CBCA 5420

GRANTED IN PART: November 4, 2019 CBCA 5420, 5733 PEGASUS ENTERPRISES, LP, Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Kyle E. Yaege of Hickman & Robinson, LLP, San Diego, CA, counsel for Appellant. James F. H. Scott, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. Before Judges GOODMAN, RUSSELL, and O’ROURKE. O’ROURKE, Board Judge. Appellant, Pegasus Enterprises, LP (Pegasus),1 a California limited partnership, entered into a lease with the General Services Administration (GSA) to provide office space for two federal agencies. Toward the end of the lease, appellant filed two claims for overtime utilities costs totaling $1,108,153. Since a portion of the claimed costs exceeded 1 The record contains a substantial amount of evidence related to an entity called Square One Development Corporation (Square One). Square One is the management company for Pegasus and is a member of the limited partnership. All actions related to these appeals were taken by Square One on behalf of appellant. To prevent any confusion, the Board will only refer to Pegasus in this decision. CBCA 5420, 5733 2 the six-year statute of limitations under the Contract Disputes Act (CDA), and we find no basis to toll it, we only grant the appeals in part. Findings of Fact The Lease From 2002 to 2015, Pegasus leased office space to GSA at 7675 Daggett Street and 4542 Ruffner Street in San Diego, California.2 The properties were occupied, respectively, by the Defense Contract Management Agency (DCMA) and the Defense Criminal Investigative Service (DCIS). Originally, and for many years thereafter, both properties were combined under a single lease (lease no. GS-09B-99044). Lease Terms Pertaining to Overtime Utilities A decade into the lease, Pegasus discovered that DCMA and DCIS had consumed hundreds of thousands of dollars in overtime utilities but had not paid for them. Under the terms of the lease, monthly rent payments included all utilities consumed during normal hours, defined as “daily, extending from 6:30 a.m. to 5:30 pm except Saturdays, Sundays, and Federal holidays.” The lease provided for overtime utilities as follows: (a) The Government shall have access to the leased space at all times without additional payment, including the use, during other than normal hours, of necessary services and utilities such as elevators, toilets, lights, and electric power. (b) If heating or cooling is required on an overtime basis, such services will be ordered orally or in writing by the Contracting Officer or Building Manager. When ordered, services shall be provided at the hourly rate established in the contract. Costs for personal services shall only be included as authorized by the Government. (c) When the cost of services is $2,000 or less, the service may be ordered orally. An invoice shall be submitted to the official placing the order for certification or payment. Orders for services costing more than $2,000 will be 2 Pegasus’s predecessor in interest, IOP Limited ONE, LP, entered into lease no. GS- 09B-99044 with GSA on July 19, 1999. That lease was transferred to Pegasus on June 23, 2002. CBCA 5420, 5733 3 placed using a Form 300, Order for Supplies or Services. The clauses entitled “GSAR 552.232-71 Prompt Payment” and “GSAR 552.232-72 Invoice Requirements (Variation)” apply to all orders for overtime services. (d) All orders are subject to the terms and conditions of this lease. In the event of a conflict between an order and this lease, the lease shall control. An attachment to the original lease, dated July 19, 1999, established the following overtime utilities rates: $15.00 per hour for the office areas; $10.00 per hour for the ADP room; and $5.00 per hour for the EPBX room. Because the EPBX and ADP rooms contained computers and computer equipment, those rooms operated twenty-four hours a day, seven days a week (24/7) and required constant cooling. Exhibit A of GSA Form 1364, “Proposal to Lease Under the Solicitation for Offers #99044,” identified the 24/7 operational requirement for these rooms.