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B-170539, JUL 15, 1971

B-170539 Jul 15, 1971
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WHICH STATES THAT PAYMENT FOR "NET USABLE SPACE" WILL NOT EXCEED THE AMOUNT REQUIRED BY THE SOLICITATION. WAS INCORPORATED INTO THE CONTRACT BY REFERENCE. WERE ALSO INCORPORATED BY REFERENCE. IT IS REPORTED THAT PREVIOUS TO JANUARY 1968. THE BUILDING IN QUESTION WAS OCCUPIED EXCLUSIVELY BY THE FOREST SERVICE UNDER A GSA LEASE FOR THE PERIOD FROM APRIL 15. RENTAL DURING THE INITIAL AND RENEWAL TERMS WAS FIXED AT A RATE OF $38. IT WAS DETERMINED THAT THE EXISTING LEASE WOULD BE MUTUALLY TERMINATED AND A NEW LEASE FOR A FIVE -YEAR PERIOD WITH RENEWAL OPTIONS ENTERED INTO WHEN THE DESIRED ADDITION TO THE EXISTING BUILDING WAS COMPLETED AND OCCUPIED. THE SOLICITATION WAS PREPARED ON A SOLE SOURCE BASIS PURSUANT TO THE NEGOTIATION AUTHORITY IN 41 U.S.C. 252(C)(10) AND PRESENTED TO MR.

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B-170539, JUL 15, 1971

CONTRACTS - AMBIGUITY - UNEXECUTED LEASE DECISION HOLDING THAT A PROPOSED LEASE BETWEEN GSA AND MR. LORENZO MOFFETT FOR THE RENTAL OF A BUILDING IN NEVADA CITY, CALIFORNIA TO BE OCCUPIED EXCLUSIVELY BY THE FOREST SERVICE, SHOULD BE MODIFIED. ALTHOUGH SCHEDULE D, WHICH STATES THAT PAYMENT FOR "NET USABLE SPACE" WILL NOT EXCEED THE AMOUNT REQUIRED BY THE SOLICITATION, WAS INCORPORATED INTO THE CONTRACT BY REFERENCE, THE CONSTRUCTION DRAWINGS, WHICH REFLECT A "NET USABLE SPACE" IN EXCESS OF FIGURES LISTED IN THE OFFER TO LEASE, WERE ALSO INCORPORATED BY REFERENCE. BECAUSE OF THIS AMBIGUITY, THE LEASE SHOULD BE MODIFIED, THOUGH THIS SHOULD NOT REFLECT ANY INTEREST ON THE SUBJECT CLAIM.

TO MR. KUNZIG:

WE REFER TO A LETTER DATED JANUARY 7, 1971, FROM THE ASSISTANT GENERAL COUNSEL, CLAIMS AND LITIGATION DIVISION, AND PRIOR CORRESPONDENCE FROM THE GENERAL COUNSEL, AND INFORMAL ADVICE FROM THE CONTRACTING OFFICER AND THE ACTING CHIEF, ACQUISITION BRANCH, SPACE MANAGEMENT DIVISION, PUBLIC BUILDINGS SERVICE, REGION 9 ON JUNE 4, 1971, REPORTING ON THE CLAIM OF MR. LORENZO MOFFETT FOR MODIFICATION OF PROPOSED UNEXECUTED LEASE NO. GS-09B- 6150 FOR THE RENTAL OF A BUILDING IN NEVADA CITY, CALIFORNIA, UNDER SOLICITATION FOR NEGOTIATED OFFERS TO LEASE NO. 9-68-R-22, ISSUED BY THE PUBLIC BUILDINGS SERVICE, SAN FRANCISCO, CALIFORNIA.

FOR THE REASONS STATED, THE PROPOSED LEASE SHOULD BE MODIFIED.

IT IS REPORTED THAT PREVIOUS TO JANUARY 1968, THE BUILDING IN QUESTION WAS OCCUPIED EXCLUSIVELY BY THE FOREST SERVICE UNDER A GSA LEASE FOR THE PERIOD FROM APRIL 15, 1965, TO APRIL 14, 1970, INCLUDING RENEWAL RIGHTS THROUGH APRIL 14, 1975. RENTAL DURING THE INITIAL AND RENEWAL TERMS WAS FIXED AT A RATE OF $38,443.44 PER ANNUM, FOR "APPROXIMATELY 10,268 NET USABLE SQUARE FEET OF OFFICE SPACE *** ." EXPANSION OF FOREST SERVICE ACTIVITIES REQUIRED APPROXIMATELY 3,430 NET USABLE SQUARE FEET OF ADDITIONAL SPACE, WHEREUPON GSA ENTERED INTO NEGOTIATIONS WITH MR. MOFFETT TO PROVIDE THE NEEDED SPACE THROUGH THE CONSTRUCTION OF AN ADDITION TO THE EXISTING BUILDING.

