_____________________________________________________________ MOTION TO DISMISS GRANTED IN PART; APPEALS GRANTED IN PART: September 30, 1993 _____________________________________________________________ GSBCA 10971, 10975, 11942 301 HOWARD STREET ASSOCIATES, Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Patrick Martell and Bryant Zimmerman of Pettit & Martin, San Francisco, CA, appearing for Appellant. Robert W. Schlattman and M. Leah Wright, Office of General Counsel, General Services Administration, Washington, DC, appearing for Respondent. Before Board Judges LaBELLA, BORWICK, and WILLIAMS. LaBELLA, Board Judge. These consolidated appeals involve a lease entered into by the General Services Administration, GSA or respondent, with 301 Howard Street Associates, appellant or lessor, of commercial office space in downtown San Francisco, California, for use by the General Accounting Office (GAO). On November 7, 1990, appellant appealed from the deemed denial of its certified Claim No. 1 to the contracting officer dated June 21, 1990, for lost rent stemming from GSA's delayed occupancy and late commencement of rental payments. This appeal was docketed as GSBCA 10971. On November 8, 1990, appellant appealed from the deemed denial of its certified Claim No. 2 to the contracting officer dated August 30, 1990. Claim No. 2 requested an equitable adjustment for changes (additional work) required in connection with the build-out of the space; for the reduction in the net usable square footage of the leased space caused by the applicability of building code changes imposed after award of the lease contract that allegedly became applicable only because of Government-caused delay in providing appellant the layout drawings; and for various increased costs incurred in performing tenant improvements caused by the Government's delay in providing layout plans. This appeal was docketed as GSBCA 10975. After the Government moved to dismiss these appeals on the ground that the Board lacked jurisdiction because the claims failed to state a definite amount and thus were not properly certified, appellant, while opposing such dismissal, submitted a restated certified claim to the contracting officer as a precaution against possible dismissal of the appeals. In submitting its claims, appellant revised and withdrew certain elements of the previous submission for Claim No. 2 resulting in an amended total claim of $282,214. On May 27, 1992, the contracting officer denied the claim and on July 29, 1992, the Board received appellant's appeal of this decision and assigned it docket number GSBCA 11942. On the basis of the Government's unopposed motion, this matter was consolidated with the other pending appeals regarding this lease contract. For the reasons stated below, we deny respondent's motion to dismiss GSBCA 10971 for lack of jurisdiction, grant in part the motion and deny it in part with respect to GSBCA 10975, grant both of those appeals in part, and grant in part the appeal in GSBCA 11942. Findings of Fact 1. By solicitation dated December 12, 1988, GSA requested offers for a five-year lease of office space with twenty-six inside parking spaces located within a discrete area of the city of San Francisco, California. The tenant agency was to be the GAO. Transcript at 64. Offers were due by December 29, 1988, and were to remain open until February 15, 1989. As originally solicited, the leased space was to be provided complete with tenant improvements which were to be built out in accordance with the Government's plans and ready for occupancy no later than June 1, 1989. Appeal File, Vol. A, Exhibit 1.[foot #] 1 ----------- FOOTNOTE BEGINS --------- [foot #] 1 The numerous appeal files and trial exhibits in these consolidated appeals have been consecutively numbered and are contained in volumes numbered A through L. With the exception of volume B, the exhibits therein are consecutively numbered in Arabic numerals. The exhibits in volume B are numbered consecutively in Roman numerals. ----------- FOOTNOTE ENDS ----------- 2. On June 16, 1989, appellant[foot #] 2 was awarded Lease No. GS-09B-88650 for Block A, or 26,090 net usable square feet (NUSF) of space consisting of the entire eleventh and twelfth floors at newly constructed premises at 301 Howard Street, San Francisco. Appeal File, Vol. A, Exhibit 1. The lease was for a term of five years to begin on the day the space was certified by the Government as complete and ready for occupancy. Under the revised schedule in the lease at the time of award, and the schedule submitted to GSA by appellant, the anticipated occupancy date for this space was December 26, 1989. Id., Vol. K, Exhibit 220. 3. The lease imposed a requirement that the lessor alter the space by completing necessary build-out, or tenant improvements, after receipt of Government-approved (GSA's) layout drawings and receipt of building permits. Appeal File, Vol. A, Exhibit 1 at 6. Within forty-five days after award or receipt of plans and samples from the lessor, whichever was later, GSA was required to deliver layout drawings giving the location and requirements for rooms, corridors, stairways and other information necessary to perform the build-out and finish selections to the lessor . Id. at 44; Transcript at 75,76. Supplemental Lease Agreement (SLA) Number 1 dated November 7, 1989, established August 1, 1989, as the date by which layout drawings and finish selections were required to be furnished to appellant for Block A. Appeal File, Vol. A, Exhibit 2. These were to be used by the lessor to complete the construction documents for the build-out and for obtaining building permits. Transcript at 75. 4. The record contains a preliminary budget for the build- out of the leased space which is dated two weeks after the execution of the lease. Appeal File, Vol. E, Exhibit 144. The Executive Vice President of Continental Development Corporation, who is the representative of both partners in the day-to-day operations of the building, testified as to how the rental rate was developed. He stated: A. The rental rate was a very carefully considered analysis of Number One, what we thought to be the market rate less what we felt would be a competitive rental rate in comparison with the rest of the market. We felt that the costs were important in terms of what would be the tenant improvement cost to provide the improvements in accordance with the solicitation and probably more importantly the timing, the timing of the originally envisioned occupancy under this solicitation ----------- FOOTNOTE BEGINS --------- [foot #] 2 301 Howard Street Associates is a California general partnership which is owned fifty percent by Continental San Francisco Corporation, a wholly-owned subsidiary of Continental Development Corporation. The other fifty percent is owned by Palladin USA, Inc. ----------- FOOTNOTE ENDS ----------- was considerably earlier than the award was finally made. . . . . JUDGE LaBELLA: Excuse me, Counsel. This was a series of questions having to do with how he decided what the rental rates should be, and this was the last point. Were there any factors that play into that [which] you have not mentioned . . . ? THE WITNESS: Well, the timing which I have not quite finished elaborating on, the timing was very important because we had looked at the rental income stream from the lease to help in the building operating expenses and, since it was a newer building, the income stream toward our pro forma costs and in anticipation of paying the ongoing operating expenses and paying the loan payments and paying the security service and all those people, was important and another consideration why we chose to be very competitive and to look favorably at this lease because of the size and its timing. Transcript at 61-63. This official also testified as to the development of the preliminary budget document for the build-out for the eleventh and twelfth floors of the leased premises. This document, Appeal File, Vol. E, Exhibit 144, post-dates the execution of the lease by two weeks, and was developed from a review of the plans and requirements of the lease by estimating the cost based upon consultation with subcontractors and consultants and recent experiences for certain items. Transcript at 77-78. It was an effort to "conceptually estimate the cost of improvements." Id. He conducted comparisons of this budget to other space for purposes of satisfying himself that it was in the right range and not way beyond the norm. Id. at 83. In this regard he stated: At that time we had a norm based upon the type and level of our building improvements and based upon other build-outs that we have had that were running for full floor tenants in the neighborhood of $28, $29, $30 a square foot, probably averaging about $29 a square foot. . . . . This budget was right on, as I recall. I believe this came out at about $29 a square foot . . . . Id. at 83-84. The record in this case contains no evidence that a budget for build-out costs was specifically considered prior to bidding in determining the rental rate offered by appellant, although tenant improvement costs were to be amortized in the rent except for lump sum items requested and paid for separately. Indeed, the evidence supports a conclusion that other factors relating to competing market rates, size of the leased premises, and cash flow relating to operating expenses and loan service were the most significant factors in determining the rental rate. 5. On November 7, 1989, a portion of the tenth floor -- 6,358 NUSF -- was added to the lease and denominated Block B of the lease. Appeal File, Vol. A, Exhibit 2. This space was also to be used by the GAO. The Government was to deliver layout plans for Block B by December 1, 1989. At the time SLA Number 1 was executed, on November 7, 1989, the Government had not yet delivered layout plans for Block A, which were overdue, and the SLA specifically provided that execution of the lease of Block B should not be construed as a waiver or limitation of the damages accruing for the Government's late delivery of plans for Block A. Id. 6. Appellant's project manager, Mr. Figone, testified that he prepared bar charts representing appellant's original contract work schedule and the as-built construction schedule. Appeal File, Vol. K, Exhibits 220, 221. He testified that he allowed four and one half weeks to produce construction drawings and two weeks for permit processing. Transcript at 145. These documents also indicate that appellant would have completed the tenant improvements for the eleventh and twelfth floors by December 26, 1989, if the Government had furnished layout drawings within forty-five days of award as required by the lease contract. The December 5, 1989 plans 7. Appellant received its first set of layout drawings from GSA on December 5, 1989, for both Blocks A and B. Appeal File, Vol. C, Exhibit 13. The transmittal letter noted changes to additional private stairwells proposed to be built within the leased space and further stated that the stairwells had been approved for location only, thereby leaving open the question whether or not they would be built. Id. Accompanying the transmittal was a list of seventeen additional items for which prices were requested. Appellant's Project Manager testified that upon review of the Government-furnished drawings he determined that he could not proceed with the project because there were inadequacies in the drawings and extra work was indicated which had not been approved. Transcript at 181-82. 