MOTIONS TO DISMISS FOR LACK OF JURISDICTION
 
AND FOR SUMMARY RELIEF DENIED:  May 2, 2008
 
CBCA 425
 
801 MARKET STREET HOLDINGS, L.P.
 
and

801 MARKET STREET ASSOCIATES, L.P., 
Appellants, 
v. 
GENERAL SERVICES ADMINISTRATION, 
Respondent. 
Louis B. Antonacci and Todd Metz of Watt, Tieder, Hoffar & Fitzgerald, L.L.P., 
McLean, VA, counsel for Appellants. 
Robert Notigan and Dalton F. Phillips, Office of General Counsel, General Services 
Administration, Washington, DC, counsel for Respondent. 
Before DANIELS  (Chairman), PARKER , and HYATT , Board Judges. 
HYATT , Board Judge.  
This appeal arises from a lease entered into between the General Services 
Administration (GSA), respondent, and 801 Market Street Holdings, L.P. and 801 Market 

 
   
 
 
       
 
     
 
       
 
  
 
  
    
               
  
  
 
     
    
  
     
    
2 CBCA 425 
Street Associates, L.P. (referred to herein as 801 Market Street), appellants.  GSA has moved 
to dismiss the appeal for lack of jurisdiction. In the alternative, GSA has moved for summary 
relief, asserting that based upon uncontested material facts the appeal should be denied as a 
matter of law. 
Background 
On October 12, 2001, GSA and 801 Market Street (also referred to as the Lessor or 
owner) entered into a lease for approximately 150,129 square feet of office space on three 
floors of the building located at 801 Market Street in Philadelphia, Pennsylvania.  Appeal 
File, Exhibit 3. Under the lease, as part of the rental consideration, the Lessor was required 
to furnish all services, utilities, maintenance, operations, and other considerations as set forth 
in the lease, as well as all alterations and build-out requirements needed for occupancy by 
GSA’s tenant.  Id. The term of the lease is established in a rider, paragraph 13, to be a firm 
period of ten consecutive calendar years, subject to specified termination rights.  The lease 
term was to commence upon acceptance by the Government of all alterations and 
installations to the space.  Id. 
Under the lease, GSA was responsible for preparing and providing to the Lessor 
design intent drawings. These drawings were to detail “the Tenant Improvements to be made 
by the Lessor within the Government’s demised area.”  Appeal File, Exhibit 3 at 22.  After 
the design intent drawings were completed, the Lessor, at its own expense, was required to 
prepare any and all working drawings for the construction and to obtain any permits needed 
for the project.  Id. at 4.   Appellants were responsible for providing “all alterations/build-out 
requirements and installations in accordance with [the] Solicitation for Offers . . . and the 
design intent documents/drawings.”  Id. at 2. The build-out services were stated to be part 
of the rental consideration under the lease.  Id. 
The lease contained a tenant improvement allowance (TIA) to be used to pay for the 
requisite build-out. Appeal File, Exhibit 3 at 14. The initial TIA, in the amount of 
$4,644,641, was designated “for building out the Government-demised area in accordance 
with the Government approved design intent drawings.”  This allowance included all 
architectural and engineering services required during design and construction of the tenant 
interior alterations. The amount of $4,000,000 was allotted to tenant alterations.  Id. , Exhibit 
8 at 3.  The initial TIA, for the build-out of tenant space, was to be amortized over a period 
of fifteen years. Additional TIA was to be amortized over the ten-year fixed term of the 
lease.  Id. , Exhibit 3 at 8. 
The first supplemental lease  agreement (SLA) executed by the parties also provided 
that “[t]he parties acknowledge that the Owner [801 Market Street] will construct the tenant 

   
  
 
 
 
 
           
 
 
 
