B-13836, DECEMBER 19, 1940, 20 COMP. GEN. 327

B-13836: Dec 19, 1940

Additional Materials:

Contact:

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

 

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

LEASES - GOVERNMENT LIABILITY FOR ADDITIONAL ELECTRIC OUTLET EXPENSE WHERE A LEASE PROVIDES THAT THE PREMISES ARE TO BE USED "AS OFFICE SPACE FOR THE UNITED STATES HOUSING AUTHORITY. " THE GOVERNMENT IS NOT LIABLE FOR COST OF INSTALLATION OF ADDITIONAL OUTLETS REQUIRED BY THE GOVERNMENT AGENCY TO WHICH THE LEASE WAS TRANSFERRED BY THE UNITED STATES HOUSING AUTHORITY. * I HAVE YOUR LETTER OF DECEMBER 4. THE LEASE WAS TRANSFERRED TO THIS DEPARTMENT FOR USE BY THE FEDERAL SURPLUS COMMODITIES CORPORATION. IT WAS DETERMINED THAT ADDITIONAL ELECTRIC OUTLETS WOULD BE REQUIRED AND. FORMAL DEMAND WAS MADE ON THE LESSOR FOR THE INSTALLATION OF 127 ADDITIONAL OUTLETS. AFTER PROTESTING THAT IT WAS NOT REQUIRED BY THE TERMS OF THE LEASE TO DO THE WORK.

B-13836, DECEMBER 19, 1940, 20 COMP. GEN. 327

LEASES - GOVERNMENT LIABILITY FOR ADDITIONAL ELECTRIC OUTLET EXPENSE WHERE A LEASE PROVIDES THAT THE PREMISES ARE TO BE USED "AS OFFICE SPACE FOR THE UNITED STATES HOUSING AUTHORITY, FEDERAL WORKS AGENCY, AND/OR SUCH GOVERNMENT ACTIVITIES AS MAY BE DESIGNATED BY THE PUBLIC BUILDINGS ADMINISTRATION, FEDERAL WORKS AGENCY," AND THAT THE LESSOR SHALL FURNISH TO THE GOVERNMENT AS PART OF THE RENTAL CONSIDERATION "ELECTRIC CURRENT * * * TOGETHER WITH THE NECESSARY BULBS AND CONVENIENCE OUTLETS," THE GOVERNMENT IS NOT LIABLE FOR COST OF INSTALLATION OF ADDITIONAL OUTLETS REQUIRED BY THE GOVERNMENT AGENCY TO WHICH THE LEASE WAS TRANSFERRED BY THE UNITED STATES HOUSING AUTHORITY.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF AGRICULTURE, DECEMBER 19, 1940,*

I HAVE YOUR LETTER OF DECEMBER 4, 1940, AS FOLLOWS:

ON SEPTEMBER 18, 1939, THE GOVERNMENT ENTERED INTO A LEASE WITH STEUART BROTHERS, INC., NUMBERED WAH-269, COVERING THE OCCUPANCY BY THE UNITED STATES HOUSING AUTHORITY OF THE ENTIRE FOURTH, FIFTH, SIXTH AND SEVENTH FLOORS OF THE STEUART BUILDING, 1012 FIFTH STREET, NORTHWEST, WASHINGTON, D.C., FOR THE PERIOD BEGINNING SEPTEMBER 18, 1939, AND ENDING JUNE 30, 1940.

THE LEASE WAS TRANSFERRED TO THIS DEPARTMENT FOR USE BY THE FEDERAL SURPLUS COMMODITIES CORPORATION, NOW THE SURPLUS MARKETING ADMINISTRATION ON APRIL 8, 1940, AND HAS BEEN ASSIGNED CONTRACT NUMBER A4S-434. THE LEASE HAS BEEN RENEWED FOR THE FISCAL YEAR ENDING JUNE 30, 1941.

