!R! CALL BCA; EXIT; _______________________________________________ APPELLANT'S MOTION FOR SANCTIONS DENIED; MOTIONS FOR SUMMARY RELIEF DENIED: February 14, 1996 ________________________________________________ GSBCA 13088, 13254 PRINCIPAL MUTUAL LIFE INSURANCE CO., Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. William M. Rosen and Kendrick C. Fong of Dickstein, Shapiro & Morin, L.L.P., Washington, DC, counsel for Appellant. Robert W. Schlattman and Sharon J. Chen, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. Before Board Judges BORWICK, WILLIAMS, and VERGILIO. BORWICK, Board Judge. Respondent, General Services Administration (GSA), leases from appellant, Principal Mutual Life Insurance Co. (Principal Mutual), a building in Bethesda, Maryland, which serves as the headquarters for the United States Consumer Product Safety Commission. The lease required that the lessor furnish a turn key build out of the interior space, including partitions. These appeals involve, in part, two of Principal Mutual's claims denied by the contracting officer: a claim that the Government has erroneously taken a double-deduction for the deletion of co- polymer paint as the standard finish for partitions and a claim for payment of costs of enhanced floor loading. Respondent and Principal Mutual have filed motions for partial summary relief as to these claims. We deny the motions. The claims for payment of costs for co-polymer paint and enhanced floor loading are not ripe for summary relief; there are disputed issues of fact precluding summary relief on these issues. In responding to Principal Mutual's motion for summary relief on the claim for co-polymer paint, GSA changed the reasons why the claim should be denied from those given by the contracting officer in his denial of the claim. Principal Mutual moves for sanctions against the Government for that change. We deny the motion for sanctions. Background Credit for deletion of co-polymer paint for partitions General provisions of lease On October 10, 1992, GSA as a lessee entered into a ten year lease[foot #] 1 with East West Towers Section II Limited Partnership, the the predecessor in interest to the present lessor, appellant, Principal Mutual. Appeal File, Exhibit 9 at 1[foot #] 2. The lease required the lessor to provide in phases a build out of the interior space. Id. at 16 ( 3.1). The scheduling of each phase was specified elsewhere in the solicitation. Id. at 81 ( 9.1). Unit price provisions of lease The design of the build out was not established at the time of offering on the lease; offerors therefore bid on projected quantities stated in the solicitation for offers. Appeal File, Exhibit 9 at 45. Actual quantities of materials were to be based on approved construction drawings. Id. To enable an equitable adjustment for the Government or the lessor if actual quantities used in the build out differed from the projections, offerors were to provide unit prices for components of the build out. Id. at 13 ( 3.1). With regard to adjustment for quantities of materials in case of variance from projected quantities, the lease provided: GSA WILL USE EACH UNIT COST TO MAKE A LUMP SUM PAYMENT OR RENTAL INCREASE IF THE AMOUNT OF MATERIAL REQUIRED BY THE LAYOUT IS MORE THAN SPECIFIED OR TAKE CREDIT FROM RENTAL IF THE AMOUNT IS LESS THAN SPECIFIED. OFFERORS ARE REQUIRED TO STATE IN THE OFFER OR IN AN ATTACHMENT: THE COST PER LINEAR FOOT OF OFFICE SUBDIVIDING CEILING- HIGH PARTITIONING. ----------- FOOTNOTE BEGINS --------- [foot #] 1 The lease also had two five-year renewal options. [foot #] 2 Respondent hand numbered pages of each exhibit of the appeal file. We use those numbers as page citations to each exhibit in the appeal file. ----------- FOOTNOTE ENDS ----------- Appeal File, Exhibit 9 at 13 ( 3.1). Under the solicitation as originally issued, the standard specification covering for walls (including partitions) was vinyl. Appeal File, Exhibit 9 at 24 ( 5.3). The solicitation was revised to specify co-polymer paint as the standard partition covering: Prior to occupancy, all partitions are to be covered with one primer coat, one high pressure spray coat and one low pressure spray coat of acrylate co-polymer paint adjusted to produce a uniform pattern in accordance with the manufacturer's recommendations. Id. at 47 (Revised 5.3). The partition specifications were included in the section of the solicitation entitled "special requirements." Id. at 45. Square foot and lump sum pricing provisions of lease The solicitation required offerors to submit alternate proposals for the building and special requirements. Offerors were to state the base rental rate, a rental rate which included the cost of the special requirements and an itemized cost for lump sum payment of special requirements not to be included in the rental rate. Appeal File, Exhibit 9 at 47 (Revised 3.3). GSA had the option of paying for the special requirements through an amortized rental rate or by lump sum payment. Id. at 2 ( C). Lessor's unit cost pricing On July 16, 1992, the lessor submitted a proposed unit cost for adjustment and detailed pricing proposal for the special requirements