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B-95136 1 (1981-08-04)

handle is hein.gao/gaobacuwc0001 and id is 1 raw text is: UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 20548 August 4, 1981 OPP CE OF GENERAL COUNSEL B-95136 Mr. William 0. Nolen, Investigator Subcortmittee on Investigations and Review Carmittee on Public Works - House of Representatives B-376 Rayburn House Office Building Washington, D.C. 20515 Dear Mr. Nolen: You asked whether any provisions in the lease between Town Center Management Company, Inc. and GSA for leased space in Waterside Mall would have justified the withholding of rent for therlandlord's failure to pro- vide Wcafeteria for Federal workers, as required by the lease. In response to our recommrendation in our September 20, 1977 report No Cafeteria for Federal Employees at Waterside Mall, LCD-77-349, that rent be withheld pending resolution of the issue by the GSA Board of Con- tract Appeals, .GSA' s Office of General Counsel asserted that no lease clause permitted such withholding. As you kn<w, the GSA Board determined on March 31, 1980, that GSA had waived its entitlement to a cafeteria be- cause, among other things, it never made good on its threat to withhold rent for the landlord's failure to provide the cafeteria. At the time our reconmendation was drafted, our motivation, frankly, was to generate some novenent on a long-stalled issue. In other words, even if withholding rent for the landlord's failure to provide a cafeteria would have resulted in a technical breach of the lease requirement to pay rent in full for the space leased (because no lease clause clearly provided for such withholding), it would have been warranted by the landlord' s corresponding breach of his duty to provide the cafeteria. We felt that the withholding of rent would have prompted the landlord to litigate the question promptly, instead of continuing his inconclusive negotiations with GSA on the question, which had been pending for several years. As it turned out, it was GSA' s lack of more aggressive action which resulted in the GSA Board's determination that the lease requirenent had been waived. In our recent discussions on this issue, we speculated that either paragraph 15 of the lease 's general provisions, Failure of Performance, or paragraph 7 of the miscellaneous provisions, Termination for Default - Liquidated Damages - Tine Extensions, might have authorized the withhold- ing of rent. On further reflection, however, it appears that neither of these clauses would have clearly allowed rent to be withheld.

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