CROSS-MOTIONS FOR SUMMARY RELIEF EACH GRANTED IN PART: March 11, 1996 GSBCA 13284-SEC 7 WORLD TRADE COMPANY, L.P., Appellant, v. SECURITIES AND EXCHANGE COMMISSION, Respondent. Cornelius J. Lynch, Senior Vice President (Ret.) of Silverstein Development Corporation, New York, NY, appearing for Appellant. George Conril Brown, Gary Allen, and Laura S. Pruitt, Office of General Counsel, Securities and Exchange Commission, Washington, DC, counsel for Respondent. Before Board Judges DANIELS (Chairman), PARKER, and GOODMAN. DANIELS, Board Judge. This case involves claims which arose under a contract between the Securities and Exchange Commission (SEC) and 7 World Trade Company, a New York limited partnership, for the lease of office space in New York City. The claims pertain to work performed in building out the space. The SEC contracting officer granted some of the claims and denied others, and the lessor has appealed from much of his decision. The SEC has moved for summary relief as to the entire appeal, and the lessor has cross-moved for summary relief as to some of the issues. We consider both motions under the familiar standard that summary relief is appropriate where no genuine issue of material fact exists and the movant is entitled to judgment as a matter of law. E.g., SMS Data Products Group, Inc. v. Defense Logistics Agency, GSBCA 13413-P, 96-1 BCA 28,015, at 139,894, 1995 BPD 202, at 7. For purposes of resolving the motions, we accept as true the contested facts as presented by the non-moving party and make reasonable inferences in favor of that party. Id. at 139,898-99, 1995 BPD 202, at 14. Applying these principles, we grant each motion in part. The contract On May 27, 1992, the SEC and 7 World Trade Company entered into a contract for a fifteen-year lease of the eleventh and twelfth floors, and part of the thirteenth floor, of the building known as 7 World Trade Center in New York City. Complaint 5; Answer 5; Appeal File, Exhibit 2 at 1 of standard form 2. The contract was signed on behalf of 7 World Trade Company by the president of Silverstein Development Corporation, which is identified as the company's general partner. Answer 1; Appeal File, Exhibit 2 at 2 of standard form 2. Silverstein Properties, Inc., acted as the company's agent in connection with the matters at issue in this appeal. Respondent's Statement of Undisputed Facts in Support of Its Motion for Summary Judgment (Undisputed Facts) 3. The relationship among 7 World Trade Center, L.P.; Silverstein Development Corporation; and Silverstein Properties, Inc., is unimportant to this case. For the purposes of this decision, we treat the three as a single entity, to which we refer as "Lessor." The contract includes a "Tenant Work Agreement" which governed the build-out of the leased premises. Undisputed Facts 4; Appeal File, Exhibit 2 at TWA-1. Under this agreement, Lessor gave the SEC a "tenant allowance" of $5,561,230.77 "to be applied toward Tenant Work Costs, Tenant Plans Costs and any other fees or Lease related costs expressly determined in writing by SEC." Any unused portion of this allowance remaining after completion of the tenant work and final payment of the tenant costs could be applied to the rent or other specified expenses of the SEC. Undisputed Facts 4-5; Appeal File, Exhibit 2 at TWA- 9. In 1992 and 1993, the SEC paid Lessor an additional $546,551 to cover costs of tenant improvements. Undisputed Facts 6. The claims and the contracting officer's decision During 1993 and 1994, Lessor sent three letters to the SEC requesting additional payments under this contract. Appeal File, Exhibits 33, 35, 41. Although none of these letters was directed to the agency's contracting officer, and none of them appears to be a claim (as that term is defined at 48 CFR 33.201), the contracting officer treated them as Contract Disputes Act claims. On February 22, 1995, he issued a final decision on them and on other matters raised by the Government. Appeal File, Exhibit 1. Lessor filed an appeal of this decision on May 22, 1995.[foot #] 1 Lessor resubmitted its claims, and ----------- FOOTNOTE BEGINS --------- [foot #] 1 The appeal was filed by Silverstein Properties, Inc. By unopposed order dated August 23, 1995, the (continued...) ----------- FOOTNOTE ENDS ----------- certified them, on August 23, 1995. On September 20, 1995, the SEC stipulated that the February 22 decision "is the same decision that would have been made on the now certified Claims, and will be considered the Final Decision as to the certified Claims for purposes of these proceedings." Letter from SEC Contracting Officer and Counsel to Board. In his decision, the contracting officer addressed what he described as claims of $253,734 by Lessor against the SEC and claims of $146,944 by the SEC against Lessor. Appeal File, Exhibit 1 at 1. He considered denying all of Lessor's claims, on the ground that Lessor had not allowed the SEC's auditors access to all records they had asked to see. Id. at 2-3. He rejected that course of action, however, and instead made the following determinations regarding the various claims: Claimed Allowed Disallowed Rework sprinkler $42,237 $ 0 $42,237 Rework security 28,379 0 28,379 Reroute fire alarm 36,276 0 36,276 Flash patch