Case ID: us-ct-cl_181/html/0180-01.html
Source: Caselaw Access Project
Author: {"author": "Jones, Senior Judge,\n     Nichols, Judge,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

389 F. 2d 1016
    GENERAL WAREHOUSE TWO, INC. v. THE UNITED STATES
    [No. 268-64.
    Decided October 13, 1967]
    
      
      Warner S. Currie and Edward H. Wasson, Jr., for plaintiff. Warner 8. Currie, attorney of record. Overton A. Currie, and Smith, Swift, Currie, McGhee & Hancock, of counsel.
    
      Herbert Pittle, with whom was Acting Assistant Attorney General Carl Eardley, for defendant.
    Before Cowen, Chief Judge, Jones, Senior Judge, Lara-more, Dureee, Davis, Skelton, and Nichols, Judges.
    
   Jones, Senior Judge,

delivered the opinion of the court:

Plaintiff, a Georgia corporation, sues to recover additional rental money for office space in a building constructed by plaintiff and leased to the Government. Two questions are presented: Does the Government owe the rental money; if so, in what amount ?

Plaintiff was the successful .bidder on an invitation to purchase land on which the Government had an option and to construct an office building to be leased to the Government. The invitation called for the lessor to provide “a minimum of 100,000 net usable square feet of office and related space in a seven-story building, with a basement.” The invitation stated further:

The area leased shall be the net usable space as defined in Paragraph 10 and shall not include any wall, corridor, rest room, mechanical, lobby or other similar areas not exclusively available for use by the Government for office purposes (Emphasis supplied.)

Paragraph 10 provided:

“Net usable square feet” as used in this proposal means clear usable space, not including walls, corridors which it is necessary to construct in order to provide access to rooms which are specified * * *.

The invitation also included drawings of typical floor plans which described a building 280 feet long and 60 feet wide. Each floor plan showed a corridor running the length of the building equidistant from the side walls. Computations accompanying the drawings indicated that the Government excluded the corridors when determining net usable space. Plaintiff used reproductions of the Government’s drawings in its bid and stated that the total net usable area offered for loase was 100,000 square feet. The rentals proposed by plaintiff were $260,000 per year for an initial 10-year period and $256,000 per year for an optional 10-year renewal period. The Government accepted plaintiff’s bid in January 1962.

In July 1962, the parties executed a 10-year lease agreement providing for an annual rental of $260,000, with an option available to the Government to renew for an additional 10 years, on a year-to-year basis, at $256,000 per year. Paragraph 2 of the agreement described the leased premises as a building to be constructed with “a minimum of 100,000 net usable square feet of office and related space.” The covenants of the invitation, bid, and acceptance were incorporated into the agreement.

The invitation to bid contained a change order paragraph which gave the Government the right to issue change orders during construction and a provision calling for compensation to plaintiff either by a lump sum payment or by an increase in the annual rental if a record of the changes indicated increased costs to plaintiff. Before and during construction the Government issued 28 formal change orders. The more important of these were for floor ducts to facilitate the placement of electrical outlets, for which plaintiff was credited with a lump sum payment of $22,500; a change in lamp fixtures for which plaintiff received the lump sum of $16,858; and the installation of a sound system for the lump stun of $32,676.52. All compensation under the 28 change orders was through lump sum payment with no adjustment in rental rates, and none of the change orders concerned an increase or decrease in the amount of net usable space available to the Government.

In February 1962, before construction had begun, plaintiff complied with the Government’s request to increase both the length and width of the building by 4 inches, resulting in an additional 792 square feet of net usable space throughout the building. No change order was issued, and no discussion was held of compensation to plaintiff for the change. At later dates the Government requested and received two blocks of net usable space in the basement which plaintiff had reserved to itself in its bid: 1,432 square feet and 500 square feet. Plaintiff received no lump sum payment for these three changes, but, as will be discussed subsequently, was compensated through increased rentals.

In February or March 1962, the Government first requested and then directed plaintiff to change the basic interior design of the building. The central, longitudinal corridor was largely eliminated on each floor except the basement, and a “central core” design was substituted, which grouped the elevators and utility rooms midway along the length of the floor, against a side wall, with corridor space in front of them. The change resulted in a substantial increase in the amount of net usable space available to the Government, located in the area formerly occupied by the central corridors. Just as in the change in the size of the building, no formal change order was issued, nor was there any discussion of compensation at the time the change was directed.

In June 1963, the parties amended Paragraph 2 of the lease agreement. The Government agreed to pay additional rental for the 792 square feet of net usable space it had acquired through the expanded dimensions of the building and for the 1,432 square feet and 500 square feet it had gained in the basement. The rental rate for these areas was $2.60 per square foot per year for the 10-year period of the lease, and $2.56 per square foot for the annual renewals. The dollar amounts were arrived at by dividing the number of square feet originally offered by plaintiff (100,000) into the annual rentals ($260,000 and $256,000).

This suit was brought to recover rent for other additional space made available by plaintiff to the Government: (a) the additional space the Government received by virtue of the change from the central corridor design to the central core design; and (b) certain areas in the basement and on the first, fifth, and seventh floors. Plaintiff seeks compensation at the rate the Government has agreed to pay for net usable space it is admittedly liable for.

The Government argues that it owes plaintiff nothing for the space in the former central corridor area. It points out that the invitation and the lease document signed by the parties called for plaintiff to provide a minimum of 100,000 square feet of space, and that plaintiff agreed to lease the space for a total animal rental of $260,000; therefore, the Government argues that it “is not liable for more than the rental specified in the lease for the space furnished even if the amount of space exceeded the minimum of 100,000 square feet of usable space.” Defendant’s Exceptions to Keport of Commissioner and Brief, p. 15.

The Government contends that since it was the sole and exclusive tenant of the building it alone had the right to the area formerly occupied by the central corridors; that plaintiff’s only access to the central corridors was to have been for cleaning and maintenance; and that therefore when the interior design of the building was altered and the Government used a portion of the former corridor space for offices, it deprived plaintiff of nothing to which monetary value could be attached.