8. The Government's contracting officer, whom the Board qualified as an expert regarding the sufficiency of layout drawings, testified that generally the type of drawings furnished on December 5 would be adequate for the contractor to provide construction drawings. The contracting officer admitted, however, that he was only generally familiar with the lease requirements and had no specific knowledge of them. Transcript at 637. His view that the drawings could be converted to construction drawings was somewhat qualified by at least one problem identified by appellant's project manager, i.e., maintaining adequate inside clearance because of a problem with the wall intersecting the window mullion. Id. at 661. He also was uncertain as to the effect of the fire code requirements. Id. at 666. 9. On December 11, 1989, appellant's project manager and project architect, Gensler and Associates, met with GAO and GSA representatives. Transcript at 183. Appellant's Project Manager discussed a number of ambiguities and conflicts observed in the December 5 drawings. Id. Some of the problems discussed are contained in a formal list the project manager finalized on December 15. Appeal File, Vol. D, Exhibit 106. Some significant deficiencies contained in the December 5 drawings are apparent: (1) requirement for a receptionist station shown on the drawings was not provided for in the lease contract, (2) maintaining necessary height clearance at the interface of diagonal exterior walls and partition walls, (3) locations where perimeter insets intersect with partition walls are required to be offset from centerline of mullion, (4) insufficient clearance for handicap exiting, and (5) noncompliance with fire code requirements for fire-rated corridors. Id; Transcript at 166-71, 186-91. 10. The GAO representative also advised at the meeting that she would effect some layout changes and submit revised layout drawings by December 18. GSA's Realty Specialist who attended the December 11 meeting testified that there was no discussion of code changes to take effect on January 1, 1990, which would require fire-rated corridors, Transcript at 769, and that it was her understanding that GAO would submit some minor changes and that construction drawings would be prepared once these minor changes were received. Transcript at 771. 11. On the following day there was another meeting between the GAO representative and Gensler at which there was discussion of the requirement for a fire-rated corridor between exit stairwells that was contained in the code that was to take effect on January 1, 1990. This code change would apply to this project because the late delivery of layout drawings on December 5 would necessarily result in obtaining building permits after the January 1 effective date. The December 5 layout drawings do not provide for these fire-rated corridors. Appeal File, Vol. K, Exhibit 222. This fact alone required significant changes to the layout drawings because the fire-rated corridor would be built into some of the net usable square footage that GSA had laid out, rendering the December 5 drawing inaccurate. Transcript at 769- 70. GAO retained Gensler to assist in revising the plans to accommodate this change. Transcript at 790; Appeal File, Vol. K, Exhibit 218. The architect also advised appellant that since these changes were significant, construction drawings would be started upon receipt of the revised layout drawings. On December 12, GSA's Realty Specialist received a call from Gensler who advised of the code change and that this would affect the December 5 plans. Transcript at 769. Appellant's Project Manager also advised respondent of this by letter dated December 13, 1989. Appeal File, Vol. C, Exhibit 14. During the period appellant awaited production of revised drawings, appellant made repeated requests to GSA for such plans and alerted GSA to the lost rent that continued to accrue. Id., Exhibits 15-18. Appellant was not advised by respondent to go forward with construction drawings on the basis of the December 5 layout plans. Transcript at 191. 12. While there is conflicting testimony regarding the adequacy of the December 5 drawings irrespective of the code changes, the preponderance of the evidence convinces us that a reasonable lessor would need revised layout plans before producing construction drawings adequate to obtaining requisite building permits in the circumstances. Finding 9. There is no question, however, that the addition of fire-rated corridors required revised layout plans. We also consider that GSA was given prompt and clear notice of this fact and of appellant's intention to proceed with construction drawings only after it received revised layout plans. 13. Our findings regarding the adequacy of the December 5 drawings are confirmed by GSA's issuance of the next set of drawings which took place on March 5, 1990.[foot #] 3 Appeal File, Vol. C, Exhibit 21 and Vol. K, Exhibit 223. There were significant differences between the December and March drawings to accommodate layout changes required as a result of the discrepancies noted in Finding 9. Id., Vol. K, Exhibits 222, 223; Transcript at 202-06. Requirement for fire-rated corridors 14. The building's core contained two fire stairways, one on each side of the core, and included the latest available fire protection apparatus and life safety system, including smoke detectors and rapid-response sprinklers. The building had been constructed in accordance with the San Francisco Codes applicable at the time, in the mid-1980s. The code required, at the time this lease was executed, that fire exits be separated by a distance equal to at lease one-half the diagonal measure of the building; and required construction of a fire resistant corridor connecting the exits if it did not meet or exceed that distance in separation. However, the corridor was not required in buildings having rapid- response sprinklers or other fire safety features, such as those present at the leased premises. Appeal File, Vol. L, Exhibit 232; Transcript at 445. Appellant's fifteenth floor was a full floor tenancy comparable to the ----------- FOOTNOTE BEGINS --------- [foot #] 3 Both the December and March drawings were produced by architects employed or retained by GAO. Transcript at 711-12. In both instances, however, the drawings were approved and furnished to appellant by GSA. ----------- FOOTNOTE ENDS ----------- eleventh and twelfth floors of the GAO lease. Appellant received permit approval for the fifteenth floor in January 1989 without having to build a fire-rated corridor connecting the two exits. Transcript at 442-44. 15. Mr. Keith Brown, an architect and expert in San Francisco building codes, space planning, and design, Transcript at 374, testified that in 1987 he assisted in developing the hypothetical floor plan for 301 Howard Street that was used for showing prospective tenants how the space might be utilized. Id. at 380. During that effort, Mr. Brown discussed the exit separation issue with officials of the Bureau of Building Inspection (BBI), including both the head of plan checking and the current head of BBI. During those discussions, it was concluded that one-hour fire-rated corridors were not required for the full-floor tenant floors of 301 Howard Street because they met all three criteria established by the BBI in a code ruling issued August 21, 1986. Id. at 382-84; Appeal File, Vol. L, Exhibit 232. In mid-1989 San Francisco adopted a new code that went into effect on January 1, 1990. According to Mr. Brown, at the time the new code was adopted, the prior interpretations were rescinded, and one-hour fire-rated corridors became required if exit stairwells were separated by less than half the diagonal of the building in linear feet. Transcript at 385. The new code applied to all building permit applications filed after its effective date. Id. at 387. According to Mr. Brown, prior to January 1, 1990, the eleventh and twelfth floor plans would have received a permit without fire-rated corridors connecting the exits due to the 1986 interpretation excepting floors that met the three criteria -- single floor tenant, full sprinklers throughout entire floors, and rapid-response sprinklerheads. 16. GSA has attempted to show in its brief that fire-rated corridors were not required by the new 1990 code in a building with the features of appellant's building. However, credible expert testimony adequately established that it was the city's interpretation of the new code and the disallowance of prior exceptions that created the need for additional fire related measures in this case. We credit this testimony and conclude that the new code as interpreted by the city did not permit appellant to go forward on the basis of the December 5 layouts. Moreover, if the layout drawings had been delivered to the lessor by early August, as required by the lease, permit applications would have been submitted in early September 1989 and the new building code would not have applied to this build-out. Appeal File, Vol. K, Exhibit 220. 