Damages Incident to a Breach of Maintenance Obligation by the Defense Plant Corporation

B-119782: Jul 9, 1954

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Reference is made to the letter of April 9, 1954, requesting a decision concerning the measure of damages incident to the reported breach of the maintenance obligation by the Defense Plant Corporation and its successor and assignee, the Reconstruction Finance Corporation, under a lease dated March 2, 1943, for certain land and improvement at the New York Municipal Airport. Specifically, it was requested to be advised whether, in determining the amount of the Government's liability for the aforesaid breach and the failure to return to return the premises in good condition, the value of the realty prior to the construction of the permanent improvements thereon should be used as a basis for determining the difference between the present appraised value and the value at the time of entry upon the premises or whether for such determination the computation should be based on the value of the property after completion of the improvements by the Government.

Accordingly, the Comptroller General would not be required to object to the payment of $120,000 to the lessor for cancellation of the lease, provided the lessor will execute a release releasing the Government from all liability arising under the lease. The forgoing is based on the assumption that the various departments and establishments of the Government have been canvassed to determine whether there is any present need for premises.