n o t e s a n d i ss u e s Federal Government Appraisal Contract Work: Where to Find It and How to Get It by Kathleen M. Holmes, MAI W ould you like to appraise a lighthouse or maybe an old military base? How about apprais- entity can bid to a preestablished group of qualified appraisers when the need arises for an appraisal ing a former post office or courthouse? The federal assignment as described in the contract. government has all of these properties and much On the FedBizOpps Web site recently, one of the more, including basic office and warehouse facili- active solicitations was for the Natural Resources ties. Federal entities require appraisals for diverse Conservation Service (NRCS), which was requesting uses—acquisition, eminent domain, lease, exchange quotes for real estate appraisal services throughout and auction—and of full- and partial-interest estates. Illinois. According to that posting, NRCS is expecting I have tried to find out the number of appraisals the a need for 15 appraisals in 11 counties in Illinois for federal government consumes in an average year, conservation easements under the Wetlands Reserve but since there are so many federal departments, Program. The NRCS had similar contracts in other agencies, and administrations ordering appraisals, states as well as a contract for Technical Review Ser- neither the contracting officers nor the Federal Busi- vices. On this particular day, NRCS had numerous ness Opportunities representatives I have spoken offerings, which were more rural in nature. However, with know of any one tracking site. a look back through listings on FedBizOpps, showed other sources of federal appraisal contracts in the FedBizOpps past year or two, including the following: The Federal Business Opportunities Web site called • General Services Administration, Public Build- FedBizOpps (www.FedBizOpps.gov) is the common ings Service site used by all federal entities contracting work. By • General Services Administration (GSA), Physical law, all federal contracts over $25,000 must be posted Capital Asset Management Division on this Web site. A recent check of the FedBizOpps site showed • Department of Housing and Urban Development seven pending appraisal solicitations out for bid. Now • Department of Agriculture, Rural Development that may not seem like a lot; however, many of them • Department of Agriculture, Forest Service are for multiple appraisals. Also, the appraisal solici- • Department of Agriculture, Farm Service Agency tations are frequently for multiyear periods, such as • Department of State, Office of Logistics Manage- five years, and some have extension options. Often a ment federal entity does not know exactly how many ap- • Department of the Air Force praisal assignments it will have or when they will • U.S. Army Corps of Engineers be needed. In order to meet their expected future demands for contract appraisers who are qualified to The GSA is one of the more active users of do the assignments, some entities award contracts for appraisal services since it provides procurement “Indefinite Delivery and Indefinite Quantity” (IDIQ) services for numerous other federal government over a period of time. Some contracts are “Blanket departments and agencies, including buying, sell- Purchase Agreements” (BPAs), which are established ing, and leasing real estate across the country and for a period of years and sometimes include option in territories. To give you some idea of how much years. With these IDIQ or BPA contracts, a federal real estate GSA alone needs appraised, I pulled a 380 The Appraisal Journal, Fall 2006 notes and issues summary from one of the recent solicitations it ad- Table 1 Finding Solicitations on FedBizOpps vertised. In November 2005, GSA’s Physical Capital 1. From the opening page of http://www.FedBizOpps.gov, Asset Management Division sought information Click on the “go” box of Find Business Opportunities for a potential nationwide and U.S. Territories (11 in the left-hand pane. regional offices) IDIQ contract for appraisal firms 2. Scroll down the page to the box labeled Search by that specialize in the field of real estate appraisal NAICS Code towards the bottom of the page. and consulting services. Following is the summary 3. Scroll down in the NAICS box to code 531—REAL GSA used to describe the range of appraisal skills ESTATE and Click on this line to highlight it. required of the appraiser/firm: 4. Click on the FILTER NAIC box immediately below the NAICS box. The company must be proficient in valuing the following 5. Scroll down to the box labeled FILTERED NAIC, and in property types: A. GSA’s Portfolio: General Purchase–Of- this box Scroll down to code 531320 Offices of Real fice, warehouse; Vacant Land—Rural or urban; Special Estate Appraisals. Click on this code to highlight it. Purpose–Courthouse, post office, historic properties, border stations, labs; Mixed use–office/courthouse/re- 6. Scroll to bottom of page and Click on Start Search tail; Facilities–Multiple building complexes that may be box. unique or complex in nature. B. Disposition Properties: 7. Look for the new solicitations mixed in