PARAGRAPH 6 OF THE LEASE PROVIDES IN PART THAT THE LESSOR SHALL FURNISH AS PART OF THE RENTAL CONSIDERATION "ELECTRIC CURRENT FROM 8:00 A.M. TO 6:00 P.M. ON REGULAR WORKING DAYS, FOR POWER, LIGHTING, ELECTRIC FANS, AND ORDINARY OFFICE EQUIPMENT, TOGETHER WITH THE NECESSARY BULBS AND CONVENIENCE OUTLETS; * * *.'

IN CONNECTION WITH THE WORK OF THE SURPLUS MARKETING ADMINISTRATION, IT WAS DETERMINED THAT ADDITIONAL ELECTRIC OUTLETS WOULD BE REQUIRED AND, ON JUNE 1, 1940, FORMAL DEMAND WAS MADE ON THE LESSOR FOR THE INSTALLATION OF 127 ADDITIONAL OUTLETS. CONSIDERABLE CORRESPONDENCE RESULTED FROM THE DEMAND, AND THE LESSOR, AFTER PROTESTING THAT IT WAS NOT REQUIRED BY THE TERMS OF THE LEASE TO DO THE WORK, MADE THE NECESSARY INSTALLATIONS.

THERE HAS NOW BEEN RECEIVED THE ATTACHED LETTER FROM JOHN J. LANE, VICE PRESIDENT OF STEUART BROTHERS, INC., TOGETHER WITH THE VOUCHER MENTIONED THEREIN, REQUESTING THAT STEUART BROTHERS, C., BE REIMBURSED FOR THE WORK WHICH WAS PERFORMED. IT WOULD, THEREFORE, BE APPRECIATED IF THIS DEPARTMENT WOULD BE ADVISED WHETHER PAYMENT TO THE LESSOR WOULD BE PROPER UNDER THE VOUCHER.

THE SUPPORTING PAPERS ATTACHED TO SUBJECT LEASE DISCLOSE THAT ON SEPTEMBER 15, 1938, THE RURAL ELECTRIFICATION ADMINISTRATION REQUESTED BIDS FOR OFFICE SPACE IN THE DISTRICT OF COLUMBIA "FOR THE ADMINISTRATIVE, CLERICAL, AND OTHER USES OF THE RURAL ELECTRIFICATION ADMINISTRATION, AND/OR SUCH OTHER GOVERNMENT ACTIVITIES AS MAY BE DESIGNATED BY THE NATIONAL PARK SERVICE OF THE DEPARTMENT OF THE INTERIOR," THE SPECIFICATIONS PROVIDING IN PERTINENT PART AS FOLLOWS:

(1) SPACE REQUIRED.---THE FLOOR SPACE TO BE LEASED UNDER THE PROVISIONS OF THESE SPECIFICATIONS WILL BE OCCUPIED BY THE RURAL ELECTRIFICATION ADMINISTRATION FOR ADMINISTRATIVE, CLERICAL, AND OTHER PURPOSES. * * *

(4) PERIOD OF LEASE.--- THE PERIOD OF THE LEASE COVERED BY THESE SPECIFICATIONS SHALL BEGIN WITH THE DATE OF OCCUPANCY OF THE SPACE, AND EXTEND TO JUNE 30 OF THE SAME FISCAL YEAR IN WHICH SAID OCCUPANCY SHALL HAVE BEGUN; PROVIDED THAT, UPON THIRTY DAYS WRITTEN NOTICE TO THE LESSOR, THE UNITED STATES GOVERNMENT SHALL HAVE THE RIGHT TO RENEW, AND WILL RENEW, SAID LEASE, ANNUALLY, FROM YEAR TO YEAR, THEREAFTER, FOR A PERIOD NOT TO EXCEED THREE YEARS, OR TO A DATE NOT LATER THAN JUNE 30, 1943, SUBJECT TO APPROPRIATIONS BEING MADE BY CONGRESS WHICH SHALL BE AVAILABLE FOR SUCH ANNUAL RENEWALS, AND SUBJECT TO THE APPROVAL OF THE NATIONAL PARK SERVICE.

