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B-154997, FEB. 8, 1965

B-154997 Feb 08, 1965
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DON DAHL: FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 1 AND SEPTEMBER 21. THE LEASE WAS ENTERED INTO BY THE FEDERAL AVIATION AGENCY (FAA) WITH YOU. YOU AND YOUR ATTORNEY CONTEND THAT THE LEASE IS FOR A FIRM TERM OF YEARS EXTENDING THROUGH JUNE 30. THAT IT IS NOT SUBJECT TO CANCELLATION EXCEPT FOR THE NONAVAILABILITY OF ADEQUATE APPROPRIATIONS. WHILE THE ORIGINAL TERM IS STATED AS BEGINNING SEPTEMBER 1. THE REPORTED FACTS SHOW THAT THE PREMISES WERE ACTUALLY OCCUPIED BY FAA ON FEBRUARY 24. FA 2- 2857) WITH YOU WAS NOT EXECUTED UNTIL JULY 12. THE PREMISES WERE SOLD AT A SHERIFF'S SALE TO MR. THE ORIGINAL LEASE WAS SUPERSEDED BY THE INVOLVED LEASE (NO. FA SW-569 STATES THAT ARTICLE 5 OF THE LEASE WAS DELETED AND THAT THIS ATTACHMENT CONTAINING ARTICLES 12.

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B-154997, FEB. 8, 1965

TO MR. DON DAHL:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 1 AND SEPTEMBER 21, 1964, AND LETTER OF AUGUST 18, 1964, FROM YOUR ATTORNEY PROTESTING THE CANCELLATION OF LEASE NO. FA SW-569, DATED SEPTEMBER 29, 1961, FOR THE PREMISES LOCATED AT 7915 DOWNMAN ROAD, NEW ORLEANS, LOUISIANA. THE LEASE WAS ENTERED INTO BY THE FEDERAL AVIATION AGENCY (FAA) WITH YOU, ADLOE ORR, JR., AND THE ST. BERNARD BANK AND TRUST COMPANY, ASSIGNEE. THE ASSIGNEE, HOWEVER, DID NOT SIGN THE LEASE.

YOUR PROTEST AROSE BECAUSE OF THE FAILURE OF FAA TO RENEW THE LEASE FOR THE FISCAL YEAR BEGINNING JULY 1, 1964. YOU AND YOUR ATTORNEY CONTEND THAT THE LEASE IS FOR A FIRM TERM OF YEARS EXTENDING THROUGH JUNE 30, 1971, AND THAT IT IS NOT SUBJECT TO CANCELLATION EXCEPT FOR THE NONAVAILABILITY OF ADEQUATE APPROPRIATIONS.

WHILE THE ORIGINAL TERM IS STATED AS BEGINNING SEPTEMBER 1, 1961, AND ENDING JUNE 30, 1962, THE REPORTED FACTS SHOW THAT THE PREMISES WERE ACTUALLY OCCUPIED BY FAA ON FEBRUARY 24, 1961, BUT THAT A LEASE (NO. FA 2- 2857) WITH YOU WAS NOT EXECUTED UNTIL JULY 12, 1961; THAT ON JULY 6, 1961, THE PREMISES WERE SOLD AT A SHERIFF'S SALE TO MR. ADLOE ORR, JR.; AND THAT ON SEPTEMBER 29, 1961, THE ORIGINAL LEASE WAS SUPERSEDED BY THE INVOLVED LEASE (NO. FA SW-569).

PARAGRAPH 14 OF "ATTACHMENT "A" " TO LEASE NO. FA SW-569 STATES THAT ARTICLE 5 OF THE LEASE WAS DELETED AND THAT THIS ATTACHMENT CONTAINING ARTICLES 12, 13, AND 14, AND THE ATTACHED PROVISION, NONDISCRIMINATION IN EMPLOYMENT, WERE ADDED THERETO AND MADE A PART THEREOF PRIOR TO THE SIGNATURE OF ANY OF THE PARTIES TO THE LEASE. PARAGRAPH 12 OF THE ATTACHMENT PROVIDES THAT:

"THIS LEASE MAY, AT THE OPTION OF THE GOVERNMENT, BE RENEWED FROM YEAR TO YEAR * * *. THE GOVERNMENT'S OPTION SHALL BE DEEMED EXERCISED AND THE LEASE RENEWED EACH YEAR FOR ONE YEAR UNLESS THE GOVERNMENT GIVES NINETY (90) DAY'S NOTICE THAT IT WILL NOT EXERCISE ITS OPTION, BEFORE THIS LEASE OR ANY RENEWAL THEREOF EXPIRES; PROVIDED, THAT NO RENEWAL THEREOF SHALL EXTEND THE PERIOD OF OCCUPANCY OF THE PREMISES BEYOND THE THIRTIETH (30TH) DAY OF JUNE, 1971; AND PROVIDED FURTHER, THAT ADEQUATE APPROPRIATIONS ARE AVAILABLE FROM YEAR TO YEAR FOR THE PAYMENT OF RENTALS.'

THE RENEWAL PROVISIONS IN THE ORIGINAL LEASE AND THE SUCCEEDING LEASE ARE IDENTICAL. PARAGRAPH 13 OF LEASE NO. FA SW-569 STATED THAT IT SUPERSEDED THE PRIOR LEASE (NO. FA 2-2857).

IN THE SPRING OF 1964, IT WAS ADMINISTRATIVELY DETERMINED THAT A CONSOLIDATION OF ALL FAA ACTIVITIES AT THE NEW ORLEANS AIRPORT WOULD RESULT IN SAVINGS TO THE GOVERNMENT IN ECONOMY AND EFFICIENCY AND ACCORDINGLY, BY LETTERS DATED MARCH 25, 1964, YOU, MR. ORR, AND THE ST. BERNARD BANK AND TRUST COMPANY, ASSIGNEE, WERE NOTIFIED THAT THE GOVERNMENT WOULD NOT EXERCISE ITS RENEWAL OPTION FOR ANY PERIOD BEYOND JUNE 30, 1964, AND THAT NO RENTALS WOULD ACCRUE THEREAFTER. FAA VACATED THE PREMISES PRIOR TO JUNE 30, 1964, BUT IT FURNISHED CUSTODIAL SERVICES TO THE BUILDING THROUGH THAT DATE.

BOTH YOU AND YOUR ATTORNEY CONTEND THAT UNDER THE TERMS OF PARAGRAPH 12 OF "ATTACHMENT "A," " THE LEASE WAS AUTOMATICALLY EXTENDED THROUGH JUNE 30, 1964, AND THAT THE NOTICES OF MARCH 25, 1964, TO THE PARTIES IN INTEREST COULD NOT AND DID NOT OPERATE TO TERMINATE THE LEASE OR RELIEVE THE GOVERNMENT FROM THE OBLIGATION TO PAY RENTAL THROUGH JUNE 30, 1971. IN SUPPORT OF THIS VIEW REFERENCE IS MADE TO ANOTHER ATTACHMENT TO THE LEASE,"PAGE 5" HEREINAFTER REFERRED TO AS THE ,ADDENDUM" WHEREIN IT IS STATED THAT:

"RENEWAL AUTOMATIC FIRST DAY OF JULY TO BECOME EFFECTIVE ON FEBRUARY 24, 1961 THROUGH JUNE 30, 1971. ANNUAL AMOUNT OF $6,987.00

"WINDOW AIR CONDITIONERS (6 UNITS) HAVE BEEN PAID FOR BY THE U.S. GOVERNMENT.'

