RESPONDENT’S MOTION FOR SUMMARY JUDGMENT DENIED:
November 20, 2018
CBCA 5997
SBC ARCHWAY HELENA, LLC,
Appellant,
v.
GENERAL SERVICES ADMINISTRATION,
Respondent.
Diana Parks Curran and Hadeel N. Masseoud of Curran Legal Services Group, Inc.,
Johns Creek, GA, counsel for Appellant.
Justin S. Hawkins, Office of General Counsel, General Services Administration,
Washington, DC, counsel for Respondent.
Before VERGILIO, KULLBERG, and CHADWICK.
VERGILIO, Board Judge.
SBC Archway Helena, LLC (lessor) seeks a sum certain denied by a contracting
officer of the General Services Administration (agency) under a lease.  The lessor asserts that
the agency delayed issuing a notice to proceed with tenant improvements.  It seeks to recover
various cost increases that it attributes to the delay.  The agency moves for summary
judgment under Board Rule 8(f), 48 CFR 6101.8(f) (2018), asserting that, even if the agency
delay is assumed to have occurred, the claimed amounts are not recoverable costs of
performance under the contract and applicable law.


CBCA 5997 2
The Board denies the agency’s motion.  The agency reads too restrictively the terms
of the lease and prior decisions based upon particular contract clauses, claims, and evidence. 
The lessor does not seek the payment of rent prior to occupancy.  The lessor is not foreclosed
from demonstrating that agency delays occurred that impacted the lessor’s costs during an 
extended period of performance prior to or during occupancy.
Findings of Fact
With an award date of January 6, 2015, the agency and lessor entered into a lease that
includes a Changes (MAR 2013) and a Disputes (JUL 2002) clause.  The lease term is for
fifteen years (ten firm) beginning upon acceptance by the agency of the premises.  The
annual rent consists of amounts for shell rent, real estate taxes, tenant improvements,
operating costs, and building specific amortized capital costs.  Payments would begin after
occupancy.  Among other obligations, the lease requires the agency to issue a notice to
proceed within fifteen working days following the lessor’s submission of the tenant
improvements price proposal, provided the proposal conforms to contract requirements and
the parties negotiate a fair and reasonable price for the improvements.  For purposes of
resolving its motion, the agency posits that it untimely issued that notice to proceed, which
delayed the occupancy of the premises.  Such a delay could extend the period from lease
signing to occupancy and result in a later than anticipated start to rental payments under the
lease.  The lessor states in its claim that it is entitled to relief under the Disputes clause,
seeking payment (with documentation in support) as a matter of right for the agency’s delay
in issuing the notice to proceed.
Discussion
The lessor contends that it has and will incur increased costs to perform the lease
because of agency delay in issuing the notice to proceed.  In particular, it states that the delay
has resulted in base amounts (for which it is liable throughout the occupancy) for local
property taxes and operating costs higher than would have occurred without the delay, and
has required it to expend more on construction loan interest, return on capital, costs incurred
as a result of inefficiencies and delays, and legal fees. Additionally, the lessor seeks to
recover for operating cost increases, said to arise from increases in the tenant improvement
budget that led to increased insurance costs over the life of the lease above those negotiated
in the lease.
The standards for summary judgment are established and recognized.  JDL Castle
Corp. v. General Services Administration, CBCA 4717, et al., 16-1 BCA ¶ 36,249, at
176,857.  The agency contends that the lessor’s costs of performance have not increased
because of the purported delay such that under the contract’s Changes clause and case law,

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including Coley Properties Corp. v. United States, 593 F.2d 380 (Ct. Cl. 1979), and JDL,
relief is not available.  The agency characterizes the claim as implicitly one for lost rent,
stating that the lessor seeks compensation for obligations that it would have incurred
regardless of the delay.  
In the claim, the lessor seeks payment that is not necessarily prohibited under the lease
or case law.  The lessor does not seek payment of rent.  Under the lease, rent obligations
begin with occupancy and continue for at least ten years.  In substance, the lessor seeks
compensation for costs it has paid or will be obligated to pay that are not part of the rental
payments.  Regarding taxes and operating costs, the lessor maintains that the base rates (for
which it is liable under the lease) have increased because of the delay, such that its cost of
performance increases.  Other costs, relating to construction loan interest, return on capital
costs, costs incurred as a result of inefficiencies and delays, and legal fees, it maintains were
incurred only because of agency delays.  Further, the lessor seeks payment for what it
describes as operating cost increases (higher insurances costs) arising from the larger than
anticipated at award budget for tenant improvements.
The agency focuses upon language in Coley that states that the purpose of the Changes
clause is to compensate for the unanticipated and extra out-of-pocket expenses incurred in
performing the contract, and that the loss of expected income during a period of delay does
not represent an out-of-pocket expense.  593 F.2d at 385-86.  However, the Court recognized
the contractor’s ability to recover impact costs arising from a delay.  Id. at 385 (“The delay
that the changes the government ordered in the postal portion caused Coley in completing
the tower portion, with its concomitant additional expenses to Coley in completing the tower,
is an item of additional impact cost for which the government is liable . . . .”).  In JDL, the
Board concluded that the contractor provided no evidence of additional incurred costs arising
from an agency delay, and sought damages in the form of delayed rental payments.  The
Board recognized that delayed rental payments are not compensable under Coley, and the
lack of evidence precluded further relief.  16-1 BCA at 176,858.  This lessor’s claim is
structured differently.  This lessor has provided sufficient support of costs it has incurred or
will incur because of the alleged delay to move forward with the case.  The lessor has the
opportunity to demonstrate that these are impact costs and not mere loss of rental income.
Decision
The Board DENIES the agency’s motion for summary judgment.
     Joseph A. Vergilio          
JOSEPH A. VERGILIO
Board Judge

CBCA 5997 4
We concur:
    H. Chuck Kullberg              Kyle Chadwick               
H. CHUCK KULLBERG KYLE CHADWICK
Board Judge Board Judge