B-151104, JUL. 2, 1963

B-151104: Jul 2, 1963

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HORNBY: REFERENCE IS MADE TO YOUR LETTER OF MARCH 9. THE RECORD DISCLOSES THAT THE ABOVE-CITED LEASE WAS ENTERED INTO ON OCTOBER 27. THE RENTAL RATE STIPULATED WAS $375 PER MONTH. AMENDMENT NO. 1 WAS EXECUTED TO BECOME EFFECTIVE NOVEMBER 1. THE RENTAL RATE WAS INCREASED TO $515 PER MONTH. AMENDMENT NO. 2 PERTAINS TO THE INSTALLATION OF A PLASTIC FLOOR COVERING IN A PORTION OF THE BUILDING AND IS NOT PERTINENT TO YOUR CLAIM. AMENDMENT NO. 3 WAS EXECUTED ON DECEMBER 21. THE INCREASED COST OF ELECTRIC CURRENT WAS PROVIDED FOR BY AN INCREASE IN THE RENTAL RATE TO $533 PER MONTH. PROVIDING FURTHER THAT SUCH RIGHT OF CANCELLATION IS RESTRICTED TO AND CAN ONLY BE EXERCISED IF THE ANNUAL METERED COST TO THE LESSOR FOR ELECTRIC CURRENT AND FUEL FOR HEAT COMBINED EXCEEDS $1896.00.

B-151104, JUL. 2, 1963

TO MR. H. B. HORNBY:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 9, 1963, REQUESTING REVIEW OF SETTLEMENT DATED MARCH 5, 1963, WHICH DISALLOWED YOUR CLAIM FOR $833.54, REPRESENTING INCREASED COSTS INCIDENT TO THE FURNISHING OF ELECTRICITY AND PROPANE GAS FOR PREMISES KNOWN AS THE HORNBY BUILDING, AINSWORTH, NEBRASKA, WHILE UNDER LEASE TO THE UNITED STATES UNDER LEASE NO. GS-06B- 5147 AND OCCUPIED BY THE BUREAU OF RECLAMATION, DEPARTMENT OF THE INTERIOR, DURING THE PERIOD FROM NOVEMBER 1, 1960, TO OCTOBER 31, 1962.

THE RECORD DISCLOSES THAT THE ABOVE-CITED LEASE WAS ENTERED INTO ON OCTOBER 27, 1958, FOR RENTAL OF THE PREMISES FOR THE PERIOD FROM NOVEMBER 1, 1958, TO OCTOBER 31, 1959, WITH RENEWAL OPTION NOT TO EXTEND BEYOND OCTOBER 31, 1964. PARAGRAPH 6 OF THE ORIGINAL LEASE REQUIRED THE LESSOR TO FURNISH A HEATING SYSTEM CAPABLE OF MAINTAINING A TEMPERATURE OF 72 DEGREES FAHRENHEIT DURING THE NORMAL HEATING SEASON AND DURING ANY SUBNORMAL PERIODS IN THE WEST HALF OF THE BUILDING AND HEATING EQUIPMENT INSTALLED AT THE EFFECTIVE DATE OF THE LEASE IN THE EAST HALF OF THE BUILDING; ONE 3-TON AIR-CONDITIONING UNIT; VENTILATING FANS INSTALLED AT THE EFFECTIVE DATE OF THE LEASE; FAUCET TEMPERATURE RUNNING WATER; SEPARATE SANITARY PLUMBING FIXTURES, AND CERTAIN PLUMBING, TOILET AND REST ROOMS, AND CERTAIN OTHER LIGHT FIXTURES, BULBS, ETC., AS MORE SPECIFICALLY DESCRIBED THEREIN. THE RENTAL RATE STIPULATED WAS $375 PER MONTH.