SUBSEQUENT TO VARIOUS COMMUNICATIONS BETWEEN MR. MOFFETT, THE FOREST SERVICE AND GSA, ON AUGUST 22, 1968, ALL INTERESTED PARTIES ATTENDED A MEETING TO DISCUSS THE SITUATION. AT THAT MEETING, IT WAS DETERMINED THAT THE EXISTING LEASE WOULD BE MUTUALLY TERMINATED AND A NEW LEASE FOR A FIVE -YEAR PERIOD WITH RENEWAL OPTIONS ENTERED INTO WHEN THE DESIRED ADDITION TO THE EXISTING BUILDING WAS COMPLETED AND OCCUPIED. ALSO, MR. MOFFETT SUBMITTED DRAWINGS DEPICTING A PROPOSED ADDITION TO THE EXISTING BUILDING WHICH WOULD PROVIDE APPROXIMATELY 3,500 NET USABLE SQUARE FEET OF ADDITIONAL SPACE.

THEREAFTER, THE SOLICITATION WAS PREPARED ON A SOLE SOURCE BASIS PURSUANT TO THE NEGOTIATION AUTHORITY IN 41 U.S.C. 252(C)(10) AND PRESENTED TO MR. MOFFETT AT A MEETING ON OCTOBER 16, 1968. PERTINENT PORTIONS OF THE SOLICITATION ARE DISCUSSED BELOW. SCHEDULE NO. 1 SET FORTH THE REQUIRED NET USABLE SQUARE FOOTAGE, AS FOLLOWS:

"1. SPACE REQUIREMENTS: 13,916 NET USABLE SQUARE FEET OF GOOD QUALITY AIR-CONDITIONED OFFICE SPACE BEING

NET USABLE SQ. FT.

A. THE EXISTING STRUCTURE CONTAINING 10,268

B. ADDITION TO EXISTING STRUCTURE CONTAINING 3,648

FOR A TOTAL OF .....................................13,916"

THE FACE PAGE OF THE SOLICITATION REFERENCED EXHIBITS A AND B, WHICH WERE DRAWINGS DERIVED FROM THE DRAWINGS ORIGINALLY SUBMITTED TO THE FOREST SERVICE BY THE CLAIMANT AND WHICH CONTAINED THE SQUARE FOOTAGE FIGURES FORMING THE BASIS FOR THE FIGURES SET OUT ABOVE. ALSO, PARAGRAPH 7 OF SCHEDULE NO. 3 REQUIRED MR. MOFFETT TO SUBMIT SCALED DRAWINGS OF FLOOR PLANS AND SPECIFICATIONS TO DESCRIBE ALL WORK TO BE DONE, IN RESPONSE TO WHICH MR. MOFFETT SUBMITTED TWO SETS OF FINAL CONSTRUCTION DRAWINGS AT THE OCTOBER 16 MEETING. FINALLY, THE FACE PAGE OF THE SOLICITATION REFERENCED "SCHEDULE D," WHICH ALTHOUGH APPARENTLY NOT INCLUDED IN THE CONTRACT DOCUMENT FURNISHED MR. MOFFETT AND SIGNED BY HIM AT THE OCTOBER 16 MEETING, DEFINES "NET USABLE SPACE" FOR PURPOSES OF THE SOLICITATION AND, IN ADDITION, CONTAINS THE FOLLOWING RESTRICTION AS REGARDS PAYMENT FOR SPACE TO BE LEASED:

"B. SPACE OFFERED FOR LEASE TO THE GOVERNMENT MUST CONTAIN THE REQUIRED SQUARE FOOT NET USABLE AREA AS IDENTIFIED ABOVE, AND UPON DELIVERY, THE ACTUAL NUMBER OF NET USABLE FEET OF SPACE DELIVERED WILL BE DETERMINED BY MUTUAL FIELD MEASUREMENT. PAYMENT WILL BE MADE ON THE BASIS OF ACTUAL MEASUREMENT BUT NOT TO EXCEED THAT AMOUNT REQUIRED BY THE SOLICITATION."

