c. In unusual circumstances, two applicants may submit closely comparable proposals, but on different terms such as lower percentage rate with a higher guaranteed return or vice versa. In this situation, the probable expectancy of return and other factors, in each case is presented to the Commission for final determination.

d. In the remote instance that a group of two or more applications may be outstanding among the entire number of applications received, but so closely identical in their detailed proposal terms as to indicate the necessity of further negotiation with each in order to determine the best financial return, such a procedure is recommended to the Commission. If approval to this course is obtained, the Agent negotiates the best obtainable proposal from each and recommends the proposal selected.

5. Approval of Recommendation.-Upon receipt of notice from the Commission of approval or disapproval of a recommended applicant, the Agent notifies the interested parties of the decision reached.

a. If approved, the lease is prepared.

b. If disapproved, the negotiations are reopened in accordance with instructions received by the Agent from the Commission.

6. Execution of Lease.-After receipt of approval from the Commission the lease is prepared by the Agent and submitted to the Commission for review. After review, it is returned to the Agent with comments or approval for execution by the lessee and the Agent. Four copies of the lease are executed and forwarded to the Commission for approval consistent with standard practice; in some cases the Agent may require a performance bond. The original and duplicate copy are retained by the Commission, the other two copies being returned to the Agent, one for the Agent and one for the lessee. Three confirmed copies are then forwarded to the Commission for filing and necessary distribution. (In the event a performance bond is required, it will be executed on approved forms by the lessee at the time the lease is executed and the same number of copies of the bond as of the lease will be executed and distributed in the same manner.)

7. Reasons for Not Making Public An Abstract of Commercial Proposals.— Consistent with normal real estate practice it is necessary that the Agent treat information submitted by applicants on a confidential basis, similar to the treatment expected by a client of a licensed realtor in a normal community. We feel this is both necessary and appropriate for the following reasons:

a. In order to attract and hold the better merchants, it is necessary to treat this type of information as confidentially as they would expect in other localities.

b. In selecting the best possible proposal for a commercial facility, we consider all the steps taken leading to the final selection as a part of a negotiation. The steps we take in soliciting proposals for commercial facilities are closely parallel to standard government practice for obtaining competitive proposals on construction or procurement contracts. While this parallel procedure is practical in the solicitation of proposals, it is not practical to follow after the formal. proposals are received. Unlike a construction or procurement contract, in obtaining proposals for commercial enterprise, it is not possible to define or standardize all pertinent factors considered into a standard form to obtain proposals that can be abstracted in a manner from which the proposal in the best interest of the government can be determined by an arithmetical extension. The parallel steps are taken for the purpose of insuring that a standard procedure is followed. In solicitation, all interested parties are accorded the same information and consideration, and the Agent recognizes the necessity of making clear to each that the proposals received are based on a clear knowledge of the requirements and the manner in which they will be evaluated and selection made; also that the final evaluation and selection will be based on the written formal proposals. In this manner we obviate any possible criticism of favoritism and have complete backup information to substantiate all selections made. Therefore, highly confidential business information pertaining to finances, operational recommendations, general public reputation, and the manner in which he proposes to conduct his business is asked for in lieu of detailed specifications. Public release of this type of information submitted by the applicant would deter highly qualified companies and individuals from submitting their proposals if they were aware that this information was to be made available to their competitors.

8. Rental figures, proposed amount of investment in the premises, type of operation and similar figures are the only data which might be abstracted and made public. However, a comparison of these figures alone would have no real meaning and would lend to misinterpretation by those not having access to all the confidential descriptive information which also was considered by the government and its real estate agent in making final selection.

Field/rdl.

CC: R. W. Cook.

F. W. Ford

R. Field.

L. C. Macneal, RA Co. (2).

OCA Reading File.

CSD Reading File.
AMEC M & R.

R. W. COOK.

6. Amount of rental proposed (Percent of Gross Receipts and Minimum Guarantee or Flat Rental as the case may be)

7. Estimated cost of setting up proposed business:

9. Maintenance in general: (To be filled in by Agent)

Interior (Including doors &

(By Agent)

windows)

Exterior

Major Structural_.

(By Applicant)

10. Attach to this application a complete balance sheet, using the enclosed state

Landlords

Name

[Page 2]

Street

City & State

12. If individual, list all businesses operated during the past ten (10) years: Location Annual gross

Date

Туре

business

13. Have you ever been adjudged or declared bankrupt?

(For individual or partnership)

14. Will additional funds be borrowed to set up proposed business? give amount and name of person or organization who will finance

Annual rent paid

If so,

15. If corporation has been formed within last 12 months, members of the corporation must individually guarantee all obligations to the Government incurred by the corporation. Is this Agreeable?