 
3 CBCA 425 
improvements and alterations required under this Lease and will be the owner of such items, 
except movable items.”  Appeal File, Exhibit 4 at 2. 
Paragraph 33(a) of the lease permitted GSA, by written order, to make changes within 
the general scope of the lease in any one or more of the following: 
(1)		 Specifications (including drawings and designs); 
(2)		 Work or services; 
(3)	 	 Facilities space layout; or 
(4) 	 Amount of space, provided the Lessor consents to the change. 
Appeal File, Exhibit 3 at 77. 
Paragraph 33(b) of the lease provided that if any such change causes an increase or 
decrease in Lessor’s cost or the time required to perform, whether or not changed by the 
order, the contracting officer shall modify the lease to provide for one or more of the 
following: 
(1)	 	 A modification of the delivery date; 
(2)	 	 An equitable adjustment in the rental rate; 
(3)	 	 A lump sum equitable adjustment; or 
(4)	 	 An equitable adjustment of the annual operating costs per ANSI/BOMA 
[American National Standards Institute/Building Owners and Management 
Association] usable square foot specified in this lease. 
Appeal File, Exhibit 3 at 77. 
The Disputes clause of the lease provided a mechanism for 801 Market Street to file 
claims arising out of the lease.  This clause also stated that the lease is subject to the Contract 
Disputes Act of 1978 (CDA), 41 U.S.C. §§ 601-613 (2000).  Appeal File, Exhibit 3 at 79. 
On November 2, 2001, 801 Market Street entered into a construction management 
agreement with Preferred Construction Advisors LLC (Preferred Construction) for the 
provision of construction management services in connection with construction activities for 
the property, including the tenant improvements.  Supplemental Appeal File, Exhibit 514. 
GSA electronically transmitted the design intent drawings to 801 Market Street on 
February 8, 2002.  These design intent drawings were incorporated into the lease.  Appeal 
File, Exhibit 4.  The lease specified that once GSA completed the design intent drawings, the 

  
 
  
 
 
 
  
 
  
  
  
  
  
  
  
    
     
4 CBCA 425 
Lessor would be solely responsible and liable for the technical accuracy of the construction 
drawings in meeting all requirements of the lease.  Id. , Exhibit 3 at 8. 
Preferred Construction issued a request for proposals (RFP) on July 9, 2002, seeking 
offers for the construction of the build-out space.  The RFP advised that it was issued by 
Preferred Construction Advisors, LLC and the United States Federal Government, General 
Services Administration.  The pertinent terms and conditions provided that the contractor 
would be required to provide notice to Preferred Construction with respect to acts or 
directions the contractor deemed to constitute changed work and would proceed to continue 
to perform the work should a claim or dispute arise.  Appeal File, Exhibit 16 at 27.  The 
proposed terms also included a requirement to mediate in the first instance and, in the event 
the parties could not resolve disputes by mediation, to submit to resolution of the dispute 
through either arbitration or litigation at the owner’s option.  Id. 
On August 6, 2002, Preferred Construction entered into a contract with Nason and 
Cullen, Inc. to provide general construction services related to the build-out of the GSA 
space.  The contract included the provision for mediation and arbitration of disputes at the 
owner’s [Preferred Construction’s] option.  Supplemental Appeal File, Exhibit 512.  GSA 
points out that this contract contained several provisions that differ from customary 
government contract terms, citing to provisions stating that drawings and specifications are 
to be equal in authority, lack of a requirement for Miller Act bonds, and failure to incorporate 
Federal Acquisition Regulation (FAR) clauses that are generally present in government 
contracts.  Id. 
The complaint alleges that during performance of the build-out, GSA directed changes 
to 801 Market Street’s scope of work.  These changes were performed by Nason and Cullen 
and increased the scope of work and time for performance for both Nason and Cullen and 
801 Market Street.  Complaint ¶¶ 14-15. Nason and Cullen submitted numerous proposed 
change orders to Preferred Construction seeking adjustments to the time for performance or 
the price of its contract.  Appeal File, Supplemental Appeal File, Exhibits 55-513.  The 
contracting officer did not issue change orders with respect to any of these proposals. 
Declaration of Carrie S. Vineberg, Contracting Officer (Sept. 18, 2007) ¶¶ 12-13. 
At the conclusion of construction, 801 Market Street, Preferred Construction, and 
Nason and Cullen entered into a liquidating agreement, dated February 3, 2004, to dispose 
of Nason and Cullen’s claims and proposed change orders.  The liquidating agreement settled 
claims that were not based on alleged actions taken by GSA.  These claims were listed in 
Exhibit B of the liquidating agreement. With respect to claims that 801 Market Street and 
Preferred Construction deemed to be the responsibility of GSA, which were enumerated in 
Exhibit A to the liquidating agreement, it was agreed that appellants would submit a claim 