to level floors 24,920 0 24,920 Clean and replace blinds 4,445 0 4,445 Power supply to 13th floor 14,570 0 14,570 Costs questioned by audit 7,011 0 7,011[foot #] 2 Port Authority fee 41,633 41,548 85 Other claims 95,811 92,926 2,885 Interest on above amounts 19,982 7,666 12,316 Id. at 3-7. He concluded, after reviewing all of these matters, that Lessor was entitled to payment of $100,592, which is the sum of the allowed costs for "other claims" and "interest" shown above. Id. at 7. This amount has been paid to Lessor. Undisputed Facts 7. Through this appeal, Lessor contests parts of the contracting officer's decision -- the entirety of the determinations made as to the claims headed "rework security," "reroute fire alarm," "flash patch to level floors," "clean and replace blinds," "power supply to 13th floor," and "costs questioned by audit," and the determination as to half the amount disallowed for "rework sprinkler." Lessor does not contest half of the disallowed amount for "rework sprinkler," or the ----------- FOOTNOTE BEGINS --------- [foot #] 1 (...continued) Board substituted as appellant 7 World Trade Company, L.P., the entity with which the SEC contracted. [foot #] 2 A summary in the contracting officer's decision uses the number $7,096, which apparently includes the $85 in questioned costs which is included in this opinion under the heading "Port Authority fee." ----------- FOOTNOTE ENDS ----------- determinations as to the claim for "Port Authority fee" and the "other claims." (The parties agree that the amount for interest is to be calculated, based on resolution of the various claims.) Complaint 43-45; Respondent's Memorandum in Support of its Motion for Summary Judgment (Respondent's Memo) at 12. Rework sprinkler ($21,118 at issue); rework security ($28,379); reroute fire alarm ($36,276) The parties agree that each of these amounts relates to actions (or inactions) of the architect for the build-out, Interior Space International, or the mechanical, electrical, and plumbing engineer, Flack & Kurtz. We do not decide here whether the architect or the engineer was actually responsible for the costs. We do accept the parties' agreement as to responsibility, however, for the purpose of determining liability as between Lessor and the SEC. Rework sprinkler The design for the space encompassed by the build-out called for the replacement of existing light fixtures with new, differently-shaped, energy-efficient fixtures. Undisputed Facts 80; Appellant's Response in Opposition to Respondent's Motion for Summary Judgement and Appellant's Motion for Partial Summary Judgement (Appellant's Filing), Tab 14 at 2. The existing sprinkler system had to be redesigned to avoid conflicts with the new lighting fixtures. Undisputed Facts 82; Appellant's Filing, Tab 14 at 2-3. According to the SEC, the additional costs were caused by inadequate communication between Lessor's general contractor, Ambassador Construction Co., Inc., and Flack & Kurtz. The SEC maintains that the engineer gave a preliminary ceiling plan to the general contractor, which began construction on a sprinkler system before the lighting system had been designed; some of the sprinkler work had to be redone later. Appeal File, Exhibit 46 at 3 n.6. According to Lessor, the costs were entirely the result of the SEC's decision to replace the lighting fixtures, thereby making impossible the use of the existing sprinkler system. Appellant's Filing, Tab 14. The SEC hired Project Control Group, Inc., to ensure quality control over the construction process, and this firm monitored progress in the work. Undisputed Facts 18. After the leased premises were occupied, the president of Project Control Group made an Errors and Omissions Analysis pertaining to the build- out. Id. 21. According to this analysis, the sprinkler-related costs associated with various change orders were $42,237. Project Control Group attributed $24,507 of these costs (58%) to Ambassador Construction and $17,730 (42%) to Flack & Kurtz. Id. 94-99; Appeal File, Exhibit 51 at 2, 4. Lessor accepts responsibility for half of the amount identified by Project Control Group, or $21,119, which it considers that the SEC has determined to be attributable to actions of Ambassador Construction. Lessor maintains that it should be reimbursed for the other half, however, because that sum is attributable to actions of Flack & Kurtz, which it calls "the Commission's Engineer." In addition, Lessor contends that the SEC did not "suffer[] any damage due to sprinkler rework." Complaint 45(c); see also Appellant's Filing, Tab 4 at 6. Rework security According to Project Control Group's Errors and Omissions Analysis, $28,379 in costs were incurred because of design defects in the security system for the thirteenth floor. Undisputed Facts 64. The analysis specifically states that these costs were ISI's fault, and the SEC agrees that "such rework was required because of a design failure by ISI." Appeal File, Exhibit 51 at 3; Answer 45(d). Lessor maintains that it should be reimbursed for these costs because the SEC has determined that they were "caused by the performance of the Commission's Architect, and . . . we are not responsible for the performance of the Commission's Architect." Complaint 