B-166997, JUN. 16, 1969

TO MR. KUNZIG:

REFERENCE IS MADE TO YOUR LETTER OF MAY 16, 1969, WITH ENCLOSURES, SUBMITTING FOR OUR CONSIDERATION THE REQUEST OF TOWNCREST PROFESSIONAL OFFICES, INCORPORATED, FOR WAIVER OF THE GOVERNMENT'S CLAIM OF $1,751.75, ARISING UNDER LEASE NO. GS-06B-10985.

THE SUBJECT LEASE, DATED OCTOBER 17, 1968, FOR THE RENTAL OF OFFICE SPACE IN IOWA CITY, IOWA, FOR THE USE OF THE UNITED STATES GEOLOGICAL SURVEY, WAS NEGOTIATED BY THE GENERAL SERVICES ADMINISTRATION PURSUANT TO THE AUTHORITY AT 41 U.S.C. 252 (C) (2). PARAGRAPH 13 OF THE LEASE PROVIDES THAT THE LESSOR SHALL FURNISH CEILING-HIGH PARTITIONS AT THE RATE OF ONE LINEAR FOOT FOR EACH 22 NET USABLE SQUARE FEET OF OFFICE SPACE AND BANK- TYPE PARTITIONS AT THE RATE OF ONE LINEAR FOOT FOR EACH 13 NET USABLE SQUARE FEET OF OFFICE SPACE. IN ADDITION, PARAGRAPH 13 PROVIDES THAT THE GOVERNMENT WILL PAY FOR PARTITIONING FURNISHED IN EXCESS OF THE SPECIFIED RATIOS AND WILL TAKE A CREDIT FROM THE RENTAL PAYMENTS WHERE THE AMOUNT OF PARTITIONING FURNISHED IS LESS THAN THE SPECIFIED RATIOS. A UNIT PRICE PER LINEAL FOOT IS SPECIFIED FOR DETERMINING THE AMOUNT OF ANY ADJUSTMENT.

AFTER CONSTRUCTION WAS COMPLETED AND THE OFFICES OCCUPIED IT WAS DETERMINED THAT THE PARTITIONING FURNISHED WAS LESS THAN THE SPECIFIED RATIOS. BY APPLYING THE PER-LINEAL-FOOT UNIT PRICE IT WAS DETERMINED IN ACCORDANCE WITH THE TERMS OF PARAGRAPH 13 THAT THE GOVERNMENT WAS ENTITLED TO A CREDIT OF $1,751.75 ON THE RENTAL PAYMENTS. THE GOVERNMENT HAS BEEN TAKING THE CREDIT BY REDUCING THE MONTHLY RENTAL PAYMENT FROM $1,225 TO $974.75 OVER A SEVEN-MONTH PERIOD.

DR. CHARLES G. SLEICHTER, THE LESSOR'S REPRESENTATIVE IN NEGOTIATING THIS LEASE, CONTENDS THAT NO CREDIT IS JUSTIFIED BECAUSE THE LESSOR'S OFFER WAS BASED ON A ROUGH PLAN OF THE OFFICE LAYOUT FURNISHED BY THE GEOLOGICAL SERVICE AND THE PARTITIONING FURNISHED IS IN ACCORDANCE WITH THIS PLAN, WHICH IS EXHIBIT "A" ATTACHED TO AND MADE A PART OF THE LEASE. ADDITION, DR. SLEICHTER CONTENDS THAT THE LEASE WAS SIGNED WITH THE UNDERSTANDING THAT MANY OF THE DETAILS, INCLUDING THE PARTITIONING FORMULAS, WOULD NOT BE "STRICTLY ADHERED" TO BECAUSE OF THE EARLY OCCUPANCY DATE CALLED FOR.