We cannot agree with the Government’s argument that the lease precludes plaintiff’s right of recovery for the additional space, because we find that the lease is ambiguous with respect to this matter. We agree with the defendant, however, that any recovery by plaintiff should be limited to the amount of space actually used by defendant and should not include the cross corridors, nor what was left of the longitudinal corridors.

The invitation to bid, which was expressly incorporated into the lease, stated that the building was to be used exclusively by the Government and that the amount of space required was “a mmirmim of 100,000 net usable square feet of office and related space.” (Emphasis added.) These provisions can be read so as to support the Government’s position that the use of the entire building (except certain areas in the basement) belonged to the Government, and that if the ultimate amount of net usable space in the building happened to exceed the minimum of 100,000 net usable square feet, the Government would not thereby be obligated to pay more rental than was stipulated in the lease. On the other hand, these provisions can be read consistently with plaintiff’s position by interpreting them to mean only that plaintiff would rent office space to no other tenant and that each plan submitted by a bidder to the Government had to provide for at least 100,000 square feet of office space before it would be considered for acceptance.

Paragraph 8 of the General Provisions of the invitation to bid stated that “the area leased shall be the net usable space as defined in Paragraph 10 and shall not include any * * * corridor * * (Emphasis added.) Paragraph 10, supra, carefully defines “net usable square feet” and expressly excludes corridors from the definition. From the painstaking description of net usable space plaintiff could reasonably deduce that the amount of net usable space leased was to be a paramount consideration in determining the rental price. And since corridors were not included in the area leased, i.e., the net usable space, it was also reasonable for plaintiff to believe that when corridor space was converted into additional office space the Government would be obligated to pay increased rentals accordingly. Yet these provisions are certainly not conclusive on the issue of increased rental, and it can reasonably be contended that their sole purpose was to clarify to potential bidders the Government’s minimum requirements for office space.

The lease is fraught with even more uncertainty than the invitation to bid. In the first place, the ambiguous invitation is expressly incorporated into the lease. Also incorporated into the lease is the actual bid of plaintiff. This bid made no reference to a “minimum” amount of space. It offered exactly 100,000 square feet for lease at the specified rate of rental. Plaintiff argues that the bid and its incorporation into the lease indicate that the parties intended the lease of a particular amount of area for a particular sum of money and contemplated that additional area would be compensated for.

We are thus confronted with a document that is ambiguous with respect to the issue of whether plaintiff is entitled to compensation for the corridor space. See, e.g., Dipo v. Ringsby Truck Lines, 282 F. 2d 126 (10th Cir. 1960); United Packinghouse Workers v. Maurer-Neuer, Inc., 272 F. 2d 647 (10th Cir. 1959), cert. denied, 362 U.S. 904 (1960); Johnson v. United States, 173 Ct. Cl. 561 (1965). The provisions in question can be read to support plaintiff’s argument, but they are also susceptible of an. interpretation favorable to the Government; none of the provisions are specifically addressed to the issue, and none are conclusive of it.

It is a fundamental rule of construction that an ambiguous contract should be interpreted most strongly against the party who drafted it. E.g., Lilley-Ames Co. v. United States, 154 Ct. Cl. 544, 293 F. 2d 630 (1961); Breese Burners, Inc. v. United States, 128 Ct. Cl. 649, 121 F. Supp. 530 (1954); Peter Kiewit Sons' Co. v. United States, 109 Ct. Cl. 390 (1947). If the contract is reasonably susceptible of two differing interpretations, that interpretation placed on the contract by the nondrafting party will prevail. E.g., Thompson Ramo Wooldridge, Inc. v. United States, 175 Ct. Cl. 527, 361 F. 2d 222 (1966); Blount Bros. Constr. Co. v. United States, 171 Ct. Cl. 478, 346 F. 2d 962 (1965); WPC Enterprises, Inc. v. United States, 163 Ct. Cl. 1, 323 F. 2d 874 (1963). In the instant case the Government authored the ambiguous provisions.' Thus when the rule is applied to the case at bar, it becomes clear that plaintiff’s interpretation should be given effect and that plaintiff is entitled to additional compensation for the additional net usable space it made available to the Government.

It is well settled that the conduct of the parties to a contract is of great weight in interpreting the contract, e.g., Universal Match Corp. v. United States, 161 Ct. Cl. 418 (1963) ; Union Paving Co. v. United States, 126 Ct. Cl. 478, 115 F. Supp. 179 (1953); Houston Ready-Cut House Co. v. United States, 119 Ct. Cl. 120, 96 F. Supp. 629 (1951), and the conduct of the parties in this case with respect to the areas of additional space requested by the Government lends support to the conclusion we have reached.

In February 1962, after the lease had already been signed, the Government asked for a 4-inch expansion in the dimensions of the building. In February or March, the Government requested the change from central-corridor to central-core design. In neither instance was extra compensation discussed at the time of the request. Plaintiff made the changes expecting to be paid for the extra space the Government would derive, and all the circumstances indicated that this belief was a reasonable one. Later the Government requested and received extra space in the basement that plaintiff had reserved to itself. The Government, in Amendment No. 2 to the lease agreement, agreed to compensate plaintiff for all areas of increased space except that formerly occupied by the central-corridor area. The rate of compensation for the extra space was based on the amount plaintiff charged in its bid for the 100,000 square feet originally offered. If the Government had intended to pay nothing for the space it received in excess of 100,000 square feet, if the use of the word “minimum” and the provision giving the Government exclusive occupancy obviated any obligation to pay, then there appears to be no reason for the Government to have agreed to pay plaintiff as specified in the amendment. On the contrary, the conduct of the parties in agreeing to extra compensation for the areas requested after the lease had already been signed indicates that plaintiff expected to receive and the Government expected to pay additional rental when the net usable space was increased.

Apparently the reason the Government agreed to increase the rental payment was not simply to compensate plaintiff for the cost of providing the space, for the rate of payment was not based on the cost to plaintiff but on the amount of additional space provided. The record shows clearly that where a change involved merely increased construction costs the parties elected to settle through lump sum payment, but where a change involved the transfer of space the parties elected to settle through increased rentals. The Government evidently recognized an obligation under the contract to pay the agreed rate for the extra space. We think the contract obligated the Government to pay additional rental for all of the net usable space it received over the 100,000 square feet originally offered by plaintiff, not just for those areas for which the Government might elect to pay.