45(d). Reroute fire alarm The fire alarm system, as originally designed, was defective. Undisputed Facts 74. The system was rerouted at a cost of $36,276. Id. 73. According to Project Control Group, Flack & Kurtz was responsible for this problem. Appeal File, Exhibit 51 at 2. Lessor says that the SEC should pay these costs because they were "caused by the performance of the Commission's Engineer, and . . . we are not responsible for the performance of the Commission's Engineer." Answer 45(e). Contract provision The question affecting all of these three matters is whether the contract makes Lessor or the SEC responsible for the actions in question. The contract's Tenant Work Agreement includes the following provisions which, notwithstanding their having been written in legalese rather than English, are key to answering the question: 5. Architectural and Engineering Services; Construction Documents. (a) (i) Subject to subparagraph (iv) below, Lessor shall cause to be prepared all plans, working drawings and specifications for the Tenant Work and necessary for the construction and completion thereof (the "Tenant Plans"). Lessor shall retain i s d + A I [ [ f o o t # ] 3 ] ( t h e "Architect") for the purpose of preparing such Tenant Plans. The Tenant Plans shall include mechanical, electrical and plumbing drawings and shall be done by engineers selected by Lessor and reasonably approved by SEC. SEC hereby approves the Architect. . . . Lessor shall retain or cause the Architect to retain one or more of the following engineers and consultants for the purpose of participating in the preparation of the Tenant Plans (the "Other Consultants"), together with such additional Other Consultants as SEC may determine: Flack & Kurtz for mechanical, electrical and p l u m b i n g e n g i n e e r i n g . . . .[[foot #] 4] Subject to the other terms of the Lease . . . , SEC agrees to reimburse Lessor for the professional fees and approved reimbursable expenses of the Architect and Other Consultants actually incurred in accordance with their respective approved contracts in preparing, reviewing and modifying the Tenant Plans (the "Tenant Plans Costs"). . . . . (iv) SEC shall have the right to undertake directly to supervise and direct the day-to-day activities of the Architect and/or any Other Consultant(s) responsible for preparing the Tenant Plans. In such event, the terms of the Lease and this Tenant ----------- FOOTNOTE BEGINS --------- [foot #] 3 Interior Space International (ISI) acted as Architect with respect to the build-out of the leased premises pursuant to the contract. Undisputed Facts 9. Whether isd+AI and ISI are the same or different firms (and if different, why the firm named in the contract did not act as Architect) has not been explained. [foot #] 4 No contracts were ever entered into between Lessor and either ISI or Flack & Kurtz. Undisputed Facts 12, 137. The SEC says that "their contracts were established by ISI's and Flack & Kurtz's performance." Id. 12. Lessor ___ maintains that the reason for the absence of written contracts is that the SEC told Lessor it wanted to prepare the contracts itself, and made great efforts to do so, but that the contracts were never completed. Appellant's Filing, Tabs 4 at 3-4; 10; 13 at 1. The lack of written contracts, and the reason for it, are not important to this case. ----------- FOOTNOTE ENDS ----------- Work Agreement shall remain the same except that (A) SEC shall have the sole right to direct the activities of such Architect and/or Other Consultant(s), . . . and (B) Lessor shall not exercise any control over the activities of such Architect and/or Other Consultant(s), and shall have no responsibility or liability for the further or subsequent performance of such Architect and/or such Other Consultant(s) or for any cost or delay resulting from such performance, except in any such cases enumerated or described in this subpart (B) (x) as otherwise provided in this Tenant Work Agreement, (y) if resulting from the act or omission of Lessor (or its agents, employees or contractors), or (z) if such delay or cost arises in connection with any errors or omissions arising from matters or information set forth in the Construction Documents or in other written information supplied by Lessor or its agents, employees or contractors. Appeal File, Exhibit 2 at TWA-9 to -12. Each party admits that under these provisions, it is responsible for the consequences of its own actions and the actions of others who acted at its specific direction. The parties disagree, however, as to which of them is responsible for errors and omissions of the architect (ISI) and the engineer (Flack & Kurtz) which were made in the absence of specific direction of either party. The SEC urges, "[W]hether or not the Commission exercised . . . control [over the day-to-day activities of the architect and the engineer] does not change the outcome in this appeal -- based on the language of the contract itself, Appellant is responsible for the errors and omissions alleged here." Respondent's Memorandum in Further Support of Its Motion for Summary Judgment (Respondent's Second Memo) at 3 n.3. The agency makes this argument in two ways. First, it maintains that Lessor is responsible for