Landlord's Failure To Provide Cafeteria for Federal Workers

GAO was asked whether any provisions in a General Services Administration (GSA) lease would have justified the withholding of rent for the landlord's failure to provide a cafeteria as required by the lease. GAO had recommended the withholding to prompt the landlord to litigate the question. Subsequently, however, the GSA Board of Contract Appeals determined that GSA had waived its entitlement to a cafeteria because, among other things, it never made good on its threat to withhold rent for the landlord's failure to provide the cafeteria. Failure of performance would have allowed the agency to provide the cafeteria and deduct its cost from rent payments, but would not have allowed deductions from the lease's inception for failure to provide a cafeteria. A lease provision for termination for default, liquidated damages, and time extensions would not have justified the rent withholding.