   
   
      
  
   
   
  
 
  
 
   
 
 
      
 
5 CBCA 425 
to GSA and proceed under the disputes Clause in 801 Market Street’s lease.   Supplemental 
Appeal File, Exhibit 515. 
By letter dated December 4, 2004, 801 Market Street submitted a certified claim in 
the amount of $1,162,538 to the GSA contracting officer. Appellants’ claim asserted that 
various changes to the lease were caused by GSA’s actions and directions.  Appeal File, 
Exhibits 51, 53.  
SLA no. 5 was issued on December 21, 2004.  This document provides that the 
amount of $4,644,641, based on the tenant improvement allowance, was amortized into the 
rental rate.  In addition to other matters addressed in this SLA, the following statement is 
made: 
Lessor and Government agree that the costs outlined on the 
attached spreadsheet represent the tenant improvement costs that 
have been agreed upon by the parties as of the date of execution 
of this SLA. . . . Lessor and Government further agree that the 
Lessor’s General Contractor, Nason and Cullen, Inc. submitted 
$1,162,538 in outstanding Proposed Change Orders (“PCOs”) 
which are in dispute between Lessor and Government.  Lessor 
has advised Government that Lessor (or Lessor on behalf of its 
contractor, Nason and Cullen, Inc., or Nason and Cullen, Inc. in 
the name of Lessor) intends to exercise its rights under 
Paragraph 36 “52-2333-1 DISPUTES (December 1998)” of the 
general clauses of the Lease against the Government related to 
the outstanding PCOs. 
Appeal File, Exhibit 8 at 1. 
On August 15, 2005, the contracting officer issued a final decision denying the claim 
in its entirety.  801 Market Street filed a timely notice of appeal at the General Services 
Administration Board of Contract Appeals.
1   After joinder of issue, the parties pursued 
On January 6, 2007, pursuant to section 847 of the National Defense 
Authorization Act for Fiscal Year 2006, Pub. L. No. 109-163, the General Services Board 
of Contract Appeals was terminated and its cases, personnel, and other resources were 
transferred to a newly-established Civilian Board of Contract Appeals (CBCA).  The case 
remains as it was; the docket number has been changed to reflect the transfer to the new 
Board. 
1 

 
 
      
    
 
        
 
 
 
       
    
  
 
         
      
   