with the Vacant Land–rural and urban improved parcels typi- listings of modifications (changes to synopses) and cally unzoned with multiple potential uses and complex amendments (changes to solicitations). features; General Purchase Property–Office Buildings, warehouses, industrial, commercial, retail, and residen- From there you’re on your own! Good Luck! tial properties; Former Government Buildings–Court- houses, post office, and federal buildings; Special Purpose Facilities–Hospitals, large housing complexes, golf courses, historic properties, military installations, aviation-related facilities, defense manufacturing plants, Dun & Bradstreet in the CCR online registra- complex industrial facilities, environmentally impacted tion process; you also may contact Dun & Brad- properties, maritime properties, lighthouses, right-of- street at 866-705-5711 to obtain a DUNS number. ways, rail spurs, partial interests (air rights, water rights, easements, etc.) and other properties that are unique or When you view solicitations in FedBizOpps, complex in nature.1 you will notice many contracts are set aside for small businesses. The Small Business Administra- Bids tion provides financial, technical, and management Since all federal contracts over $25,000 must be assistance to help Americans start, run, and grow advertised in FedBizOpps, sooner or later federal their businesses. To ensure that a fair percentage of entities are likely to solicit bids there. Some of the government contracts and purchases are awarded to contracts run for multiple years so they do not come small businesses, the Federal Acquisition Regulation up for bid very often. Although not required to do (FAR) describes the process and requirements for so, some federal entities also use FedBizOpps for set-aside contracts on its Web site at www.acqnet contracts lower than $25,000. For appraisal work .gov/far/. A vendor only needs to input business under the $25,000 threshold, you will need to contact information in one database (CCR), which will then the entity directly to see how they award the assign- automatically populate the SBA database. According ments. A step-by-step process for finding solicitations to the CCR Web site, if you are interested in receiving on FedBizOpps is shown in Table 1. Small Disadvantaged Business, HUBZone, or 8(a) Although any vendor may bid, vendors must certifications, you will need to refer separately to register with Central Contracting Registration (CCR) SBA to complete that process.2 before they are eligible to be awarded a contract. You may register on the CCR Web site at www.ccr.gov. Standards To register on CCR, you will need your bank Regardless of the dollar amount of a contract, govern- information, taxpayer I D, and a Data Univer- ment agencies share a common thread promulgated sal Numbering System (DU N S) number pro- by the Federal Acquisition Regulation to conduct vided by Dun & Bradstreet. There is a link to business with integrity, fairness, openness, and . FedBizOpps Solicitation No. GS-00P-06-CYD-0012, Posted November 4, 2005. 1 2 . Descriptions of these programs can be found at http://www.sba.gov/sdb/; http://www.sba.gov/hubzone; and http://sba.gov/8abd. The Appraisal Journal, Fall 2006 381 notes and issues fulfill public policy objectives. Driving the federal Conclusion government acquisition process is the concept of Doing work for the federal government does re- “Best Value.” According to FAR 2.101, quire a learning curve, but could be worth the time “Best Value” means the expected outcome of an acquisi- and effort. Since all federal contracts over $25,000 tion that, in the Government’s estimation, provides the must be advertised in FedBizOpps, sooner or later greatest overall benefit in response to the requirement. federal entities are likely to solicit bids there. When one thinks about all the real estate owned by the Best value may be, but is not always, the lowest federal government, the appraisal opportunities price or the highest-ranked technical proposal. Often are limitless. it is achieved by a combination of price and non-price factors and how the interests of the government are best realized. Kathleen M. Holmes, MAI, is the Arizona Lead Ap- In addition to conforming to the Uniform Stan- praiser for the Department of Interior, Appraisal Services dards of Professional Appraisal Practice, much of Directorate, managing a program and reviewing apprais- the appraisal work required by the federal gov- als used for acquisitions, disposals, rights-of-way, and ernment must conform to the Uniform Appraisal exchanges of federal land. Her 20-year appraisal career Standards for Federal Land Acquisitions. Because includes working in private practice commercial firms, of its rather lengthy name, these standards are com- and positions as senior review appraiser, valuation man- monly referred to simply as the “Yellow Book” due ager, and state chief appraiser for several large national to its yellow cover. The Yellow Book is a complex banks. Holmes has been appointed to the Arizona State set of guidelines and requirements written by the Land Department Board of Appeals by two