IT IS REPORTED THAT ON SEPTEMBER 19, 1968, A GSA REALTY OFFICER AND A REPRESENTATIVE OF THE GEOLOGICAL SERVICE INSPECTED THE NEWLY CONSTRUCTED BUILDING OWNED BY TOWNCREST AND DETERMINED IT WOULD SATISFY THE GOVERNMENT'S PURPOSE. THE REALTY OFFICER THEN ENTERED INTO PRELIMINARY NEGOTIATIONS WITH DR. SLEICHTER. DR. SLEICHTER FURNISHED A FLOOR PLAN OF THE BUILDING AND THE REALTY OFFICER ASKED THE USING AGENCY REPRESENTATIVE TO INDICATE THEREON THE DESIRED OFFICE ARRANGEMENT AND LAYOUT. DR. SLEICHTER WAS GIVEN A COPY OF A SOLICITATION SETTING FORTH THE SPACE REQUIREMENTS NEEDED BY THE USING AGENCY. THIS SOLICITATION INCLUDED A PROVISION SIMILAR TO PARAGRAPH 13 OF THE SUBJECT LEASE AND IT IS REPORTED THAT IT WAS EXPLAINED IN DETAIL TO DR. SLEICHTER. DR. SLEICHTER WAS ADVISED THAT A REVISED SOLICITATION WAS TO BE ISSUED AND HE WOULD BE REQUESTED TO MAKE A FORMAL WRITTEN OFFER. THIS SOLICITATION FOR OFFERS WAS ISSUED ON SEPTEMBER 24, 1968, AND INCLUDED A PROVISION ESSENTIALLY IDENTICAL TO PARAGRAPH 13 OF THE LEASE.

UNDER DATE OF OCTOBER 1, 1968, THE LESSOR SUBMITTED ITS WRITTEN OFFER. THEREAFTER NEGOTIATIONS WERE CONDUCTED AND BY TELEGRAM DATED OCTOBER 10, 1968, THE LESSOR REDUCED ITS INITIAL OFFER. THIS PROPOSAL WAS ACCEPTED BY GSA BY TELEGRAM DATED OCTOBER 16, 1968. THE LEASE WAS EXECUTED BY THE LESSOR ON OCTOBER 17, 1968, AND PARAGRAPH 13 THEREOF CONTAINS THE UNIT PRICES STATED IN THE LESSOR'S OFFER AS THE MEASUREMENT OF A POSSIBLE ADJUSTMENT OF PARTITIONING COSTS.

THE GSA REALTY OFFICER WHO HANDLED THE NEGOTIATIONS DENIES THAT HE AGREED TO ANY WAIVER OR MODIFICATION OF THE PROVISIONS OF PARAGRAPH13. HOWEVER, IT IS CONCEDED THAT PRIOR TO SUBMITTING ITS OFFER, THE LESSOR DID OBTAIN A FLOOR PLAN FROM THE GEOLOGICAL SERVICE; THAT THE PARTITIONING SHOWN ON THIS FLOOR PLAN IS THE SAME AS THAT SHOWN ON EXHIBIT "A" OF THE LEASE; AND THAT THE PARTITIONING INSTALLED IS IN ACCORDANCE WITH EXHIBIT "A.' THIS CONNECTION, THE REGIONAL COUNSEL, KANSAS CITY REGIONAL OFFICE, POINTS OUT THAT THE SOLICITATION PROVIDES THAT AN OFFEROR SHALL NOT ENTER INTO NEGOTIATIONS CONCERNING THE SPACE TO BE LEASED WITH REPRESENTATIVES OF AGENCIES OTHER THAN OFFICERS AND EMPLOYEES OF GSA. HOWEVER, HE DOES NOT THINK THIS PROVISION SHOULD BE RELIED ON IN THIS CASE SINCE IT WAS REASONABLE FOR THE LESSOR TO CONTACT THE USING AGENCY LOCATED IN THE SAME CITY FOR INFORMATION ON WHICH TO PREDICATE A RENTAL PRICE. FURTHERMORE, HE FEELS THERE IS EVIDENCE TO SUPPORT THE POSITION THAT THE RENTAL OFFERED BY THE LESSOR WAS BASED ON THE ACTUAL PARTITIONING REQUIREMENTS OF THE USING AGENCY WITHOUT REGARD TO THE REQUIREMENTS SET FORTH IN BOTH THE SOLICITATION AND LEASE AND THE GOVERNMENT "RECEIVED WHAT, IN FACT, IT CONTRACTED FOR.' HOWEVER, THERE IS SOME BASIS FOR CONCLUDING THAT THE REDUCTION IN THE RENTAL OFFER STEMMED FROM A REVISION IN THE COST OF SERVICES TO BE PROVIDED BY THE LESSOR.