AMENDMENT NO. 1 WAS EXECUTED TO BECOME EFFECTIVE NOVEMBER 1, 1958, AND REQUIRED THAT THE LESSOR FURNISH HEAT AT A UNIFORM MINIMUM TEMPERATURE OF 72 DEGREES FAHRENHEIT DURING THE NORMAL HEATING SEASON AND DURING ANY SUBNORMAL PERIODS IN THE WEST HALF OF THE BUILDING; ADEQUATE HEAT FOR VEHICLE STORAGE IN THE EAST HALF OF THE BUILDING; ONE 3-TON AIR- CONDITIONING UNIT; WATER AND ELECTRICITY FOR AIR CONDITIONING EQUIPMENT; VENTILATING FANS INSTALLED AT THE EFFECTIVE DATE OF THE LEASE; HOT AND FAUCET TEMPERATURE RUNNING WATER; SEPARATE SANITARY PLUMBING FIXTURES, AND CERTAIN OTHER FACILITIES AS MORE SPECIFICALLY DESCRIBED IN THE AMENDMENT. THE RENTAL RATE WAS INCREASED TO $515 PER MONTH.

AMENDMENT NO. 2 PERTAINS TO THE INSTALLATION OF A PLASTIC FLOOR COVERING IN A PORTION OF THE BUILDING AND IS NOT PERTINENT TO YOUR CLAIM.

AMENDMENT NO. 3 WAS EXECUTED ON DECEMBER 21, 1959, BECAUSE THE GOVERNMENT DESIRED TO INSTALL SOME AIR-CONDITIONING UNITS. THE INCREASED COST OF ELECTRIC CURRENT WAS PROVIDED FOR BY AN INCREASE IN THE RENTAL RATE TO $533 PER MONTH.

THE FOREGOING NECESSITATED A REVISION OF PARAGRAPH 20 (A) TO READ:

"THE LESSOR RESERVES THE RIGHT TO TERMINATE THIS LEASE, EFFECTIVE OCTOBER 31 OF ANY YEAR, UPON THIRTY (30) DAYS' PRIOR WRITTEN NOTICE TO THE GOVERNMENT, SUCH NOTICE TO BE COMPUTED AS OF THE DATE OF MAILING, AND PROVIDING FURTHER THAT SUCH RIGHT OF CANCELLATION IS RESTRICTED TO AND CAN ONLY BE EXERCISED IF THE ANNUAL METERED COST TO THE LESSOR FOR ELECTRIC CURRENT AND FUEL FOR HEAT COMBINED EXCEEDS $1896.00. AT THE TIME OF ISSUING SUCH NOTICE, THE LESSOR SHALL FURNISH TO THE GOVERNMENT CERTIFIED OR PHOTOSTATIC COPIES OF PAID INVOICES FOR THESE UTILITIES WHICH DEMONSTRATE THAT THE ANNUAL COST FOR THE SPECIFIED UTILITIES HAS EXCEEDED $1896.00.'

PARAGRAPH 22 WAS ADDED TO THE LEASE AND IT READS AS FOLLOWS:

"THE LESSOR AGREES TO MAKE NO FURTHER CLAIM FOR ANY COST TO HIM IN EXCESS OF THE INCREASED RENTAL PROVIDED FOR IN AGREEMENTS 1 AND 3 TO LEASE GS-06B -5147 FOR PROVIDING FUEL FOR HEAT, WATER AND ELECTRICITY FOR OPERATION OF ONE (1) LESSOR-OWNED 3-TON AIR-CONDITIONING UNIT, ELECTRICITY FOR OPERATION OF TWO (2) GOVERNMENT-OWNED 1 1/2 TON AIR CONDITIONING UNITS AND FOUR (4) GOVERNMENT-OWNED 2 TON AIR CONDITIONING UNITS, AND ELECTRIC CURRENT FOR ALL ORDINARY OFFICE PURPOSES, SUCH AS LIGHTING, OPERATION OF FANS, ADDING AND CALCULATING MACHINES, AND OTHER ORDINARY OFFICE APPLIANCES DURING THE OCCUPANCY OF THE DEMISED PREMISES UNDER LEASE GS-06B -5147 OR ANY RENEWAL THEREOF.'