17. GSA has interpreted the lease as requiring a reduction in the NUSF attributable to the addition of the two corridors and a consequent reduction in the rent payable to appellant. It based its interpretation on lease Section 24 which provides that rent would only be paid for NUSF and excludes corridors "required by local codes" from that definition. The revised layout which included fire-rated corridors reduced the NUSF on the eleventh and twelfth floors by a total of 1,076 NUSF, or $118,360 over the five-year term of the lease. Appeal File, Vol. F, Exhibit 166 and Vol. J, Exhibit 202. The San Francisco Board of Examiners approved this remodeling work on the condition that the drawings provide for fire-rated corridors. Id., Vol. F, Exhibit 160 at 5. The March 5, 1990 plans 18. On March 5, 1990, GSA issued the next set of layout drawings. Appeal File, Vol. K, Exhibit 223. These drawings contained many changes from the December 5 drawings, including the addition of fire-rated corridors connecting the exit stairways, and changes to the configuration of rooms which corrected prior inadequacies. Id.; Transcript at 202-04. The March drawings continued to show openings for a set of private internal stairways, however the transmittal letter from GSA stated that these stairways had been approved only for location and not for actual construction. Appeal File, Vol. C, Exhibit 21. Appellant's Project Manager testified that in early February he finalized a proposal to actually design these stairwells and sent the proposal to GSA. Transcript at 213. While on April 13, 1990, the parties entered into Supplemental Lease Agreement No. 2 for the design of the stairwells, Appeal File, Vol. A, Exhibit 5, GSA has never approved construction of these stairwells and they have never been built. Transcript at 206. 19. Appellant initially proceeded with the preparation of construction drawings based on the March plans but eventually discontinued that effort based on perceived inadequacies and conflicts in the plans. Transcript at 216-19. Appellant's Project Manager testified that although GSA was required to identify the finishes it desired, they were not included with the March drawings. Id. at 217. By letter dated March 29, 1990, appellant advised the contracting officer that the March 5 plans failed to conform to contract requirements in several respects and included a tabulation of nine specific issues that appellant believed needed to be addressed. Appeal File, Vol. C, Exhibit 23. Notably, the issue of the private internal stairs was not listed among the issues to be resolved. This letter also gave notice to GSA that unless clear direction was provided by April 13, 1990, appellant would proceed with the work as envisioned in the original lease. 20. By letter dated April 13, 1990, the contracting officer responded to the questions raised by appellant regarding the build-out. Appeal File, Vol. C, Exhibit 26. He further expressed surprise in learning that appellant was not proceeding with construction plans on the basis of the March 5 drawings. It was GSA's intention that any further changes requested by the tenant agency to the March 5 floorplans would be held and processed as alteration projects after the initial build-out was completed. Id., Vol. J, Exhibit 204. At the hearing, the contracting officer expressed the view that GSA's response of April 13 was an adequate one. Transcript at 715-16. He testified convincingly that most of the items did not affect the completion of construction drawings, e.g., the failure to provide the architectural finishes with the March 5 drawings. These finishes normally are provided at a later time, id. at 705, and are not essential to the preparation of construction drawings because they pertain to surfaces rather than to the structure of the space. Id. at 725. He did admit to a potential problem with two of the items listed by appellant. Id. at 705. As to appellant's item number seven regarding a possible change in the structural floor load for a file room, he correctly pointed out that appellant did not receive such indication from the layout plans but rather from the client agency. Appellant's responsibility in such circumstances was to proceed in accordance with GSA's layout directions. Id. at 705-06. The contracting officer also stated that it was "a little bothersome" to him that the layout drawing for the mini-computer room identified wall- hung furniture while appellant believed this conflicted with the requirement for acoustical tile on walls. He stated it would be a problem only if the walls could not be reinforced to hang the furniture because of the acoustical tile. Id. at 706. Appellant, however, has presented no evidence to that effect. As to appellant's remaining items of concern, the contracting officer correctly pointed out that such concerns do not involve a difficulty with the layout plans, per se, but rather with directions or information received directly from the tenant agency. 21. We agree with the contracting officer that these problems should have been resolved by merely refering to the lease agreement as the controling document. Transcript at 705- 16. In any event, an adequate and timely response by GSA provided clarification to appellant. We find no substantial basis in the record for concluding that the March 5 plans were inadequate for purposes of producing construction drawings and permit approval. 22. By letter dated April 27, 1990, GSA provided its finish selections to appellant. Appeal File, Vol. C, Exhibit 30. Construction and the permits 23. Appellant's Project Manager testified that he actually planned to begin construction of the tenant improvements prior to receipt of permit approval by the city. Q Q During the time that you allocated toward permitting, is there any other work that can be done while the permit applications are being processed by whichever authority processes them? A Yeah. About four or five weeks' worth of work can go from start and we can do all of the rough-ins, all the work, until we need rough-in inspections. So that means we can frame walls, we can even [dry] rock one side, we can stub in all the electrical, we can put in all the ceiling grid, the light fixtures, all the wiring -- we can't close the ceiling up, we can't button up the second side of any drywall, and we can't lay any carpet if we have stuff on the floor. So all that can go on until we need inspections. Q So that can go on while the permitting process -- A While the permitting is in process, yes. Transcript at 154. 24. As to the permit applications made in this case, appellant's project manager testified that "[w]e submitted the 10th floor [permit application] on May 31st, I think we submitted the 11th floor [permit application] about two weeks later, mid- June, and then about the 28th of June we submitted the 12th floor [permit application], so they were about two-week intervals." Transcript at 174. Completion of construction drawings and commencement of construction would have more or less coincided with the timing of the applications for permits, as indicated on appellant's bar graph, Appeal File, Vol. K, Exhibit 221. Although construction of tenant improvements began at about the time applications for permits were made, or shortly after that time in the case of the tenth floor, delays in obtaining permit approvals caused the construction on the tenth and eleventh floors to be interrupted for significant periods of time. Id., Vol. K and Vol. D, Exhibit 136; Transcript at 164-65. The delay in obtaining a permit for the tenth floor caused a break or delay in the construction for approximately one month and a delay of nearly two months occurred in the construction of the eleventh floor as a result of delays in obtaining a permit for that floor. Appeal File, Vol. K, Exhibit 221. Appellant's Project Manager testified that but for these interruptions, actual construction on the eleventh floor took place over a period of eleven weeks plus a couple of days and the twelfth floor work was done over a period of slightly less than thirteen weeks. Id.; Transcript at 164-65. The bar graph shows that construction of the tenth floor was completed in approximately thirteen weeks excluding the one month break in construction. Appeal File, Vol. K, Exhibit 221. The entire build-out period, including interruptions for permit approvals, was approximately twenty weeks. Id. 25. In its Claim No. 1, appellant states that the Government's actions caused a delay which impacted appellant's efforts to obtain permits. Appellant notes that after the October 1989 earthquake, the San Francisco Building Department was overloaded with building requests and that the permit process took seven to nine weeks, whereas prior to the earthquake this process could be completed in two weeks. Id., Vol. A, Exhibit 7 at 2. In its Claim No. 2, appellant states that the earthquake increased the normal permit processing time from two weeks, as assumed in its bid, to almost thirteen weeks. Id., Vol. B, Exhibit VII. 26. Upon completion of the work appellant notified the Government that the space would be delivered ready for occupancy on November 8, 1990. Appeal File, Vol. C, Exhibit 83. Subsequently, the parties executed a condition survey report which recorded measurement of the leased space and established a total of 6,358 NUSF of leased space on the tenth floor and 25,014 NUSF on the eleventh and twelfth floors for a total of 31,372 NUSF. Id., Vol. J, Exhibit 202. The measurement of 25,014 NUSF for the upper two floors represents a reduction of 1,076 NUSF from the space anticipated in the original lease document. Id., Vol. A, Exhibits 1 and 2. On August 15, 1991, the parties executed Supplemental Lease Agreement No. 5 which set the lease term as beginning November 8, 1990 and ending on November 7, 1995 for Blocks A and B. Id., Vol. K, Exhibit 217. This document reserves appellant's claims as follows: In executing this Supplemental Lease Agreement, the Government acknowledges that Lessor reserves its claim to recover from the Government all rent, rent escalation and all damages, including losses, liabilities and all additional costs of performance caused by the delayed acceptance of the space and alleged breaches of the Lease, including claims for additional costs, as reflected in the complaint before the General Services Board of Contract Appeals, Docket No. 10975. Id. The claim for lost rent through November 8, 1990 27. By letter dated June 21, 1990, appellant filed its certified Claim No. 1 for lost rent with the contracting officer. Appeal File, Vol. A, Exhibit 7. This claim seeks an equitable adjustment under the Changes clause for damages in the form of lost rent due to the Government's delay in providing layout drawings which in turn delayed the original planned occupancy dates of December 26, 1989 for Block A and March 31, 1990 for Block B through the revised projected occupancy date of October 30, 1990. This claim provides for a deduction for services and utilities not provided and requests a total sum of $439,508.66. No alternative remedy was sought in the claim presented to the contracting officer. 