THE RIGHTS AND OBLIGATIONS OF THE PARTIES MUST BE DETERMINED ON THE BASIS OF THE LEASE ALONE. THE LEASE AS EXECUTED IN PRESUMED IN LAW TO EXPRESS THE FINAL UNDERSTANDING OF THE PARTIES. SEE BRAWLEY V UNITED STATES, 96 U.S. 168, 173; AND SIMPSON V UNITED STATES, 172 U.S. 372. IN THE ABSENCE OF FRAUD OR MUTUAL MISTAKE, PRIOR NEGOTIATIONS FORM NO PART OF THE WRITTEN LEASE UNLESS INCORPORATED THEREIN. GOLDSTEIN V UNITED STATES, 79 CT. CL. 477; 32 AM. JUR. LANDLORD AND TENANT SEC. 134. IN THE INSTANT CASE, PARAGRAPH 13 OF THE LEASE CLEARLY PROVIDES FOR AN ADJUSTMENT IN THE RENTAL WHEN THE PARTITIONING ACTUALLY FURNISHED IS MORE OR LESS THAN THE LINEAR FOOTAGE SPECIFIED THEREIN. THE UNIT COST FOR SUCH ADJUSTMENT IS THAT OFFERED BY THE LESSOR AND ACCEPTED BY THE GOVERNMENT. ALTHOUGH THE LINEAR FOOTAGE OF THE PARTITIONING LAYOUT SHOWN ON EXHIBIT "A" IS APPARENTLY LESS THAN THAT SPECIFIED IN PARAGRAPH 13 THERE IS NO BASIS TO CONCLUDE THAT THE PROVISIONS OF THE LATTER PARAGRAPH DO NOT APPLY. THE INTENTION OF THE PARTIES WHICH IS SIGNIFICANT IN THE CONSTRUCTION OF CONTRACTS IS NOT WHAT MAY HAVE EXISTED IN THE MIND BUT WHAT OVERT EXPRESSIONS OR ACTIONS INDICATE EXISTED IN THE MIND. ALSO IT IS A WELL-ESTABLISHED RULE OF CONTRACT LAW THAT WHEN THERE IS A WRITTEN AGREEMENT THAT SPEAKS TO THE POINT IN ISSUE AND A PAROL STATEMENT CONTROVERTING THE WRITING, THE WRITING WILL ALWAYS TAKE PRECEDENCE. SEE CORBIN ON CONTRACTS, SECTION 573; SECTION 2-202, UNIFORM COMMERCIAL CODE.

APPLYING THESE PRINCIPLES TO THE CIRCUMSTANCES OF THE INSTANT CASE REQUIRES, IN OUR OPINION, THE CONCLUSION THAT THE GOVERNMENT IS ENTITLED TO THE CREDIT CLAIMED IN ACCORDANCE WITH PARAGRAPH 13 OF THE LEASE.

WITH REGARD TO THE STATEMENT THAT STRICT ADHERENCE TO THE TERMS OF THE LEASE, IN THE CIRCUMSTANCES REPORTED, WILL WORK AN UNCONSCIONABLE AND INEQUITABLE HARDSHIP, IT IS ESTABLISHED THAT A MERE LOSS UNDER A CONTRACT DOES NOT AFFORD EVEN AN EQUITABLE BASIS FOR RELIEF. SEE 19 COMP. GEN. 560, AND CASES CITED. APART FROM THAT, THE AUTHORITY OF OUR OFFICE UNDER SECTION 236, REVISED STATUTES, AMENDED BY SECTION 305 OF THE BUDGET AND ACCOUNTING ACT OF 1921, 31 U.S.C. 71, DOES NOT EXTEND TO CLAIMS BASED SOLELY ON EQUITABLE OR MORAL OBLIGATION.