set forth in the solicitation. Appellant's Supplemental Appeal File, Exhibit 1. Lessor priced the unit cost for standard partitions at $16.50 per linear foot. At a negotiation meeting of July 17, 1992, GSA's chief lease negotiator advised the lessor that its price for partitions must include the price for co-polymer paint. Appellant's Motion for Partial Summary Relief, Exhibit C (Affidavit of GSA Lease Negotiator, Mr. Donald Silverstein (Silverstein Affidavit)) (July 25, 1995), 11(ii). Mr. Silverstein's advice was based on his assumption that the partition price of $16.50 per linear foot could not include the cost of the co-polymer paint. Id. 11(i). On July 28, the lessor quoted $25 per linear foot for "typical ceiling high partitions (with [three] color co-polymer paint and vinyl base.)" Appellant's Supplemental Appeal File, Exhibit 4. This was the rate the parties agreed would apply to any adjusments for variation in material quantities from the amount specified. Appeal File, Exhibit 9 at 13, 3.1. Lessor's amortized and lump sum pricing for build out On August 5, 1992, lessor submitted its best and final offer (BAFO) for the lease. It proposed to lease 100,679 usable square feet of space to GSA. Lessor's net rent inclusive of real estate taxes, but "exclusive of base operating expenses and the minimum specifications and other special requirements (as set forth on [certain specified pages of the solicitation])" was $12.40 per square foot. Appellant's Supplemental Appeal File, Exhibit 5 at B. Lessor proposed $12.40 per square foot for net rent, and $6.95 per square foot for base operating expenses. Lessor proposed $3.65 per square foot as the "amortized cost of special requirements." Id. Included in those amortized costs were $1.81 per square foot for minimum performance specifications. The amortized costs of "other special requirements" was $1.84 per square foot. Included in that $1.84 per square foot figure was $.20 for security system, $.38 for fiber optic system, $.04 for sound masking system, $.19 for co-polymer paint upgrade, $.02 for acoustic ceiling tile, $.10 for carpet tile upgrade, $.78 for HVAC system upgrade and $.13 for electrical upgrades. Id. GSA agreed to pay the lessor $2,039,756.54 per year for 100,679 usable square feet of space. This equals an annual square foot rate of $20.26. Appeal File, Exhibit 9 at 1. On a square foot basis, the sum of the lessor's BAFO prices of the net rent ($12.40), base operating expense ($6.95), HVAC upgrade ($.78) and electrical upgrade ($.13) is $20.26. Appellant's Supplemental Appeal File, Exhibit 5 at B. In accordance with revised paragraph 3.3 of the solicitation, lessor priced the itemized cost for lump sum payment of the special requirements not to be included in the rental rate, as follows: (1) minimum performance specifications/special requirements-- $1,133,521; (2) security system--$125,500; (3) fiber optic system--$237,711.38; (4) sound masking system--$28,050; (5) co-polymer paint upgrade--$119,800; (6) acoustic ceiling tile--$12,081; (7) carpet tile upgrade-- $66,325. Appeal File, Exhibit 8 at 3. The sum of those prices is $1,722,988.38. GSA agreed to pay that total as a lump sum. In this regard, the lease provided: "The Government will reimburse the Lessor by a lump sum payment of $1,722,988.38 for all above standard costs associated with the build out, as identified in the special requirements section of this [solicitation] and made a part of this lease." Id., Exhibit 9 at 2 ( 6C). Under the lease, lessor was required to provide one linear foot of partition for every ten square feet of space; GSA was therefore entitled to 10,068 linear feet of partition. Appeal File, Exhibit 9 at 25 ( 5.10). In agreeing to a lump sum payment of $119,800 for the co-polymer paint, GSA agreed to pay for the co-polymer paint at a rate of $11.90 (rounded) per linear foot. This rate is derived by dividing $119,800 by 10,068. GSA deletion of partitions At some point during interior construction, GSA removed 8,468 linear feet of partitions from the space design, which left 1,600 linear feet of partitions. GSA deducted $211,700 (8,468 linear feet x $25 per linear foot) from the lump sum payment due for the build out. Joint Supplemental Appeal File, Exhibit 3 at 7.[foot #] 3 Also, GSA abandoned co-polymer paint as the standard finish for partitions and returned to vinyl as the standard finish. Respondent's Brief in Support of Respondent's Motion for Partial Summary Relief, Exhibit A (Declaration of GSA Contracting Officer Gerald H. Brown (Brown Declaration) (Oct. 12, 1995)) 3. Post-lease price negotiations Between December 14, 1993, and March 15, 1994, the lessor and GSA held cost and price negotiation meetings at which the issue of a proper credit for the co-polymer paint finish was discussed. Appeal File, Exhibits 15-19, 67. The parties held a final meeting on May 6, after which GSA took the following position regarding that credit: The lessor's [BAFO] . . . clearly shows the slab-to- ceiling partition at $25.00 per linear foot. This does not include the co-polymer paint. An add of $119,800 is included to cover the cost of this work. . . . Therefore