the errors and omissions because the architect and engineer were subcontractors to Lessor. "If the cost or delay was due to misfeasance by the subcontractor on its own and was not related to direction by the SEC, [Lessor] retains liability. The errors and omissions claims do not involve SEC direction, they are simply errors by ISI and F&K. Accordingly, [Lessor] remains liable." Appeal File, Exhibit 47; see also Undisputed Facts 42. The second variant of the argument is this: Under subparagraph (iv), even if the Commission takes over day-to-day supervision, Lessor is liable for the performance of the architect and the engineer for actions "as otherwise provided in this Tenant Work Agreement"; under subparagraph (i), Lessor "shall cause to be prepared all [tenant] plans"; therefore, Lessor is liable for all problems that result from the preparations of the plans. The SEC maintains that Lessor has recognized its responsibility for the actions of its subcontractors by failing to pursue the $2,885 "other claim" which was disallowed by the contracting officer. This amount pertained to an action of Flack & Kurtz. Respondent's Memo at 16. The agency also asserts that a sentence in a decision of another board of contract appeals supports its position: "The responsibility of a prime contractor for compliance with the contract specifications is not diluted by provisions delegating to the [Government] Project Engineer the necessary authority for enforcement of the contract requirements." Boespflug-Kiewit-Morrison, IBCA 320, 65-1 BCA 4630, at 22,120. Lessor contends that pursuant to subparagraph (iv), the SEC may direct the activities of the architect and the engineer, and if it does so, Lessor may not interfere and is expressly excused from any responsibility or liability for what the firms do (unless a problem is caused by the acts or omissions of Lessor or its agents). According to Lessor, the SEC took over the direction of day-to-day activities of the architect and engineer, and is consequently liable for errors and omissions of those firms. Each party has moved for summary relief as to its interpretation of this part of the contract. Generally, a party which contracts with the Government is responsible for the performance of its subcontractors. P. J. Dick Inc. v. General Services Administration, GSBCA 12036, 94-3 BCA 27,073, at 134,928, and cases cited therein. Thus, under normal circumstances, Lessor would be liable for the costs stemming from actions of the architect and the engineer because, notwithstanding the absence of written agreements, those firms were its subcontractors. Subparagraph (iv) is an unusual provision, however; it shifts from Lessor to the agency the responsibility for actions taken by the architect or the engineer, not under direction by either Lessor or the agency, if a specified event occurs. The event is the SEC's undertaking directly to supervise and direct the day-to-day activities of those firms. The SEC's suggestion that Lessor is responsible for all consequences of tenant plan preparation ignores the first phrase of subparagraph (i) -- Lessor's duties under that provision are "[s]ubject to subparagraph (iv)." Thus, considering plan preparation to be one of the items "as otherwise provided in this Tenant Work Agreement" which may reinstate Lessor responsibility does not give meaning to subparagraph (iv) and is inconsistent with it. This understanding of the contract ignores the fundamental principle that a contract is to be read as a whole, giving reasonable meaning to and harmonizing all provisions. Incore, Inc. v. General Services Administration, GSBCA 12711, 96-1 BCA 27,932, at 139,497 (citing Granite Construction Co. v. United States, 962 F.2d 998, 1003 (Fed. Cir. 1992); Hol-Gar Manufacturing Corp. v. United States, 351 F.2d 972, 979 (Ct. Cl. 1965); and other decisions of our appellate authority). The understanding is not correct because it does not give a reasonable meaning to paragraph 5 taken as a whole. The fact that Lessor has abandoned a part of its claim which relates to the engineer's work is immaterial; Lessor has done so not in admission that it is liable for the sum, but because the engineer has already paid the money to the SEC. Complaint 45(g); Appeal File, Exhibit 48. The Interior Board of Contract Appeals decision cited by the SEC did not involve a contract provision like the one at issue here; it stands for the unremarkable proposition that the Government is not responsible for selection of construction procedures to be used by a subcontractor merely because the contract gives the Government general supervisory authority over the work. We grant Lessor's motion for summary relief, and deny the SEC's, as to the interpretation of paragraph 5 of the Tenant Work Agreement. Thus, if the SEC took over the supervision and direction of the day-to-day activities of the architect and the engineer, it is liable for actions or inactions taken by those firms which were not specifically mandated or caused by either party to this case. The remaining question, as to liability for the rework sprinkler, rework security, and reroute fire alarm claims, is whether the Commission took over this work. Lessor effectively presented as a Statement of Uncontested Fact that