(15) AMOUNT AND TYPE OF SPACE.--- NET USABLE SPACE REQUIRED EXCLUSIVE OF CORRIDORS, TOILET, STAIRS, HALLS, ELEVATORS, BUILDING EQUIPMENT, ETC., SHALL CONSIST OF APPROXIMATELY 80,000 TO 100,000 SQ. FT. OF FLOOR SPACE, WITH A PORTION OF THE SPACE ON ANY OR ALL FLOORS SUBDIVIDED BY SATISFACTORY PARTITION WORK INTO A TOTAL OF APPROXIMATELY 50 OFFICES OR ROOMS OF APPROXIMATELY 300 SQ. FT. EACH, A CONFERENCE ROOM OR AUDITORIUM SEATING 100 PEOPLE, AS PER LAYOUT TO BE APPROVED BY THE GOVERNMENT, AND THE BALANCE IN OPEN SPACE FOR CLERICAL, STORAGE, AND FILING PURPOSES.

(20) FIXTURES AND EQUIPMENT.--- ALL CONDUITS NECESSARY FOR THE INSTALLATIONS AS PROVIDED FOR IN THIS PARAGRAPH SHALL BE CONCEALED FROM VIEW BY MEANS OF UNDERFLOOR DUCTS, WALLCHASES, ETC. ALL APPLIANCES AND FIXTURES NECESSARY TO FURNISH ADEQUATE AND SATISFACTORY HEAT, LIGHT, FIRE PREVENTION AND WATER SHALL BE AVAILABLE OR PROVIDED AND INSTALLED. THE NECESSARY LIGHTING FIXTURES, WITH GLOBES OR OTHER SUITABLE PROVISIONS TO PREVENT GLARE, MUST PROVIDE AN AVERAGE ILLUMINATION OF TEN FOOT CANDLES AT DESK HEIGHT; AND SOCKETS, BULBS, WALL PLUGS, FUSES, ETC., SHALL BE PROVIDED. IN ADDITIONAL TO THE GENERAL ILLUMINATION, NECESSARY FAN AND POWER ELECTRIC OUTLETS, TELEPHONE AND POWER CONDUITS MUST BE PROVIDED.

ON SEPTEMBER 24, 1938, STEUART BROTHERS, INC., SUBMITTED A BID PURSUANT TO THE ABOVE REQUEST OFFERING TO FURNISH 74,365 NET SQUARE FEET OF SPACE FOR .684 CENTS PER SQUARE FOOT OR $50,892 ($50,865.66) AND ON APRIL 11, 1939, IT SUBMITTED AN AMENDED BID EXTENDING THE TIME FOR ACCEPTANCE TO AND INCLUDING MAY 1, 1939, AND PROVIDING FOR AN ANNUAL RENTAL RATE OF FOUR- SEVENTHS OF 15 PERCENT OF TOTAL ASSESSED VALUE OF BUILDING AND GROUND AND CERTAIN OTHER CHANGES IN ITS ORIGINAL BID. IN LETTER OF APRIL 21, 1939, THE ACTING DIRECTOR, NATIONAL PARK SERVICE, ACCEPTED THE AMENDED BID "FOR OCCUPANCY AS QUARTERS FOR A PORTION OF THE EMPLOYEES OF THE UNITED STATES HOUSING AUTHORITY UNDER CERTAIN CONDITIONS" INCLUDING REVISED SPECIFICATIONS IN PERTINENT PART AS FOLLOWS:

PAGE 6, PARAGRAPH (20). ALL FIXTURES, CONDUITS, SOCKETS, LAMPS, WALL PLUGS, FUSES, ETC., SHALL BE PROVIDED AS CALLED FOR IN THIS PARAGRAPH WITH THE EXCEPTION OF THE LIGHTING FIXTURES WHICH SHALL BE PROVIDED AND INSTALLED BY THE GOVERNMENT.