We turn now to a consideration of how much additional square footage is involved and the proper rate of compensation for it.

With respect to the increased net usable space which resulted from the change from central-corridor to central-core design, the Government agrees that it is occupying 4,727 square feet which otherwise would have been enclosed within central corridors. Plaintiff claims an additional 3,700 square feet, or a total of 8,427 square feet. This space is composed of a number of what plaintiff calls inter-office pathways, each containing 100 square feet, located on all floors except the basement. The Government argues that they are corridors and therefore excludable from net usable space under the definition agreed to by the parties. We agree with the Government. Our examination of the record, most particularly defendant’s exhibit 8, convinces us that, regardless of the small size of these several areas, their primary function was to provide access from offices to larger corridors. They are located between partitioned offices and in most cases the doors of the offices open onto them. They would appear to fit the common meaning of the word “corridor:”

1. a gallery or passage connecting parts of a building;
2. a passage into which several rooms or apartments open. (The Random House Dictionary of the English Language, Unabridged Ed. (1966).)

There is nothing to indicate that we should apply other than this standard meaning. This court recently held, in Gholson, Byars & Holmes Constr. Co. v. United States, 173 Ct. Cl. 374, 351 F. 2d 987 (1965), that trade usage takes precedence over ordinary meaning, but here there has been no showing that the meaning of “corridor” in the construction or real estate business is different from that in everyday usage. We find, therefore, that these areas, comprising 3,700 square feet throughout the building, are not part of the net usable space and are excludable from plaintiff’s recovery.

With respect to the other areas in dispute we find as follows:

Basement. A telephone equipment room of defendant is properly included in net usable space. There is apparently a conflict of testimony on the size of the room, and the figure of 400 square feet is adopted. A storage area used by plaintiff is excluded. A comparison of plaintiff’s exhibit 28 with defendant’s exhibit 8 indicates that the computation of net usable space should include 500 square feet specifically transferred to the Government in the amendment to Paragraph 2 of the lease agreement.

Details concerning other areas on the first, fifth, and seventh floors are contained in the numbered findings.

With regard to the rate of compensation which the Government is required to pay, we find that it is logical and proper to 'apply the rates agreed to by the parties of $2.60 per square foot per year for the initial 10-year period of the agreement, and $2.56 per square foot for the annual renewals.

Nichols, Judge,

dissenting:

I respectfully dissent from the opinion of the majority.

My examination of the documents in question does not reveal any ambiguity in the provisions relating to the “net usable square feet” to be leased and paid for by the Government, nor do they call for payment by the Government for the extra usable space occasioned by the change from a “central corridor” to a “central core” design. I agree with the Government’s contention that it is not bound to pay for any of this extra space. I cannot ascribe to the documents an “intelligent meaning” other than that which the Government proposes and, therefore, though the documents are said to be ambiguous, “* * * the line of cases which holds that an ambiguous contract susceptible of several possible meanings must be construed against the party which drew it * * * has no applicability to the present situation.” Keco Industries, Inc. v. United States, 176 Ct. Cl. 983, 991, 364 F. 2d 838, 843 (1966), cert. denied 386 U.S. 958 (1967), quoting with approval Russell & Pugh Lumber Co. v. United States, 154 Ct. Cl. 122, 128, 290 F. 2d 938, 941 (1961).

If plaintiff expected additional rental in the event that some corridor space was converted to “net usable space,” it expected a windfall, because such conversion was in no way a detriment and added nothing to its burdens. There would be no rational reason why the Government would contract for this outcome. In determining whether a contract is ambiguous because of having more than one possible meaning, it appears to me to be proper to exclude interpretations which produce whimsical and capricious results, having no relation to the purpose of the contract. Bishop Engineering Co. v. United States, 180 Ct. Cl. 411 (1967); Gelco Builders & Burjay Construction Corp. v. United States, 177 Ct. Cl. 1025, 369 F. 2d 992 (1966).

The Invitation, to Bid made mandatory, as the inside dimensions for all seven floors and the basement, measurements of 60' x 280'. Therefore, exclusive of the lobby and mechanical rooms which jutted from the building proper (and which, in any event, were to be excluded from the area leased), the maximum square footage available would have been 134,400 square feet. From this total was to be subtracted any “* * * areas not exclusively available for use by the Government for office purposes,” e.g., walls, stairways, janitor and other closet rooms, corridors which it was necessary to construct in order to provide access to specified rooms, etc. And, as long as the remaining square footage was enough to provide “a minimum of 100,000 net usable square feet of office and related space * * *” the Government agreed to lease the premises from the successful bidder. The Government clearly intended to pay rent for a building as a whole and not in accordance with its actual “net usable square feet”, as long as the latter was at least 100,000. That it meant to pay for the “whole” is borne out by the fact that the Invitation also specified that the building was to “* * * be used exclusively by the United States Government, its successors or assigns.” (Emphasis supplied.)

Except for the owner’s retention of part of the basement, which the original lease allowed, it thus must have been clear that no one but the Government was to use beneficially any of the space, “net usable” or not, and the rental was to be the same whatever it turned out to be. The sole purpose of the definition of “net usable space” was to clarify the requirement that the bidder must furnish at least 100,000 feet of such space. There was no stated purpose to measure the actual “net usable space” and mulct the Government with any excess over 100,000. The corridors etc., excluded from the “net usable space” were no benefit to the contractor, as it had to police them, without deriving income from them, and the sole use of the corridors was for access to and among the Government offices.

Since plaintiff merely reproduced the drawings which the Government had attached to the Invitation (with one modification not important to this discussion) it knew that the rentable square footage that would result from following those plans would be not 100,000 but at least 100,893. At no time did the plaintiff inquire as to whether there would be an increase in rental if the “net usable square feet” exceeded 100,000. If, as I do not agree, there was ambiguity, it was the kind about which plaintiff had a duty to inquire. Bishop Engineering, supra. And, the Invitation provided that “Any explanation desired by bidders regarding the meaning of interpretation of the conditions and specifications of this Invitation must be requested in writing, and with sufficient time allowed for a reply to reach them before the submission of their bids.” Therefore, in light of what I deem the only intelligent meaning of this contract and in light of the “Change Orders” provision of the Invitation next discussed, plaintiff must have known that it would be leasing to the Government, if successful in its bid, an entire building, for a single gross rental, as long as it provided a minimum of 100,000 “net usable square feet.”