the SEC did exercise its right to take over. In response, the agency admits that it elected "to generally supervise" ISI and Flack & Kurtz, but says that this "does not mean that the Commission acted on a day-to-day basis to instruct and lead [the firms] to commit the errors and omissions that necessitated the rework and resulted in the extra costs of this buildout." Letter from SEC to Board (Feb. 28, 1996) at 1-2. The agency's response is in large part misfocused onto the non-issue of specific direction, but it is sufficient to call into question at this stage in the proceedings the meaning of the phrase "to undertake directly to supervise and direct the day-to- day activities," as it is used in subparagraph (iv). On cross- motions for summary relief, we are reluctant to decide what "general supervision" means, and whether it constitutes the event that shifts liability. Lessor has suggested that a few documents contained in the record support its position; we find, however, that some of them refer merely to the SEC's exercise of contractual rights (as to approval of subcontractors, compare Appellant's Supplemental Appeal File, Exhibit 2, with Appeal File, Exhibit 2 at TWA-15; as to establishment of scope of work, compare Appellant's Supplemental Appeal File, Exhibit 3, with Appeal File, Exhibit 2 at TWA-3), and others are, standing on their own, inconclusive (as to use of phrase "our direction" and listing of team members, see Appellant's Supplemental Appeal File, Exhibits 4, 57). We deny both motions as to this matter and will consider additional evidence on this specific issue. Flash patch to level floors ($24,920) The contract provides that "[a]ll adjoining floor areas must be of a common level. . . . Under-floor surfaces must be smooth and level." Appeal File, Exhibit 2 at 9 of Solicitation for Offers. Amendment two to the solicitation for offers added this provision: Landlord shall: Flash patch, scrape and level floor. Any areas which have been excessively core drilled by previous tenants (i.e., for power distribution) to be repaired so that the floor has the structure and integrity for tenants [sic] purposes. . . . . All of the above to be at Landlord's sole cost and shall not [a]ffect the leasehold improvement allowance. Id. at amdt. 2. In 1993, the president of Project Control Group wrote to Lessor: Given the overall poor condition of the floor with regard to its unlevel [sic] slab and areas where the previous tenant had applied glues and finishes that were difficult to remove, a significant amount of effort was required to bring the floor to a workable condition. . . . [Lessor] should provide additional funding of $38,802.68 . . . for the floor preparation. Appeal File, Exhibit 29 at 3. The SEC asked Lessor to "increase the SEC Tenant Improvement fund" by this amount to cover costs the agency "deemed Landlord responsibility." Id. at 1. Lessor objected, maintaining that if floor repair had been necessary, the SEC should have called that to Lessor's attention before proceeding with the work, so Lessor could have examined the floors and, if necessary, performed the work itself at an economical price. Nevertheless, "in a spirit of cooperation," Lessor agreed to pay $13,881.76 toward the floor repairs. According to Lessor, the remainder of the floor preparation charges involved sweeping and cleaning of the floors, something its general contractor did regularly and therefore should not have been done specially at extra cost. Appeal File, Exhibit 31 at 1. Lessor contends that the SEC is not entitled to recover the costs of floor preparation (or the costs of cleaning and replacement of window blinds -- see below) not only because Lessor was not obligated to perform this work, but also because the agency "went ahead, on its own, not only without our approval, but without even consulting us. . . . [The SEC] deliberately violated the Lease by failing to give [Lessor] the notice and the opportunity to cure, that was specifically negotiated into the Lease." Appellant's Filing, Tab 17 at 1. In this regard, Lessor points to two provisions of the contract. The first is General Clause 15, Failure in Performance, which begins, "The covenant to pay rent and the covenant to provide any service, utility, maintenance, or repair required under this lease are dependent. . . ." Appeal File, Exhibit 2 at 3 of GSA Form 3517. The second provision is subparagraph (g) of paragraph 62, Deviations from General Clauses, as contained in solicitation amendment 3: The provisions of General Clauses Paragraph 15 notwithstanding, SEC shall not exercise its set-off, rental reduction or lease termination rights under General Clauses Paragraph 15 unless SEC has notified the lessor in writing of the lessor's breach or failure and the lessor has failed to fully remedy such breach or failure within such period of time, not to exceed twenty (20) days, as may be necessary to complete such remedy assuming that the lessor is using all best efforts and available means to complete same as soon as reasonably practicable. Id. at 8 of amdt. 3. As the SEC suggests, these provisions refer to rights and obligations which exist while the space is being rented, not while the build-out is taking place. The agency's failure to advise