Signatures of Guarantors: (Individual Financial Statement Attached to be filled out)

16. The applicant will in general be required to adhere to the provisions of a standard agreement form which is available in the office of the Agent. 17. Application must be filed with Roane-Anderson Company, acting as Agent for the United States of America at Oak Ridge, Tennessee, not later than after which time no other applications for this location will be accepted. The Roane-Anderson Company reserves the right to reject any and all applications when it is deemed advisable in the interest of the Government or the Agent. All applications will be considered not only on the basis of rental proposed but also upon the experience, assets, integrity of, and investment proposed by the applicant.

Date:

(Witness)

(Witness)

(Witness)

(Witness)

day of

194

EXHIBIT 5

(Referred to on p. 45)

HISTORICAL RÉSUMÉ OF DEPARTMENT STORE OPERATION

Location: Group 2, Building No. 4, Broadway, consisting of 37,000 square feet on two floors, main and basement.

The building was completed in 1943 by the USED and a concession agreement negotiated by them with Miller's, Inc., of Knoxville, to operate a department store therein. This agreement was for a period of one year, subject to renegotiation for renewal after proper indication of such intent by the licensee to the licensor. It, likewise, contained provision for termination by either party upon the party desiring to terminate first serving, 30 days prior written notice to the other of its intention to do so.

The above referenced agreement was successfuly renegotiated with Miller's, Inc., prior to the negotiation period of 1946 for the year 1946-47. Volume attainments and attendant net profits indicated at this time certain inequities in rental returns to the Government existed in several concession agreements. These apparent inequities were remedied by mutual agreement of licensee and licensor for payment of the indicated proper market value rental on the part of the concessionaire involved or by the opening to competitive proposals of the concession in order to determine the actual current value of the property at the time of such negotiation.

Solicitation by the Agent during this period of negotiation with Miller's, Inc.,` in the year 1946 produced several proposals from interested parties for the operation of this property. On approximately June 18, 1946, the Agent was contacted by a Mr. H. A. Levison, field representative of Darling Stores Corporation, to determine if their company could submit a proposal for this location on the basis of subleasing all departments other than their own to qualified operators. They were advised to submit a proposal if they so desired which would receive full consideration by this office along with all others received. The attached correspondence, marked "Exhibit A," covers this period of negotiation and type sublessee, with forecast of expected annual volume, which Darling Stores Corporation indicated they would give to the licensor if awarded the referenced location under a concession agreement.

A complete and full discussion of the problems involved at the time of negotiation between the representatives of the Roane-Anderson Company and the USED resulted in the selection and approval of the proposal submitted by Darling Stores Corporation in preference to the other proposals received by the Agent for the occupancy of this property. (See attached letter of recommendation dated July 3, 1946, and the reply of approval to same dated October 21, 1946, included in Exhibit A.)

In accordance with the terms of the proposal submitted by the Darling Stores Corporation and consistent with the negotiations conducted between the licensee and licensor, a document in the form of a concession agreement was executed by Taylor's Oak Ridge Corporation and the Roane-Anderson Company, acting as Agent of the U. S. Government. The Darling Stores Corporation simultaneously executed an agreement with the Roane-Anderson Company in which they guaranteed to the Agent, Roane-Anderson Company, acting in behalf of the U. S. Government, the performance of all contractual obligations of the Taylor's Oak Ridge Corporation, its wholly owned subsidiary.

The above-referenced agreement, in addition to the usual provisions of the accepted form of concession agreement, provided for the following:

a. The optional right of the licensee to renew the agreement prior to the expiration date of the first year's term of occupancy for two successive oneyear periods under the same terms and conditions, provided all other contractual obligations were performed in a reasonable manner.

b. A mutually acceptable safeguard for the amortization of initial fixturing expense by the licensce was agreed upon and became a part of the referenced concession agreement.

c. The right of termination was established and defined in the signed document as indicated in the negotiations for same. (See Exhibit B.) On May 19, 1947, the Agent was notified in writing that the licensee desired to exercise the optional right contained in his agreement for an additional one-year period commencing September 1, 1947, under the same terms and conditions of the expiring agreement. This action was accomplished by modifications to the original document as covered in "Exhibit C."

On August 26, 1947, a visit from Mr. Stanley Roth indicated clearly the difficulty Taylor's were experiencing in obtaining satisfactory sublessees and