The “Change Orders” provision of the Invitation gave the Government “the right to issue change orders pertaining to the construction after approval of the plans and specifications, and prior to completion of construction * * If the plaintiff’s construction costs were, as a whole, increased by any construction changes called for, the Government had the option of making either a lump sum settlement or an increase in the rental rate. Thus, after plaintiff complied with the Government’s request to increase the dimensions of the building 4 inches both in length and width, this change was provided for by an amendment to the lease which increased the annual rental. So too with plaintiff’s surrender of the basement. In both cases plaintiff gave up something of value. However, the construction change from “central corridor” to “central core” design did not give rise to an increase in plaintiff’s construction costs. In fact, as part of the debits and credits entering into the computation of the lump sum paid to plaintiff on change orders, the parties allowed defendant $56,720 on account of installation by plaintiff of a lesser quantity of interior movable partitions under the revised “central core” design than would have been required under the original “central corridor” design. Without there being a construction cost increase occasioned by a change order, such increase causing a final additional sum to be owed to plaintiff, plaintiff was not entitled to either a rental increase or a lump sum adjustment. In my opinion, the “corridor” to “core” change falls within the latter class. The handling by the parties of the building enlargement and the basement does not reflect an interpretation of the contract enlarging the scope of the Change Order clause from its plain words, (Emphasis supplied.)

For the two reasons stated above, those relating to the area the Government contracted to lease and to when an adjustment was to be made under the “Change Orders” provision, I must dissent from the majority opinion.

EINDINGS OF FACT

The court, having considered the evidence, the report of Trial Commissioner Roald A. Hogenson, and the briefs and argument of counsel, makes findings of fact as follows:

1. Plaintiff is and was a Georgia corporation engaged in the business of building and construction, and buying, selling and leasing real estate, with its principal office at Atlanta, Georgia.

2. On October 13,1961, defendant by its General Services Administration issued its Invitation to Bid on a contract “for the leasing of space” to defendant in a building to be constructed by the successful bidder on a designated site at East Point, Georgia, near the Atlanta Municipal Airport, Atlanta, Georgia. It was recited that the site was owned by a certain third party which had granted an assignable option to defendant to purchase such site for $149,350, which option would be assigned by defendant to the successful bidder at the time of contract award, who would be required within 5 days to exercise the option and within an additional 40 days complete the purchase of the site from the owner. The Invitation to Bid called for the construction of a 7-story building, with a basement, with “all of the above-described land, together with the improvements thereon” to be “used exclusively” by defendant, its successors or assigns, with, the “amount of net usable space required” in the building defined as follows:

A mínimum, of 100,000 net usable square feet of office and related space to be provided in a seven-story building, with a basement, to be constructed on the site described below, together with an outside paved parking area to be used by the U.S. Government.

Bidders were requested to propose a lease to defendant for either (á) 5 years, with annual renewal options for an additional 5 years, or (b) 10 years, with annual renewal options for an additional 10 years. The Invitation to Bid indicated that the premises would be leased by defendant for use by its Federal Aviation Agency.

3. Attached to the Invitation to Bid were various plans, drawings, and specifications, among which were Schedules D, E, and F, entitled respectively, Typical Basement Floor Plan, Typical First Floor Plan, and Typical Second Through Seventh Floor Plan. With respect to defendant’s plans, drawings, and specifications, the general statement was made in paragraph 2 of the General Provisions of the Invitation:

* * * These are furnished for such use as the Bidder may desire to make of them; however, they represent the minimum requirements of the Government. * * *

In addition to preliminary and final working drawings and specifications, to be submitted within specified times after contract award, and “as built” drawings after completion of construction, the Invitation required submission:

a. With the Bid: Typical floor plans of the Basement, Ground Floor and Floors above Ground Floor, together with sketches of elevations. Such plans will be drawn to scale and show the locations of windows, columns, stairways, elevations, toilets and washrooms, janitor’s closets, ducts, etc., corridors, etc., will be shown on these plans. Partitions between offices will not be shown; however, such partitions will be provided by the successful Bidder as required by the Specifications, Schedule C.

4. Defendant’s drawings depicted a rectangular building, with inside wall dimensions of 280 feet in length and 60 feet in width.

5. Paragraph 8 of the General Provisions of the Invitation provided that the building was to be delivered ready for use as a complete unit, that a condition report and survey would be made by representatives of defendant and the owner when the building was ready for use, and further stated:

* * * The area leased shall be the net usable space as defined in Paragraph 10 and shall not include any wall, corridor, rest room, mechanical, lobby or other similar areas not exclusively available for use by the Government for office purposes. Within three (3) months after complete occupancy, the Government and the Lessor will determine the inside net usable area as defined above.

Paragraph 10 provided:

10. Net Usable Square Feet: “Net usable square feet” as used in this proposal means clear usable space, not including walls, corridors which it is necessary to construct in order to provide access to rooms which are specified, toilets, stairways, boiler rooms, 'buildings mechanical equipment rooms, janitor and other closet rooms, and projections or columns of four (4) square feet or over.

6. The three above-mentioned floor plan drawings of the defendant (Schedules D, E, and F) plainly depicted in the basement and on each of the seven floors of the proposed building, a central corridor 7-feet wide extending longitudinally in the center of each floor to stairways at either end of the building, with doors opening off each corridor at intervals into unpartitioned office space on all floors above the basement, partitioning in the basement being shown. The elevator lobby on each floor (open at one end to each central corridor) extended at right angle on one side of the central corridor in the center of the building transversely to the front longitudinal wall, and on either side of the elevator lobby were spaces provided for the elevator shaft, a stairway, toilets, and mechanical facilities. On the first floor, there was shown a central area of building projection to provide a front entrance lobby, with access to the elevator lobby.