a credit on partitions will be taken by the Government at $25.00 per linear foot and no disbursement made on the lump sum total of $119,800-- the co-polymer paint was not executed on the job. Id., Exhibit 68. After failure of settlement negotiations, Appeal File, Exhibit 69, the lessor submitted a claim to the contracting officer maintaining that GSA erroneously determined that the charge of $25 per linear foot did not include the co-polymer paint finish for the partitions. Id., Exhibit 70 at 4. Lessor maintained that by (1) taking a credit of $25 per linear foot for the deleted partitions against the rent and (2) refusing to disburse $119,800 of the lump sum payment for the build out, GSA took a double credit for the deletion from the lease of co- polymer paint as standard partition finish. Id. ----------- FOOTNOTE BEGINS --------- [foot #] 3 On December 15, 1995, the parties filed the joint supplemental appeal file pursuant to Board orders of November 13 and December 12. ----------- FOOTNOTE ENDS ----------- By declaration, the GSA contracting officer who was in charge of the build out for this lease now states: The cost of the co-polymer paint is already included in the $25 per [linear foot] unit cost for subdividing ceiling-high partitions which is part of the base rent of $12.40 per net usable square foot. The amount of $119,800 should not be included in the lump sum payment of $1,722,988 listed in Paragraph 6(C) on Standard Form 2 of the lease. Respondent's Brief in Support of Respondent's Motion for Partial Summary Relief, Exhibit C (Declaration of GSA Contracting Officer Douglas G. Benton (Benton Declaration) (Oct. 12, 1995)) 5. Enhanced floor loading For office areas, the lease required a minimum live load capacity of fifty pounds per square foot plus twenty pounds per square foot for movable partitions. Storage areas were required to have a minimum live load capacity of one hundred pounds per square foot. Appeal File, Exhibit 9 at 17. The lease contained enhanced floor loading specifications as part of the special requirements of the lease. Id. at 242. The lease provided that "the intent of the specials section is to list the above standard alterations in the form of minimum performance specifications that will result in a 'turnkey' build out." Id. at 45. The enhanced floor loading was specified on a room-by-room basis. Some of the enhanced floor loading was stated in terms of ability to support specified equipment: "[For the Chairman's Suite File/Storage Room] provide floor loading for three (3) fully loaded 3'-0" wide x 2'6" deep x 6' x-0" high times two files weighing 1220 pound each, nine (9) linear feet of 6'-0" high bookshelves." Appeal File, Exhibit 9 at 242. Other enhanced floor loading was stated in terms of enhanced pounds per square foot. For example, the specified floor loading for the ADMS central shipping and receiving area was "150 [pounds per square foot] plus concentrated load." Id. at 321. The special requirements section of the lease provided in pertinent part: Actual quantities will be based on the approved construction drawings that are based on Government provided design intent drawings and the Solicitation for Offers including the above standard alteration performance requirements. Although offerors must include all tenant alterations, both standard and above standard as turn key, there is a provision in the lease to make unit price adjustments for additional or fewer quantities if the design intent drawings change the actual quantities from the allowances. If there is a difference in an item that is not covered in the unit price table, then the actual difference in cost, either as a debit or credit to the Government, will be negotiated in accordance with the changes and proposal for adjustment clauses of the general conditions part of the Solicitation for Offers. Appeal File, Exhibit 9 at 44-45. In its BAFO, lessor priced enhanced floor loading at $31.51 for the material cost per square foot, and $15.17 as installation cost per square foot. These prices were in the lessor's unit price table. E.g., Appeal File, Exhibit 9 at 167, Lessor's Pricing Proposal for the General Counsel's Central Mobile File Room. By affidavit, the GSA lease negotiator states that he reviewed the lessor's proposed unit prices for each special requirement, including enhanced floor loading, and considered the prices and quantities for enhanced floor loading to be responsive, mathematically correct, complete, fair and reasonable. The lease negotiator accepted the lessor's prices and quantities for the specials--including the enhanced floor loading--which he maintains were incorporated into the lease. Silverstein Affidavit 20. The GSA lease negotiator states that the lessor's prices and quantities constituted a unit price agreement between the lessor and GSA, which was to be used to reconcile the final cost to GSA based on actual quantities received by GSA. Id. 21. The GSA contracting officer for the non-build out requirements in his declaration states in part that: During the market survey, for the procurement of the leased premises, [lessor's representatives] informed me