[Code of Federal Regulations]
[Title 32, Volume 4]
[Revised as of July 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 32CFR644.84]

[Page 166-167]
 
                       TITLE 32--NATIONAL DEFENSE
 
              CHAPTER V--DEPARTMENT OF THE ARMY (CONTINUED)
 
PART 644--REAL ESTATE HANDBOOK--Table of Contents
 
                         Subpart C--Acquisition
 
Sec. 644.84  Counteroffers.

    (a) Consideration of Counteroffers. In negotiations with landowners, 
if agreement cannot be reached with a landowner as to the purchase price 
established by the appraisal, the lowest price demanded by the landowner 
may be considered by the Division and District Engineer, and the Chief 
of the Real Estate Division, on the basis of the following factors:
    (1) Variations in Appraisals. In the usual case, the Corps will have 
the opinion of only one appraiser with respect to the market value of 
the particular tract of land. It must be recognized that the opinion of 
a second equally competent appraiser might be higher or lower than that 
of the appraiser who appraised the property. Hence in considering 
counteroffers of landowners, Division and District Engineers should keep 
in mind that two equally competent appraisals may reflect reasonably 
divergent opinions of value as to the same property. Instances requiring 
two appraisals are covered in Sec. 644.82(d).
    (2) Built-in Costs, Prior Counteroffers, Settlements and Liability 
Risks of Proceeding to Trial. It is recognized that there are certain 
Government administrative costs and liability risks involved when 
property is condemned by the United States and the land value is 
judicially determined. These items are definite in character but the 
attendant costs will vary. ``Built-in'' costs of proceeding to trial 
include, but are not limited to, the following items: Salaries of all 
Government personnel participating in trial preparation, pre-trial 
hearings, and the actual trial; cost of an additional appraisal(s); 
witness fees of contract appraisers employed by the Corps of Engineers 
or the Department of Justice; travel costs of all Government personnel 
and consultants participating in trial preparation, pre-trial hearings, 
and the actual trial; and cost of preparing trial documents and 
exhibits. Consideration should also be given to prior counteroffers 
which have been accepted and settlements approved prior to trial. 
``Liability risks'' of proceeding to trial are the amount of the 
anticipated award over and above the appraised value, taking into 
consideration probable testimony on behalf of the Government and the 
landowners, as well as the history of condemnation awards in the Federal 
court jurisdiction in which the lands are located, and the amount of 
interest on a deficiency judgment which would result from the 
anticipated award. Serious consideration of the above factors may 
justify a recommendation for authority to accept a counteroffer which 
otherwise would appear to liberal.
    (3) Non-Compensable Elements of Value. Elements of value based on 
consequential damages or speculative values, as defined by the Federal 
courts, may not be recognized in considering a landowner's counteroffer. 
However, even though a landowner's counteroffer might include non-
compensable items of value, favorable consideration of the counteroffer 
may be given if it can be justified on the basis of variances in

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appraisals, built-in costs, and liability risks of proceeding to trial.
    (4) Value of Reserved Items. The salvage value of improvements and 
the value of crops and/or timber reserved by the landowners, as provided 
in Sec. 644.86 (g), (h), and (i), will not be included in the amount of 
the counteroffer in determining the excess of counteroffers over 
appraised values when applying the dollar and percentage limitations in 
the delegations of authority to Division and District Engineers for 
acceptance of counteroffers. The determination of the excess will be 
made on the basis of the appraised value of the interests being acquired 
(including the value of the reserved items) compared to the cash payment 
which will be made to the landowner if the Government accepts his 
counteroffer. However, this method of analyzing the counteroffer is 
intended for use only in determining the limitations of authority. The 
overall transaction must be in the interest of the United States and not 
afford an unwarranted windfall to the vendor.
    (b) Application and Limits of Delegated Authority. The negotiating 
procedures outlined herein will apply to all acquisitions by the Corps 
of Engineers for the Army (military and civil), Air Force, Department of 
Energy (DOE), National Aeronautics and Space Administration (NASA), and 
other Federal agencies which utilize the services of the Corps for 
acquisition of real estate. Delegations of authority to Division and 
District Engineers and to the Chiefs of their Real Estate Divisions to 
accept offers in excess of the appriased valuation have been made. 
Offers which do not exceed the approved appraised value may be accepted 
by authorized Division and District personnel regardless of the amount. 
Other offers will be handled as outlined in the paragraphs which follow.
    (c) Exercise of Delegated Authority. The approval of a counteroffer 
over the appraised value, but within the authority redelegated to 
Divisions and Districts, will be evidenced by the Division Engineer, the 
District Engineer, the Chief of the Real Estate Division, or the 
incumbent of the position to which redelegations have been made, in one 
of the following manners:
    (1) Manually accepting, on behalf of the United States, the offer to 
sell, as provided in Sec. 644.87; or
    (2) Manually executing a dated notation of approval of the purchase 
price, to be placed in the tract file, preferably on the original of the 
Negotiator's Report (Sec. 644.83(g)).
    (d) Submission of Counteroffers to the Chief of Engineers. 
Recommendations for the grant of authority to accept counteroffers which 
are considered reasonable, but which cannot be accepted by the Division 
Engineer, the District Engineer, or the Chief of the Real Estate 
Division, within the limitations of delegated authority, will be 
submitted to HQDA (DAEN-REA) WASH DC 20314 for consideration. 
Negotiator's Reports, prepared in accordance with Sec. 644.83(g) will 
accompany this submission; the contents thereof need not be repeated in 
the transmittal letter or in forwarding indorsements. The assembly will 
consist of the forwarding correspondence and the Negotiator's Report, 
with any additional material needed to support the recommendation of the 
Division and District Engineer. An analysis should be made of this offer 
as compared with other counteroffers accepted for the project, as well 
as with results in condemnation cases settled before trial. Signed 
offers will not be forwarded unless they contain deviations requiring 
approval by the Chief of Engineers. Appraisal reports are helpful and 
may be necessary reference for proper consideration of the 
recommendation. In the event the appraisal report was approved by HQDA 
(DAEN-REA), the forwarding letter should refer to the approval 
correspondence and data. It will not be necessary to enclose copies of 
the appraisal report. Where only a portion of an ownership is required, 
information should be furnished in the Negotiator's Report or in the 
transmittal correspondence (1) as to whether or not the remainder 
portion is considered to be an uneconomic remnant and (2) if so, as to 
whether or not an offer was made to acquire the entire property. 
Further, a statement is required as to whether or not it is considered 
that the acquisition will have any adverse effect on the acquisition of 
the remaining land required for the project.

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