7. With respect to the structural columns for the building, defendant’s floor, plan drawings showed a longitudinal spacing (center tb center of successive columns) of 25 féet, and the transverse spacing was in succession 25, 10, and 25 feet. Tbe 7-foot central corridor on each floor plan was depicted as running between tbe two longitudinal rows of interior columns (which were 10 feet apart, center to center), thus indicating as shown on the floor plans, that the interior columns would not be adjacent to or part of the corridor walls, but that within the office space area on either side of the corridor, there would be some space between each interior column and the corridor wall, unless, of course, this space was otherwise filled in some manner. In any event, each interior column would be an obstruction in or intrusion into office space unless at that point an interior transverse partition was constructed in line with the columns.

8. The title page of defendant’s floor plan drawings set forth a schedule showing that the gross square footage of floor space in the proposed building was 16,800 for each floor (which is the product of the inside dimensions of 280 by 60 feet), or 136,800 for all floors, basement through the seventh, including the 960 square feet for the lobby projection at the building entrance and 1,440 square feet of building projection for mechanical areas. The schedule also showed that the “net square feet of assignable floor area” for the basement was 10,803; for the first floor, 12,396; and for each of the other 6 floors, 12,949; or a total for all floors of 100,893 square feet.

A comparison of the defendant’s items and figures set forth in such schedule with the defendant’s typical floor plan drawings indicates that defendant excluded the central corridors from net usable space in arriving at the figure of 100,893 square feet.

i9„ The specifications attached to and included in the Invitation to Bid provided that the basement space was to be partitioned as shown on Schedule D, and as to the partitioning of all floors above the basement, stated:

c. Partitioning — Floors 1 thru 7: These floors will be designed on a 5' i 5' module as shown in Schedules “E” and “F”. Interior partitions on perimeters of public space (lobbies, stairways, toilets, construction, mechanical and custodial areas) are to be constructed of plaster over concrete block, or plaster over metal lathe, in accordance with local building and fire codes. The interior corridor partitioning through, the center of the building will be solid metal to ceiling. At the time the final plans and specifications are approved by the Government, the partition layout will be furnished for each floor. Bids received will be considered on the basis that the bidder will furnish and install the type and quantity of moveable sectional office and corridor partitions (exclusive of masonry partitions around lobbies, stairways, toilets, construction, mechanical and custodial areas, etc., and other areas as specified herein) as follows:
(1). Ceiling high solid metal_ 6,000 linear feet.
(2). Ceiling high metal and glass_ 1,500 linear feet.
(3). Ceiling high unpolished plate glass- 500 linear feet.
(4). Wood doors (natural finish)_ 225 linear feet each.
The partitions furnished shall be Hauserman Signature, or equal. The Government will select the colors and finish.
In the event the Government changes its partition requirements, such adjustments in price will be handled as set forth in Paragraph 4 of General Provisions on the basis of the prices as set forth in the bid.

10. Paragraph 4 of the General Provisions of the Invitation to Bid reserved to defendant the right to issue change orders, as follows:

4. Ohcmge Orders: In submitting proposals bidders agree that the Government shall have the right to issue change orders pertaining to the construction after approval of the plans and specifications, and prior to completion of construction of the building, and provided further that a record of the dollar amount of the increased and decreased completion costs, resulting from change orders issued by the Government, will be kept by the Government during the course of construction. If upon satisfactory completion of construction the total dollar amount of all increased costs is greater than the total dollar amount of all decreased costs, then the net amount of such difference will be paid to the Lessor in a lump sum at the time the first month’s rental is paid, or at the sole election of the Government, the annual rentals stipulated in the lease will be increased by a percentage of the net increased cost per annum, in the same ratio as the annual rental without building operating service bears to the acquisition cost of the land plus the certified cost of the improvements. If the total dollar amount of all decreased costs is greater than the total dollar amount of all increased costs, then the annual rentals stipulated in the lease will be reduced by a percentage of the net decreased cost, per annum, in the same ratio as the annual rental without building operating service bears to the acquisition cost of the land plus the certified cost of the improvements. Anything herein to the contrary notwithstanding, the Government shall in no event require the Lessor to accept a net dollar amount of increase or decrease in completion costs as a result of changes greater than $100.00, without written agreement thereto.

11. On November 20,1961, plaintiff submitted its bid and drawings in response to, in compliance with, and in reliance on the terms of defendant’s Invitation to Bid.

Since plaintiff had reached its decision to submit a bid only about 3 days before the bid was due, it merely reproduced defendant’s above-mentioned drawings, with one modification, and submitted such reproduced drawings with its bid. Plaintiff depicted the central corridor on each floor the same as shown on defendant’s drawings. The one modification of defendant’s drawings was as to the transverse spacing of the structural columns. The two rows of interior columns were moved equidistant and somewhat closer together so that instead of being 10 feet apart center to center, they were 7 feet apart between insides of opposing columns, corresponding with and conforming with the width of the central corridor. The columns were about 16 inches square. Thus, plaintiff’s proposed transverse spacing (center to center) of the columns, approximated 25T0", 8'4", and 25T0", in lieu of defendant’s spacing of 25,10, and 25, above-mentioned.

12. In its bid, plaintiff proposed concerning amount of floor space in the building to be leased:

2.a. Total net usable area offered for lease: 100,000 square feet.

Plaintiff did not bid on the basis of a 5-year lease with annual renewal options, but proposed a 10-year term with annual renewal options for an additional 10 years. Plaintiff stated that the annual rate would be $224,000 for the initial 10-year term, with an annual renewal rate of $220,000, on the condition that the lessor would furnish only space and facilities, without services, supplies, and utilities. On the basis that lessor would furnish space, facilities, supplies, utilities (except electric energy) and services, plaintiff’s proposed annual rental rate was $260,000 for the initial 10-year term, with an annual renewal rate of $256,000.

13. On January 15, 1962, defendant notified plaintiff by teletype and by letter that plaintiff’s bid was accepted and that plaintiff was awarded the contract.

Plaintiff thereafter acquired the pertinent land and constructed the building.

14. On July 3, 1962, plaintiff and defendant (by GSA) executed a lease agreement for a 10-year term beginning February 4, 1963, and ending February 3, 1973, at a rental rate of $260,000 per annum, renewable by defendant from year to year for an additional 10 years at an annual rate of $256,000. The leased premises were described in paragraph 2 as follows:

A minimum of 100,000 net usable square feet of office and related space in a building to be constructed on a site located in East Point, Georgia, more particularly described in Invitation to Bid AT-40.

