CBCA 5696

DENIED: September 28, 2017 CBCA 5696 AVALON PLAZA LLC, Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Joseph Ghadir, Managing Member of Avalon Plaza LLC, Los Angeles, CA, appearing for Appellant. Jordan K. Baker, Office of Regional Counsel, General Services Administration, San Francisco, CA, counsel for Respondent. Before Board Judges SOMERS, SHERIDAN, and RUSSELL. SHERIDAN, Board Judge. Avalon Plaza LLC (Avalon or lessor) has appealed a contracting officer’s (CO) final decision which was issued by the General Services Administration (GSA or lessee). Avalon asserts that it is entitled to recover additional compensation of $43,944.98 for air conditioning the approximately 200 square foot data communications room (DCR or computer room) during the fifteen years of its lease with GSA. The lease in issue required Avalon to maintain the DCR at a temperature range of between sixty-eight and eighty degrees Fahrenheit. This is a standard GSA leasing provision that ensures electronic components in server rooms do not overheat. The issue under consideration in this matter is whether GSA owes Avalon additional compensation for constantly maintaining the DCR temperature between sixty-eight and eighty degrees Fahrenheit for the lease period. The appellant argues that the lease failed to include CBCA 5696 2 compensation for the cost of operating the air conditioning (A/C) unit in the DCR. We find that the plain language of the lease includes the cost of operating the A/C unit for the DCR in the base rental consideration and no additional compensation is owed to Avalon. The appeal was submitted for decision on the written record pursuant to Board Rule 19 (48 CFR 6101.19 (2015)). The record consists of the complaint, answer, appeal file, an affidavit, and the briefs of the parties. Statement of Facts GSA and Avalon entered into lease LCA00052 on May 31, 2000, for a total of 15,710 square feet of space at 12701 Avalon Boulevard, Los Angeles, California. Exhibit 1.1 The lease tenant was the Social Security Administration (SSA). Id. The lease had a term of ten years firm with an option to extend for another five years. According to Joseph Ghadir, Avalon’s managing member, Royal Cochran was the GSA contracting officer who executed the lease and: Mr. Cochran failed to inform [Avalon] that the lessor is allowed to charge and to be compensated for those expenses such as the overtime (24 hours less than the 8 normal operation hours) usage of air conditioning in the DCR room which were not included in the monthly rental payments. Affidavit of Joseph Ghadir (July 11, 2017) ¶ 2. Paragraph 6 of the Standard Form 2 portion of the lease requires the lessor to furnish “as part of the rental consideration” all “utilities . . . ‘with the sole exception that the Government, will pay to the extent specifically identified herein as payable to the Government.” Exhibit 1 at 0002. Paragraph 7 of the Standard Form 2 portion of the lease incorporated “[a]ll terms, conditions, and obligations of the Government and Lessor as set forth in SFO [solicitation for offer] 9CA0777 (35 pages); Agency’s special requirements (15 pages), GSA Form 3517 (26 pages), GSA Form 3518 (4 pages); Sheet Nos. 1 and 2, containing Paragraphs 9 through 18, and Exhibit A, floor plan.” Exhibit 1, at 0002. 1 All exhibits referenced in this decision are found in the appeal file, unless otherwise noted. CBCA 5696 3 GSA was responsible for the cost of overtime utilities pursuant to paragraph 15 of the Standard Form 2 portion of the lease, which read: Pursuant to Paragraph 7.3, “Overtime Usage”, upon request by the GSA Field Office Manager, the Lessor shall provide heating, ventilation, and air conditioning (HVAC) at any time beyond normal service hours (7:00 a.m. – 6:00 p.m., Monday through Friday, except federal holidays) at an hourly rate of $20.00 per hour.