6 CBCA 425 
discovery until respondent filed its two motions, one contending that the Board lacks 
jurisdiction to entertain this appeal and the second asserting, in the alternative, that the appeal 
must be denied as a matter of law. 
Discussion 
At the outset, we note that while respondent has submitted two separate motions, its 
primary factual and legal contentions with respect to both jurisdiction and summary relief are 
largely the same.   GSA maintains that the claim presented in this appeal did not arise directly 
under the lease, but rather out of the separate “non-Government” contract entered into 
between Preferred Construction and Nason and Cullen. GSA regards this action as one based 
on the “Contract” entered into between these two entities and thus characterizes this appeal 
as a purely private dispute between those two contractors, who are not in privity with the 
Government and should not be permitted to pursue relief in this forum.  As such, GSA argues 
that the Board has no jurisdiction over this matter and should dismiss or deny the appeal. 
Although the arguments presented in the two motions are very similar, we discuss and rule 
on the motions separately.  
Jurisdiction 
GSA contends that Preferred Construction and Nason and Cullen, the contractors that 
have generated these claims, have no standing to pursue the claims in issue against the 
Government since neither 801 Market Street, the Lessor, nor GSA was a party to the contract 
between Preferred Construction and Nason and Cullen.  These contractors are not in privity 
of contract with the Government so as to be eligible to assert claims against GSA.  Moreover, 
GSA argues, Preferred Construction’s contract with Nason and Cullen is not a Government 
subcontract, and does not contain the customary features of such contracts, such as provisions 
that disputes will be decided under the CDA and requirements for Miller Act bonds.  Thus, 
the Government asserts, Nason and Cullen cannot be regarded as a government 
subcontractor.  
GSA notes that 801 Market Street, in its complaint, alleged that it, as Lessor, had 
contracted with Nason and Cullen for the performance of the construction work necessary 
to complete the tenant space. Complaint ¶ 13. GSA points out that this allegation is 
erroneous -- the Nason and Cullen contract is with Preferred Construction, not with 
appellants.  GSA asserts that this inaccuracy supports its position that the claim that has been 
presented is in reality a claim arising between two non-parties to the lease, which is the only 

 
 
 
   
 
 
  
   
 
  
 
   
 
 
    
   
 
   
       
 
    
     
 
7 CBCA 425 
agreement covered by the CDA.  GSA urges that while the Board has jurisdiction to hear 
disputes arising under the lease, it does not have jurisdiction to adjudicate a private dispute 
between two contractors with which the Government has no privity and which arose under 
a non-Government contract or subcontract.   
801 Market Street has a ready response to GSA’s contentions.  Appellants concede 
that the allegation in the complaint that they contracted with Nason and Cullen was in error, 
but argues that this is irrelevant.  Appellants meant to aver that they had contracted with 
Preferred Construction, not with Nason and Cullen.  Appellants point out that GSA has 
focused on two entities that are admittedly not parties to the lease, while effectively ignoring 
the fact that the appeal itself has been brought by the Lessor, which is a party to a 
government contract providing for the resolution of disputes under the CDA. 801 Market 
Street properly certified and submitted the claim in issue here to the contracting officer for 
resolution.  After the contracting officer denied the claim, 801 Market Street timely filed an 
appeal of the contracting officer’s decision. 
Subject matter jurisdiction is a threshold matter which must be addressed before the 
Board proceeds to consider the merits of appellants’ claim.  The determination turns on the 
basis of jurisdictional facts or evidence provided by the parties. Although the appellants bear 
the burden to establish that jurisdiction exists, “in passing on a motion to dismiss  . . . on the 
ground of lack of jurisdiction over the subject matter the allegations of the complaint should 
be construed favorably to the pleader.”  Scheuer v. Rhodes , 416 U.S. 232, 236 (1974); accord 
Hamlet v. United States , 873 F.2d 1414, 1416 (Fed. Cir. 1989);  Reynolds v. Army & Air 
Force Exchange Service , 846 F.2d 746, 747 (Fed. Cir. 1988);  Kentucky Bridge & Dam, Inc. 
v. United States , 42 Fed. Cl. 501, 515 (1998); CACI, INC.- FEDERAL v. General Services 
Administration, GSBCA 15588, 02-1 BCA ¶ 31,712, at 156,635 (2001). 
GSA recognizes that a prime contractor that is liable to a subcontractor for damages 
sustained by the subcontractor due to Government actions may bring a pass-through suit on 
behalf of its subcontractor.  What GSA appears to question is whether 801 Market Street, as 
the Lessor, can bring a pass-through suit that arises from a contract between its construction 
manager and the construction company, neither of whom are, as GSA puts it, “Government 
subcontractors.”  GSA considers that these contracts are too far removed to qualify for 
sponsorship by a prime contractor since the Lessor was not a party to the lower-tier contract. 
To support this notion, GSA cites us to AG Route Seven Partnership v. United States , 
57 Fed. Cl. 521 (2003), aff’d , 10 Fed. App’x 184 (Fed. Cir. 2004) (table), cert. denied ,  544 