Paragraph 12 of the Instructions to Bidders in the Invitation to Bid provided:

Finality of Acceptance: The unconditional acceptance of a bid received in response to this Invitation establishes a valid contract extending to all covenants of the Invitation, Bid, and Acceptance, between the bidder and the Government.

and in this connection, the lease agreement stated:

Said space is to be furnished to the Government in strict compliance with all the terms and conditions of Invitation to Bid AT-40, dated October 13, 1961, and proponent’s bid, dated November 20, 1961, all attached hereto and made a part hereof as if wholly copied herein at this point. Lessor agrees to furnish the Government with specifications and full sized detailed architectural and engineering drawings as required by Item 2 of General Provisions of Invitation to Bid AT-40; and when such specifications and drawings have been approved by the Government shall become a part of this lease as if wholly copied herein at this point.

The lease further provided:

6. The Lessor shall furnish to the Government, during the occupancy of said premises, under the terms of this lease, as part of the rental consideration, the following :
All equipment, facilities and services (not including electrical energy) as specified and described in Invitation to Bid AT-40, dated October 13, 1961, and lessor’s bid dated November 20,1961, which are attached hereto and made a part of the lease.

15» Plaintiff diligently prosecuted the work on the building in complete accordance with the contract, specifications, and drawings, with certain modifications hereinafter related. Upon completion of construction, defendant accepted the building, and the Federal Aviation Agency assumed occupancy.

16. At a meeting in February 1962, between plaintiff, GSA, and FAA, before construction of the building had commenced, FAA requested that plaintiff increase the dimensions of the building 4 inches both in length and width, the purpose being to add 2 inches of additional interior space around the entire perimeter of the building to solve a technical problem concerning use of the specified movable interior partitions. Plaintiff complied, prepared and submitted its working drawings accordingly, and 792 square feet of additional floor space was thus provided in the building as constructed. No formal change order was issued on this modification.

There was no discussion concerning compensation or increase in rental rates for this additional space until after completion of construction of the building. No payment was made by defendant to plaintiff for the actual cost of enlarging the building, but an increase in rental rates was made as related in finding 20.

17. Also at a meeting in February 1962, representatives of FAA (GSA representatives being in attendance) requested that in lieu of the two longitudinal interior rows of columns, there be constructed only one such row along the center of the building, i.e., changing the transverse spacing of columns from plaintiff’s design of three spans (25' 10", 8' 4", and 25' 10") to two spans of 30 feet each. GSA stated that it had no objection to the proposal, but made it plain to plaintiff that it was a matter to be decided by plaintiff. Plaintiff declined to provide the 30-foot span because the cost of construction would be substantially increased. FAA (and its own contractor on layout, decor, and furniture) plainly expressed dissatisfaction, and plaintiff suggested that it would accommodate FAA by providing transverse column spacing at 20', 20', and 20', which FAA reluctantly accepted as its second best choice in lieu of the existing design. Plaintiff prepared and submitted its working drawings accordingly. As constructed, the building had transverse column spacing of 20' 2", 20', and 20' 2", including the 4 inches of additional width provided to the building.

Plaintiff made no request for compensation for this change or for increased rentals on account thereof, nor was any such allowance ever made, nor was any formal change order issued for this modification.

18. In February 1962, GSA at the behest of FAA requested plaintiff to construct under-floor ducts so that when furniture was moved around, a hole could be punched in the floor close to any given location to provide an electrical outlet for a telephone or other service. Plaintiff agreed and included this modification in the building as constructed. GSA subsequently issued a formal change order for this item, allowing plaintiff $22,500, which sum was credited and paid to plaintiff as part of the lump sum payment made by defendant to plaintiff in the overall settlement of credits and debits arising from various changes (none of which included any increase in floor space), as provided in Amendment No. 2 to the lease agreement.

As part of the credits and debits entering into the computation of the lump sum paid to plaintiff on change orders, the parties agreed and allowed defendant $56,720 on account of installation by plaintiff of a lesser quantity of interior movable partitions under the revised “central core” design (hereinafter described) than would have been required under the original “central corridor” design.

19. In all, some 28 formal change orders were issued to plaintiff by GSA, covering modifications ordered mainly during construction, but some prior to commencement thereof. Most of these changes were minor in nature, with three of tbe largest being tbe above-mentioned floor-duct modification, installation of 16 two-lamp fixtures in lieu of 8 four-lamp fixtures in eacb bay of tbe building, for wbicb plaintiff was allowed and paid $16,858 in the above-mentioned balancing of credits and debits, and installation of a complete sound system for $32,676.52. Since credit or debit was allowed, and thus payment made for all such modifications (none involving floor space), no adjustment in rental rates was made.

There were some minor changes (not involving floor space) made and paid for by ancillary agreements between FAA and plaintiff.

20. In addition to the 792 square feet of floor space mentioned in finding 16, defendant requested assignment to it of 1,432 square feet of partitioned basement space reserved to plaintiff in the bid proposal as accepted, to which plaintiff agreed. No discussion of compensation or increase in rentals on account of transfer of such space was had until just prior to the execution of Amendment No. 2.

Amendment No. 2 to the lease agreement (executed June 7, 1963) provided that paragraph 2 of the lease agreement, quoted in finding 14, was amended, effective February 4,1963, to reflect an increase of 2,224 square feet of space, “thereby reflecting a total of 102,224 square feet under lease.” The added 2,224 square feet included the 792 mentioned in finding 16 and the 1,432 described in this finding. The parties then agreed in such amendment that effective February 4, 1963, the annual rental of $260,000 would be increased by $5,782.40 during the 10-year term, with the annual rental thereafter of $256,000 increased by $5,693.44. To arrive at the amount of these increases, the parties considered that plaintiff had offered in its bid to rent 100,000 square feet for annual rates of $260,000 (10-year term) and $256,000 (annual renewals), derived therefrom respective annual square footage rates of $2.60 and $2.56, and applied such rates to the 2,224 square feet involved.

There were only minor physical changes involved in the transfer of the 1,432 square feet of basement space from plaintiff to defendant, for the cost of which plaintiff neither requested nor did defendant make any payment.