Lessor prior to incurring costs is not cause, in and of itself, for holding that the agency must pay for the floor preparation and window blind work. As to the floor preparation itself, Lessor maintains that the floors were "level, smooth and in excellent condition" when construction began, and that the costs in dispute all resulted from the SEC's decision to remove the carpeting which the previous tenant had left on those surfaces. Lessor says the expenses are "properly the cost of normal carpet demolition (i.e. removal) and normal floor preparation for the installation of new carpeting." Appellant's Filing, Tab 18. Additionally, Lessor maintains, the wage rates used in calculating charges for sweeping, cleaning, and vacuuming the floors to prepare them for carpeting are excessive. The SEC responds that the cause of the irregularities in the floor cannot be considered unexpected, since the contract permitted the agency to install new carpeting and did not require that it take the previous tenant's used carpet. As the SEC says, Lessor's statements, even if true, do not change the facts that floor preparation work was necessary and that the contract required Lessor to pay for such effort. The agency's motion for summary relief as to this matter is granted as to entitlement. The Board will take additional evidence as to the reasonable cost of this work, a matter which is in dispute. Clean and replace blinds ($4,445) Amendment two to the solicitation for offers addresses not only floor repairs, but also window blinds. The pertinent part states: Landlord shall: . . . . Place all window blinds in working order. . . . . All of the above to be at Landlord's sole cost and shall not [a]ffect the leasehold improvement allowance. Appeal File, Exhibit 2 at amdt. 2. Another contract provision dealing with window blinds states: JANITORIAL SERVICES . . . . I. ANNUALLY Wash all venetian blinds and dust six months from washing. Appeal File, Exhibit 2 at 17-19 of Solicitation for Offers. The record contains an invoice relating to window blinds which includes these entries: Remove-wash-reinstall all existing 291 units venetian blinds $4,041.40 Replacement w/matching blinds for the missing 7 units 405.35 Appeal File, Exhibit 18 at 2. The 1993 letters from the president of Project Control Group and the SEC noted above with regard to floor repairs also assert that amendment two requires Lessor to clean all blinds on the eleventh and twelfth floors, and replace seven missing blinds on those floors. (The letters also say that "the new blinds for the 13th floor are an SEC responsibility.") The letters maintain that Lessor must absorb the cost of this blind work. Appeal File, Exhibit 29. The SEC continues to insist that "[a]s a result of [the janitorial services] provision, the blinds were required to be in clean condition at the time of the tenant move- in." Undisputed Facts 118. Lessor refused to credit this amount to the SEC's account. It maintained that the contract did not require Lessor to replace missing blinds or clean blinds which were present. Appeal File, Exhibit 31 at 2. Lessor has explained its position further: This Amendment [two] is rather straight forward. It is in plain English. The only obligation that it imposes on Appellant is an obligation to fix any blinds that are not working properly. Please note that no how, no way, does it impose any obligation whatsoever to wash the existing blinds or replace the few that are missing. Prior to the commencement of Respondent's construction, and in compliance with this Amendment, and without any charge to Respondent, Appellant did place in working order, all of the same 291 blinds that were on the premises during Respondent's many inspections of the premises. We did everything we were obligated to do. . . . There is no obligation to "clean" or "replace" blinds. Appellant's Filing, Tab 11 at 1-2. "If Respondent wanted the blinds washed, or the missing blinds replaced, all they had to do was to specify it [in the solicitation for offers]. . . . Naturally, we would have had to make a small corresponding adjustment in our rental offer to offset the increased costs." Letter from Appellant to Board (Dec. 9, 1995) (Appellant's Second Filing) at 4. Each party moves for summary relief as to this matter. We grant Lessor's motion and deny the SEC's. As to the replacement of missing blinds on the eleventh and twelfth floors, the contract's requirement that Lessor "[p]lace all window blinds in working order" speaks only to existing blinds. As the SEC recognizes with regard to the thirteenth floor, the contract does not require Lessor to provide any blinds which were not already present. There is no reason why the provision should be treated differently for different floors. As to cleaning the existing blinds, the janitorial services provision of the lease pertains to requirements imposed on Lessor during the period of time when the SEC will be renting the building, not during the build-out. It mandates that Lessor wash the blinds each year, but does not specify that the first washing be at any particular time during the year (such as on the first day). The SEC has not pointed to any provision in the contract, or any legal requirement outside it, which would