A-11788, NOVEMBER 21, 1925, 5 COMP. GEN. 366

A-11788, NOVEMBER 21, 1925, 5 COMP. GEN. 366

LEASES - IMPROVEMENTS TO RENTED PREMISES THE BUILDING BY THE GOVERNMENT OF AN OFFICE ON THE FIRST FLOOR OF A GARAGE, OCCUPIED UNDER A LEASE, TO TAKE THE PLACE OF AN OFFICE ON THE MEZZANINE FLOOR IN THE REAR OF THE BUILDING, WHICH HAD PROVED TO BE INADEQUATE FOR THE PURPOSE FOR WHICH THE BUILDING WAS RENTED, IS IN THE NATURE OF A PERMANENT IMPROVEMENT OF THE PROPERTY AND, IN THE ABSENCE OF A PROVISION IN THE LEASE AGREEMENT FOR THE MAKING OF SUCH IMPROVEMENTS BY THE UNITED STATES AS A PART OF THE RENTAL CONSIDERATION, THE COST THEREOF IS NOT CHARGEABLE TO PUBLIC FUNDS. (REVERSED BY 5 COMP. GEN. 696.)

COMPTROLLER GENERAL MCCARL TO THE POSTMASTER GENERAL, NOVEMBER 21, 1925:

I HAVE YOUR LETTER OF OCTOBER 29, 1925, AS FOLLOWS:

THIS DEPARTMENT IS ADVISED BY THE POSTMASTER OF NEWARK, NEW JERSEY, THAT HE IS IN RECEIPT OF A NOTICE FROM THE GENERAL ACCOUNTING OFFICE, DATED SEPTEMBER 12TH, SUSPENDING CREDIT ON THE FOLLOWING ITEMS, WITH ACCOMPANYING COMMENT:

$79.20--- TRIEBE AND TUCKER: EXPENDITURE FOR BUILDING OFFICE IN CONNECTION WITH POST-OFFICE GARAGE SUSPENDED IN THE ABSENCE OF A SHOWING THAT THE DISBURSEMENT IS PROPERLY CHARGEABLE TO THE APPROPRIATION FOR MOTOR VEHICLE SERVICE. UNDER THE TERMS OF CONTRACT FOR RENTAL IT WOULD APPEAR THAT THE OFFICE WAS TO BE PROVIDED BY THE LESSOR.

$10.00--- JOSEPH A BURKE: BILL OF MAY 11, 1925, FOR WORK IN REMOVING FUSE BOX AND CONTROLLER SWITCH FROM POST-OFFICE GARAGE TO THE NEW OFFICE IN THE GARAGE. THE CONTRACT FOR GARAGE QUARTERS ALSO REQUIRES LESSOR TO FURNISH EQUIPMENT, ETC.

$76.08 AND $8.57--- CLARK AND CO.: BILLS DATED APRIL 30TH AND MAY 18TH, FOR LUMBER. CREDIT SUSPENDED AWAITING INFORMATION AS TO THE PURPOSE FOR WHICH LUMBER WAS BOUGHT.

$16.00--- FREDERICK SCHILL AND CO. .$ BILL OF MAY 13, 1925, FOR WINDOW SASH AND FIR/DOOR. CREDIT SUSPENDED AWAITING INFORMATION AS TO THE PURPOSE FOR WHICH THE SASH AND DOOR WERE BOUGHT.

THE FACTS OF THE MATTER ARE THAT THIS DEPARTMENT ENTERED INTO A LEASE EFFECTIVE DECEMBER 1, 1921, FOR A POST-OFFICE GARAGE AT NEWARK, THE CONTRACT BEING ON FILE IN YOUR OFFICE. UNDER THE TERMS OF THE CONTRACT THE LESSOR WAS REQUIRED TO PROVIDE OFFICE SPACE IN THE BUILDING AND AN OFFICE WAS LOCATED ON A MEZZANINE FLOOR IN THE REAR OF THE BUILDING, IN ACCORDANCE WITH PLANS SUBMITTED TO THE DEPARTMENT FOR APPROVAL PRIOR TO EXECUTING THE LEASE. SUBSEQUENTLY, THE REQUIREMENTS OF THE NEWARK GARAGE WERE GREATLY CHANGED, AS THE GARAGE AT THAT POINT WAS DESIGNATED AS THE CENTRAL REPAIR UNIT TO OVERHAUL TRUCKS FOR THIRTY-FIVE POST OFFICES IN THE VICINITY OF NEWARK. THIS NECESSITATED EMPLOYING A FORCE OF MECHANICS FOR OVERHAUL WORK AND MADE IT IMPERATIVE THAT THE SUPERVISORS BE LOCATED ON THE GROUND FLOOR, WHERE THE EMPLOYEES IN THE SHOPS COULD BE UNDER OBSERVATION AT ALL TIMES. AFTER INVESTIGATION BY REPRESENTATIVES OF THE DEPARTMENT, IT WAS DECIDED TO ERECT A TEMPORARY FRAME PARTITION WITH NECESSARY GLASS SASH, DOORS, ETC., AT A SUITABLE LOCATION ON THE FIRST FLOOR, AND THE SUSPENDED ITEMS CONSTITUTE THE BILLS FOR LABOR AND MATERIAL INCIDENT TO THIS WORK.

