B-119370, APR. 8, 1957

B-119370: Apr 8, 1957

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GENERAL SERVICES ADMINISTRATION: FURTHER REFERENCE IS MADE TO YOUR LETTER OF MARCH 1. THAT AT THE TIME OF THE ORIGINAL AGREEMENT THE PARTIES WERE UNAWARE OF THE FACT THAT THERE WAS ROOM FOR ONLY EIGHT OF THE TEN BUILDINGS STIPULATED IN PARAGRAPH 20 OF THE LEASE. WAS INTENDED TO REIMBURSE THE LESSOR FOR ACTUAL EXPENSES INCURRED BY IT IN MOVING SUFFICIENT BUILDINGS TO THE SITE FOR USE BY THE GOVERNMENT. THAT IT WAS ANTICIPATED THAT THE LESSOR WOULD EXPEND $100. THAT THE ORIGINAL AGREEMENT TENDS TO SUPPORT THE POSITION TAKEN BY THE DEPARTMENT OF LABOR AND THE LESSOR TO THE EFFECT THAT THERE WAS A MUTUAL MISTAKE OF FACT AS TO THE NEED FOR THE TWO ADDITIONAL BUILDINGS AND THAT IT WAS THE CLEAR INTENT OF THE ORIGINAL AGREEMENT THAT THE RENTAL WOULD BE SUFFICIENT TO REIMBURSE THE LESSOR FOR THE EXPENSES INCURRED.

B-119370, APR. 8, 1957

TO THE HONORABLE FRANKLIN G. FLOETE, ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF MARCH 1, 1957, REQUESTING A DECISION WHETHER LEASE NO. GS-09B-182, DATED DECEMBER 20, 1951, AS AMENDED, MAY BE FURTHER AMENDED TO CHANGE THE REQUIREMENT IN PARAGRAPH 20 FOR FURNISHING TEN BUILDINGS FOR SLEEPING QUARTERS TO EIGHT BUILDINGS, WITHOUT ANY DEDUCTION IN THE RENTAL AS PROVIDED IN PARAGRAPH 7.

YOU STATE, IN EFFECT, THAT AT THE TIME OF THE ORIGINAL AGREEMENT THE PARTIES WERE UNAWARE OF THE FACT THAT THERE WAS ROOM FOR ONLY EIGHT OF THE TEN BUILDINGS STIPULATED IN PARAGRAPH 20 OF THE LEASE, THAT THE STIPULATED RENTAL FOR THE ORIGINAL TERM ENDING JUNE 30, 1957, WAS INTENDED TO REIMBURSE THE LESSOR FOR ACTUAL EXPENSES INCURRED BY IT IN MOVING SUFFICIENT BUILDINGS TO THE SITE FOR USE BY THE GOVERNMENT, THAT IT WAS ANTICIPATED THAT THE LESSOR WOULD EXPEND $100,000, REIMBURSABLE AT THE PER ANNUM RATE OF $20,000 FOR 5 YEARS, THAT SO FAR THE LESSOR ACTUALLY HAS SPENT AN AMOUNT IN EXCESS OF $100,000, AND THAT THE GOVERNMENT HAS NO NEED FOR THE TWO BUILDINGS THE LESSOR FAILED TO ERECT. ALSO, YOU STATE THAT PREVIOUSLY THE ADMINISTRATION HAS TAKEN THE POSITION THAT REFORMATION OF THE LEASE AS REQUESTED WOULD NOT BE JUSTIFIED IN THE ABSENCE OF SOME CONSIDERATION FLOWING TO THE GOVERNMENT, SUCH AS A PROPORTIONATE REDUCTION IN THE RENT. YOU STATE, HOWEVER, THAT THE ORIGINAL AGREEMENT TENDS TO SUPPORT THE POSITION TAKEN BY THE DEPARTMENT OF LABOR AND THE LESSOR TO THE EFFECT THAT THERE WAS A MUTUAL MISTAKE OF FACT AS TO THE NEED FOR THE TWO ADDITIONAL BUILDINGS AND THAT IT WAS THE CLEAR INTENT OF THE ORIGINAL AGREEMENT THAT THE RENTAL WOULD BE SUFFICIENT TO REIMBURSE THE LESSOR FOR THE EXPENSES INCURRED.

