B-129538, OCT. 29, 1956

B-129538, OCT. 29, 1956

TO ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO A LETTER DATED OCTOBER 17, 1956, WITH ENCLOSURES, FROM THE ACTING ADMINISTRATOR, REQUESTING A DECISION AS TO WHETHER THE HAZARD CHAMBER OF COMMERCE, HAZARD, KENTUCKY, MAY BE RELIEVED FROM THE OBLIGATION OF FURNISHING JANITORIAL SERVICES FOR THE OFFICE SPACE IN THE COAL HOUSE BUILDING, HAZARD, KENTUCKY, AS APPARENTLY REQUIRED BY ITS ACCEPTED BID ON WHICH UNEXECUTED LEASE NO. GS-05B-4465 IS BASED.

THE RECORD SHOWS THAT IN RESPONSE TO INVITATION NO. 5PR/LO/-115, THE HAZARD CHAMBER OF COMMERCE SUBMITTED A BID DATED MAY 21, 1956, WHEREIN IT OFFERED TO FURNISH 570 SQUARE FEET OF OFFICE SPACE IN THE COAL HOUSE BUILDING, HAZARD, KENTUCKY, AT AN ANNUAL RENTAL OF $1,000 FOR OCCUPANCY JULY 1, 1956. THE SPACE OFFERED IS STATED TO BE THE IDENTICAL SPACE OCCUPIED BY THE GOVERNMENT UNDER TWO PRIOR LEASES, NAMELY, LEASES NOS. VA6B/RE/49 AND GS-15B-743, THE LATTER OF WHICH, COVERING THE TERM ENDED JUNE 30, 1956, PROVIDED FOR THE SAME RENTAL RATE AS SPECIFIED IN THE BID. THE SPECIFICATIONS ATTACHED TO THE INVITATION REQUIRED BIDDERS TO ANSWER "YES" OR "NO" AS TO WHETHER CERTAIN SPECIAL SERVICES WOULD BE FURNISHED AS PART OF THE RENTAL CONSIDERATION. ITEM 4B (9) OF THE INVITATION, PERTAINING TO THE INCLUSION IN THE RENTAL QUOTED OF "DAILY CLEANING OF DEMISED AND PUBLIC SPACES, INCLUDING TOILET FACILITIES, AND REMOVAL OF WASTE; JANITOR SUPPLIES," WAS ANSWERED IN THE AFFIRMATIVE BY THE HAZARD CHAMBER OF COMMERCE.

IN A MEMORANDUM DATED AUGUST 28, 1956, THE CONTRACTING OFFICER (CHIEF, REAL ESTATE DIVISION) STATES THAT UPON REVIEWING THE BID OF THE HAZARD CHAMBER OF COMMERCE, WHICH WAS THE ONLY BID RECEIVED, HE CONSIDERED THIS AFFIRMATIVE INDICATION AS UNUSUAL SINCE THE TWO PRECEDING LEASES FOR THE SAME PREMISES DID NOT INCLUDE SUCH SERVICE, AND THE NEW PROPOSAL DID NOT INCREASE THE RENT PAID ON THE LEASE JUST EXPIRED. HE ALSO STATED THAT THE POSSIBILITY THAT THE LESSOR WOULD FURNISH THE SERVICE UPON ACCEPTANCE OF THE BID, BUT WOULD ALLEGE A MISTAKE IF VERIFICATION WAS REQUESTED, LED HIM TO DETERMINE THAT THE GOVERNMENT'S BEST INTERESTS WOULD BE SERVED BY ACCEPTING THE PROPOSAL WITHOUT QUESTION. THE BID OF THE HAZARD CHAMBER OF COMMERCE WAS ACCEPTED ON JUNE 12, 1956, AND A LEASE WAS DRAFTED ACCORDINGLY AND SENT TO THE LESSOR FOR SIGNATURE.

UPON RECEIPT OF THE PROPOSED LEASE, THE HAZARD CHAMBER OF COMMERCE ADVISED BY LETTER DATED JULY 10, 1956, AS FOLLOWS:

"I WISH TO REFER YOU TO YOUR LETTER OF APRIL 23, 1956, ADDRESSED TO THE HAZARD CHAMBER OF COMMERCE, HAZARD, KENTUCKY, TO WHICH YOU HAD ATTACHED A SHEET OF SPECIFICATIONS COVERING A BID WHICH WE PRESENTED TO YOU ON APPROXIMATELY 570 SQUARE FEET OF OFFICE SPACE IN THE COAL HOUSE BUILDING, FLEET STREET, HAZARD, KENTUCKY, AND OCCUPIED BY THE VETERANS ADMINISTRATION.