28. Appellant's initial complaint filed in this proceeding, GSBCA 10971, essentially restates the claim of June 21 with appropriate adjustments to cover the entire period through November 8, 1990, which was the occupancy date as agreed to by the parties. Appeal File, Vol. K, Exhibit 217. Appellant claimed a total of $464,301. Correspondence File, GSBCA 10971. Appellant subsequently amended its complaint and revised this claim upward to $502,821.14, to reflect the correct monthly rental rate established in Supplemental Lease Agreement No. 5. Id., Vol. K, Exhibit 217.[foot #] 4 29. In both its original and amended complaints appellant added alternative requests for relief not originally presented to the contracting officer. Appellant requested that the Board reform the lease contract so that the five-year lease period be deemed to have commenced on December 26, 1989 for Block A and on March 31, 1990 for Block B. Correspondence File, GSBCA 10971, Complaints dated December 14, 1990 and January 10, 1991. Under this alternative appellant seeks what it deems the full rental rate without any deductions for services and utilities not provided, for a total of $604,036.62. This was also the only amount sought at trial. Appeal File, Vol. K, Exhibit 226. These amounts are calculated to compensate appellant for a "corridor loss" of $20,581, i.e., the rent for Block A includes payment for the fire corridor area. 30. The Government seeks to reduce the amount claimed for lost rent by any reduction in operating expenses that appellant has been able to save in the sense that some anticipated expenses were not actually incurred during the period of delayed occupancy. The lease, in Section 27 of the miscellaneous provisions, deals with the issue of the owner's savings due to reduced operating expenses during a period of Government-declared vacancy: 27 ADJUSTMENT FOR VACANT PREMISES GSAR 552.270-25 IF THE GOVERNMENT FAILS TO OCCUPY ANY PORTION OF THE LEASED PREMISES OR VACATES THE PREMISES IN WHOLE OR IN PART PRIOR TO EXPIRATION OF THE FIRM TERM OF THE LEASE, THE RENTAL RATE SHALL BE REDUCED AS FOLLOWS: THE RATE SHALL BE REDUCED BY THAT PORTION OF THE COSTS PER SQUARE FOOT OF OPERATING EXPENSES NOT REQUIRED TO MAINTAIN THE SPACE. SAID REDUCTION SHALL OCCUR AFTER THE GOVERNMENT GIVES 30 DAYS PRIOR NOTICE TO THE LESSOR, AND SHALL CONTINUE IN EFFECT UNTIL THE GOVERNMENT OCCUPIES THE PREMISES OR THE LEASE EXPIRES OR IS TERMINATED. Appeal File, Vol. A, Exhibit 1 at 10 of 33. No thirty-day notice of delayed occupancy, however, was ever provided to the lessor. Appellant's expert in Government leasing and construction contracts, a former GSA employee and consultant, testified as to the purpose of this adjustment clause: ----------- FOOTNOTE BEGINS --------- [foot #] 4 The amount claimed for Block A includes $20,581 of rent for the space taken up by the fire-rated corridor which the Government has excluded from its calculation of NUSF. ----------- FOOTNOTE ENDS ----------- It's my understanding, in my experience, that this clause was written to cover situations where the government is tied up in a firm-term lease and the agency either goes out of business or changes their missions. . . . and they have to vacate leased space at some point after the time it was delivered. And in those situations the government gives the lessor 30 days prior written notice. . . . Q Do you have an opinion as to whether this particular clause applies in the situation we've been taking about the last two days? A I don't think it has any application to this for several reasons. One, I'm not aware that the government ever gave 301 Howard Street 30 days notice of their intent to employ this clause and two, the reason they probably did not is because, like I said earlier, the intent of this clause is to come into operation when the government is already in a leased situation and they are trying to reduce their cost for some remaining term that they are unable to terminate. In this case the lease had not beg[u]n in the government's eyes, so there would be no vehicle for them to implement this. Transcript at 421-23 (emphasis added). The claim for "corridor loss" for remainder of lease term 31. The Government is required under the lease to pay rent on a square foot rate only for areas included in the computation of NUSF as that term is defined in the lease. Appeal File, Vol. A, Exhibit 1 at 9 of 33. This computation resulted in the exclusion of the fire-rated corridor areas on floors eleven and twelve and a reduction in the rent. Because the construction of fire-rated corridors became necessary only as a result of the Government's delay in producing layout drawings and because such corridors were not required at the time the lease was signed, appellant believes it is entitled to be paid the rental rate for this excluded area for the duration of the lease. This claim for an adjustment of $143,440 in the full five-year lease term to account for the reduction in NUSF initially was a part of appellant's Claim No. 2 dated August 30, 1990. Id., Vol. B, Exhibit VII. It also was included in its amended claim of February 14, 1992, although it reduced both the amount of NUSF lost due to the corridors as well as the dollar amount claimed for this item. Appellant's claim of February 14 requests payment of $118,360 as compensation for the reduced space for the duration of the lease. Correspondence File, GSBCA 11942. At trial, appellant further adjusted the amount claimed for this item to be consistent with its demand for reformation of the lease term. Thus it takes into account the loss of rent for the corridor space already included in the demand for lost rent through November 8, 1990. On the assumption that the lease term would be reformed, appellant's "Summary of Claim," Appeal File, Vol. K, Exhibit 226, adjusts the amount claimed downward to $97,779. The claim for construction of fire-rated corridors 32. Appellant seeks the cost of constructing the fire-rated corridors on the eleventh and twelfth floors, an expense it did not anticipate at the time it entered into the lease. These costs were first claimed in appellant's resubmitted claim of February 14, 1992, in an amount of $93,284. Correspondence File, GSBCA 11942. This amount later was reduced significantly. Appellant's Project Manager testified at trial that he computed this cost by determining the materials and labor that were used to construct the corridors, and subtracting the costs of materials and labor that would have been incurred if the corridors had not been built. The resulting estimated figure is $14,760.97 for each corridor, for a total of $29,521.94. Transcript at 253-54, 257-60, 264; Appeal File, Vol. K, Exhibit 225. The claim for increased permit application fees 33. Appellant's Claim No. 2 dated August 30, 1990, makes a claim for "Change in Scope and Cost of Build Out." In connection with this claim, appellant articulates no dollar amount but states various general categories of increased build-out costs. Among those mentioned are appellant's costs incurred in applying for three separate "fast track" building permits -- one for each floor -- in order to accelerate performance. This process allowed appellant to treat each floor as an independent project and proceed on an incremental basis. Appeal File, Vol. B, Exhibit VII. Appellant's original Claim No. 2 sought the difference in cost of fees but the amount of such fees was unknown at that time. The appellant's resubmitted claim of February 14, 1992, states that the additional cost of fees for obtaining permits is $4,388. 34. Appellant now seeks $4,649 as increased costs of permit applications which it claims is owed as a result of the Government's breach. Appellant's claim summary arrives at this figure by determining the total reasonable permit cost for Blocks A and B ($8,717) and then subtracting this figure from what it claims is the total permit costs ($13,366) as increased "by the delays in delivering plans, the defects in the plans, and the need to divide the permit applications into several separate steps." Id., Vol K, Exhibit 226 at 4. Appellant's Claim No. 2 as resubmitted on February 14, 1992, explains that "[i]n order to allow the alteration work to proceed in areas where permits were obtainable, Lessor applied for and received three separate `fast track' permits." Appellant's Manager for Administration testified that the budgeted permit cost of $7,000 for Block A was derived from appellant's historical permit costs for other build- out space. Transcript at 356-59. It does not appear to be derived from an analysis of the actual anticipated GAO build-out work but rather from a calculation of historical square footage cost for permits. Appellant's Project Manager testified as to why these costs were incurred: Q Do you know why you incurred the cost? A There were two reasons: [One is] that in permit fee calculations, some of the fees are a single set fee for each permit. So you're going to pay only that one if you apply for one permit. And you're going to pay it three times if you applied for three permits. The other thing that transpired is that the city evaluates some components of the permit based on the value of their perceived value of the cost of the work. Every time you send an application there is a box in there wherein you write in the value of the work that you want to give to them. At one time they used to follow and accept our prices that we gave them. Later, and especially into 1990 after the earthquake when they were fighting to capture fees in operating cost, they started implementing their own evaluations. They actually have their own publications they can follow. But they are not bound by any rules. And they can put a value in as they want. And that's what they started doing is they would scratch off our valuations that we consistently used to use, and they increased the value, therefore, the permit fees went up. Transcript at 265-66. He further testified that the $13,366 cost figure includes the cost of hiring an expediter to expedite the permit