THE PREMISES ARE DESCRIBED IN PARAGRAPH 2 AS INCLUDING THE EXISTING BUILDINGS, COMPRISING THE ,BRIGHT RESIDENCE 51 FEET BY 126 FEET (6426 SQUARE FEET), ADDITIONAL DINING ROOM 12 FEET BY 126 FEET (1512 SQUARE FEET), THE WATER PROCESSING PLANT (NO AREA), TOGETHER WITH OTHER BUILDINGS DESCRIBED IN PARAGRAPH 20, COMPRISING A TOTAL OF APPROXIMATELY 42,470 SQUARE FEET.' PARAGRAPH 20 STIPULATES THAT---

"PRIOR TO OCCUPANCY, AND IN ANY EVENT NOT LATER THAN FEBRUARY 1, 1952, LESSOR WILL AT HIS OWN EXPENSE ERECT SUITABLE AND ADEQUATE FENCE TO ENCLOSE THE ENTIRE AREA UNDER THIS LEASE; 10 BUILDINGS FOR SLEEPING QUARTERS, 23 FEET BY 110 FEET, 25,300 SQUARE FEET; 1 BUILDING FOR SLEEPING QUARTERS, 36 FEET BY 140 FEET, 5040 SQUARE FEET, 2 QUONSET HUTS, 48 FEET BY 20 FEET, 1920 SQUARE FEET, 1 SANITARY BUILDING INCLUDING LATRINES AND SHOWERS, 16 FEET BY 142 FEET, 2272 SQUARE FEET; ALL MEETING THE REQUIREMENTS OF THE GOVERNMENT.'

IT SEEMS CLEAR THAT AT THE TIME THE LEASE WAS EXECUTED THE GOVERNMENT AND THE LESSOR BOTH CONTEMPLATED AND EXPECTED THAT, IN ADDITION TO THE BUILDINGS THEN ON THE PREMISES AS DESCRIBED IN PARAGRAPH 2 OF THE LEASE, THE LESSOR WOULD ERECT THE ADDITIONAL BUILDINGS AS DESCRIBED IN PARAGRAPH 20 OF THE LEASE, THE ENTIRE AREA OF ALL BUILDINGS AS DESCRIBED IN BOTH PARAGRAPHS AGGREGATING APPROXIMATELY 42,470 SQUARE FEET. WHILE IT WELL MAY BE THAT THE LESSORS FAILURE TO ERECT TWO OF THE TEN BUILDINGS FOR SLEEPING QUARTERS AS DESCRIBED IN PARAGRAPH 20 CONTAINING AN AGGREGATE AREA OF 5,060 SQUARE FEET WOULD HAVE BEEN SUFFICIENT BASIS, IN THE FIRST INSTANCE, FOR THE GOVERNMENT TO HAVE REFUSED TO ACCEPT FEWER BUILDINGS THAN AS SPECIFIED IN PARAGRAPH 20 AND TO HAVE ACQUIRED OTHER SUITABLE PREMISES, HOLDING THE CONTRACTOR LIABLE FOR THE EXCESS COSTS INCURRED, OR TO HAVE REFUSED TO OCCUPY THE PREMISES WITHOUT A REDUCTION IN THE RENTAL TO BE PAID, NEITHER OF SUCH COURSES WAS ADOPTED. ON THE CONTRARY, IT APPEARS THAT THE GOVERNMENT ENTERED THE PREMISES UNDER THE LEASE AND HAS CONTINUED TO OCCUPY SAME FOR OVER FIVE YEARS. IT IS REPORTED THAT DURING THE ENTIRE PERIOD OF SUCH OCCUPANCY THE GOVERNMENT HAS HAD NO NEED FOR THE TWO BUILDINGS THE LESSOR FAILED TO ERECT.

IN THE CIRCUMSTANCES, HAVING PARTICULAR REGARD FOR THE REPORTED FACT THAT THE GOVERNMENT HAS HAD NO NEED FOR THE TWO BUILDINGS; THAT THE LESSOR HAS MADE AVAILABLE TO THE GOVERNMENT TWO OTHER BUILDINGS AT A NEARBY LOCATION FOR EMERGENCY SLEEPING QUARTERS IF NEEDED; THE POSSIBLE SAVINGS ON MAINTENANCE; AND THAT THE LESSOR ALREADY HAS EXPENDED IN EXCESS OF $100,000, WHICH EXPENDITURE IS STATED TO HAVE FURNISHED THE BASIS FOR THE STIPULATED RENTAL, WE WOULD NOT BE REQUIRED TO OBJECT TO A FURTHER MODIFICATION OF THE LEASE RETROACTIVELY SO AS TO RELIEVE THE LESSOR FROM THE OBLIGATION FOR FURNISHING THE TWO INVOLVED BUILDINGS AS PART OF THE RENTAL CONSIDERATION.