DETAILED PLANS ARE TO BE PREPARED BY YOU IN CONSULTATION WITH AND SUBJECT TO THE APPROVAL OF THE UNITED STATES HOUSING AUTHORITY AND THE NATIONAL PARK SERVICE, SO THAT WITHIN THE LIMITATIONS PERMITTED BY THIS AGREEMENT THE MAXIMUM OF ADAPTATION TO THE GOVERNMENT'S DESIRES WILL RESULT. SEPTEMBER 18, 1939, THE GOVERNMENT, BY THE CONTRACTING OFFICER FOR THE UNITED STATES HOUSING AUTHORITY, ENTERED INTO A LEASE (WAH-269) WITH STEUART BROTHERS, INC., FOR 61,329 NET SQUARE FEET OF OFFICE SPACE IN THE STEUART BUILDING AT AN ANNUAL RENTAL RATE OF $65,119.80 (NET RENT $36,619.80 AND $28,500 SPECIAL SERVICES).

PARAGRAPH 2 OF THE LEASE PROVIDES THAT THE LEASED PREMISES ARE TO BE "USED EXCLUSIVELY * * * AS OFFICE SPACE FOR THE UNITED STATES HOUSING AUTHORITY, FEDERAL WORKS AGENCY AND/OR SUCH GOVERNMENT ACTIVITIES AS MAY BE DESIGNATED BY THE PUBLIC BUILDINGS ADMINISTRATION, FEDERAL WORKS AGENCY," AND PARAGRAPH 6 OF SAID LEASE PROVIDES THAT THE LESSOR "FURNISH TO THE GOVERNMENT, DURING THE OCCUPANCY OF SAID PREMISES, THE TERMS OF THIS LEASE, AS PART OF THE CONSIDERATION * * * THE NECESSARY BULBS AND CONVENIENCE OUTLETS.'

IT APPEARS THAT THE LEASED PREMISES WERE OCCUPIED BY THE UNITED STATES HOUSING AUTHORITY FROM THE EFFECTIVE DATE OF THE LEASE UNTIL APRIL 8, 1940, WHEN THE LEASE WAS TRANSFERRED TO THE DEPARTMENT OF AGRICULTURE WHICH ASSUMED LIABILITY FOR THE RENT PROVIDED FOR UNDER THE LEASE, SAID TRANSFER BEING APPROVED BY THE PUBLIC BUILDINGS ADMINISTRATION, DEPARTMENT OF THE INTERIOR. THE LESSOR WAS NOTIFIED OF THE TRANSFER AND ON MAY 31, 1940, THE SECRETARY OF AGRICULTURE NOTIFIED THE LESSOR THAT THE CONDITIONS AND PROVISIONS OF THE LEASE (RENUMBERED A4S-434) WOULD BE EXTENDED TO COVER THE PERIOD BEGINNING JULY 1, 1940 AND ENDING JUNE 30, 1941.

THE VOUCHER TRANSMITTED WITH YOUR LETTER IS IN THE AMOUNT OF $297.78 AND COVERS THE LESSOR'S CLAIM FOR LABOR AND MATERIAL INCIDENTAL TO THE INSTALLATION OF THE OUTLETS REFERRED TO IN SAID LETTER. THE LESSOR, IN URGING PAYMENT OF THE AMOUNT CLAIMED ON THE VOUCHER, STATES IN ITS LETTER OF NOVEMBER 8, 1940, IN PART:

YOU MAY RECALL THAT WE PREVIOUSLY POINTED OUT THAT WE DID NOT FEEL OBLIGATED TO MAKE THESE EXTENSIVE CHANGES EVERY TIME THE LEASE WHICH WE ORIGINALLY MADE WITH U.S. HOUSING AUTHORITY WAS ASSIGNED. AS WE HAVE STATED TO YOU BEFORE, THE BUILDING WAS ERECTED AND ELECTRICAL OUTLETS INSTALLED IN ACCORDANCE WITH A DEFINITE OFFICE PLAN SUBMITTED TO US BY U.S.H.A. WE DO NOT BELIEVE THAT ANY REASONABLE INTERPRETATION OF THE LEASE COULD MEAN THAT THESE EXTENSIVE ALTERATIONS ARE ,REPAIRS.' THERE IS NOTHING IN OUR LEASE WHICH CALLS UPON US TO MAKE EXTENSIVE CHANGES TO SATISFY CHANGING CONDITIONS OF THE TENANT.

