CBCA 5150

GRANTED IN PART; DISMISSED IN PART FOR LACK OF JURISDICTION: December 20, 2016 CBCA 5150 1201 EYE STREET, N.W. ASSOCIATES, LLC, Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Reginald M. Jones, Douglas P. Hibshman, and Nicholas T. Solosky of Fox Rothschild LLP, Washington, DC, counsel for Appellant. Heather R. Cameron and Kristi Singleton, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. Before Board Judges DANIELS (Chairman), SOMERS, and SULLIVAN. SULLIVAN, Board Judge. 1201 Eye Street, N.W. Associates, LLC (1201 Eye Street) appeals the final decision of a contracting officer of the General Services Administration (GSA), in which the contracting officer denied 1201 Eye Street’s claim for additional amounts in operating cost adjustments for the term of the five-year lease extension that began on July 16, 2012. Based upon the plain language of the terms of the lease and the lease extension agreement between the parties, we grant the appeal and award 1201 Eye Street additional operating cost adjustments in the amount of $1,326,687.42, for the first three years of the lease extension, and interest as allowed by the Contract Disputes Act (CDA), 41 U.S.C. § 7109 (2012). CBCA 5150 2 Findings of Fact I. Relevant Lease Terms In 2002, GSA awarded 1201 Eye Street1 a contract for a lease of real property, located at 1201 Eye Street, NW, Washington, D.C. Appeal File, Exhibit 1.2 The lease period was ten years, id. at 1, and the tenant agency, the National Park Service (NPS), took occupancy on July 16, 2002. The contract, including the solicitation for offers, contained the terms and conditions that were to govern the lease. The lease set forth the annual rent amounts that GSA would pay in the ten years of the lease: 3. The Government shall pay the Lessor annual rent of: For lease years 1 – 4, the Government shall pay the Lessor annual rent of Eight Million Two Hundred Nine Thousand Nine Hundred Twenty and 00/100 Dollars ($8,209,920.00) (based on a rate of $42.76 per USF [useable square foot] payable at the rate of Six Hundred Eighty Four Thousand One Hundred Sixty and 00/100 Dollars ($684,160.00) per month in arrears. For lease years 5 through 7, the Government shall pay the Lessor annual rent of Eight Million Seven Hundred Eighty Five Thousand Nine Hundred Twenty and 00/100 Dollars ($8,785,920.00) (based on a rate of $45.76 per USF) payable at a rate of Seven Hundred Thirty Two Thousand One Hundred Sixty and 00/100 Dollars ($732,160.00) per month in arrears. For lease years 8 through 10, the Government shall pay the Lessor annual rent of Nine Million Three Hundred Sixty One Thousand Nine Hundred Twenty and 00/100 Dollars ($9,361,920.00) (based on a rate of $48.76 per USF) payable at a rate of Seven Hundred Eight Thousand One Hundred Sixty and 33/100 [sic] Dollars ($780,160.00) per month in arrears. Exhibit 1 at 1. The lease further required that, “[i]n addition to the annual rent, the Government shall pay Operating Expense Adjustments and Tax Adjustments as provided in this [standard form] 2 and the attached Solicitation for Offers during the Lease term.” Id. 1 The contract was initially awarded to 1215 Eye Street as the original owner of the property, but in 2006 ownership was transferred to 1201 Eye Street. Transcript, Vol. 1 at 57-59. 2 All exhibits are found in the appeal file, unless otherwise noted. CBCA 5150 3 Operating expenses were defined in the lease as “cleaning services, supplies, materials, maintenance, trash removal, landscaping, water, sewer charges, heating, electricity, and certain administrative expenses attributable to occupancy.” Exhibit 1 at 19. The total of these expenses for the property at the beginning of the lease was $1,326,720, an amount documented on the form 1217 included in the lease. Id. at 2, 72. This operating base amount was included in the first year’s annual rent amount for the property, with adjustments to be made every year thereafter. Transcript, Vol. 1 at 68-69.3 The lease provided direction as to how the operating expense adjustments would be calculated: 3.5 Operating Costs (Sep 2000) A.