that the original lessor's building did not meet the lease[']s floor loading requirements and that floor load work would have to be done to meet those requirements. Brown Declaration 8. The leased building supports floor loads of one hundred pounds per square foot, as indicated both by the structural drawings for the building and the calculations of a structural engineer retained by the lessor as a consultant. Appellant's Supplemental Appeal File, Exhibit 7. This floor load was stated in lessor's BAFO. Appeal File, Exhibit 8 at 7. The lessor did no work to enhance the floor loading in the building. Benton Declaration 6. By letter dated October 19, 1993, lessor's consulting structural engineer stated that for the rooms that have enhanced floor loading requirements, "the floor slabs are structurally sound to support the proposed loads." Appellant's Supplemental Appeal File, Exhibit 6. The GSA contracting officer in charge of the build out states that: The construction drawings submitted by the lessor show that the lessor did not perform the work necessary to increase the floor loading from 100 lbs/sf to 150 lbs/sf as required by the lease conditions specified in the "Introduction and Instructions for Offerors". Therefore, because the lessor provided no quantity of "enhanced", or increased floor loading, the lessor is entitled, pursuant to the "Introduction and Instruction For Offerors" of the lease, to no reimbursement from GSA. Benton Declaration 3. After cost and price negotiation meetings, by letter of May 6, 1994, GSA took the position that "verification of actual quantities" showed no structural work required to meet the floor loading requirements. GSA maintained that the base building slab for the building was originally built to accommodate loads in excess of 150 pounds per square foot, that the lessor had reason to know that at the time of their initial offer and at the time of BAFO. Based on verification of actual quantities "enhanced floor loading was not executed." Appeal File, Exhibit 67. GSA stated that it would not pay lessor that portion of the lump sum attributable to the cost of enhanced floor loading. Id. By letter of May 27, GSA advised the lessor that since it had performed no actual work to enhance the floor load, lessor would not be paid for enhanced floor loading. Id., Exhibit 68. The claim On July 18, 1994, lessor submitted a claim to the contracting officer seeking, among other things, a payment of $119,800 for the co-polymer paint, and $175,854.17 for enhanced floor loading. Appeal File, Exhibit 70. On July 20, the contracting officer denied the claim. Discussion Motion for sanctions Principal Mutual moves for sanctions against GSA for GSA's change of position as to the issue of the credit for co-polymer paint. Principal Mutual notes that "throughout negotiations with [Principal Mutual] . . . GSA has refused to reimburse the lessor for co-polymer paint costs on the basis that the $25.00 unit price for ceiling-high office subdividing partitions . . . did not include the cost of co-polymer paint." Appellant's Motion for Sanctions at 3. Principal Mutual notes further that GSA, in responding to Principal Mutual's motion for summary relief, now agrees that the cost of co-polymer paint was included in the $25 per linear foot unit price, but is taking a new position that the co-polymer paint was charged to the Government twice; once in the lump sum payment, and once in the net rent of $12.40 per square foot. Id. In response, GSA states that: [Principal Mutual's] motion for partial summary relief and the declaration of Donald Silverstein, which was attached to its motion presented respondent with new evidence and legal arguments with [sic] which respondent had not previously addressed. Essentially, Mr. Silverstein's new position in his declaration regarding the co-polymer paint conflicts with what he told respondent earlier. See Appeal File, Exhibit 14.[[foot #] 4] This new evidence came to light and these new legal arguments came to light after respondent filed its answer and after respondent served its discovery responses. Respondent's Reply to Appellant's Motion for Sanctions at 3-4. We do not regard the prior rationale of the contracting officer as a straight-jacket that prevents GSA from presenting new theories. Board proceedings are de novo. See 41 U.S.C.A. 605(a) (West Supp. 1995); Assurance Co. v. United States, 813 F.2d 1202, 1206 (Fed. Cir. 1987). Therefore, we are not restricted to considering only the evidence or legal theories presented to or relied upon by the contracting officer. Laidlaw Environmental Services (GS) Inc., ASBCA 45365, 93-3 BCA 26,128, at 129,884. An appeal from the contracting officer's decision opens the entire subject matter for the Board's consideration whether the contracting officer's decision was based on broad or narrow grounds. AVW Electronic Systems, Inc., DOT BCA 2696, 94-2 BCA 26,937, at 134,155. The Government, therefore, may take a new position in litigation that differs from the position relied upon by the contracting officer. Principal Mutual has not been prejudiced by GSA's change in position. Principal Mutual obtained