BY WRITTEN NOTICE DATED SEPTEMBER 26, 1961, THE GOVERNMENT EXTENDED THE TERM OF THE LEASE TO OCTOBER 31, 1962.

IN YOUR LETTER DATED JANUARY 5, 1963, YOU SHOW THAT COSTS INCURRED FOR ELECTRICITY AND PROPANE GAS FOR THE YEARS ENDING OCTOBER 31, 1961, AND OCTOBER 31, 1962, AMOUNTED TO $2,068.34, AND $2,621.99, RESPECTIVELY, A TOTAL OF $4,690.33. FROM THIS TOTAL YOU HAVE DEDUCTED THE ANNUAL ALLOWANCE OF $1,896.00 FOR THE TWO YEARS TOTALING $3,792.00, AND $64.79 FOR PROPANE GAS PAID FOR BY GENERAL SERVICES ADMINISTRATION, LEAVING A BALANCE YOU BELIEVE DUE YOU OF $833.54.

IN YOUR LETTER REQUESTING REVIEW YOU STATE THAT IN CONSIDERING YOUR CLAIM WE APPARENTLY OVERLOOKED CERTAIN FACTS WHICH JUSTIFY THE ALLOWANCE OF SUCH CLAIM. YOU STATE THAT WHEN THE GENERAL SERVICES ADMINISTRATION REQUESTED YOU BY LETTER DATED DECEMBER 5, 1961, TO INSTALL ADDITIONAL LIGHTS AND HEATING EQUIPMENT, THE AGENCY ALSO REQUESTED YOU TO FURNISH THE ADDITIONAL COST OF THE UTILITIES REQUIRED FOR THE OPERATION OF SUCH ITEMS; THAT WITH THE HELP OF A FIELD MAN FROM THE GENERAL SERVICES ADMINISTRATION, YOU ESTIMATED THAT THE ADDITIONAL COST OF THE UTILITIES WOULD BE $5.42 PER MONTH FOR PROPANE GAS AND $16.50 PER MONTH FOR ELECTRICITY, MAKING A TOTAL OF $21.92 PER MONTH; AND THAT IN A LETTER DATED DECEMBER 7, 1961, TO THE GENERAL SERVICES ADMINISTRATION, YOU REQUESTED THAT THE MONTHLY RENTAL RATE BE INCREASED BY $21.92 TO COVER THE COST OF THE ADDITIONAL PROPANE GAS AND ELECTRICITY. IT ALSO IS STATED THAT ON JANUARY 10, 1962, THE GENERAL SERVICES ADMINISTRATION ACCEPTED YOUR OFFER TO INSTALL THE EQUIPMENT AND THAT INSTEAD OF PRORATING THE COST THEREOF IN A MONTHLY PAYMENT ALONG WITH THE EXTRA FUEL AND ELECTRICITY, THE AGENCY PAID YOU THE SUM OF $185 TO COVER THE TOTAL COST OF THE INSTALLATION BUT THAT IT DID NOT INCREASE THE MONTHLY RENTAL RATE TO COVER THE COST OF THE EXTRA PROPANE GAS AND ELECTRICITY. YOU CONTEND THAT WHILE THE LEASE DOES NOT CONTAIN A PROVISION FOR INCREASING THE RENTAL RATE TO COVER THE COST OF THE EXTRA FUEL AND ELECTRICITY, THE FACT REMAINS THAT THE GENERAL SERVICES ADMINISTRATION REQUESTED YOU TO FURNISH THE EXTRA FUEL AND ELECTRICITY INCLUDING THE ESTIMATED COST THEREOF AND THAT YOU EXPECT TO BE PAID FOR IT.