 
  
 
   
 
    
    
  
 
 
  
 
     
  
     
   
 
 
    
    
 
8 CBCA 425 
U.S. 948 (2005).  AG Route Seven Partnership  is a Winstar 2-related case brought by 
shareholders of a successor thrift savings institution.  Private shareholders, along with other 
parties, filed suit seeking damages arising from the Government’s actions with respect to the 
original ailing thrift institution.  The court dismissed the suit brought by the private plaintiff 
shareholders on the ground that no implied-in-fact contract existed between the Government 
and investors who became shareholders of the new thrift, created to effect supervisory 
acquisition of the ailing thrift, where the new thrift, and not the investors, acquired the assets 
of the ailing thrift, and thereafter entered into separate and exclusive transactions with the 
Government.  This case is simply not apposite, however.  It is not a suit under the CDA, but 
rather involves a series of complicated transactions arising from government efforts to shore-
up a failing thrift institution.  This case  simply does not contain any analysis that is pertinent 
to the well-defined rights of parties under the CDA. 
Most significantly, Preferred Construction and Nason and Cullen, unlike the 
shareholders in AG Route Seven Partnership , have not attempted to bring direct suits against 
the Government; rather, they have adhered to the well-established  procedure of presenting 
their claims under the sponsorship of 801 Market Street, which is in privity with both the 
Government and Preferred Construction.  
801 Market Street is the Lessor under a lease between it and the Government and thus 
is a “contractor” as that term is defined in the CDA.  41 U.S.C. § 601(4).  The CDA makes 
no distinction regarding the rights of a lessor as opposed to any other contractor. Disputes 
arising from such leases are subject to resolution by the procedures specified in the Act.  To 
the extent that a lease between the Government and another party is considered a contract 
within the purview of the CDA, the traditional rights accorded to all contractors generally 
apply to such lessors.  E.g. , Forman v. United States , 767 F.2d 875, 879 (Fed. Cir. 1985); 
Modeer v. United States , 68 Fed. Cl. 131, 136 (2005). 
Appellants consider GSA’s contention that the construction manager and construction 
company are not “subcontractors” to be irrelevant, citing the 48 CFR 44.201-1 (2001), which 
defines a subcontractor as “any supplier, distributor, vendor, or firm that furnishes supplies 
or services to or for a prime contractor or another subcontractor.”  Preferred Construction and 
its construction contractor, Nason and Cullen, furnished supplies and services necessary to 
complete the tenant improvements in the premises that were to be occupied by GSA under 
its lease with 801 Market Street.  
2 See United States v. Winstar Corp. , 518 U.S. 839 (1996). 

  
 
     
 
    
  
 
  
 
 
 
  
  
       
   
 
       
  
 
 
      
  
  
         