ALL OF THE NEGOTIATIONS LEADING UP TO THE LEASE AND THE LEASE ITSELF INDICATE THAT IT WAS THE INTENTION OF THE PARTIES THAT THESE PREMISES WERE FOR OCCUPANCY BY THE ORIGINAL TENANT "AND/OR SUCH GOVERNMENT ACTIVITIES AS MAY BE DESIGNATED BY THE PUBLIC BUILDINGS ADMINISTRATION, FEDERAL WORKS AGENCY.'

IN VIEW OF THIS AND THE LESSOR'S OBLIGATION TO FURNISH THE VARIOUS SPECIAL SERVICES AS PROVIDED FOR UNDER PARAGRAPH 6 OF THE LEASE INCLUDING "THE NECESSARY BULBS AND CONVENIENCE OUTLETS" IT MUST BE PRESUMED THE RENTAL STIPULATED UNDER THE LEASE WAS ADJUSTED TO COVER THIS OBLIGATION.

A CONTENTION SIMILAR TO THAT MADE BY THE CLAIMANT IN THIS CASE WAS MADE BY THE PLAINTIFF IN UNITED STATES POST OFFICES CORPORATION V. UNITED STATES, 80 CT.1CLS. 785, WHERE THE PLAINTIFF HAD AGREED AMONG OTHER THINGS TO FURNISH TOILET FACILITIES AS PART OF THE RENTAL CONSIDERATION. THE PLAINTIFF CONTENDED THAT THIS PROVISION OF THE LEASE OBLIGATED IT TO FURNISH ONLY SUCH TOILET FACILITIES AS WERE REQUIRED BY THE PLANS AND SPECIFICATIONS APPROVED BY THE POST OFFICE DEPARTMENT IN ADVANCE, AND TO KEEP SUCH FACILITIES IN GOOD REPAIR DURING THE LEASE TERM, AND THAT IT DID NOT REQUIRE OR OBLIGATE IT TO FURNISH SUCH ADDITIONAL TOILET FACILITIES AS THE POST OFFICE DEPARTMENT MIGHT FROM TIME TO TIME DURING THE TERM OF THE LEASE CONSIDER NECESSARY TO MEET THE EXIGENCIES OF THE SERVICE. HOWEVER, THE COURT, IN HOLDING THE PLAINTIFF WAS NOT ENTITLED TO RECOVER FOR SUCH SERVICES, SAID:

THE PLAINTIFF'S OBLIGATION UNDER THE LEASE WAS TO FURNISH "SATISFACTORY PLUMBING AND NECESSARY TOILET FACILITIES.' THIS OBLIGATION WAS A CONTINUING ONE THROUGHOUT THE PERIOD OF THE LEASE. IT IS NOT CONTENDED THAT THE ADDITIONAL TOILET FACILITIES THE DEPARTMENT ORDERED PLAINTIFF TO FURNISH WERE NOT NECESSARY FOR CARRYING ON THE BUSINESS FOR WHICH THE BUILDING WAS LEASED. THEREFORE THE REFUSAL OF THE PLAINTIFF TO FURNISH THE NECESSARY TOILET FACILITIES, WHEN CALLED UPON TO DO SO, JUSTIFIED THE DEPARTMENT IN SUPPLYING THEM AND DEDUCTING THE COST THEREOF FROM THE RENT. THE PLAINTIFF IS NOT ENTITLED TO RECOVER ON THIS ITEM OF THE CLAIM.

THE RULE STATED BY THE COURT IN THE CASE CITED ABOVE IS EQUALLY APPLICABLE TO THE INSTANT CASE. ACCORDINGLY, YOU ARE ADVISED THAT PAYMENT ON THE VOUCHER WHICH WILL BE RETAINED IN THIS OFFICE, IS NOT AUTHORIZED.