INASMUCH AS THE PREMISES IN QUESTION HAD BEEN ACCEPTED AS COMPLYING WITH THE TERMS OF THE LEASE, IT IS NOT BELIEVED THAT THE DEPARTMENT COULD LEGALLY INSIST ON THE LESSOR LOCATING AN ADDITIONAL OFFICE ON THE FIRST FLOOR, AND THE POSTMASTER WAS, THEREFORE, AUTHORIZED TO PROCEED WITH THE INSTALLATION OF THIS VERY NECESSARY FACILITY, UNDER THE TERMS OF THE APPROPRIATION FOR ,VEHICLE SERVICE," WHICH SPECIFICALLY PROVIDES FOR GARAGE FACILITIES.

IT IS REQUESTED THAT THE MATTER BE RECONSIDERED IN THE LIGHT OF THE FACTS RELATED ABOVE AND THAT CREDIT BE RESTORED IN THE ACCOUNT OF THE POSTMASTER OF NEWARK FOR THE ABOVE-LISTED ITEMS.

THE APPROPRIATION ACT OF APRIL 4, 1924, 43 STAT. 86, PROVIDES:

FOR VEHICLE ALLOWANCE, THE HIRING OF DRIVERS, THE RENTAL OF VEHICLES, AND THE PURCHASE AND EXCHANGE AND MAINTENANCE, INCLUDING STABLE AND GARAGE FACILITIES, OF WAGONS OR AUTOMOBILES FOR, AND THE OPERATION OF, SCREEN- WAGON AND CITY DELIVERY AND COLLECTION SERVICE, $15,400,000: PROVIDED, THAT THE POSTMASTER GENERAL MAY, IN HIS DISBURSEMENT OF THIS APPROPRIATION, APPLY A PART THEREOF TO THE LEASING OF QUARTERS FOR THE HOUSING OF GOVERNMENT-OWNED AUTOMOBILES AT A REASONABLE ANNUAL RENTAL FOR A TIME NOT EXCEEDING TEN YEARS.

UNDER THE TERMS OF THE LEASE ENTERED INTO THE LESSOR, THE PARTY OF THE FIRST PART, AGREED TO FURNISH A BUILDING WITH SPACE PARTITIONED OFF "BY THE SAID PARTY OF THE FIRST PART" FOR OFFICE FOR THE USE OF THE UNITED STATES, PARTY OF THE SECOND PART, AS AN AUTOMOBILE GARAGE, FOR, DURING, AND UNTIL THE FULL END OF THE TERM OF 10 YEARS FROM DECEMBER 1, 1921, AT AN ANNUAL RENTAL RATE OF $15,400, PAYABLE MONTHLY. THE LEASE ALSO PROVIDED THAT THE LESSOR WOULD AT ALL TIMES KEEP SAID PREMISES, FIXTURES, AND EQUIPMENT, INCLUDING SPACE PARTITIONED OFF FOR AN OFFICE, IN GOOD REPAIR AND CONDITION, TO THE SATISFACTION OF THE PARTY OF THE SECOND PART.

IT APPEARS THAT THE SPACE WHICH HAD BEEN PARTITIONED OFF FOR AN OFFICE ON THE MEZZANINE FLOOR IN THE REAR OF THE BUILDING PROVED TO BE UNSATISFACTORY; BUT INSTEAD OF REQUIRING THE LESSOR TO BUILD AN OFFICE WHICH WOULD BE SATISFACTORY IN ACCORDANCE WITH THE TERMS OF THE CONTRACT, AND TO MAINTAIN SAME, THE DEPARTMENT DECIDED TO DO THE WORK, AND ACCORDINGLY ERECTED FRAME PARTITIONS, WITH NECESSARY GLASS, ETC., AT A SUITABLE LOCATION ON THE FIRST FLOOR TO BE USED AS AN OFFICE. PAYMENT OF THE BILLS INCIDENT TO THE WORK, MATERIAL, MECHANICS, LABOR, ETC., CAUSED THE CASE TO COME TO THIS OFFICE FOR DECISION.

IT IS NOTED THAT THE USUAL AUTHORITY IN LEASES OF THIS KIND FOR THE GOVERNMENT TO MAKE ALTERATIONS OF THE PREMISES AND CONSTRUCT AND REMOVE PARTITIONS, ETC., AT ITS OWN EXPENSE, DOES NOT APPEAR IN THE LEASE IN QUESTION.

IT HAS BEEN HELD REPEATEDLY THAT GOVERNMENT FUNDS MAY NOT BE USED TO MAKE IMPROVEMENTS TO PRIVATE PROPERTY HELD UNDER LEASE IN THE ABSENCE OF A SPECIFIC PROVISION IN THE LEASE OBLIGATING THE GOVERNMENT TO MAKE SUCH IMPROVEMENTS AS A PART OF THE RENTAL CONSIDERATION. THE BUILDING OF THE OFFICE ON THE FIRST FLOOR OF THIS BUILDING TO TAKE THE PLACE OF AN OFFICE ON THE MEZZANINE FLOOR IN THE REAR OF THE BUILDING, WHICH HAD PROVED TO BE INADEQUATE FOR THE PURPOSE FOR WHICH THE BUILDING WAS RENTED, APPEARS TO BE IN THE NATURE OF A PERMANENT IMPROVEMENT TO THE PROPERTY; AND AS NO PROVISION WAS MADE IN THE LEASE OF THE PREMISES FOR THE MAKING OF SUCH IMPROVEMENT BY THE UNITED STATES AS A PART OF THE RENTAL CONSIDERATION, THE PAYMENT OF THE COST OF SUCH IMPROVEMENT IS UNAUTHORIZED. 6 COMP. DEC. 943.