supplemental discovery on GSA's new theory and was afforded, and took, the ----------- FOOTNOTE BEGINS --------- [foot #] 4 That exhibit contains Mr. Silverstein's comments of April 6, 1992, on the lessor's price proposal. There, Mr. Silverstein assumes that the lessor's partition prices excluded wall finishes. There is nothing inconsistent about this assumption with what he later told respondent. Mr. Silverstein's assumption of April 6 explains his advice to the lessor in July of that year to include the cost of co-polymer paint in its price for partitions. ----------- FOOTNOTE ENDS ----------- opportunity to reply to GSA's motion for summary relief and to explain why GSA's theory lacked merit. We therefore deny Principal Mutual's motion for sanctions. Summary relief Both parties have submitted motions for summary relief on the issues of the credit for the co-polymer paint and enhanced floor loading. Before considering these issues, we set forth the standards for considering motions for summary relief. We are obliged in ruling on motions for summary relief to draw all inferences in favor of the party opposing the motion; a motion for summary relief is proper only on those facts about which we "need not function as an arbiter among differing versions of every factual reality for which evidentiary support has been presented." Cable Electric Products, Inc. v. Genmark, Inc., 770 F.2d 1015, 1020 (Fed. Cir. 1985). All significant doubt over pertinent factual issues must be resolved in favor of the party opposing summary relief. Summary relief is appropriate only when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. Armco, Inc. v. Cyclops Corp. 791 F.2d 147, 149 (Fed. Cir. 1986). The same standards apply to cross-motions for summary relief. Prineville Sawmill Co. v. United States, 859 F.2d 905, 911 (Fed. Cir. 1988); Mingus Constructors, Inc. v. United States, 812 F.2d 1387, 1391 (Fed. Cir. 1987). Co-polymer paint Following the instruction of the solicitation, the lessor submitted alternate proposals for pricing of the build out; one proposal priced the build out amortized over the rental payments; the second priced the build out as a lump sum. The cost-- $119,800--of the co-polymer paint was included in the lump sum build out; that cost was a component of the $1,722,988.38 GSA agreed to pay the lessor for the build out. Respondent has presented evidence suggesting that the per square foot rental rate of $20.26 did not include an amortized cost for the co-polymer paint upgrade; rather it included only the net rent and amortized cost for base operating expenses, HVAC upgrade, and electrical upgrade. Lessor's BAFO stated that the $12.40 rate was "exclusive of base operating expenses and the minimum specifications and other special requirements (as set forth on [certain specified pages of the solicitation])." Lessor priced its BAFO for co-polymer paint as a "special requirement." The Government argues that lessor's inclusion of the co- polymer paint upgrade in its unit price under paragraph 3.1 of the lease means that the lessor included the cost for co-polymer paint twice--once in the net rent and once in the lump sum payment. We note that Paragraph 3.1 of the lease required the lessor to provide the unit cost of materials for one purpose--to determine the amount of the adjustment due either party in case the actual amount of materials used in constructing the build out varied from the amount specified. Nothing in the lessor's pricing or the lease language suggests that the unit costs stated in that paragraph were to be considered a component of base rent. Indeed, the lessor's BAFO explicitly stated that the net rent figure did not include the co-polymer paint upgrade. The contracting officer's statement that the lessor double charged the Government by including the cost of co-polymer paint in the net rent of $12.40 per square foot, however, is supported by ambiguous language of the lease. In one portion of the lease, the lump sum build-out is stated to be for "above standard" costs, while the co-polymer paint is referenced in another portion of the lease as a "standard" item. This Board panel is of the opinion that granting either party's motion is premature at this stage of the proceedings. The lease negotiations must be explored at a hearing (or through record submission should the parties so choose) in light of the ambiguities of the lease. Enhanced floor loading The Government maintains that Principal Mutual is only due credit for enhanced floor loading shown on construction documents as varying from standard, and that no enhancement was shown on construction documents because, supposedly, the whole building had enhanced floor loads. GSA alleges that Principal Mutual did no work to enhance the floor loads and is therefore not entitled to any credit for enhancement. Respondent's Cross Motion for Partial Summary Relief at 12-13. Principal Mutual argues that because the floor loads were performance specifications, it could "enhance" the loads in any way it desired, and that "the amount of work incurred by [Principal Mutual] is irrelevant." Appellant's Motion for Partial Summary Relief at 