21. In May 1963, defendant requested plaintiff to transfer to defendant’s use an additional 500 square feet of basement space, which, consisted of a room which had been originally reserved to plaintiff and was being used by plaintiff. Plaintiff agreed and requested that increased rentals be allowed at the $2.60 rate. Apparently no physical changes were made.

On account of this transfer of space, the parties agreed in Amendment No. 2 (above-mentioned) that paragraph 2 of the lease agreement was amended, effective June 1, 1963, to reflect an increase of 500 square feet of space, “thereby reflecting a total of 102,724 square feet under lease,” and that effective June 1,1963, the annual rentals (as previously increased) would be further increased by $1,300 to $267,-082.40 during the 10-year term, and by $1,280 to $262,973.44 for the annual renewals. These increases were at the annual square footage rate of $2.60 for the 10-year term, and $2.56 for the annual renewals.

22. In or about February or March 1962, prior to the commencement of construction, FAA requested and GSA approved and directed plaintiff to substitute for the “central corridor” design for each floor of the building (with the exception of the basement) what is termed a “central core” design. Plaintiff complied, and as the building was constructed, the central corridors were eliminated except in the basement and part of the seventh floor. The front entrance lobby projection of the building was eliminated and a carport substituted therefor. The front entrance, however, remained in the center of one of the longitudinal walls (front of building) , with a large entrance lobby provided immediately inside the main structure on the first floor. The elevator shaft was located along the center and on the inside of the back exterior longitudinal wall, with the elevator lobby directly in front of it, with spaces on either side of the elevator shaft and elevator lobby area for toilets, and electrical and mechanical facilities, with some additional corridor space along this central core to provide access to the toilets, etc., and to the rest of the floor. No central stairway was provided in the revised design, but the stairways remained at either end of the building. This central core area occupied somewhat less than one-third of the length of the building and less than one-half of the width (at the back of the building), with the central core areas somewhat larger on the first and basement floors than the upper floors. In the basement, of course, the elevator lobby was open to the central corridor which was retained. On the seventh floor, the elevator lobby was open to a central corridor which extended through one-half of the building to the stairway at one end. Thus, except for central corridors in the basement and part of the seventh floor and a few other small corridors hereinafter described, there was no public corridor space except in the central core area. Except to the extent hereinafter specifically stated, the central core areas were partitioned off from the remaining floor space, with access doors provided into the rest of the building.

•23. The “central core” design resulted in an increase in the net usable floor space in the building. Generally through all floors above the basement, the central 20-foot wide space through the length of the building (through which the central corridor would have extended on each floor under the original design) was partitioned in most places into private offices and other rooms, with the space on either side generally left as unpartitioned or open office space. At intervals along the central area of the partitioned offices, a small corridor, 5 feet wide and 20 feet long, was provided between partitioned spaces to provide a convenient means of access to and from the open office space at the front 'and back of the building, with doors to the private offices opening onto each small corridor.

There were four such small corridors on the first floor, six on each of the second through the sixth floors, and one on the seventh floor, aggregating 3,500 square feet of floor space. In addition, there was on the seventh floor a similar corridor, also 5 feet wide but with two right-angle turns therein, which occupied 200 square feet of floor space. Thus, these small corridors occupied a total of 3,700 square feet of floor space.

24. Plaintiff claims that the central core design provided defendant with 9,272 net usable square feet of floor space over and above the 102,724 square feet for which it is receiving rentals under the lease as amended. While contending that plaintiff is not entitled to recover, defendant concedes that it is occupying 4,727 square feet of net usable space which otherwise would have been enclosed within central corridors.

After completion of construction, representatives of plaintiff and a subordinate employee of defendant conducted a survey and measurement of the net usable space, and such measurement amounted to 111,996 square feet, which exceeds by 9,272 square feet the 102,724 square feet mentioned in Amendment No. 2 as being under lease. This measurement was not accepted as correct by any duly authorized representative of defendant.

25. In the computation of the amount of increased net usable square feet of floor space (9,272 claimed by plaintiff and 4,727 conceded by defendant) the principal amount of difference between the parties is the inclusion by plaintiff and the exclusion by defendant of the 3,700 square feet of floor space occupied by the above-described small corridors.

26. As constructed, each floor of the building had 16,902 square feet of gross floor space. In their respective computations of net usable space, each party deducts from this gross space on each floor the stairway areas on either end of the building, the central corridor in the basement and on the seventh floor, the central core area on each floor, and certain basement space reserved for and used by plaintiff. The differences between the parties as to space to be deducted from gross space to arrive at net usable space are hereinafter described.

BASEMENT

27. From the 16,902 square feet of gross floor space in the basement, plaintiff deducts 4,665 and defendant 5,306 square feet to arrive at net usable space of 12,224 and 11,596 square feet, respectively. The basement areas in dispute are: (1) In their respective computations, plaintiff includes and defendant excludes as net usable space 400 square feet of space described as “telephone equipment” room. At the trial of this case, defendant conceded that this space was used exclusively by defendant, and should be included in net usable space. (2) Plaintiff includes and defendant excludes as net usable space a contiguous area at one end of the central core area, designated on the floor plan as “locker room” and “toilet.” Originally, these facilities were constructed as shower facilities for FAA airplane pilots, but actually they have been used by plaintiff as storage space for supplies. They occupy about 250 square feet of space.

The net usable space occupied by defendant in the basement, including as did plaintiff the 400 square feet for defendant’s telephone equipment room, but excluding the 250 square feet for plaintiff’s storage room (locker room and toilet), amounts to 11,987 square feet.

first floor

■28. From the 16,902 square feet of gross floor space on the first floor, plaintiff deducts 3,416 and defendant 4,123 square feet to arrive at net usable space of 13,473 and 12,779 square feet, respectively. Plaintiff includes and defendant excludes as net usable space the 400 square feet occupied by the four first-floor transverse small corridors described above. While the parties both deduct the stairway spaces and the central core area from gross space, they are in disagreement as to how to treat the large entrance lobby area about 50 feet wide and 30 feet deep, open to and lying between the central core area and the front entrance of the building. Plaintiff includes this entire lobby in net usable space. Most of this lobby is used exclusively by defendant as a reception and display area, and to that extent, defendant includes it as net usable space-However, defendant deducts a 13-foot wide strip along the front of this lobby (adjacent to the front entrance) and a 5-foot wide area along either side of this lobby. These areas are public corridors, providing around the reception and display area, access to the central core and to the rest of the first floor. These corridor areas in the large first-floor lobby cover 506 square feet of floor space.