AT THE OCTOBER 16 MEETING, MR. MOFFETT NOTICED THAT THE SQUARE FOOTAGE FOR THE NEW SPACE LISTED IN THE RFP, I.E. 3,648, WAS IN CONFLICT WITH A FIGURE CONTAINED IN THE DRAWINGS PREPARED BY HIS ARCHITECT WHICH INDICATED: "NET TOTAL AREA GAINED - 3,536 SQ. FT." ALTHOUGH THIS FIGURE DID NOT REFER TO THE TOTAL NUMBER OF SQUARE FEET IN THE PROPOSED ADDITION SET OUT IN THE DRAWINGS (WHICH FIGURE WAS 3,664 SQUARE FEET), THE SOLICITATION WAS AMENDED AND INITIALED BY THE CONTRACTING OFFICER TO INDICATE A FIGURE OF 3,536 NET USABLE SQUARE FEET REPRESENTING THE ADDITIONAL SQUARE FOOTAGE THEREBY RESULTING IN A CHANGE IN THE TOTAL SQUARE FOOTAGE TO BE 13,804 SQUARE FEET RATHER THAN 13,916 SQUARE FEET. MR. MOFFETT'S OFFER TO LEASE SPACE WAS PREPARED BY GSA AND SIGNED BY HIM AT THAT MEETING FOR THE RENTAL OF 10,268 SQUARE FEET (THE EXISTING BUILDING) AT A NEGOTIATED RATE OF $3.744 PER SQUARE FOOT AND 3,536 SQUARE FEET AT A NEGOTIATED RATE OF $4,111 PER SQUARE FOOT. MR. MOFFETT STATES THAT HE WAS NOT CONCERNED WITH THE FIGURES LISTED IN THE SOLICITATION AS IT WAS HIS UNDERSTANDING THAT THOSE FIGURES WERE SUBJECT TO LATER VERIFICATION FOR PURPOSES OF PAYMENT BY ACTUAL FIELD MEASUREMENT.

SUBSEQUENT TO GSA'S ACCEPTANCE OF THE MOFFETT OFFER AND CONSTRUCTION OF THE ADDITIONAL SPACE AND MINOR CHANGES TO THE EXISTING BUILDING, MR. MOFFETT AND THE CONTRACTING OFFICER MADE ACTUAL FIELD MEASUREMENTS OF THE NEW SPACE, AND THE EXISTING SPACE, AND IT WAS DETERMINED THAT THE NEW SPACE CONTAINED AT LEAST 262 SQUARE FEET IN EXCESS OF THAT SET FORTH IN THE SOLICITATION AND OFFER OF MOFFETT, I.E. 3,798 AS OPPOSED TO 3,536, WHILE THE EXISTING BUILDING CONTAINED AT LEAST 517 SQUARE FEET OVER AND ABOVE THAT SET FORTH, I.E. APPROXIMATELY 10,785 AS OPPOSED TO 10,268. THIS DISCREPANCY WAS CAUSED, ACCORDING TO MR. MOFFETT, BECAUSE THE "NET USABLE SPACE" FIGURES INCORPORATED IN THE EXHIBIT A AND B DRAWINGS AND SET OUT IN THE SOLICITATION WERE NOT DETERMINED IN ACCORDANCE WITH THE INSTRUCTIONS SET OUT IN SCHEDULE D. IT IS THE POSITION OF MR. MOFFETT THAT THE DIMENSIONS CONTAINED IN HIS FINAL CONSTRUCTION DRAWINGS, SUBMITTED WITH THE OFFER, YIELD A "NET USABLE SPACE" IDENTICAL TO THAT LATER DETERMINED BY FIELD MEASUREMENT. THEREAFTER, MR. MOFFETT REFUSED AND HAS CONTINUED TO REFUSE TO EXECUTE A PROFERRED LEASE REFLECTING THE NET USABLE SQUARE FOOTAGE FIGURES LISTED IN THE SOLICITATION AND HIS OFFER.