processing. Id. at 268. The claim for extraordinary administration 35. Appellant's Claim No. 2 dated August 30, 1990, requests an equitable adjustment for "Change in Scope and Cost of Build Out." One of the many elements mentioned under this general category is the extraordinary administrative cost associated with the Government's multiple layout submissions. This claim, however, fails to state any dollar amount for this work. Appeal File, Vol. B, Exhibit VII. Appellant's resubmitted claim dated February 14, 1992, states that the cost incurred for additional administrative effort caused by late receipt of plans, changes, and deficient plans was $17,127. Correspondence File, GSBCA 11942. It appears that this amount includes the administrative work associated with the three building permits. Id. 36. At trial, appellant alleged that excessive administrative (labor) costs were incurred by appellant's administrative staff in dealing with the Government's late issuance of layout drawings, the repetitive issuance of drawings, and the need for resolution of conflicts on the drawings. The amount of this claim as asserted at trial was $24,189. Appeal File, Vol. K, Exhibit 226. It appears to be based upon the Project Manager's comparison of the actual administrative staff costs attributed to this project -- $25,885 in salaries for appellant's employees and $7,061.75 for services of appellant's consultant, for a total of $32,950 -- with the administrative staff costs for a project on another floor. He estimated the latter cost to be $8,761 on the basis of an assumed cost per square foot. Transcript at 272-74. Appellant seeks the difference of $24,189. 37. Another element of claimed excess administration costs relates to the cost of employing architects and engineers for the build-out work. As in the above claim for administrative (labor) costs, appellant's original Claim No. 2 does not state a dollar amount for its alleged extra costs incurred for architects and engineers. The only express reference to the cost associated with architects and engineers was in the attachment (Tab No. 2) which shows merely the amount budgeted for this category of work and which presumably was amortized as part of appellant's basis for formulating its rental rate. This work was actually budgeted for Block A at $59,212, or $2.27 per square foot. Appeal File, Vol. L, Exhibit 236. It is unclear whether this budgeted amount represents merely appellant's historical costs reduced to a square footage charge or whether it represents an estimate of the actual services to be required under this lease. The earliest budget document in the record, dated June 30, 1989, post-dates the lease by two weeks. Id, Vol. E, Exhibit 144. Appellant's resubmitted claim dated February 14, 1992, makes a lump sum demand of $47,041, which includes the alleged extra costs for architects and engineers, extraordinary administrative work, and blueprint costs. 38. At trial, appellant claimed that a reasonable cost for architects and engineers for Blocks A and B was $73,645 and that its actual costs were $99,284. Transcript at 282-84; Appeal File, Vol. L, Exhibit 236 and Vol. K, Exhibit 226. Thus, appellant now seeks reimbursement of $25,639 for excess costs of architects and engineers. Id. 39. Appellant's Project Manager testified that increased architect costs were incurred for the following reasons: A. . . . Even though Gensler was working with GAO to do the layout drawings, somewhere in that transition they started trying to produce construction drawings for us. And all these ambiguities that we've discussed, they went on for so long and time just etched away. Every time we had a meeting you had to rework the drawings and they had questions, as they were sitting down and trying to fit in the layout to finish the stuff, in that process they would find problems. You have to stop work. You had to clarify it, break away from it, wait for the answers to come back. It all takes time. Transcript at 282-83. 40. The final element of appellant's claim for extraordinary administration relates to the costs for additional blueprints. There was no specific reference to the extra costs of producing blueprints in appellant's original Claim No. 2, but this element was included in the lump sum demanded for various items listed in its resubmitted claim dated February 14, 1992. At trial, appellant sought a total of $1,146 for producing additional blueprints. This is the difference between the actual costs incurred for Blocks A and B and the originally budgeted costs for Block A with a pro-rata increase for Block B. Costs budgeted for Block A were based on appellant's historical blueprint cost for various jobs which was converted to a square foot cost and then adjusting larger jobs downward for economies of scale. Transcript at 285. Appellant's Project Manager explained why he believed appellant incurred increased blueprint costs: A. Going back to the explanation I just was explaining why we had increased A and E cost, architect costs. While they're working on these drawings they're getting input from us, and if we're having meetings we had to produce another set of drawings. Well, the drawings, if they are not finished, they just keep being redone. So every time you have a new meeting the drawings have been revised so there's new input so you have to produce another set of drawings. And every time you crank them out you have to go out and blueprint cranks them out and it's another 50 bucks or whatever it cost. Id. at 284-85. On cross examination of appellant's Project Manager counsel sought to obtain a clearer picture of this problem: Q. Isn't [it] true that yesterday I believe you said that Gensler was stuck when they looked at the March plans submitted by the government? A. No. I don't believe that's what I said. What I said was that they called me and said that they were trying to extrapolate the information and get [it] into the CAD system. And, in relation to everything that [had] transpired up to that point, the questions that I had asked about the conflicts and ambiguities, the stuff that they introduced to whatever answers we did get, if in fact we got answers, there obviously were things that were unanswered and they could not go forward any more. And what specific relationship that has to do with the March drawings, I am not sure. I am just saying in that point in time all the information that we had and if it included the drawings, it included the issues that were still outstanding, that's where they were. They could not finalize background drawings to go forward. Q. And isn't [it] odd that Gensler would have those, would perceive those conflicts, since it prepared the March drawings? . . . . A. . . . Now I do understand that part of the problem [was] that GAO was feeding Gensler changes and more information. And that they were trying to get them to put in and apparently saying go ahead and do this, but all those changes, none of those changes were part of our contract work. So there was this duality of conflict I think that Gensler was dealing with. They had one party saying one thing and another party is saying something else. And there was a real dilemma in there. I don't exactly [know] what transpired. . . . . A. . . . Here again the conflict is they each had a different agenda. GAO wasn't following the contract that I had with GSA. They would have a new agenda. So I think there [were] some problems being generated here. But it was not by me. Transcript at 311-13. The claim for increased labor, equipment, and materials 41. In its original Claim No. 2, submitted on August 30, 1990, appellant claimed an equitable adjustment under the Changes clause of the lease on the basis that GSA's delay caused the cost of build-out to increase from its original estimate. Appellant, however, did not state any dollar amount for this segment of its claim but promised to supplement the claim when it "identified the full cost difference for this item." It did list various categories of increased costs for this claim: increased cost of permits, increases in its administrative costs due to multiple layout submittals; "subcontractor, consultant and associated cost increases;" and "increases due to renegotiation of union contracts for skilled workers and laborers, as well as increases in material costs . . ." Appeal File, Vol. B, Exhibit VII. 42. In resubmitting this claim on February 14, 1992, appellant no longer requested an equitable adjustment under the Changes clause as previously claimed but rather asserted a breach of contract and set forth, inter alia, a claim for $2,986 for "[i]ncreased costs of labor, materials and equipment caused [by] increases in the cost of doing the alteration work required under the Lease." The claim contains no explanation as to precisely how this amount was determined. Correspondence File, GSBCA 11942. This resubmitted claim also seeks, apart from the claim for $2,986, as separate elements: damages stemming from reduction of rent and added construction costs (fire-rated corridors) as a result of new code provisions requiring additional corridors; additional fees for building permits; extra costs of extraordinary administrative work, architects/engineers fees and blueprint costs; and a profit factor for the claimed extra work. All of these latter elements of the restated claim, except for the claimed profit factor for the extra work, are treated separately above in accordance with the "Summary of Claim" presented at trial. Appeal File, Vol. K, Exhibit 226.