mandate that Lessor pay for cleaning the blinds before the agency moved into the building. Power supply to 13th floor ($14,570) The contract provides that "[t]he lessor shall ensure that utilities necessary for operation are available." Appeal File, Exhibit 2 at 17 of Solicitation for Offers. Specifically, the contract states, "The electric power supply used to operate the HVAC [heating, ventilation, and air conditioning] Equipment for the 13th floor is connected to an electric submeter or submeters on such floor." Id. at 8 of Addendum. Additionally, "Lessor represents and warrants that the electrical distribution system as presently existing is capable of supplying to Lessee, exclusively for Lessee's use within the Premises (and exclusive of any electricity necessary for HVAC or other uses or for areas which would be considered common or core areas on multi-tenanted floors . . .) at least six (6) watts per rentable square foot in the premises connected load." Id. at 15 of Addendum. According to a letter signed by the SEC's lease management specialist, "Martin Schneider informs me that the Tenant Work Allowance was charged $14,570 as part of the Coyne Electric base bid to bring a separate feeder and panel to the 13th floor electrical closet [for the purpose of providing exclusive access to 6 watts per rentable square foot of electrical power]." Appeal File, Exhibit 29 at 1. Lessor promptly responded, "There is today, and there was at the time of your electrical installation, enough electrical power in the electrical closets on the 13th Floor to far exceed the 6 watt lease requirement and to still leave an enormous supply for additional tenants." Lessor further maintained that Flack & Kurtz had decided to get power for the thirteenth floor's needs from the twelfth floor in order to minimize costs, and that the engineer "fully understood that [this change] was, of course, to be at the sole cost of the Tenant." Id., Exhibit 31 at 3. Lessor's representative affirms that Mr. Schneider, a vice- president of Ambassador Construction, has advised him that the SEC official's letter is "totally incorrect." Appellant's Filing, Tab 19 at 2; Affidavit of Cornelius J. Lynch (Feb. 27, 1996) (Lynch Affidavit). He continues, "Mr. Schneider has further informed me that he is prepared to testify at the Hearing that the Respondent was not charged any amount for bringing a separate feeder from off the floor, because no separate feeder was ever needed, and therefore none was ever installed. We will also present expert testimony that, ever since it move[d]-in more than three years ago, Respondent has been receiving electricity through Landlord's regular electric service in the 13th Floor electric closet!" Id. Lessor also points out that a handwritten note on the SEC's copy of a settlement offer reads, "[Lessor] says 6 watts was supplied, & method was irrelevant. Probably req're expert testimony to resolve". Appeal File, Exhibit 46 at 4. Lessor agrees with this analysis. Appellant's Second Filing at 2. We recognize that Lessor's evidence as to this matter is hearsay. The nature of the evidence goes to weight, but not admissibility; hearsay evidence is admissible before the Board. Board Rule 22 (41 CFR 6101.22 (1995). The statements are sufficiently reliable to serve, in response to a motion for summary relief, as the basis for a finding that a genuine issue exists on this matter. Rule 8(g)(3). In light of the conflicting (and confusing) assertions of fact on the matter, we must deny the SEC's motion for summary relief. Costs questioned by audit ($7,011) Sales taxes ($610) Lessor paid sales taxes in the amount of $610 on goods and services purchased for the SEC. Undisputed Facts 52. The SEC is exempt from state and local sales taxes, according to a letter that an agent of the Commission sent to Lessor. Id. 53. Lessor admits that these taxes were paid in error. Complaint 26. It maintains, however, that it made the payment because "Respondent mistak[en]ly told us to pay." Appellant's Filing, Tab 23 at 1; Lynch Affidavit. Lessor may present evidence in support of its estoppel theory. The agency's motion for summary relief on this item is denied. Electrical work ($1,007) Lessor paid $22,635 to an electrical subcontractor for the performance of certain work, but according to the SEC, the agency authorized payment of only $21,628 for this work. Undisputed Facts 56-58. The difference is $1,007. Lessor maintains that it "can't find Respondent's authorization" for the payment of the $1,007 in dispute. Appellant's Filing, Tab 23 at 1. We take this as a request, pursuant to Rule 8(g)(4), that the Board defer ruling on this matter until after necessary discovery is conducted. Lessor's position appears to be that the authorization may be found, and that if it is, the payment will be shown to have been appropriate. Such discovery is appropriate. The SEC's motion for summary relief as to this item is denied now. It may be renewed after discovery has occurred. Furniture ($5,394) Lessor paid $5,394 on two furniture invoices which were not approved by SEC's authorized representative. Undisputed Facts 60-61. Lessor counters that "Respondent (1) selected, (2) placed an order for, (3) directed us in writing to pay for, (4) received