governors Interagency Land Acquisition Conference and pub- and twice approved by the Arizona Senate. She holds a lished by the Appraisal Institute. You can obtain this real estate broker’s license and is a member of Lambda document through the Appraisal Institute Web site Alpha International. Holmes serves on the Appraisal at www.appraisalinstitute.org/ecom/publications, Institute’s Valuation in the Government Sector Shared or the Department of Justice Web site at www.usdoj Interest Group. She holds a B.S. in business adminis- .gov/enrd/land-ack/Land_acquisition.html. The Ap- tration, with a specialization in real estate, from Arizona praisal Institute and the American Society of Farm State University. Contact: email@example.com Managers and Rural Appraisers offer Yellow Book classes.3 In addition to the Yellow Book regulations, This article is the individual work of the author and often agency-specific regulations apply when doing does not represent the views of her employer. federal government work. 3. Some federal agencies may require appraisers to have completed a course on the Yellow Book before the agency will award a contract. 382 The Appraisal Journal, Fall 2006 notes and issues Post-Kelo Legislation on Eminent Domain Impacts Valuations by Justin R. Morton S tate legislatures spent a good portion of their 2006 legislative sessions ensuring that property own- law also provides for attorney fees and allows for some means of compensating property owners in ers whose property is taken by eminent domain will condemnation proceedings, the bulk of the legisla- receive just compensation. In response to the U.S. tion focuses on the parameters of public use. Supreme Court’s 2005 Kelo v. New London deci- sion,1 which allows government agencies to take Just Compensation private property for economic development, state A few states have also tackled the issue of how to legislatures have focused heavily on eminent domain justly compensate property owners whose property and what constitutes just compensation. While the has been taken. majority of states enacted legislation prohibiting Traditionally courts have determined that when municipalities from taking private property for taking property by eminent domain, the government economic development, some state legislatures have must offer the property owner just compensation. also enacted laws ensuring that property owners are Under the Fifth Amendment of the U.S. Constitu- fairly compensated if their property is subject to a tion, the courts have interpreted just compensation government taking. Some of these newly enacted to mean fair market value. However, some states laws ensure property owners are fully compensated believe that fair market value does not fully compen- by changing the definitions of just compensation and sate an owner whose property is taken by eminent fair market value. Other state legislatures have gone domain. As such, the state legislatures have adopted as far as altering the appraisal process in order to new ways of measuring just compensation. ensure property owners receive just compensation. One of the most popular ways to ensure just compensation is to require that the state compensate Public Use the owner at a value above and beyond fair market Over half the states have enacted some type of emi- value. During the past year, several states introduced nent domain reform. The majority of states passed legislation that vastly increases the amount of just legislation defining public use so as not to include compensation a property owner would receive. For economic development. Traditionally public use has example, in New Hampshire (HB 1554) legislation included airports, highways, or other enterprises was introduced providing that the price paid for intended for the general use. However, under the property taken in eminent domain shall be at least Kelo decision local governments were allowed to take three times the highest value for the property in the property for economic development. Most states have past 10 years. In a similar vein, in Tennessee (SB reverted back to the traditional public use definition 3237) legislation was introduced that required the and restricted local governments’ ability to take state or a municipality condemning private property property for economic development. to pay the property owner three times the value of A good example of this type of state legislation the property as determined by the average of three can be found in Minnesota, where legislation passed MAI appraisals. Both of these bills failed to report (SF 2750) redefining public use and prohibiting from committee, but Tennessee did pass legislation the local municipalities from taking property for redefining public use. economic development. Although Minnesota’s new 1 . Kelo v. City of New London, 125 S. Ct. 2655 (2005); for a discussion of the issues in this case, see Hugh J. Totten and Jade R. Lambert, “Takings and Judicial Deference: Takings Law After the 2004–05 Supreme Court Term,” The Appraisal Journal (Fall 2005): 348–362. The Appraisal Journal, Fall 2006 383
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