CBCA 6659

CBCA 6659 GRANTED IN PART; CBCA 7422 GRANTED: February 19, 2025 CBCA 6659, 7422 WISE DEVELOPMENTS, LLC, Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Diana Parks Curran, Hadeel N. Masseoud, and Aseil Abu-Baker of Curran Legal Services Group, Inc., Marietta, GA, counsel for Appellant. Justin S. Hawkins, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. Before Board Judges LESTER, O’ROURKE, and NEWSOM. O’ROURKE, Board Judge. These consolidated appeals concern the lease of a building designed and constructed for the Social Security Administration (SSA), the tenant agency. Shortly after SSA moved in, personnel perceived an unpleasant odor in the building. Despite exhaustive efforts, no one was ever able to identify the source of the odor. Eventually, SSA vacated the building, and the leasing agency, the General Services Administration (GSA or agency), terminated the lease for default. Appellant, Wise Developments LLC (lessor or Wise), did not challenge the termination at that time. Five years later, however, Wise submitted a claim for damages based on the GSA’s wrongful termination of the lease. CBCA 6659, 7422 2 In a prior decision in these appeals, the Board determined that, although Wise did not appeal the termination for default within the required ninety-day period, the termination decision remained vulnerable to dispute because it lacked a notice of appeal rights. Wise Developments, LLC v. General Services Administration, CBCA 6659, 21-1 BCA ¶ 37,774. Attempts to resolve the surviving dispute through mediation were unsuccessful. The agency then asserted a claim for excess reprocurement costs against Wise, which Wise timely appealed before moving to dismiss the claim through summary judgment. The Board suspended consideration of the summary judgment motion, among other motions, and conducted a merits hearing focused on the propriety of the default termination. Currently before the Board are (a) Wise’s claim for unpaid rent and other damages and (b) the agency’s claim for excess reprocurement costs. Implicit in both of these appeals is the question of whether the termination for default was proper. For the reasons explained below, we find that the agency has failed to establish the validity of the default termination. Accordingly, we grant a portion of Wise’s requested damages. We also grant Wise’s appeal of the agency’s claim for excess reprocurement costs and deny as moot Wise’s motions for summary judgment, declaratory judgment, and sanctions. Findings of Fact Contract and Build-out Requirements for the Tenant Agency On May 26, 2011, GSA awarded Wise lease number LNC61075 (the contract) for leased facilities in Hickory, North Carolina. The contract specified a ten-year term, the first five of which were firm (the firm term), which meant that the contract could not be terminated during the first five years. Appeal File, Exhibit 11 at 1-2.1 Rent was initially established at $36,241.29 per month for the firm term, then amended to $37,252.96 per month. Id.; Exhibit 13 at 1. The contract involved a “build to suit” project, designed and constructed specifically for the mission of the tenant agency, SSA. The facility, a customer service center for the local community, was a brand new, LEED certified,2 single-story office building, with the SSA as the sole tenant. Specifications for constructing “build to suit” facilities for the SSA were detailed and extensive due to the high customer volume and public-facing nature of its day-to-day mission. For these reasons, it can take several years to complete a new SSA office. Transcript, Vol. 1 at 263-65. 1 All exhibits are found in the appeal file, unless otherwise indicated. 2 Transcript, Vol. 2 at 46-47. LEED stands for Leadership in Energy and Environmental Design. CBCA 6659, 7422 3 The contract required Wise to lease to GSA “[a] total of 14,950 rentable square feet (RSF) of space on the first floor of a building to be constructed on Parcel Number 370213144561 in Southgate Corporate Park” and “seventy-eight (78) onsite, surface parking spaces for the exclusive use of Government employees and patrons.” Exhibit 11 at 1.