24. Principal Mutual is correct on the general nature of performance specifications. Performance specifications "set forth an objective or standard to be achieved, and the successful bidder is expected to exercise his ingenuity in achieving that objective or standard of performance, selecting the means and assuming a corresponding responsibility for that selection." Blake Construction Co. v. United States, 987 F.2d 743, 745 (Fed. Cir. 1993). Nevertheless, there are numerous disputed facts which do not allow for disposition on summary motion. First, GSA raises factual issues about the pre-lease negotiations on enhanced floor loading: (1) whether Principal Mutual's lease negotiators told GSA representatives that specific work on the "original lessor's building" would be needed to enhance the floors, and (2) whether GSA properly relied on those representations in allowing Principal Mutual to bid unit prices for enhanced floor loading for the leased building. GSA raises an issue of fact as to whether the entire building supports loads up to 150 pounds per square foot. If the building does not support that load, there is an obvious factual issue present as to whether appellant is entitled to payment for the "enhancement" that does not meet that specification. Finally, if every floor of the building supports 100 pounds per square foot, there is a factual issue as to whether the floor loads were in fact "enhanced" for storage areas when the minimum allowable floor load for those areas is 100 pounds per square foot. Decision Appellant's motion for sanctions is DENIED. The parties' motions for summary relief are DENIED. ________________________________ ANTHONY S. BORWICK Board Judge VERGILIO, Board Judge, concurring. I concur with the determinations to deny the motion for sanctions and to deny the motions for summary relief. In the hope that in the further development of the record the parties will address my concerns, I write separately on Principal Mutual's (the party to this appeal, and phrase used here for its predecessor under the contract) motion for summary relief on the issue of co-polymer paint. Findings of Fact 1. The solicitation and contract establish pricing based upon specific solicitation requirements and assumptions under which the lessor is obligated to complete space alterations. Pricing is of two relevant varieties: annual rent to be paid monthly in arrears and a lump sum payment. Exhibit 9 at 1-2 ( 3, 6(c)).[foot #] 5 2. The solicitation recognizes that the build out identified for purposes of proposal preparation and contract award utilizes estimates; actual construction and quantities are dependent upon the site selected. Exhibit 9 at 13 ( 3.1) (see Finding 7). The basic tenant improvements require the ----------- FOOTNOTE BEGINS --------- [foot #] 5 Unless otherwise indicated, all referenced exhibits are in the appeal file. ----------- FOOTNOTE ENDS ----------- installation of two varieties of standard partitions--permanent and subdividing. Id. at 25 ( 5.8, 5.10). Standard subdividing partitions are to be provided at a ratio of one linear foot to ten net usable square feet of space. Id. at 25 ( 5.9). As altered by an amendment to the solicitation, the basic finish for all partitions is co-polymer paint. Id. at 47 ( 5.3). 3. The agency awarded a lease contract to Principal Mutual for 100,679 net usable square feet of office space. Exhibit 9 at 1 ( 1). Thus, under the basic tenant improvements, the contract should have been priced to include the provision of 10,068 linear feet of standard subdividing partitions. Finding 2. 4. The contract establishes an initial annual rent of $2,039,756.54 (which represents $20.26 per net usable square foot of space). This figure is not fully itemized in the agreement; it is unclear how, or if, any portion of this figure represents an amount for construction of standard permanent or subdividing partitions and for finishing standard partitions (at a rate of $25 per linear foot or some other charge). Exhibit 8 at 5-6; Exhibit 9 at 1 ( 3). In addition to the annual rent, the lease contains a dollar figure for a lump sum payment. The contract provision specifies: The Lessor shall furnish to the Government, as part of the rental consideration, the following: . . . The Lessor shall complete all construction and alterations of the basic tenant improvements required by SFO [solicitation for offers] 92-025, as well as construction of all Special Requirements set forth in Section 1 of the Minimum Performance Specifications. The Government will reimburse the Lessor by a lump sum payment of $1,722,988.38 for all above standard cost associated with the build-out as identified in the Special Requirements Section of this SFO, and made a part hereof this lease. See Attachment C. Exhibit 9 at 2 ( 6(c)). 