BECAUSE OF THE PROVISIONS OF THE "ADDENDUM" AND THE PROVISIONS OF PARAGRAPH 12 OF "ATTACHMENT ,A" " IT IS CONTENDED BY YOU AND YOUR ATTORNEY THAT LEASE NO. FA SW-569 WAS AUTOMATICALLY RENEWED THROUGH JUNE 30, 1971, AND THAT SINCE APPROPRIATIONS CURRENTLY ARE AVAILABLE FOR RENTAL PAYMENTS, THE NOTICES OF MARCH 25, 1964, DID NOT TERMINATE THE GOVERNMENT'S RENTAL OBLIGATION UNDER THE LEASE. FAA HAS REPORTED THAT THE "ADDENDUM" IS NOT IN FACT A PART OF THE LEASE. IT HAS BEEN REPORTED THAT THE "ADDENDUM" WAS PREPARED IN THE OFFICE OF YOUR FORMER ATTORNEY (ADRIAN DUPLANTIER) AND THAT IT IS NOTHING MORE THAN A MEMORANDUM OF THE TOTAL REVENUE WHICH COULD BE RECEIVED UNDER THE LEASE, THE POSSIBLE MAXIMUM TERM AND A NOTE OF THE OWNERSHIP OF THE AIR-CONDITIONERS. IT IS FURTHER REPORTED THAT THE "ADDENDUM" WAS NOT ATTACHED TO THE LEASE AT THE TIME IT WAS SIGNED; THAT IT WAS NOT EXECUTED AND ATTACHED TO THE LEASE UNTIL SOMETIME LATER; AND THAT PARAGRAPH 14 OF "ATTACHMENT "A" " WHILE LISTING ADDITIONAL CONTRACT PARAGRAPHS WHICH WERE ADDED TO AND MADE A PART OF THE LEASE PRIOR TO ITS EXECUTION, DID NOT LIST THE "ADDENDUM.' FURTHER, IT IS REPORTED THAT AT THE TIME LEASE NO. FA SW-569 WAS EXECUTED, ALL OF THE PARTIES CONCERNED WERE AWARE OF THE FACT THAT THE LEASE WAS FOR A ONE-YEAR TERM, RENEWABLE AUTOMATICALLY AT THE GOVERNMENT'S OPTION UNLESS THE LESSORS WERE ADVISED TO THE CONTRARY AND THAT NO RENEWAL COULD EXTEND THE GOVERNMENT'S OCCUPANCY BEYOND JUNE 30, 1971.

FROM A REVIEW OF THE ENTIRE RECORD OUR OFFICE IS OF THE VIEW THAT THE "ADDENDUM" MAY NOT REASONABLY BE INTERPRETED AS A FIRM AND FIXED OBLIGATION OF THE GOVERNMENT FOR THE ENTIRE TERM ENDING JUNE 30, 1971. NEITHER DO WE REGARD THE "ADDENDUM" AS PART OF THE LEASE. EVEN IF THE ,ADDENDUM" COULD BE SO REGARDED, LEASES SUCH AS HERE INVOLVED WHICH PURPORT TO OBLIGATE THE GOVERNMENT UNDER AUTOMATIC RENEWAL OPTIONS AND WHICH FIND THEIR AUTHORITY IN THE ANNUAL APPROPRIATIONS OF THE AGENCIES INVOLVED ARE IN CONTRAVENTION AND FALL SQUARELY WITHIN THE INHIBITION CONTAINED IN SECTIONS 3732 AND 3679, REVISED STATUTES, AS AMENDED, AND SECTION 1 OF THE ACT OF JULY 6, 1949, DERIVED FROM SECTION 3690, REVISED STATUTES, CODIFIED AS 41 U.S.C. 11; 31 ID. 665/A); ID. 712/A), RESPECTIVELY, IN PERTINENT PARTS AS FOLLOWS:

"NO CONTRACT OR PURCHASE ON BEHALF OF THE UNITED STATES SHALL BE MADE, UNLESS THE SAME IS AUTHORIZED BY LAW OR IS UNDER AN APPROPRIATION ADEQUATE TO ITS FULFILLMENT * * *.

"NO OFFICER OR EMPLOYEE OF THE UNITED STATES SHALL MAKE OR AUTHORIZE AN EXPENDITURE FROM OR CREATE OR AUTHORIZE AN OBLIGATION UNDER ANY APPROPRIATION OR FUND IN EXCESS OF THE AMOUNT AVAILABLE THEREIN; NOR SHALL ANY SUCH OFFICER OR EMPLOYEE INVOLVE THE GOVERNMENT IN ANY CONTRACT OR OTHER OBLIGATION, FOR THE PAYMENT OF MONEY FOR ANY PURPOSE, IN ADVANCE OF APPROPRIATIONS MADE FOR SUCH PURPOSE, UNLESS SUCH CONTRACT OR OBLIGATION IS AUTHORIZED BY LAW.

