A-75720, JUNE 5, 1936, 15 COMP. GEN. 1064

A-75720: Jun 5, 1936

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

SET-OFF - LEASES - AMOUNT PAYABLE TO THIRD PARTY FOR LESSOR'S FAILURE TO MEET OBLIGATIONS WHERE A THIRD PARTY PERFORMS SERVICES UNDER A GOVERNMENT CONTRACT WHICH THE LESSOR IS OBLIGATED TO PERFORM UNDER THE TERMS OF THE LEASE. THE LESSOR IS CHARGEABLE WITH THE AMOUNT PAYABLE TO THE THIRD PARTY. 1936: THERE IS FOR CONSIDERATION PREAUDIT VOUCHER NO. 8878 IN FAVOR OF THE CHARLES E. WAS RETURNED WITHOUT CERTIFICATION UNDER PREAUDIT DIFFERENCE STATEMENT DATED MAY 9. - * * * THE LESSOR AT ITS OWN COST AND EXPENSE SHALL ALSO FURNISH THE NECESSARY EQUIPMENT AND FACILITIES FOR SUPPLYING THE PREMISES HEREIN LEASED WITH BOTH ALTERNATING AND DIRECT ELECTRIC CURRENT. * * * THE VOUCHER WAS RESUBMITTED BY LETTER DATED MAY 16.

A-75720, JUNE 5, 1936, 15 COMP. GEN. 1064

SET-OFF - LEASES - AMOUNT PAYABLE TO THIRD PARTY FOR LESSOR'S FAILURE TO MEET OBLIGATIONS WHERE A THIRD PARTY PERFORMS SERVICES UNDER A GOVERNMENT CONTRACT WHICH THE LESSOR IS OBLIGATED TO PERFORM UNDER THE TERMS OF THE LEASE, THE LESSOR IS CHARGEABLE WITH THE AMOUNT PAYABLE TO THE THIRD PARTY, THE AMOUNT TO BE WITHHELD FROM RENTAL PAYMENTS OTHERWISE DUE UNDER THE LEASE.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF COMMERCE, JUNE 5, 1936:

THERE IS FOR CONSIDERATION PREAUDIT VOUCHER NO. 8878 IN FAVOR OF THE CHARLES E. TULL CO. FOR $1,075, FOR INSTALLATION OF ELECTRIC WIRING, PANEL BOARDS, OUTLETS, AND RECORDING VOLT METER, UNDER CONTRACT ER-TPS 23-4622, DATED DECEMBER 17, 1935, IN QUARTERS IN THE GUARANTY INDUSTRIAL BUILDING, PHILADELPHIA, PA., OCCUPIED BY THE BUREAU OF CENSUS UNDER LEASE ER-CCO-1, ENTERED INTO SEPTEMBER 3, 1935, BETWEEN THE DIRECTOR, BUREAU OF CENSUS, AND THE GUARANTY CORPORATION, FOR THE TERM BEGINNING SEPTEMBER 16, 1935, AND ENDING SEPTEMBER 15, 1936, AT AN ANNUAL RENTAL OF 50 CENTS PER SQUARE FOOT.

THE VOUCHER WHEN ORIGINALLY SUBMITTED UNDER SCHEDULE 1412-A, WAS RETURNED WITHOUT CERTIFICATION UNDER PREAUDIT DIFFERENCE STATEMENT DATED MAY 9, 1936, FOR AN EXPLANATION WHY THE WORK PERFORMED UNDER SUCH CONTRACT SHOULD NOT BE CONSIDERED AS AN OBLIGATION OF THE LESSOR UNDER PARAGRAPH 6 OF THE LEASE DESCRIBED ABOVE, SAID PARAGRAPH PROVIDING AMONG OTHER THINGS THAT---

* * * THE LESSOR AT ITS OWN COST AND EXPENSE SHALL ALSO FURNISH THE NECESSARY EQUIPMENT AND FACILITIES FOR SUPPLYING THE PREMISES HEREIN LEASED WITH BOTH ALTERNATING AND DIRECT ELECTRIC CURRENT. * * *

THE VOUCHER WAS RESUBMITTED BY LETTER DATED MAY 16, 1936, FROM THE CHIEF CLERK, BUREAU OF CENSUS, AS FOLLOWS:

ALTHOUGH IT IS NOT CLEARLY STATED IN PARAGRAPH 6 OF E.R.C. CO. 1 THAT THE LESSEE WOULD BEAR THE COST OF THE SPECIAL ELECTRICAL WORK REQUIRED IN CONNECTION WITH THE USE OF TABULATING AND SORTING MACHINES, IT WAS THE UNDERSTANDING OF BOTH THE LESSOR AND LESSEE THAT THIS WOULD BE DONE.

