
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 42USC1594]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
        CHAPTER 9--HOUSING OF PERSONS ENGAGED IN NATIONAL DEFENSE
 
              SUBCHAPTER XI--HOUSING FOR MILITARY PERSONNEL
 
Sec. 1594. Contracts for construction


(a) Contract provisions; competitive bids

    The Secretary of Defense or his designee is authorized to enter into 
contracts with any eligible bidder to provide for the construction of 
urgently needed housing on lands owned or leased by the United States 
and situated on or near a military reservation or installation for the 
purpose of providing suitable living accommodations for military 
personnel of the armed services assigned to duty at the military 
installation at or in the area where the housing is situated. Any such 
contract shall provide that each housing unit in the project shall be 
placed under the control of the Secretary of Defense, or his designee, 
as soon as the unit is available for occupancy as determined by the 
Secretary of Housing and Urban Development. Any such contract shall also 
provide that, except for stock held by the Secretary of Housing and 
Urban Development, the capital stock of the mortgagor (where the 
mortgagor is a corporation) be transferred to the Secretary of Defense, 
or his designee, when the housing has been completed as determined by 
the Secretary of Housing and Urban Development. Any such contract shall 
contain such terms and conditions as the Secretary of Defense may 
determine to be necessary to protect the interests of the United States. 
Any such contract shall provide for the furnishing by the contractor of 
a performance bond and a payment bond with a surety or sureties 
satisfactory to the Secretary of Defense, or his designee, and the 
furnishing of such bonds shall be deemed a sufficient compliance with 
the provisions of section 270a of title 40, and no additional bonds 
shall be required under such section. Before the Secretary of Defense 
shall enter into any contract as authorized by this section for the 
construction of housing, he shall invite the submission of competitive 
bids after advertising in the manner prescribed in section 2305 of title 
10.

(b) ``Eligible bidder'' defined

    For the purposes of this subchapter, the term ``eligible bidder'' 
means a person, partnership, firm, or corporation determined by the 
Secretary of Defense after consultation with the Secretary of Housing 
and Urban Development (1) to be qualified by experience and financial 
responsibility to construct housing of the type described in subsection 
(a) of this section, and (2) to have submitted the lowest acceptable 
bid.

(c) Acquisition of capital stock of property covered by mortgage

    Notwithstanding any other provision of law, the Secretary of Defense 
or his designee is authorized to acquire the capital stock of mortgagors 
holding property covered by a mortgage insured under title VIII of the 
National Housing Act as amended by the Housing Amendments of 1955 [12 
U.S.C. 1748 et seq.], and to exercise the rights as holder of such 
capital stock during the life of such mortgage and, upon the termination 
of the mortgage, to dissolve the corporation; to guarantee the payment 
of notes or other legal instruments required by the Secretary of Housing 
and Urban Development of such mortgagors; to make payments thereon; and 
to guarantee and indemnify the Armed Services Housing Mortgage Insurance 
Fund against loss in cases where so required. All housing facilities 
placed under the control of the Secretary of Defense pursuant to the 
provisions of this subchapter shall be deemed to be housing facilities 
under the jurisdiction of the military department to which they are 
assigned.

(d) Opinion as to title to property; guarantee; title search and title 
        insurance