[foot #] 5 43. Appellant's employee in charge of day-to-day operations of the leased premises testified that appellant's Office Manager and Construction Coordinator had a significant role in preparing the claim summary document in evidence at Appeal File, Vol. K, Exhibit 226, and used extensively at trial to prove entitlement on a total cost basis. "Her role primarily was to check back on the accounting records of construction costs of verifying administrative time, and breaking out certain of the expense claims that are set forth in the claim." Transcript at 133. Appellant's Project Manager testified that he helped produce the formation and presentation of appellant's claim for increased labor, equipment and materials as presented in Exhibit 226. Transcript at 276. He stated that increased costs in these categories were incurred because appellant's "budgeting and pricing was put together from early 1989 and we were not able to price out and contract for the work until mid 1990, almost a year and a half later." Id. at 277. As to the direct causes of cost increases he testified: A. We had during that timeframe almost every union renegotiated for increased wages. We had some material cost increases; copper and conduit prices were erratic and usually increasing during that timeframe. A lot of the fabricated and manufactured materials had increases in cost. Anything that was put together, electrical fixtures, all of these things had [a] tendency to go up by 20 percent or something. Id. at 277-78. ----------- FOOTNOTE BEGINS --------- [foot #] 5 This exhibit makes no claim for profit, but appellant's counsel resurrects a profit factor in Appellant's Reply Brief. It argues therein that appellant is entitled to a liberal profit percentage in the range of fifteen to twenty-five percent. Appellant fails to state what element or figure this profit factor should be applied to. ----------- FOOTNOTE ENDS ----------- 44. At trial appellant pursued a total cost theory of relief for increased labor, equipment, and materials. Appellant's Exhibit 226 sets out appellant's total costs for all tenant improvement work, including additional work requested and separately paid for by GSA. Appellant deducts from this total cost amounts claimed separately for permits, blueprints, architect and engineer costs, and amounts it was separately reimbursed by GSA presumably for additional work required. The exhibit shows unreimbursed construction costs for Blocks A and B as $1,084,332. From this amount appellant has deducted its "reasonable budgeted costs" for Blocks A and B in the amount of $874,148 to arrive at increased construction costs of $210,184. From this amount it then deducts the cost of constructing the fire-rated corridors, $29,522, which are claimed separately, for a total claim for increase in construction costs of $180,622. 45. On the last day of trial this claim was substantially revised and reduced on rebuttal to $60,661 to account for a $120,000 error discovered in appellant's construction cost records. Id. at 802-04. This error erroneously inflated appellant's base figure for its total cost of tenant work. Relevant lease provisions 46. The lease contains GSA Form 3517 (Rev. 3/89), General Clauses (Acquisition of Leasehold Interests in Real Property). Appeal File, Vol. A, Exhibit 1. This document provides for changes in the Government requirements: 17. 552/270-21 CHANGES (JUNE 1985) (a) The Contracting Officer may at any time, by written order, make changes within the general scope of this lease in any one or more of the following: (1) Specifications. (2) Work or services. (3) Amount of space. (4) Facilities or space layout. (b) If any such change causes an increase or decrease in the Lessor's cost of, or the time required for, performance under this contract, whether or not changed by the order, the Contracting Officer shall modify the lease by (1) making an equitable adjustment in the rental rate, (2) making a lump sum price adjustment, or (3) revising the delivery schedule. (c) If such change causes an increase in costs under this contract, the Lessor shall submit any "proposal for adjustment" (hereafter referred to as proposal) under the clause at 552.270-20, Proposal for Adjustment. (d) Adjustments for operating expenses in vacant leased premises will be in accordance with the clause at 552.270-25, Adjustment for Vacant Premises. (e) Failure to agree to any adjustment shall be a dispute under the Disputes clause. (f) No services or work for which an additional cost or fee will be charged by the Lessor will be furnished without the prior written authorization of the Contracting Officer or a designated representative of the Contracting Officer. Id. 47. Other relevant provisions of the General Clauses follow: 5. 552.270-27 DELIVERY AND CONDITION Unless the Government elects to have the space occupied in increments, the space must be delivered ready for occupancy as a complete unit. The Government reserves the right to determine when the space is ready to occupy. 7. MEASUREMENT FOR PAYMENT (APRIL 1984) When space is offered and accepted, the space will be mutually measured upon delivery. Payment will be made on the basis of actual measurement; however, payment will not be made for delivered space which is in excess of the maximum square footage solicited. 20. 552.270-15 APPLICABLE CODES AND ORDINANCES (JUNE 1985) The Lessor, as part of the rental consideration, agrees to comply with all codes and ordinances applicable to the ownership and operation of the building in which the leased space is situated and, at his own expense, to obtain all necessary permits and related items. Appeal File, Vol. A, Exhibit 1. 48. The lease agreement also incorporated solicitation provisions as a part of the lease. A provision relevant to the Government's reduction in the rent because of the reduction in NUSF provides: 24. NET USABLE SPACE Net usable space is the method of measurement for the area for which GSA will pay a square foot rate. It is determined as follows: If the space is on a single tenancy floor, compute the inside gross area by measuring . . . . . . . In all measurements, . . . deduct the following from the gross area including their enclosing walls: . . . . corridors in place or required by local codes and ordinances. Appeal File, Vol. A, Exhibit 1. Discussion Respondent's motion to dismiss The Government has moved to dismiss the appeals in GSBCA 10971 and 10975 for lack of jurisdiction on the basis that the claims presented to the contracting officer in these cases did not seek a particular requested amount. It argues that a proper claim must be for a specific amount of money and, as required by the Federal Acquisition Regulation, seek payment of money in a sum certain. 48 CFR 33.201. Respondent argues that "appellant's statements that `. . . the amount of damages for which the Government is liable on this claim is indeterminable . . .' and that the certified claim figure `. . . represents the minimum amount the government is liable for' render the claims in these appeals qualified." Respondent would distinguish this case from the one considered in Mary Lou Fashions, ASBCA 29318, 84-2 BCA 17,483 at 87,100, because in Mary Lou the contractor said that the amount being certified was correct at the time of certification while appellant in these appeals states that the amounts it is seeking are "indeterminable." Appellant argues that the claims as submitted were proper and that only future costs and losses, dependent on resolution of legal issues and future Government conduct, were reserved. At the time the claims were submitted, appellant claims it could not accurately predict when GSA would stop the delays. It contends that acknowledgment of a potential upward adjustment of a claimed amount does not improperly qualify a claim or deprive the Board of jurisdiction under the Contract Disputes Act, 41 U.S.C. 601-613 (CDA), citing to Computer Sciences, Inc., ASBCA 27275, 83-1 BCA 16,452 at 81,843. Appellant also argues that Mary Lou Fashions supports its position because the board there held that the specific reservation of right to change the claim did not affect the validity of the claim or certification. Finally, appellant contends that even if there had been no demand for a minimum monetary amount appellant's demand is still a proper "claim" as that term is defined by regulation to include the "adjustment or interpretation of contract terms, or other relief arising under or related to the contract." 48 CFR 33.201. In some respects this case is similar to Mary Lou Fashions. In that case, the contractor certified a claim for $944,201.05. There was a detailed breakdown of costs which included two estimated items. The board concluded that the claim was for a sum certain which was not qualified. The fact that two items were estimated did not render the certification invalid. The use of estimates can be justified on the basis that the contracting officer has been made aware of the basic parameter of the claim, even though the amount may change in light of new evidence. Heritage Reporting Co. v. General Services Administration, GSBCA 10396, 92-1 BCA 24,740. Because the circumstances in each of these claims (Nos. 1 and 2) are quite different, we treat each separately and reach different conclusions with respect to each. The first claim dated June 21, 1990, Appeal File, Vol. A, Exhibit 7, is a claim for an equitable adjustment for lost rent or marketability due to the Government's delay in providing adequate layout drawings. The claim states a specific period of delay (a definite start date and a projected ending date), imputes responsibility for delay to specific Government action (failure to provide layout drawings), seeks a specific dollar adjustment ($439,508.66), and explains how appellant calculated the amount sought (lost rent for the delay period less an adjustment for services and utilities). What is indeterminate in this claim is any possible future delays that might occur. In other words, appellant reserved the right of a potential upward adjustment for any further delays. This possibility does not render this claim improperly qualified or the certification of such a claim inadequate. Computer Sciences, 83-1 BCA at 81,843. Once the Board determines whether or not the Government is at fault for the delay in layout drawings and the period of delay, the amounts due for lost marketability or rent would immediately become plain and easily calculable. Where the amount of the claim is calculable from the facts provided with the claim, a claim need not be rejected despite the absence of a precise dollar amount. Metric Const. v. United States, 1 Cl. Ct. 383 (1983). We therefore conclude that Claim No. 1 stated a sum certain and was properly certified and presented to the contracting officer for decision. As such, we have jurisdiction on the basis of the contracting officer's deemed denial of the claim in GSBCA 10971. Claim No. 2, dated August 30, 1990, is a claim for an equitable adjustment in contract price for three GSA-ordered changes: 1) change in amount of NUSF space; 2) change in scope and cost of build-out, and 3) change in lease term. Regarding the first change, appellant's claim seeks payment at the rental rate for the reduction in NUSF due to the construction of fire corridors, which it views to be a change from the original lease requirement. It seeks payment of a specified amount for this space calculated at the rental rate for the entire five-year term of the lease. This claim for an adjustment due to the reduction in NUSF allegedly caused by the Government suffices as "a clear and unequivocal statement that gives the contracting officer adequate notice of the basis and amount of the claim." Contract Cleaning Maintenance, Inc. v. United States, 811 F.2d 586, 592 (Fed. Cir. 1987). The contractor need submit only the amount of costs it has incurred or a basis upon which the contracting officer could compute the amount. 