CBCA 6060-C(5449)

DENIED: September 12, 2018 CBCA 6060-C(5449) RICHTER DEVELOPMENTS, LTD., Applicant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Stephen B. Hurlbut, John M. Neary, and Daniel R. Miktus of Akerman LLP, Washington, DC; and Scott A. Silver of Akerman LLP, Miami, FL, counsel for Applicant. Jay Bernstein, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. Before Board Judges SHERIDAN, KULLBERG, and LESTER. SHERIDAN, Board Judge. Richter Development, LTD (Richter or applicant) has filed an application under the Equal Access to Justice Act (EAJA), 5 U.S.C. § 504 (2012), seeking recovery of $167,144.29 in fees and expenses incurred in connection with its appeal made pursuant to the Contract Disputes Act (CDA), 41 U.S.C. §§ 7101-7109. The underlying appeal arose out of a lease between Richter and the General Services Administration (GSA). The parties settled the appeal at the start of the hearing in this matter. Upon joint stipulation for entry of judgment, the Board granted the appeal in part by entering a judgment. The joint stipulation and resultant judgment reserved Richter’s right to seek attorney fees and expenses. CBCA 6060-C(5449) 2 Background On September 9, 2014, GSA and Richter entered into lease GS-04P-LPL62198 for office and warehouse space in Doral, Florida. During the build-out of the space, certain changes and delays occurred for which the parties discussed potential solutions. In some instances, the parties were able to negotiate lease amendments, but for other changes the parties were unable to agree. GSA accepted the space, and the lease commenced on March 7, 2016. Richter’s certified claim totaling $545,076 was submitted on March 29, 2016, seeking an equitable adjustment of the contract lease price for delay costs of $98,536; increased tenant improvement (TI) costs in the amount of $402,978; increased operating expenses totaling $30,025; and a shell rent increase in the amount of $13,537. The claim consisted of a cover letter and twenty attached pages consisting of spreadsheets and summaries listing costs. Virtually no documentation was provided to support the claimed costs. GSA contracting officer (CO) James Thompson issued a final decision on July 28, 2016, addressing each element of Richter’s claim. The contracting officer stated he would be issuing a lease amendment deleting Richter’s responsibility to provide various items for which Richer sought extra operating costs, including but not limited to janitorial and cleaning, electrical, plumbing, and air conditioning. GSA asserted that the amendment would render moot Richter’s claim for some of the extra operating costs it sought. GSA rejected Richter demand for “miscellaneous” operating costs, concluding that “Richter has not submitted any documents or other materials to substantiate GSA’s responsibility for the delay . . . or to substantiate its claimed damages.” GSA informed Richter that it was rejecting Richter’s claim for an increase of the operating cost base from $39,063 to $69,088, and that the issuance of its proposed amendment “will result in a new operating cost base of $14,174 ($1.83/sf).” For the increased TI costs Richter alleged, the CO determined that “the difference between Richter’s costs of $366,941 and the TI improvement allowance of $307,774 is $59,197 [and] of that amount, $15,000 is amortized as part of the lease payments. The remaining balance of $44,197 represents the total amount due to Richter for ‘excess tenant improvement costs.’” Richter also claimed that the change in lease scope entitled it to increases for real estate taxes, insurance, building maintenance reserves, and management.