Request for Reconsideration

A company requested reconsideration of the Claims Division settlement disallowing the company's claim for $4,968,743 believed due for the alleged taking of its property without compensation incident to various facilities contracts with the Government, and for reimbursement of $184,392 due for utilities services. The claimant contended that although the lease only covered 3.98 acres, the Government had in fact used approximately 14 acres of the claimant's land, and that the unauthorized use of approximately 10 acres of land gave rise to a right to compensation. GAO held that one lease agreement did not entitle the claimant to the fair rental value of the unleased property used by the Government and, therefore, denied this portion of the claim. The utilities claim consisted of unabsorbed overhead expenses on Government contract and costs for utilities provided by the company to its commercial customers. The company argued it had not been fully reimbursed for utility services. Although forecasted utility expenses, including those applicable to the leased premises, were included in the overhead bid rates used in negotiating other Government contracts, the company alleged that a certain portion was unabsorbed. In denying the claim, the Claims Division concluded that additional reimbursement could not be permitted under the lease agreement in that the amount of payment received was the result of an inadequate allocation formula rather than nonpayment by the Government. The Air Force also believed that this claim should be denied. The Air Force argued that the contract merely provided that the Government should pay the company the reasonable cost of utilities as negotiated between the parties, and it was the intention to define and limit such reasonable cost rather than to provide a blanket guaranty of costs their applicable to the company's overall operation. The Air Force pointed out that the company had received under the facilities contract reimbursement for utilities costs properly allocable to the facilities contract. GAO agreed with the Air Force. To give this lease provision the effect argued by the company required an interpretation that the Government intended to guarantee reimbursement of the company's utility costs attributable to its overall operation. Therefore, this portion of the claim also was denied.