25 New Chardon Street Ltd. Partnership v. United States, 19 Cl. Ct. 208 (1990). We have jurisdiction over this request for an equitable adjustment because the contractor has asserted with sufficient specificity a right to additional compensation and has explained precisely how it has computed the amount requested. It is enough if the amount in dispute can be "easily determined by a simple mathematical calculation or from the contractor's submission to the contracting officer . . . ." Metric Construction Co., Inc. v. United States, 14 Cl. Ct. 177 (1988). See also Quality Diesel Engines, Inc., GSBCA 11332, 92-1 BCA 24,410 (1991) at 121,849 (claim which set forth the amount to which appellant believes it is entitled and the method by which the amount was calculated is sufficient even though appellant stated that the claim may increase when more information was provided by the respondent). Appellant's claim for "change in scope and cost of build- out" seeks an equitable adjustment because the cost of providing tenant improvements increased as a result of the Government's delay in providing layout plans and in providing multiple plans. The claim as submitted to the contracting officer mentions various aspects of the build-out costs that increased as a result; e.g., the costs of obtaining permits; additional manhours and administrative cost to review, identify, and price multiple changes in the scope of work; and increases in material costs and wages for skilled workers and laborers. Appellant, however, fails to state any dollar amount sought for this adjustment and merely presents its original estimate for the build-out work, presumably as a benchmark for determining its unspecified increased costs. By way of explanation, appellant noted that these costs were ongoing and their full impact could not be determined at that time. Although appellant presumably knew at the time it submitted this claim to the contracting officer that its costs for tenant improvements were increasing, it failed to state any sum certain for this demand for equitable adjustment. Because this claim is essentially one for additional compensation but states no specific dollar amount representing its increased costs, under the authorities cited above it is not a proper CDA claim and we dismiss it for lack of jurisdiction. Essex Electro Engineers, Inc., v. United States, 960 F.2d 1576, 1581 (Fed. Cir. 1992). The final portion of Claim No. 2 relates to an alleged change in lease term. Many elements included under this rubric have been withdrawn, e.g., "Impact on Rent Free Period," "Parking Fees Impact," and "Change In Fair Market Value." Correspondence File, GSBCA 11942, Appellant's Resubmitted Claim dated February 14, 1992. Another element of this claim relates to the issue of lost market time caused by the delay in the commencement of the lease which is duplicative of the request for an adjustment in Claim No. 1. The only other element under this general heading is yet another demand for an adjustment to compensate for additional administrative labor expended as a result of the multiple submissions of layout plans. However, appellant once again failed to specify any dollar amount for this demand, and it is dismissed for the same reasons as stated above. In conclusion, we deny the Government's motion to dismiss Claim No. 1. As to Claim No. 2, we deny the motion with respect to the claim for the equitable adjustment for the change in amount of NUSF and grant the motion with respect to the remaining elements of Claim No. 2. The merits Claim No. 1: Loss of rent/marketability The Government was obligated under the lease agreement to provide layout plans for Block A by August 1, 1989, Finding 3, and for Block B by December 1, 1989, Finding 5. We have found as fact that the Government delayed delivery of adequate layout plans until March 5, 1990. Findings 12, 13, 18-21. This amounted to a delay of seven months and four days in the delivery of plans for Block A and a delay of three months and four days in the delivery of plans for Block B. Appellant, however, seeks recovery for a greater period of time than merely the delay in providing layout plans. It seeks compensation for the full period running from the original planned occupancy date of December 26, 1989, through the date the tenant improvements were completed and the premises was ready for occupancy, i.e., November 8, 1990, a period of slightly more than ten months for Block A. A lesser period is sought for Block B on the basis that the anticipated occupancy date was March 31, 1990. These longer periods reflected in appellant's claim include periods of extended delays in obtaining permits for the tenth and eleventh floors. Finding 24. Alternatively, appellant's complaints seek to have the lease reformed to commence on the date the parties originally anticipated occupancy to occur and to run for five years from that date. Under the contract's Changes clause, the Government is entitled to make changes in the specifications and in space layout. The Government, in fact, changed the specification that required it to provide layouts within the prescribed time frame. We hold that the Government's delay in providing final layout plans is properly addressed as a constructive change under the Changes clause. This is the relief appellant originally requested of the contracting officer. Appellant is not entitled to recovery on the basis of a breach of contract for which reformation of the lease term is requested, given the Government's rights under the Changes clause.[foot #] 6 In addition, the parties expressly agreed in Supplemental Lease Agreement No. 5 that the five-year term would run beginning November 8, 1990 and continue through November 7, 1995. This agreement did not reserve any submitted claim for reformation of the lease term, and we see no basis for providing relief in contradiction to the express agreement of the parties. The Changes clause permits an adjustment where a change causes an increase in the lessor's cost of, or the time required for, performance. Of the three methods provided to compensate the lessor for its losses, the one that most appropriately accomplishes this is a lump sum price adjustment for appellant's loss of marketability for the period the Government was at fault for delay in commencement of occupancy and rental payments. Appellant has proven that the Government clearly was responsible for the delay in providing layout plans and we grant an equitable adjustment to compensate for that delay. We think the additional delay in obtaining building permits, however, was not the Government's fault. It is more directly attributable to factors outside the Government's control which were not foreseeable by either party and for which the contract provides no relief. Robert L. Rich d.b.a. Unitranco, DOT CAB 1026, 82-2 BCA 15,900 at 98,823-33. The evidence shows that the time required to obtain permits substantially increased from appellant's historical experiences for the leased building primarily because of the backlog caused by the October 1989 earthquake in San Francisco. Finding 25. As to any other cause of delay or increased costs in performing the build-out, appellant has not met its burden of proving that the Government was responsible for any such delay. The contractor must show that the Government was the sole proximate cause of the delay and there were no concurrent causes which would have equally delayed the project. Avedon Corp. v. United States, 15 Cl.Ct. 648, 653 (1988). Appellant has not met this burden. Thus, we award appellant a lump sum price adjustment equivalent to the rental rate for the period the Government delayed providing adequate layout plans, i.e., from August 1, 1989 through March 5, 1990, for Block A and from December 1, 1989 through March 5, 1990, for Block B. We reduce this amount by the fair value of build-out, services, and utilities which were amortized in the rental rate, the cost of which appellant did not incur for the time period covering this period of lost marketability. In determining how much of an adjustment to ----------- FOOTNOTE BEGINS --------- [foot #] 6 Counsel put forth this demand as an alternative basis for relief in the pleadings and argued this at hearing. ----------- FOOTNOTE ENDS ----------- allow, we turn to the contracting officer's request of the appellant to revise its claim by reducing the full rental rates for Blocks A and B to reflect an adjustment for appellant's unincurred costs that had been amortized into the rent. Appellant thereafter provided the contracting officer with its operating and build-out costs that were amortized in its full rental rates. The Government's post hearing brief admits that this is the proper measure of relief assuming the Board finds appellant to be entitled to damages for delays caused by the Government. We agree that this is the appropriate measure of damages. As reduced by these unincurred costs, the monthly rental rate per square foot for Block A is $ .96 and the daily rate is $ .032. For Block B the adjusted rates per square foot are $1.40 per month and $ .047 per day. Appeal File, Vol. C, Exhibit 46. Accordingly, appellant is entitled to an equitable adjustment for Block A covering seven months and four days of lost marketability for an award of $178,664.32. For Block B it is entitled to an adjustment equal to three months and four days rent at the above rates for an award of $27,898.90. This comes to a total adjustment of $206,563.22 for both blocks of space. Claim for corridor loss for lease term Appellant's Claim No. 2, dated August 30, 1990, seeks a lump sum equitable adjustment to compensate for the reduction of 1,076 NUSF on the eleventh and twelfth floors. The Government reduced the rent to account for the reduction in NUSF due to the addition of fire-rated corridors required by the building code change that