and (5) is still currently using" the furniture covered by the invoices. Appellant's Filing, Tab 23 at 1; Lynch Affidavit. As with the sales tax matter, the SEC's motion for summary relief on this item must be denied and Lessor permitted to produce evidence in support of its estoppel contention. Counterclaim ($100,592) In its Answer, and again in its Motion for Summary Relief, the SEC has asserted a counterclaim: because Lessor refused to allow the agency's auditors access to all the records they asked to see, all of Lessor's claims (including the claims which were allowed in the contracting officer's decision) should be disallowed and credited against the Commission's rent. The agency asks us to credit against its rent not only the amounts which it has already taken, as to the claims discussed above, but also as to the $100,592 which was allowed and paid by the contracting officer for "other claims" and interest. Answer at 19-20; Respondent's Memo at 29-33. Lessor maintains that "[t]he counterclaim is extortion, plain and simple." Appellant's Filing, Tab 22 at 1. Whether the counterclaim is extortion or not, we may not consider it. A board of contract appeals has jurisdiction, under the Contract Disputes Act of 1978, 41 U.S.C. 607(d) (1994), only to consider appeals of contracting officer decisions. The contracting officer's decision which is the subject of this appeal does not make a counterclaim. Furthermore, the matters said to be covered by a counterclaim have already been decided by the contracting officer, and the part of his decision which grants various claims is final because it has not been appealed. 41 U.S.C. 605(b). Lessor made a number of claims to the SEC. The fact that the contracting officer chose to resolve them in a single decision does not transform the many claims into one, however. The contracting officer treated each claim separately and decided it on what he viewed as its merits; his letter was in effect a series of decisions, each pertaining to one claim. Tele-Sentry Security, Inc., GSBCA 7703, 85-3 BCA 18,175, at 91,270; see also Assurance Co. v. United States, 813 F.2d 1202, 1206 (Fed. Cir. 1987) (appeal is as to a claim). The decisions as to each of the "other claims" have not been appealed and are therefore final. Furthermore, the SEC has indicated its belief that the matters raised in those claims are closed by issuing a check in the amount of the granted claims. Cf. Maxima Corp. v. United States, 847 F.2d 1549, 1556-57 (Fed. Cir. 1988) (limiting ability of Government to take retroactive, contrary actions regarding contract payments). It is true that a board of contract appeals is to consider afresh any matter decided by a contracting officer if the decision is challenged on appeal by a contractor. Strand Hunt Construction v. General Services Administration, GSBCA 12860, slip op. at 6, (Jan. 30, 1996) (citing Wilner v. United States, 24 F.3d 1397, 1402 (Fed. Cir. 1994) (en banc), and Assurance Co., 813 F.2d at 1206). Thus, for example, if on the $42,237 rework sprinkler claim the contracting officer had allowed $20,000, on appeal the Board might determine that the appropriate amount is $42,237, nothing, or any other number. The matters covered by the claims as to which the SEC now posits a counterclaim, however, although decided by the contracting officer, have not been placed before this Board on appeal. Whether the contracting officer might have relied on Lessor's failure to provide requested records as a ground for denying the claims is now immaterial. The SEC says that the contracting officer "specifically reserved his rights to seek reimbursement of the amounts awarded based on Lessor's failure to cooperate with the audit in the event his decision was appealed." Respondent's Second Memo at 23 n.20. This is not so. What the contracting officer actually wrote was: [Lessor's] refusal to allow the Commission's authorized representative access to relevant records and documents would by certain precedents be grounds to deny the entirety of [Lessor's] claims . . . . I as Contracting Officer exercising my business judgment am not at this time relying on disallowance precedents to disallow [Lessor's] claims. However, any forum that reviews my decision will do so de novo. Such forum may in its independent review disallow the amount of [Lessor's] claims that I allow hereafter. Appeal File, Exhibit 1 at 2-3. Rather than reserving his rights, the contracting officer made a definitive determination and offered a legal analysis as to the finality of that determination. The contracting officer's view of the law is not correct. Decision Each cross-motion for summary relief is granted in a limited respect, as set out above. The only matter fully resolved on the cross-motions is the window blind claim. As to this matter, the SEC owes Lessor $4,445, plus interest from August 23, 1995. 41 U.S.C. 611 (1994). The parties are directed to confer as to a schedule for further proceedings on remaining matters, and to propose, within two weeks of receipt of this decision, a schedule for such proceedings. _________________________ STEPHEN M. DANIELS Board Judge We concur: _________________________ _________________________ ROBERT W. PARKER ALLAN H. GOODMAN Board Judge Board Judge