AT THE TIME SPACE WAS RENTED, IT HAD NOT BEEN DEFINITELY DECIDED WHERE ELECTRIC OUTLETS, ETC., FOR TABULATING AND SORTING MACHINES WOULD BE PLACED OR WHEN THEY WOULD BE NEEDED. THE SPECIFICATIONS STATED ON INVITATION TO BID ON SPACE REQUIRED BUILDING TO BE EQUIPPED WITH BOTH ALTERNATING AND DIRECT CURRENT FOR LIGHT AND POWER. (SEE COPY ATTACHED.) HAD THERE BEEN ANY INTENTION OF HAVING THE LESSOR PERFORM THE SPECIAL ELECTRIC WORK UNDER THE RENTAL PRICE, A DESCRIPTION OF THE UNUSUAL REQUIREMENTS FOR ELECTRICAL SERVICE WOULD HAVE BEEN INCLUDED IN THESE SPECIFICATIONS. (SEE SPECIFICATIONS FOR ELECTRIC SERVICE.)

THE SPECIFICATIONS, WHICH BECAME A PART OF THE LEASE, PROVIDED THAT THE BUILDING SHOULD HAVE ,LIGHTING AND HEATING FACILITIES INSTALLED REASONABLY COMPLETE FOR IMMEDIATE OCCUPANCY" AND THAT THE LESSOR SHOULD FURNISH AS PART OF THE RENTAL CONSIDERATION "BUILDING * * * EQUIPPED WITH BOTH ALTERNATING AND DIRECT CURRENT FOR LIGHT AND POWER.'

THERE WAS SUBMITTED, ALSO, COPY OF LETTER OF SEPTEMBER 19, 1935, FROM THE LESSOR TO THE CHIEF CLERK, BUREAU OF CENSUS, AS FOLLOWS:

KINDLY ADVISE AT YOUR EARLIEST CONVENIENCE THE MAXIMUM TIME WHEN YOU WILL REQUIRE DIRECT CURRENT FOR THE OPERATION OF THE EQUIPMENT OF THE UNITED STATES BUREAU OF CENSUS, AT THE SAME TIME ALSO PLEASE CONFIRM INFORMATION SUPPLIED THE WRITER SOMETIME AGO THROUGH YOUR MECHANICAL ENGINEER, THAT, FOR A TABULATING EQUIPMENT, 59,000 WATT WOULD BE REQUIRED AS MAXIMUM STARTING LOAD WITH 18,000 RUNNING LOAD. WE DESIRE THIS INFORMATION IN ORDER TO BE IN A POSITION TO FULFILL OUR PART OF THE CONTRACT AT THE TIME SUCH DIRECT CURRENT IS REQUIRED BY YOUR ORGANIZATION.

RECEIPT OF THIS LETTER WAS ACKNOWLEDGED UNDER DATE OF SEPTEMBER 21, 1935, AND THE LESSOR WAS ADVISED THAT THE MECHANICAL ENGINEER OF THE ADMINISTRATIVE OFFICE WAS ON LEAVE OF ABSENCE, BUT THAT UPON HIS RETURN, SEPTEMBER 30, THE MATTER WOULD BE CONSIDERED AND THE LESSOR WOULD BE ADVISED FURTHER. ON OCTOBER 1, 1935, THE LESSOR WAS NOTIFIED AS FOLLOWS:

IT IS ESTIMATED THAT WE WILL REQUIRE DIRECT ELECTRICAL CURRENT COMMENCING JANUARY 15, 1936. IN ORDER TO START THE ELECTRICAL TABULATING EQUIPMENT 60,000 WATTS WILL BE NEEDED, AND 33,000 WATTS WILL BE REQUIRED TO KEEP THE MACHINERY RUNNING. THE VOLTAGE SHOULD BE FROM 110 TO 115.

THE RECORD IS SILENT AS TO ANY FURTHER ACTION TAKEN BY THE LESSOR OR THE ADMINISTRATIVE OFFICE WITH REFERENCE TO THE MATTERS DISCUSSED IN THE LETTERS OF SEPTEMBER 19 AND OCTOBER 1, AND, NOTWITHSTANDING THE FACT THAT THE LESSOR WAS OBLIGATED TO FURNISH AS PART OF THE RENTAL CONSIDERATION A BUILDING EQUIPPED WITH BOTH ALTERNATING AND DIRECT CURRENT FOR LIGHT AND POWER AND THE LESSOR'S APPARENT WILLINGNESS TO FURNISH SUCH SPECIAL SERVICES AS IS INDICATED BY ITS LETTER OF SEPTEMBER 19, 1935, NEVERTHELESS THE CONTRACT WAS ENTERED INTO WITH CHARLES E. TULL CO. FOR THE SERVICES COVERED BY VOUCHER NO. 8878.

THE VOUCHER, IF OTHERWISE CORRECT, WILL BE CERTIFIED FOR PAYMENT AND RETURNED THROUGH THE USUAL CHANNELS, BUT SINCE UNDER THE TERMS OF PARAGRAPH 6 OF THE LEASE THE LESSOR WAS OBLIGATED TO FURNISH THE SERVICES COVERED BY SAID VOUCHER, YOU ARE REQUESTED TO ISSUE THE NECESSARY INSTRUCTIONS TO WITHHOLD THE AMOUNT OF THE VOUCHER, TO WIT, $1,075, FROM RENTAL PAYMENTS ACCRUING UNDER THE SUBJECT LEASE AND TO TAKE THE NECESSARY ADMINISTRATIVE ACTION TO PREVENT RECURRENCE OF SIMILAR INSTANCES. SEE UNITED STATES POST OFFICE CORPORATION V. UNITED STATES, 80 CT.CLS. 785.