took effect after the anticipated occupancy date. Finding 17. Respondent's sole defense is that there was no code change and thus appellant is not entitled to relief. There is no merit to respondent's defense. The only credible expert testimony adduced at trial clearly shows that prior interpretations of the code were rescinded and one-hour fire-rated corridors were required in the circumstances applicable to this leased space for permit applications filed after January 1, 1990. Findings 15, 16. Indeed, the city's approval of the build-out was given on the basis of drawings that provide for fire-rated corridors. Finding 17. At the time this lease was entered into the parties agreed to lease the entire eleventh and twelfth floors, described as consisting of 26,090 NUSF, at an agreed annual and monthly rate established for the combined floors. The Government interpreted the contract provision for Net Usable Space, Finding 47, as permitting it to convert the lump sum annual and monthly rates for the entire eleventh and twelfth floors to a square footage rate computed on the basis of 26,090 NUSF, and then to adjust the rental rate to account for the reduction of 1,076 NUSF. In support of this action it relies on the provision in the Measurement for Payment clause, Finding 46, that payment will be made on the basis of actual measurement. Irrespective of whether the Government's interpretation was correct, we think the Government constructively changed (reduced) the amount of space it initially agreed to rent. While the parties' bargain was that appellant would comply with all applicable codes, Finding 47, appellant never agreed to assume the risk of significantly reduced NUSF and rental income resulting from code changes affecting tenant improvements required to be made after the anticipated build-out period initially agreed to by the parties. The initial layout plans provided by the Government on December 5, 1989, as drawn, would have had no effect on the amount of NUSF for these floors. The March plans which were drawn, in part, to accommodate the new building code interpretations that took effect on January 1, 1990, reduced the amount of NUSF by 1,076 because of the addition of fire rated corridors. Had occupancy taken place as planned on December 26, 1989, the new code would not have applied to this space. Because appellant's bargain reasonably did not assume the risk of such a code change during this vastly extended period, the Government's insistence that appellant comply is a constructive change for which an equitable adjustment is due under the Changes clause. The Changes clause permits making an equitable adjustment in the rental rate as well as a lump sum price adjustment. We award appellant a lump sum equal to the reduction in rent attributable to the change in the rental rate due to the reduction in NUSF taken by the Government for the period commencing November 8, 1990 through the month preceeding the date of payment of this award. Because the lease term has not yet expired, we also increase the rental rate for future rental payments to take into account the reduction taken by the Government that is attributable to the reduction in NUSF. The record before us is inadequate to determine the precise adjustments to be made for this claim and we therefore return this matter to the contracting officer for calculation of the appropriate adjustments and amounts due. Our intention here is for the contracting officer to retain the monthly and daily amounts provided for in the lease agreement for the eleventh and twelfth floors without reducing the rent for the diminution in NUSF. The claim for construction of fire-rated corridors Appellant seeks the cost of constructing the fire-rated corridors on the eleventh and twelfth floors. It did not anticipate this expense at the time it entered into the lease agreement and the cost of performing this work was not amortized into the rent. Finding 32. At trial appellant's Project Manager credibly testified as to the actual extra cost of performing this work. The total amount shown at trial to be due for this work is $29,521.94. Id. The Government objects to any award for this work because it does not believe fire-rated corridors were necessary for this space and it questions the adequacy of the proof offered by appellant for the cost of this item. As indicated above, there is no merit to the Government's position that such corridors were not required. Indeed, the Government's own layout plans dated March 5, 1990, required their construction which amounted to a change from its original December plans. While the Government properly notes the changing proof offered by appellant for this work, we are satisfied that appellant's Project Manager's testimony at trial provides sufficient proof of the actual cost of this work. Because the Government required this work and appellant did not amortize it in its rental rate, appellant is entitled to an equitable adjustment under the Changes clause in the amount of $29,521.94. It is also entitled to a ten percent profit for this extra work for a total award of $32,474.13. The claim for increased permit application fees Appellant seeks $4,388 as increased costs of permit applications as damages for the Government's alleged breach of contract. Finding 34. We deny this claim because we conclude that the Government neither caused nor required this expenditure and did not breach the lease agreement so as to be responsible for such damages. As indicated above, we have determined that appellant is entitled to certain equitable adjustments under the Changes clause rather than breach damages. We make no such award for any increased cost of permit application because the Government did not require appellant to apply for more than one permit and appellant made an independent business judgment regarding how best to proceed. Appellant assumed the risk of any escalation in permit costs resulting from its own business decision. Costs for extraordinary administrative work and build-out escalation To the extent these claims are a part of Claim No. 2 dated August 30, 1990, they were dismissed for lack of jurisdiction. They were resubmitted in the claim dated February 14, 1992. There appellant sought $17,127 for the additional administrative effort caused by late receipt of plans, changes, and deficient plans; $28,842 as increased costs for architect/engineer services required for the build-out effort and in the repetitive permit applications; and $1,072 for additional costs for blueprints necessitated by changes to plans. These three elements comprised its total claim of $47,041 for extraordinary administrative work. Finding 37. In addition, appellant's February 14 claim requests $2,986 to compensate for increased costs of construction. Finding 42. These amounts were claimed as damages for the Government's alleged breach of the lease agreement. At trial, appellant presented evidence in support of these claims on the basis of increased total costs in the administration and construction of this project. Although we have determined that the Government changed the contract work and we have allowed recovery for the proven cost of those changes where appellant has provided sufficient evidence to support an award, we do not find that the Government breached its lease contract with appellant. Nor do we think appellant has presented sufficient evidence that solely the Government caused these administrative and construction costs to increase. Appellant did demonstrate that its total costs increased somewhat from its budgeted costs in the areas at issue here. Findings 38-40, 43, 44. The evidence shows that in many respects the increase was due to appellant's own business decisions on how best to perform the contract work rather than because of any requirement imposed by the Government. Even if the Government imposed some extra work on appellant as a result of its actions, appellant has failed to present credible evidence of the extent of the Government's responsibility for any such additional effort and the cost incurred for that effort. Appellant's evidence of total build-out cost for this project does not segregate or exclude, for example, the cost of providing lump sum items or extras which the Government has separately paid for. Finding 44. We are unable to determine from this record whether the recovery sought for architects/engineers expenses, administrative labor costs, and blueprint costs were increased by the lump sum items included in the total build-out costs and whether the amounts being sought have been adjusted for any such increase. Nor does the evidence show the administrative costs associated with certain actions that are essentially appellant's responsibility, e.g., administrative costs associated with obtaining permits. We agree with the Government's argument that appellant's total cost approach for recovery must fail here. This is because appellant has not proven that the nature of the particular losses makes it impossible or highly impracticable to determine them with a reasonable degree of accuracy and that appellant was not responsible for the added expense. David J. Tierney, GSBCA 7107 et al., 88-2 BCA 20,806 at 105,170. We also have grave concern with the reliability of the evidence presented, given the diverse and varied claims submitted by appellant and the questionable accuracy and reliability of the evidence presented at trial. Finding 45. Decision We DENY respondent's motion to dismiss GSBCA 10971 (Claim No. 1), DENY IN PART respondent's motion to dismiss the portion of GSBCA 10975 (Claim No. 2) relating to appellant's claim for an equitable adjustment for the change in NUSF, and GRANT both of those claims in part. We GRANT the motion to dismiss with respect to the remaining claims in GSBCA 10975. We GRANT Claim No. 1 and award appellant $206,563.22 for lost marketability for blocks A and B. We GRANT the claim for construction of fire- rated corridors in GSBCA 11942 and award it $32,474.13, and DENY the remaining claims in that appeal. We REMAND GSBCA 10975 to the contracting officer for a determination of quantum in accordance with this decision. Interest shall be paid in accordance with the Contract Disputes Act, 41 U.S.C. 611 (1988). _______________________________ VINCENT A. LaBELLA Board Judge We concur: ____________________________ _______________________________ ANTHONY S. BORWICK MARY ELLEN COSTER WILLIAMS Board Judge Board Judge