The net usable space occupied by defendant on the first floor, excluding the 400 square feet of transverse small corridors and excluding the 506 square feet of public corridors, in the large lobby, amounts to 12,580 square feet.

SECOND THROUGH SIXTH FLOORS

29. Although differing from each other, each party’s inclusions and exclusions from net usable space are identical for the second through the sixth floors, except for a minor variation by defendant on the fifth floor.

From the 16,902 square feet of gross space on each of such floors, plaintiff deducts 2,414 and defendant 3,010 (3,110 on the fifth floor) to arrive at net usable space on each of such floors of 14,475 and 13,892 (13,792 on fifth floor) square feet, respectively.

In their respective computations, plaintiff includes and defendant excludes the above-mentioned six transverse small corridors on each of such floors, or 600 square feet per floor.

On the fifth floor, there exists a longitudinal corridor, 5 feet wide and 20 feet long, adjacent to the stairway in the center of one end of the building. While this corridor furnishes access to a large comer room, partitioned from the open office space on that side of the building, the basic function of the corridor is to provide access to the stairway, and reasonably is to be considered as a public corridor.

The net usable space occupied by def endant on each of the second through the sixth floors, excluding the 600 square feet of transverse small corridors on each floor, is 13,888 square feet, except that the 100 square feet of longitudinal corridor space adjacent to the stairway is deducted on the fifth floor, and the net usable space on that floor is 13,788 square feet.

SEVENTH FLOOR

30. From the 16,902 square feet of gross floor space on the seventh floor, plaintiff deducts 2,964 and defendant 4,085 square feet to arrive at net usable space of 18,925 and 12,817, respectively.

One minor difference between the parties is plaintiff’s inclusion and defendant’s exclusion of a longitudinal corridor of the same dimensions (100 square feet in area) and located lite and serving the same functions (access to stairway and corner room) as the longitudinal corridor described on the fifth floor, except that it is adjacent to the stairway at the opposite end of the building. This is reasonably to be considered a corridor.

The two transverse small corridors, together covering 300 square feet as described in finding 23, are included by plaintiff and excluded by defendant, in computing net usable space.

31. The major difference between the parties on the seventh floor computations concerns the lobby area which (like the large lobby on the first floor) is open to and lies between the central core area and the front wall of the building. This lobby area is 40 feet wide and 35 feet deep. Plaintiff includes this entire lobby space in net usable space. The lobby is occupied in major part by a large circular room, used exclusively by defendant as the “Executive Conference Room.” This room is partitioned off from the rest of the lobby with corridor space existing entirely around it. While defendant includes the area occupied by the circular room, it excludes the corridor space around such room. Such corridor space is open to the corridor in the central core area of the seventh floor, and in reality is an extension or part of the corridor area. In fact, the circular room extends slightly (about 4 feet) into the corridor area of the central core, and such corridor space is deducted by both parties. The remaining corridor space about the circular room and within the lobby area amounts to 590 square feet.

32. The net usable space occupied by defendant on the seventh floor, excluding the 300 square feet of transverse small corridors and excluding as did defendant the 100 square feet of the disputed longitudinal corridor and the 590 square feet of corridor space adj acent to the circular room in the lobby, is 12,948 square feet.

ALL FLOORS

33.The total net usable space on all floors, basement through the seventh, is 106,855 square feet, recapitulated as follows:

Floor Gross space Deducted space Net usable space
Sq.ft. Sq.ft. Sq.ft.
Basement. 16,902 4,915 11,987
First_ 16,902 4,322 12,680
Second_ 16,902 3,014 13,888
Third_ 16,902 3,014 13,888
Fourth. 16,902 3,014 13,888
Fifth_ 16,902 3,114 13,788
Sixth_ 16,902 3,014 13,888
Seventh-. 16,902 3,954 12,948
106,855

34. The net usable space in the building occupied by defendant (106,855 square feet) exceeds by 4,131 square feet the net usable space of 102,724 square feet, the amount of space recognized by the parties as being under lease, as stated in the above-mentioned Amendment No. 2 to the lease agreement.

35. Plaintiff has exhausted all of its administrative remedies, and its claims herein asserted were denied by defendant.

36. Applying the same annual rate per square foot, which was used by the parties in computing the increased rentals for additional space under Amendment No. 2, i.e., $2.60 per square foot per year during the 10-year term and $2.56 per square foot per year during each renewal year thereafter, the increase in rentals for the additional 4,131 square feet of net usable space would be $10,740.60 per annum during the 10-year term and $10,575.36 per annum during the renewal years thereafter.

37. Since the 10-year term of the lease commenced on February 4, 1963, increased rentals for the additional 4,131 square feet of net usable space, at the rate of $10,740.60 per annum, amount to $42,962.40 for the 4-year period ending February 3, 1967.

CONCLUSION OF LAW

Plaintiff is entitled to recover on its petition, and judgment is entered for plaintiff in the sum of forty-two thousand nine hundred sixty-two dollars and forty cents ($42,962.40) for the first 4 years of the 10-year lease term, which 4-year period commenced February 4,1963, and ended February 3, 1967, without prejudice to any claim plaintiff may hereafter assert for any rental payable after February 3, 1967. 
      
       General Provision # 11 of the Invitation provided that the provisions of the Invitation, its component schedules (if any) and the provisions of the Bid Eorm were to be incorporated into the final lease as binding conditions thereof.
     
      
       Plaintiff uses 16,889 square feet as gross space for each floor. The 16,902 figure is accepted as the accurate product of the interior dimensions of 280.S feet by 60.3 feet.
     
      
       The parties differed to some extent on measurement of space -which they agree is to be deducted from gross space, to arrive at net usable space. The larger measurement is in each such instance accepted as accurate. There is no other way afforded by the evidence to resolve such differences, and on the basis that plaintiff has the burden of proof, the larger deduction from gross space is found against plaintiff.