THE RECORD SUBSTANTIATES YOUR STATEMENT THAT THE GENERAL SERVICES ADMINISTRATION BY LETTER DATED DECEMBER 5, 1961, DID REQUEST YOU TO FURNISH AN ESTIMATE OF THE COST OF THE EXTRA PROPANE GAS AND ELECTRICITY WHICH WOULD BE USED BECAUSE OF THE INSTALLATION OF ADDITIONAL EQUIPMENT AND THAT YOU DID REQUEST IN YOUR LETTER OF DECEMBER 7, 1961, THAT THE MONTHLY RENTAL RATE BE INCREASED BY $51.85 TO COVER THE COST OF THE INSTALLATION OF THE ADDITIONAL EQUIPMENT AND THE INCREASE IN THE COST OF THE REQUIRED UTILITIES. IT INDICATES, HOWEVER, THAT THE GENERAL SERVICES ADMINISTRATION DENIED YOUR REQUEST OF DECEMBER 7, 1961, FOR AN INCREASE IN THE MONTHLY RENTAL RATE.

UNDER PARAGRAPH 6 OF THE LEASE, AS AMENDED, YOU OBLIGATED YOURSELF TO FURNISH FUEL AND ELECTRICITY FOR THE EQUIPMENT AS PART OF THE RENTAL CONSIDERATION. SUCH A PROVISION IS NOT DISCHARGED BY THE INITIAL FURNISHING OF FUEL AND ELECTRIC CURRENT FOR THE ORIGINAL EQUIPMENT INSTALLED BUT IT IS A CONTINUING OBLIGATION THROUGHOUT THE ENTIRE TERM OF THE LEASE. UNDER SUCH A PROVISION THE LESSOR IS OBLIGATED TO FURNISH SUCH ADDITIONAL FUEL AND POWER AS MAY BE REQUIRED BY THE AGENCY OCCUPYING THE LEASED SPACE DUE TO THE INSTALLATION OF ADDITIONAL EQUIPMENT. SEE UNITED STATES POST OFFICES CORPORATION V. UNITED STATES, 79 CT.CL. 173; UNITED STATES POST OFFICES CORPORATION V. UNITED STATES, 80 CT.CL. 785; 20 COMP. GEN. 327; AND 22 ID. 454.

UNDER THE LEASE, AS AMENDED BY AMENDMENT NO. 3, YOU HAD A RIGHT, UPON GIVING THE GOVERNMENT 30 DAYS' PRIOR WRITTEN NOTICE, TO TERMINATE THE LEASE IF THE ANNUAL COST FOR THE SPECIFIED UTILITIES EXCEEDED $1,896. YOUR LETTER OF JANUARY 5, 1963, SHOWS THAT THE COST OF THE UTILITIES FOR THE ANNUAL PERIOD ENDING OCTOBER 31, 1961, WAS $2,068.34 AND THAT THE COST OF THE UTILITIES FOR THE PERIOD ENDING OCTOBER 31, 1962, WAS $2,621.99. ALTHOUGH THE COST FOR EACH ANNUAL PERIOD EXCEEDED $1,896, YOU DID NOT EXERCISE YOUR RIGHT TO TERMINATE THE LEASE. YOU WERE ON NOTICE WHEN YOU RECEIVED A REPLY TO YOUR LETTER OF DECEMBER 7, 1961, THAT THE GENERAL SERVICES ADMINISTRATION WOULD NOT INCREASE THE MONTHLY RENTAL RATE TO COVER THE INCREASED COST OF THE UTILITIES RESULTING FROM THE INSTALLATION OF THE ADDITIONAL EQUIPMENT.

ON THE BASIS OF THE RECORD, IT MUST BE CONCLUDED THAT THE ADDITIONAL FUEL AND ELECTRIC CURRENT WERE REQUIRED UNDER THE LEASE, AND NO LEGAL BASIS IS FOUND FOR ALLOWANCE OF YOUR CLAIM. ACCORDINGLY, THE SETTLEMENT OF MARCH 5, 1963, IS SUSTAINED.