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B-95136 1 (1978-07-12)

handle is hein.gao/gaobadgfd0001 and id is 1 raw text is: 






                         THE  C1OMNPTROLLEP  SENEPAL
 DECISION          14    CFe T H F.uNyiTEDas  B TATES8
                         WAS  INc3T0N,. FL 2031P



 FILE:      B-95136            DATE:  July 12* -1978

 MATTER  O:         Economy A)ct Application to
                    Condemnation Proceedings

DIGEST:

     Economy Act, 40 U.S.C. 278a, which pro-
     hibits the Government from entering into
     a lease wherein the annual rental to be
     paid exceeds 15 percent of the fair market
     value of the property, precludes the ini-
     tiation of condemnation proceedings under
     the Declaration of Taking Act, 40 U.S.C.
     258a, when agency believes condemnation
     award would exceed 15 ,ercent limitation.

     The Administrator of General Services requests
our opinion on the application of section 322 of the
Economy Act of June 30, 1932, 40 U.S.C. 278a (1970),
to condemnation proceedings.  The Administrator be-
lieves that the Act is not applicable. The Department
of Justice, which is responsible for instituting and
littgating condemnation matters, takes a contrary view.

     The question arises out of the need of the General
Services Administration (GSA) for continued occupancy
of approximately 73,104 square feet in the Ford
Building, 5F5 West 57th Street, New York, New York,
for assignment to the Drug Enforcement Administration
(DEA).  A five-year lease for the space expired on
January 31, 1978, and since that date occupancy has
continued with agreement of the owner on a month-
to-month basis, not to exceed six months under the
same terms as included in the expired lease. A dispute
has arisen betw;een the contracting officer and the
landlord concerning the fair rental value of the space.
GSA states that no viable alternative to continued
occupancy exists, and has proposed that a ten-year
leaschold interest be acquired by er;inent domain
pursuant to the Declaration of Taking Act, 40 U.S.C.
258a et seq. (1970).













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