5. As to the $1,722,988.38, the contract contains a Principal Mutual submission--"detailed pricing proposal for special requirements"--which explains the pricing methodology for the above standard cost or cost difference. As an example, the contract states: "Prices for upgraded partitions reflect the total cost for the partition with the standard co-polymer paint finish; the Government will receive the credit for unused standard partitions with finish through the unit cost/allowance quantity mechanism." As to partitions with upgraded finishes: Prices for vinyl and fabric wall covering on building standard partitions reflect only the increased cost over the standard co-polymer paint finish. Prices for vinyl and fabric wall covering on upgraded partitions reflect the total cost for such items, with the costs for the partitions and finishes being shown separately; in this case the Government will receive the credit for the building standard partitions and finish through the unit cost/allowance quantity mechanism. Exhibit 9 at 135. For example, for one variety of upgraded partitions with an upgraded fabric finish, Principal Mutual priced the partitions at $43.46 per linear foot and the fabric wall covering at $.41 per square foot. Id. at 153. The $.41 per square foot is $6.97 per linear foot, if the 17 square feet per linear foot ratio used elsewhere by Principal Mutual, Finding 6, is applicable. For one variety of upgraded partitions with a vinyl finish, Principal Mutual priced the partitions at $43.46 per linear foot and the vinyl wall covering at $0.00 per square foot. Id. at 161. 6. Although Principal Mutual maintains that co-polymer paint is the standard finish for subdividing partitions, co- polymer paint is a specific element of the $1,722,988.38 lump sum "above standard cost[s] associated with the build-out." Attachment C to the contract represents "lessor's proposal for special requirements." A portion of this attachment contains the calculations underlying the lump-sum price of $119,800 in the contractor's proposal for co-polymer paint: Difference in [presumed subcontractor]'s price to [Principal Mutual] between flat paint and copol[y]mer paint-- Copol[y]mer paint -- $.90/SF [square foot] Flat paint -- $.20/SF Difference -- $.70/SF x 17 SF/LF = $11.90/LF 10,068 LF of partition x $11.90/LF = $119,809 Exhibit 9 at 127. This represents a charge of $15.30 per linear foot ($.90/SF x 17 SF/LF) for co-polymer paint, although a portion of the amount is not recovered under the lump sum upgrade amount. 7. The solicitation and contract recognize that the actual build out may vary (in terms of the quantities and materials) from the pricing assumptions. The provision captioned "unit costs for adjustments" states: Several paragraphs in this SFO [solicitation for offers] specify means for determining quantities of materials. These are Government projections to assist the offeror in cost estimating. Actual quantities may not be determined until after the lease is awarded and the space layout completed. To enable an equitable settlement if the Government layout departs from the projection, the offeror must list a unit cost for each of these materials. GSA will use each unit cost to make a lump sum payment or rental increase if the amount of material required by the layout is more than specified or take credit from rental if the amount is less than specified. Offerors are required to state in the offer or in an attachment: * The cost per linear foot of office subdividing ceiling high partitioning. Exhibit 9 at 13 ( 3.1). Principal Mutual inserted the price of $25.00 for the indicated item, which is the first of fourteen. No unit price is requested or proposed under this paragraph for co-polymer paint. Id. 8. The parties appear to agree that the $25 figure represents the amount negotiated for variations in the quantities of standard subdividing partitions with a finish of co-polymer paint. For purposes of summary relief, the record does not demonstrate that the $25 represents the single, agreed-to amount for adjustments or variations in subdividing partitions, that is, that the sole adjustment would be this figure and that there would not be a proportional adjustment to the lump sum charge for co-polymer paint. 9. In the actual build out, of the estimated 10,068 linear feet of standard subdividing partitions, 1,600 linear feet were utilized; thus, 8,468 linear feet were not utilized. Supplemental Appeal File, Exhibit 3 at 7. Further, for the actual build out, it appears that no co-polymer paint was utilized as a finish. Id. 10. The agency has withheld payment of $331,500, because of the variations in partitions and co-polymer paint, broken down as follows. Because fewer than the estimated linear feet of partitions were utilized, under paragraph 3.1 of the contract, Finding 7, the agency has withheld $211,700--calculated at the rate of $25 per linear foot for the 8,468 linear feet of partitions not utilized. Also, because no co-polymer was utilized on any of the partitions, the agency has withheld $119,800, the itemized portion for co-polymer paint included in the lump sum amount found in the contract for the provision of above-standard items. Finding 6. 