9 CBCA 425 
Although Preferred Construction and Nason and Cullen were not in privity of contract 
with GSA, all of the entities involved in this process would not have been performing this 
build-out if not for the lease under which 801 Market Street was obligated to provide office 
space in accordance with GSA’s design intent drawings.  Thus, although the entities that 
incurred the costs in the first instance are not in privity with the Government, this does not 
automatically bar a suit by the prime contractor, in this case 801 Market Street, to recover 
costs for changed work incurred by a lower-tier contractor that are alleged to be due to 
government actions.  The contractual relationships formed between 801 Market Street and 
Preferred Construction and between Preferred Construction and Nason and Cullen come 
within the purview of the “time-honored practice” of allowing “prime contractors” to sponsor 
appeals of their immediate and lower-tier subcontractors.  See Lombardo’s Lakeview Resort , 
ENG BCA 5873-Q, 95-1 BCA ¶ 27,522, at 137,184. 
Appellants presented a certified claim to the contracting officer and timely appealed 
the decision.  This suffices to meet the initial burden to establish the Board’s jurisdiction. 
After weighing the jurisdictional facts, the Board concludes that 801 Market Street is a 
proper sponsor for this pass-through claim.  The Board has jurisdiction to entertain this 
appeal. 
Summary Relief 
In the alternative, respondent contends that the appeal should be denied as a matter 
of law.  Respondent maintains that many of the same facts, which are largely undisputed, 
demonstrate that the Government should prevail as a matter of law.  Respondent effectively 
argues that the same facts that support its contention that the Board lacks jurisdiction to hear 
this claim similarly demonstrate that, even if the Board has jurisdiction, it must nonetheless 
deny the appeal at this juncture. 
 Summary relief is properly granted when there is no genuine issue of material fact 
and the moving party is clearly entitled to judgment as a matter of law.  Anderson v. Liberty 
Lobby, Inc. , 477 U.S. 242, 247 (1986); Celotex Corp. v. Catrett , 477 U.S. 317, 322 (1986); 
US Ecology, Inc. v. United States , 245 F.3d 1352, 1355 (Fed. Cir. 2001); Olympus Corp. v. 
United States , 98 F.3d 1314, 1316 (Fed. Cir. 1996).  In resolving summary relief motions, 
a fact is considered to be material if it will affect our decision and an issue is genuine if 
enough evidence exists such that the fact could reasonably be decided in favor of the 
non-movant at a hearing.  John A. Glasure v. General Services Administration, GSBCA 
16046, 03-2 BCA ¶ 32,284, at 159,746 (citing Celotex Corp. ; Matsushita Electric Industrial 
Co. v. Zenith Radio Corp. , 475 U.S. 574 (1986)).  The moving party bears the burden of 
establishing the absence of any genuine issue of material fact.  Mingus Constructors, Inc. v. 
United States , 812 F.2d 1387, 1390 (Fed. Cir. 1987). Finally, all reasonable inferences are 

 
 
  
  
  
  
 
   
 
 
 
    
 
 
  
 
 
  
 
  
 
 
  
 
 
 
10 CBCA 425 
drawn in favor of the non-moving party.  Anderson, 477 U.S. at 255; Acquest Government 
Holdings, OPP, LLC v. General Services Administration, CBCA 413, 08-1 BCA ¶ 33,720, 
at 166,968 (2007) . 
The crux of respondent’s claim in this motion, as it was in the motion to dismiss for 
lack of jurisdiction, is that Nason and Cullen had no direct contractual relationship with 801 
Market Street and is not a “government subcontractor.”  As we  pointed out above, there is 
a well-established body of law under which contractors may sponsor, or pass through, the 
claims of their subcontractors and lower-tier subcontractors.  The practice dates back to 
Severin v. United States , 99 Ct. Cl. 435 (1943), and is referred to as the Severin  doctrine.
3 
In Severin , the Court, recognizing the principles of privity of contract and sovereign 
immunity, held that a subcontractor’s claim may only be recognized in the disputes process 
if the prime contractor is obligated to pay the subcontractor.  In discussing the doctrine, our 
Board has recently observed: 
The post- Severin  direction has been for the doctrine to be construed 
narrowly.  See United States v. Johnson Controls, Inc. , 713 F.2d 1541, 1552 
n.8 (Fed. Cir. 1983).  In its present state, the doctrine applies only where there 
is an iron-clad release or contract provision immunizing the prime contractor 
completely from any liability to the subcontractor.  J.L. Simmons Co. v. United 
States , 304 F.2d 886 (Ct. Cl. 1962); Cross Construction Co. v. United States , 
225 Ct. Cl. 616 (1980); George Hyman Construction Co. v. United States , 30 
Fed. Cl. 170 (1993), aff'’d , 39 F.3d 1197 (Fed. Cir. 1994) (table).  Also, the 
burden is on the Government to establish the existence of an iron-clad release, 
sufficient to trigger application of the Severin  doctrine. Metric Constructors, 
Inc. v. United States , 314 F.3d 578 (Fed. Cir. 2002). 
Acquest Government Holdings,  08-1 BCA at 166,969.  It is well-settled that the Severin 
doctrine does not bar claims of lower-tier contractors whose work has been impacted by 
government directions.  See Time Contractors, J.V. , DOT BCA 1669, 87-1 BCA ¶ 19,582,. 
at 99,028; see also Owens-Corning Fiberglass Corp. v. United States , 419 F.2d 439 (Ct. Cl. 
1969) (prime contractor permitted to pursue pass-through claims of second-tier 
subcontractor).  The rationale for permitting the prime contractor to pass through claims of 
We note for the record that although the Federal Circuit alluded to the Severin 
doctrine in jurisdictional terms in United States v. Johnson Controls, Inc. , 713 F.2d 1541, 
1552 n.8 (Fed. Cir. 1983), several boards have held that the doctrine is most properly asserted 
as an affirmative defense.  See Caddell Construction Co. , ASBCA 46231, et al., 95-2 BCA 
¶ 27,772; Lombardo’s Lakeview Resort, Inc. 
3 