"EXCEPT AS OTHERWISE PROVIDED BY LAW, ALL BALANCES OF APPROPRIATIONS CONTAINED IN THE ANNUAL APPROPRIATION BILLS AND MADE SPECIFICALLY FOR THE SERVICE OF ANY FISCAL YEAR SHALL ONLY BE APPLIED TO THE PAYMENT OF EXPENSES PROPERLY INCURRED DURING THAT YEAR, OR TO THE FULFILLMENT OF CONTRACTS PROPERLY MADE WITHIN THAT YEAR.'

OUR OFFICE IN CONSTRUING THE FOREGOING STATUTORY PROVISIONS HAS CONSISTENTLY HELD THAT THEY PROHIBIT ANY OFFICER OR EMPLOYEE OF THE GOVERNMENT FROM INVOLVING THE GOVERNMENT IN ANY CONTRACT OR OTHER OBLIGATIONS FOR THE PAYMENT OF MONEY FOR ANY PURPOSE IN ADVANCE OF APPROPRIATIONS MADE FOR SUCH PURPOSE; AND TO RESTRICT THE USE OF ANNUAL APPROPRIATIONS TO EXPENDITURES REQUIRED FOR THE SERVICE OF THE PARTICULAR YEAR FOR WHICH THEY ARE MADE. 28 COMP. GEN. 553; 42 ID. 272. SEE ALSO, GAY STREET CORPORATION OF BALTIMORE, MARYLAND V. UNITED STATES, 130 CT.CL. 341, WHERE THE COURT STATED:

"* * * THIS COURT AND THE SUPREME COURT IN CONSTRUING SECTIONS 3679 AND 3732 OF THE REVISED STATUTES HAVE CONSISTENTLY HELD THAT A LEASE FOR MORE THAN THE FISCAL YEAR FOR WHICH AN APPROPRIATION MAY BE AVAILABLE IS PROHIBITED, SMOOT V. UNITED STATES, 38 C.CLS. 418, AND THAT A LEASE FOR A TERM OF YEARS WHEN ENTERED INTO UNDER AN APPROPRIATION AVAILABLE FOR BUT ONE FISCAL YEAR IS BINDING ON THE GOVERNMENT ONLY FOR THAT YEAR. LEITER, ET AL., TRUSTEES V. UNITED STATES, 271 U.S. 204; GOODYEAR TIRE AND RUBBER COMPANY V. UNITED STATES, 276 U.S. 287.'

ACCORDINGLY, SINCE THE OFFICER OF FAA WHO EXECUTED THE LEASE ON BEHALF OF THE UNITED STATES DID NOT HAVE AUTHORITY TO OBLIGATE THE UNITED STATES FOR A PERIOD IN EXCESS OF THE THEN CURRENT FISCAL YEAR, LEASE NO. FA SW-569 MAY NOT BE INTERPRETED OR REGARDED AS OBLIGATING THE GOVERNMENT FOR RENT FOR THE ENTIRE TERM ENDING JUNE 30, 1971. THEREFORE, WE FIND NO LEGAL BASIS FOR YOUR PROTEST WHICH MUST BE AND IS DENIED.

AS TO YOUR CLAIM FOR DAMAGES FOR BREACH OF THE GOVERNMENT'S RESTORATION OBLIGATION, THE RECORD SHOWS THAT FAA IS PREPARED TO AND IS WILLING TO MAKE APPROPRIATE RESTORATION OF THE LEASED PREMISES IN KIND CONSISTENT WITH THE REQUIREMENTS OF PARAGRAPH 8 OF THE LEASE. THEREFORE, IT IS SUGGESTED THAT YOU CONTACT THE DISTRICT OFFICE OF FAA IN NEW ORLEANS WITH RESPECT TO YOUR RESTORATION CLAIM.

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