"ITEM NO. 9 ON PAGE 3 OF THE ABOVE-MENTIONED SPECIFICATIONS READS AS FOLLOWS: "DAILY CLEANING OF DEMISED AND PUBLIC SPACES INCLUDING TOILET FACILITIES, AND REMOVAL OF WASTE; JANITOR SUPPLIES.' OPPOSITE THAT ITEM,"YES" WAS ERRONEOUSLY PLACED, AND WHAT WE MEANT TO REFLECT IN SAYING "YES" TO THAT QUESTION WAS THAT THE BUILDING IN QUESTION WAS BEING CLEANED DAILY BY A JANITOR. HOWEVER, THE COST OF THOSE SERVICES ARE BORNE BY THE VETERANS ADMINISTRATION.

"WHAT WE INTENDED TO MEAN IN ANSWERING YOUR QUESTIONNAIRE WAS THAT WE WERE WILLING TO LEASE THIS SPACE IN QUESTION TO THE VETERANS ADMINISTRATION UNDER THE SAME TERMS AND CONDITIONS AS BEFORE AND AT THE SAME ANNUAL RENT AS IN PRIOR YEARS.

"WE, THEREFORE, WISH TO MAKE IT CLEAR AT THIS POINT THAT JANITORIAL SERVICES ON THE BUILDING NOW BEING OCCUPIED BY THE VETERANS ADMINISTRATION HERE IN HAZARD WILL NEED BE PROVIDED AND PAID FOR BY THE VETERANS ADMINISTRATION.'

THE LESSOR'S ALLEGATION OF MISTAKE IS SUPPORTED BY THE FACTS THAT (1) THE TWO PRECEDING LEASES BETWEEN THE GOVERNMENT AND HAZARD CHAMBER OF COMMERCE FOR SAME PREMISES DID NOT INCLUDE THE CLEANING SERVICE, (2) RENTAL HAS NOT BEEN INCREASED OVER THAT PAID FOR THE PAST FIVE YEARS, (3) GENERALLY, OPERATING AND MAINTENANCE COSTS FOR REAL PROPERTY HAVE NOT DECREASED SO THAT ADDITIONAL SERVICES COULD NOT REASONABLY BE EXPECTED FOR THE SAME RENT, AND (4) THE BIDDER UNDOUBTEDLY KNEW THAT THE ABSENCE OF OTHER SUITABLE SPACE WOULD PRECLUDE THE POSSIBILITY OF ANY OTHER BIDS AND WOULD NOT REQUIRE HIS BID TO BE PREDICATED ON MEETING COMPETITION.

CONSIDERING ALL THE FACTS AND CIRCUMSTANCES, PARTICULARLY THE FACT THAT THE HAZARD BID OFFERED ESSENTIALLY THE SAME QUARTERS AT THE SAME RENTAL AS THE LATEST LEASE, IT SEEMS CLEAR THAT THESE FACTORS WERE SUFFICIENT TO PUT THE CONTRACTING OFFICER ON NOTICE OF ERROR BEFORE ACCEPTING HIS BID. HIS ACCEPTANCE OF THE BID, WITH KNOWLEDGE THAT IT PROBABLY DID NOT EXPRESS THE BIDDER'S TRUE INTENT, CANNOT THEREFORE BE REGARDED AS CREATING AN OBLIGATION BINDING UPON THE BIDDER.

ACCORDINGLY, THERE APPEARS TO BE NO LEGAL OBJECTION TO AMENDING THE PROPOSED LEASE TO ELIMINATE JANITORIAL SERVICES FROM THE SERVICES TO BE FURNISHED BY THE LESSOR AS PART OF THE RENTAL CONSIDERATION.

THE PAPERS, WITH THE EXCEPTION OF THE CONTRACTING OFFICER'S MEMORANDUM OF AUGUST 28, 1956, ARE RETURNED.