    On request by the Secretary of Defense, the Attorney General shall 
furnish to the Secretary of Defense, or his designee, an opinion as to 
the sufficiency of title to any property on which it is proposed to 
construct housing, or on which housing has been constructed, under this 
section. If the opinion of the Attorney General is that the title to any 
such property is good and sufficient, the Secretary of Defense is 
authorized to guarantee, or enter into a commitment to guarantee, the 
mortgagee, under a mortgage on such property which is insured under 
title VIII of the National Housing Act [12 U.S.C. 1748 et seq.], against 
any losses that may thereafter arise from adverse claims to title. None 
of the proceeds of any mortgage loan hereafter insured under such title 
VIII shall be used for title search and title insurance costs: Provided, 
That if the Secretary of Defense, or his designee, determines in the 
case of any housing project, that the financing of the construction of 
such project is impossible unless title insurance is provided, the 
Secretary of Defense may provide for the payment of the reasonable costs 
necessary for obtaining title search and title insurance. Any payments 
by the Secretary of Defense hereunder shall be made from the revolving 
fund established under section 1594a(g) \1\ of this title. Any 
determination by the Secretary of Defense under the foregoing proviso 
shall be set forth in writing, together with the reasons therefor. The 
Committees on Armed Services of the Senate and House of Representatives 
shall be promptly notified of each such determination, and of the amount 
of any payment made by the Secretary of Defense for title search and 
title insurance costs.
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    \1\ See References in Text note below.
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(Aug. 11, 1955, ch. 783, title IV, Sec. 403, 69 Stat. 651; Aug. 7, 1956, 
ch. 1029, title V, Secs. 506(b)-(d), 507, 70 Stat. 1110; Pub. L. 86-149, 
title IV, Sec. 415, Aug. 10, 1959, 73 Stat. 323; Pub. L. 90-19, 
Sec. 12(d), (h)(1)-(3), May 25, 1967, 81 Stat. 23, 24.)

                       References in Text

    The National Housing Act, referred to in subsecs. (c) and (d), is 
act June 27, 1934, ch. 847, 48 Stat. 1246, as amended. Title VIII of the 
National Housing Act is classified generally to subchapter VIII 
(Sec. 1748 et seq.) of chapter 13 of Title 12, Banks and Banking. For 
complete classification of this Act to the Code, see section 1701 of 
Title 12 and Tables.
    Section 1594a(g) of this title, referred to in subsec. (d), was 
repealed by Pub. L. 87-554, title V, Sec. 501(d), July 27, 1962, 76 
Stat. 237.

                          Codification

    In subsec. (a), ``section 2305 of title 10'' substituted for 
``section 3 of the Armed Forces Procurement Act of 1947'' on authority 
of act Aug. 10, 1956, ch. 1041, Sec. 49(b), 70A Stat. 640, the first 
section of which enacted Title 10, Armed Forces. Prior to enactment of 
Title 10, section 3 of the Armed Forces Procurement Act of 1947 was 
classified to section 152 of Title 41, Public Contracts.


                               Amendments

    1967--Subsecs. (a) to (c). Pub. L. 90-19, Sec. 12(d), substituted 
``Secretary of Housing and Urban Development'' for ``Commissioner'' 
wherever appearing.
    Subsec. (a). Pub. L. 90-19, Sec. 12(h)(1), substituted ``Secretary 
of Defense'' for ``Secretary'' in fourth and sixth sentences.
    Subsec. (b). Pub. L. 90-19, Sec. 12(h)(2), substituted ``Secretary 
of Defense'' for ``Secretary''.
    Subsec. (d). Pub. L. 90-19, Sec. 12(h)(3), substituted ``Secretary 
of Defense'' for ``Secretary'' in last three sentences.
    1959--Subsec. (d). Pub. L. 86-149 added subsec. (d).
    1956--Subsec. (a). Act Aug. 7, 1956, Secs. 506(b), (c), (d), 507, 
substituted ``eligible bidder'' for ``eligible builder'' in first 
sentence; substituted ``the mortgagor'' for ``the builder'' in two 
places in third sentence; inserted provision before last sentence, 
relating to furnishing by contractor of a performance bond and a payment 
bond with surety satisfactory to Secretary; and struck out from last 
sentence ``with any builder'' after ``Before the Secretary shall enter 
into any contract''.
    Subsec. (b). Act Aug. 7, 1956, Sec. 506(b), substituted ``eligible 
bidder'' for ``eligible builder''.

                  Section Referred to in Other Sections

    This section is referred to in section 1594d of this title; title 12 
section 1748b.