THE BASIS FOR THIS REFUSAL CONCERNS THE GSA POSITION THAT MR. MOFFETT IS BOUND BY THE TERMS OF THAT PORTION OF SCHEDULE D, SET OUT ABOVE, WHICH STATES THAT PAYMENT FOR "NET USABLE SPACE" WILL NOT EXCEED THE AMOUNT REQUIRED BY THE SOLICITATION. MR. MOFFETT CLAIMS THAT SCHEDULE D WAS NOT A PART OF THE SOLICITATION GIVEN HIM ON OCTOBER 16, 1968, AND UPON WHICH HE SUBMITTED HIS OFFER, NOTWITHSTANDING THE GSA POSITION THAT TO THE BEST OF THE KNOWLEDGE AND BELIEF OF THEIR NEGOTIATORS, THE SCHEDULE REFERENCED ON THE COVER SHEET OF THE SOLICITATION WAS A PART OF THE PACKAGE PRESENTED TO MR. MOFFETT. THE CLAIMANT ARGUES THAT EVEN IF THE SCHEDULE WAS INCLUDED IN HIS OFFER, THE DEFINITION OF "NET USABLE SPACE" CONTAINED THEREIN, TOGETHER WITH THE FINAL CONSTRUCTION DRAWINGS SUBMITTED AT THE OCTOBER 16 MEETING AND MADE A PART OF THE SOLICITATION, REVEAL AN ERROR IN THE FIGURES SET OUT IN THE SOLICITATION AND OFFER. IN ANY EVENT, THE CLAIMANT STATES THAT THROUGHOUT THE NEGOTIATION PERIOD GSA REPRESENTED THAT THE ACTUAL RENT WOULD BE DETERMINED ON THE BASIS OF ACTUAL FIELD MEASUREMENT ONCE THE ADDITION WAS COMPLETED.

IT IS WELL SETTLED THAT DOCUMENTS INCORPORATED BY REFERENCE IN A CONTRACT BECOME A PART OF THE CONTRACT AND ARE BINDING ON THE PARTIES. SEE 44 COMP. GEN. 774 (1965); 49 COMP. GEN. 289 (1969). THUS, THE REFERENCING OF SCHEDULE D ON THE FACE PAGE OF THE SOLICITATION WHICH WAS THE BASIS OF THE OFFER TO LEASE SIGNED BY MR. MOFFETT SERVED TO MAKE THAT DOCUMENT A PART OF THE CONTRACT EVEN IF IT WAS NOT PERUSED BY MR. MOFFETT BEFORE HE SIGNED THE OFFER. HOWEVER, THE FINAL CONSTRUCTION DRAWINGS FURNISHED BY MR. MOFFETT WITH HIS OFFER, WHICH ALSO BECAME A PART OF THE CONTRACT FORMED BY GSA'S ACCEPTANCE OF THE OFFER TO LEASE, REPORTEDLY REFLECT A "NET USABLE SPACE" IN EXCESS OF THE FIGURES LISTED IN THE OFFER TO LEASE WITH RESPECT TO BOTH THE EXISTING STRUCTURE AND THE NEW ADDITION. FURTHER, THE CLAIMANT WAS OBLIGATED TO AND DID SO CONSTRUCT THE ADDITION IN ACCORDANCE WITH THE GREATER "NET USABLE SPACE" REQUIRED BY SUCH DRAWINGS. SUCH A SITUATION GIVES RISE TO AN AMBIGUITY IN THE TERMS OF THE PROPOSED UNEXECUTED LEASE SINCE THE ACTUAL SQUARE FOOTAGE REFLECTED IN THE FINAL CONSTRUCTION DRAWINGS CONFLICTS WITH THE SQUARE FOOTAGE SET FORTH IN THE SOLICITATION AND OFFER.

IN SUCH CIRCUMSTANCES THE PROPOSED UNEXECUTED LEASE SHOULD THEREFORE BE AMENDED FROM THE DATE OF OCCUPATION BY THE FOREST SERVICE WITH REGARD TO THE MODIFICATION OF THE EXISTING BUILDING TO REFLECT THE "NET USABLE SPACE" AS DEFINED BY SCHEDULE D AND AS SET OUT IN THE FINAL CONSTRUCTION DRAWINGS MADE A PART OF THE CONTRACT AND ACTUALLY USED IN CONSTRUCTION. CLEARLY, GSA HAS NOT BARGAINED FOR THE USE OF THE EXCESS SQUARE FOOTAGE FOR THE STATED CONSIDERATION. SEE B-170698, MAY 4, 1971; B-168507, MARCH 9, 1970; B-163932, MAY 9, 1968, AND CASES CITED THEREIN. TO THE EXTENT THE FINAL CONSTRUCTION DRAWINGS REFLECT A CHANGE IN THE NET USABLE SPACE IN THE EXISTING BUILDING, THE MODIFICATION OF THE LEASE SHOULD INCLUDE SUCH CHANGE. HOWEVER, ANY RESULTANT MODIFICATION TO THE PROPOSED UNEXECUTED LEASE SHOULD NOT REFLECT INTEREST ON THE CLAIM. SEE THE CITY OF NEW YORK V UNITED STATES, 125 CT. CL. 576, 581 (1953); AND B-169876, AUGUST 11, 1970.

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