards to Other Than Low Bidder
A low bid submitted in response to an invitation which contains a patent indemnity clause relieving the Government of liability for infringement of any patent in connection with the contract may not be disregarded merely because the patent owner, who was the second low bidder, alleges that his patent will be infringed and that the low bidder is without any legal right to manufacture the item covered by the invitation. To the P. Wall Manufacturing Company, July 2, 1959:
We refer again to your letter with enclosure and telegram of May 12, 1959, protesting the award to another bidder of a contract under invitation No. ORD-11-199–59–145 issued March 27, 1959, by the Ordnance Weapons Command, Rock Island, Illinois.
The invitation as originally issued called for, under item No. 1, a quantity of 1351 items described as:
Blow Torch Assy., 1 pint capacity, Steel Tank, OD Color, Wall Manufacturing Company Model 61CW-2, or equal.
Stock Nr. 4933-047-4137-J003 By amendment dated April 14, 1959, the description was changed to read:
Blow Torch Assy., 1 pint capacity, Steel Tank, OD Color, Wall Manufacturing Company Model 61CW-2 or equal, modified as shown on “Marked Print" C8403624 dated 14 April 1959. Stock Nr. 4933-047-4137-J003
Bids received, which were opened on April 27, 1959, in accordance with the invitation as amended, were as follows (without consideration of prompt payment discounts): Bidder
Unit price D. W. Onan and Sons, Inc---
$25.50 Turner Corporation.--
12.49 P. Wall Manufacturing Company-
18. 93 On April 28, 1959, award in the amount of $16,873.99 was made to the low bidder, Turner Corporation.
You contend that Patent No. 2,667,214 covering the item described has been issued to you and, therefore, that the successful bidder in performing must either infringe upon your patent or furnish an article not meeting the specification.
With respect to the latter possibility, it appears that the contractor is responsible and submitted the low bid. Award was, therefore, made to that firm. Should the contractor, in fact, not comply with its obligations under the contract, the Government will, of course, have available to it the remedies afforded by law for breach of contract.
As to your contention regarding patent infringement, the invitation and contract provide at paragraph 11 of the Special Provisions in part as follows: 11. PATENT INDEMNITY (PREDETERMINED).
If the amount of this contract is in excess of $5,000, the Contractor shall indemnify the Government and its officers, agents, and employees against liability, including costs, for infringement of any United States letters patent (except letters patent issued upon an application which is now or may hereafter be kept secret or otherwise withheld from issue by order of the Government) arising out of the manufacture or delivery of supplies or out of construction, alteration, modification, or repair of real property (hereinafter referred to as "construction work”) under this contract, or out of the use or disposal by or for the account of the Government of such supplies or construction work. * * *
The letter of May 7, 1959, from the attorneys for the successful bidder, enclosed with your letter of May 12, indicates that your position that performance in conformity with the specification must necessarily result in infringement of your patent may be disputed. The patent indemnity clause quoted in part above provides for the indemnification of the Government and its agents by the contractor for any liability for infringement of any patent arising out of the manufacture of the supplies. Under such circumstances, it has been consistently held that a low bid may not be disregarded merely because it is asserted by a patent owner that his patent will be infringed and that the low bidder is without legal right to manufacture thereunder. B-132468, August 20, 1957.
Even assuming no question as to the patent rights, we held at 38 Comp. Gen. 276 (quoting from the syllabus) :
In a procurement by formal advertising involving a patented article and including in the invitation the patent consent and indemnity clauses, an award is required to be made to the lowest bidder meeting the specifications without regard to possible patent infringement. The “patent consent" clause referred to above was included in the instant invitation as paragraph 6 of the Special Provisions.
In accordance with the foregoing we conclude that no proper basis has been presented to support a determination that award to the Turner Corporation was improper.
Maritime Matters–Subsidies—Construction by Applicant in Lieu of Federal Maritime Board-Pacific Coast Preference The requirements in the public financing provisions in section 502 (d) of the Merchant Marine Act, 1936, 46 U.S.C. 1152(d), for the approval by the Federal Maritime Board of bids submitted by the Pacific coast shipyards for construction of vessels, is applicable in any case where a construction differential subsidy is applied by a Pacific coast applicant under Title V of the Merchant Marine Act, 1936, whether construction is to be done by the Federal Maritime Board or by a domestic shipyard under section 504 of the act, 46 U.S.C. 1154, and even though there may be an increase in cost in Pacific coast preference cases to the United States and to the owner,
To the Chairman, Federal Maritime Board, July 8, 1959: :
Reference is made to your letter of April 29, 1959, transmitting a copy of a legal opinion prepared by the General Counsel of the Federal Maritime Board concerning the application of sections 502 (d) and 504 of the Merchant Marine Act, 1936, as amended, 46 U.S.C. 1152(d) and 1154, to the award of a contract for construction of three cargo vessels for American Mail Line, Ltd. You request our opinion as to whether the Federal Maritime Board is required to approve an award to Todd Shipyards Corporation, Los Angeles Division, a Pacific coast shipbuilder, with the attendant increase in cost to the United States and possibly to the owner. In brief, you state the facts to be as follows:
Bids have been received and opened under the Invitation for Bids of American Mail Line, Ltd., for the construction of three cargo ships which are proposed for construction with construction-differential subsidy aid. American Mail Line's application was made under the provisions of section 504 of the Merchant Marine Act, 1936, as amended, whereby American Mail Line proposes to finance the construction of the proposed vessels rather than purchase the vessels from the Board under the provisions of section 502 of the 1936 act, 46 U.S.C. 1152. American Mail Line, Ltd. has as its principal place of business a place on the Pacific coast and intends to operate the proposed vessels in foreign trade in a service, route or line from ports on the Pacific coast of the United States. The opening of bids disclosed that the adjusted price bid of Todd Shipyards Corporation, Los Angeles Division, did not exceed the adjusted price bid of Newport News Shipbuilding and Drydock Company, the low Atlantic coast bidder, by more than six per cent.
It is assumed that your question is based upon a conclusion that the fixed-price bids are not to be considered for award.
Section 502(d) of the Merchant Marine Act, 1936, as amended, reads as follows:
In case a construction differential subsidy is applied for under this title by an applicant who has as his principal place of business a place on the Pacific coast of the United States (but not including one who, having been in business on or before August 1, 1935, has changed his principal place of business to a place on the Pacific coast of the United States after such date) to aid in the construction or reconditioning of a vessel to be operated in foreign trade in a service, route, or line from ports on the Pacific coast of the United States, and the amount of the bid of the shipbuilder on the Pacific coast who is the lowest responsible bidder on such coast for such construction or reconditioning does not exceed the amount of the bid of the shipbuilder on the Atlantic coast of the United States who is the lowest responsible bidder therefor by more than 6 per centum of the amount of the bid of such Atlantic coast shipbuilder, the Commission shall, except as provided in subsection (e), approve such Pacific coast bid, and in such case no payment shall be made to aid in such construction or reconditioning unless the applicant accepts the bid of such Pacific coast shipbuilder and agrees to designate and continue as the home port of the vessel to be constructed or reconditioned a port on the Pacific coast. Nothing in this