    
     
    
    
     
       
 
   
   
  
  
 
 
       
11 CBCA 425 
second and even lower-tier contractors is that these claims “are those of the higher-tiered 
subcontractor, which in turn are those of the prime.”  Time Contractors , 87-1 BCA at 
99,028. 4 
To prevail in this motion, GSA must demonstrate that an “iron-clad release or contract 
provision” conclusively exonerates 801 Market Street for liability to the subcontractors for 
the Government actions at issue here. Appellants maintain that the Government cannot meet 
this burden in light of the liquidating agreement appellants entered into with Preferred 
Construction and Nason and Cullen, under which appellants agreed to sponsor Nason and 
Cullen’s claims based on GSA-directed changes to the contract.  To the extent the claim is 
successful, Nason and Cullen will receive payment for the extra expenses it incurred in 
performing the enumerated changes to the work as well as delays experienced in the 
construction work in the tenant space. This type of agreement preserves a prime contractor’s 
eligibility to sponsor claims of its lower-tier subcontractors.  A liquidation agreement under 
which the prime contractor remains conditionally liable to the subcontractor only as and 
when the prime contractor receives payment from the Government suffices to permit the 
prime contractor to proceed against the Government.   See W.G. Yates & Sons Construction 
Co. v. Caldera , 192 F.3d 987, 991 (Fed. Cir. 1999); Kentucky Bridge & Dam, Inc. , 42 Fed. 
Cl. at 527; Acquest Government Holdings,  08-1 BCA at 166,969. In addition, GSA has not 
identified any contract provision in either Preferred Construction’s contract with 801 Market 
Street or in Nason and Cullen’s contract with Preferred Construction that would operate 
conclusively to relieve Lessor of liability. 
Although GSA has labored industriously to distance itself from any contractual 
responsibility for changed work that may have occurred during the build-out of its space, it 
has not succeeded in this effort.  The lease’s Changes clause contains language that permits 
GSA to direct changes in the construction of the premises as well as with respect to other 
matters that might arise under the lease after occupancy.  Nothing in the lease prevents the 
agency from making changes to the build-out process, which is what appellants allege 
occurred.  Given that the applicable law does not support GSA’s contention that the claim 
is barred as a matter of law, we must deny respondent’s motion for summary relief. 
4 See generally TAS Group v. Department of Justice , DOT BCA 4535, 06-2 
BCA ¶ 33,441, for a thorough discussion of the genesis and evolution of the Severin  doctrine 
as it is currently applied . 

 
12 CBCA 425 
Decision 
The motions to dismiss for lack of jurisdiction and for summary relief are DENIED .