11. The record does not establish if co-polymer paint was applied to any permanent partitions, or what, if any, cost savings the agency may have realized by eliminating the requirement for such a finish. It appears from a memorandum of negotiation that, for partitions for which the finish was changed from co-polymer paint to a vinyl wall covering, the agency took a credit of $11.90 per linear foot, not $15.30 per linear foot, as the entire savings to the contractor for the deleted requirement and reimbursed Principal Mutual $.70 per square foot (or $11.90 per linear foot, if the same ratio of 1 SF to 17 LF applies) as the total cost for materials and installation of the vinyl. Supplemental Appeal File, Exhibit 3 at 6-7. Thus, the record suggests that the parties did not treat the $11.90 per linear foot figure consistently--it was utilized as an "upgrade" cost and as the total cost for application of co-polymer paint. Discussion Principal Mutual maintains that the agency has over withheld for variations in the co-polymer paint and partitions. In particular, it contends that the agreed upon amount of $25 per linear foot of standard subdividing partition for use in adjustments between the estimated and actual usage includes the adjustment for co-polymer paint, because standard subdividing partitions were required to be finished with co-polymer paint. Further, it contends that the agency is entitled to no other adjustment for deleted subdividing partitions. Principal Mutual asserts that the agency is not entitled to withhold payment of $119,800 for co-polymer paint not received on those 8,468 linear feet of partitions, because the agency has already recovered for those variations by utilizing the agreed upon unit cost ($25 per linear foot) which includes the adjustment for the associated co- polymer paint. At this stage in the proceedings, the assertion of Principal Mutual fails. On its face, the contract specifies that the annual rental charge obligates the lessor to complete all construction and alterations of the basic tenant improvements. Finding 4. Finishing subdividing partitions with co-polymer paint was the contract standard--co-polymer paint no longer was a special requirement. Finding 2. Thus, the agency's initial agreement to reimburse Principal Mutual $119,800 (as an element of the lump sum, Finding 6) appears to be inconsistent with the stated contract terms which indicate that the amount is only for the provision of special requirements. Moreover, Principal Mutual's explanation does not establish how, if at all, the contract prices co-polymer paint on permanent partitions. Principal Mutual has not established that it ever was entitled to that $119,800. The record may establish that the agency has under-withheld or over-withheld money. The negotiation memorandum and actions of the agency and Principal Mutual appear to reveal an inconsistent interpretation and application of the contract provisions. The negotiations between the parties over the pricing of other finishes in lieu of the co-polymer paint suggest that they treated the $11.90 per linear foot both as an up-grade cost (from flat paint to co-polymer paint) and as the total cost for co-polymer paint, despite the figures in the contract which suggest that $15.30 is the appropriate amount. Findings 6, 11. For purposes of summary relief, these inconsistent actions do not shed sufficient light on the appropriate interpretation of the contract. It is unclear how each party would reconcile its interpretation with what was a potential scenario, namely, the agency eliminating the requirement for co-polymer paint shortly after lease signing prior to the start of the build out. Would the agency have been required to pay any of the lump sum amount of $119,800 at that time? Would subsequent variations in the linear feet of partitions then be priced at $25 per linear foot or some other contractually-derived or negotiated figure? The ultimate interpretation of the contract must, if possible, permit a consistent application for the various potential adjustments. Lacking an unambiguous contract and lacking actions of the parties which bespeak the understandings of the contracting parties reflecting a consistent interpretation and application of the contract, it is inappropriate to grant either motion for summary relief on this matter. The evidence in the record suggests that a portion ($3.40 per linear foot) of Principal Mutual's cost for co-polymer paint would be recovered, if at all, as part of the annual rental amount--either included in the base rent amount of $12.40 (a portion of the $20.26 per net usable square foot annual rent charge) or the base operating expenses of $6.95 (also a portion of the $20.26 figure). Finding 6. The record, in the context of the cross-motions for summary relief, does not demonstrate how, if at all, this may affect the proper adjustments under the contract given the $25 unit cost for subdividing partitions and the lump sum treatment of the upgrade cost for the standard co- polymer paint finish. _______________________________ JOSEPH A. VERGILIO Board Judge WILLIAMS, Board Judge concurring. As demonstrated by the two preceding opinions, there are genuine issues of material fact, which require that the motions for summary relief be denied. Thus, I concur in both decisions. I also concur in the decision to deny the motion for sanctions. ___________________________ MARY ELLEN COSTER WILLIAMS Board Judge