Court Opinion

ID: 8595961
Source: CourtListenerOpinion
Date Created: 2022-11-23 16:03:09.977228+00
Date Added: 2024-06-11T16:54:56.268882
License: Public Domain

Durfee, Senior Judge,
dissenting in part:
I respectfully dissent from that part of the trial judge’s opinion, adopted as the opinion of the court, which holds that plaintiff was contractually bound to furnish a cafeteria for the Nassif Building. Such a holding, under the facts of this case, is violative of the parol evidence rule.
The parol evidence rule requires "the exclusion of extrinsic evidence, oral or written, where the parties have reduced their agreement to an integrated writing.” 4 williston, contracts § 631 (3d ed. 1961). In determining the applicability of the parol evidence rule, the crucial step is to ascertain whether the parties assented to the writing in question as a complete integration of their agreement. 3 corbin, contracts § 582 (1960). Thus, the issue in this case centers on whether the lease agreement, executed on April 11, 1968, constituted a complete integration of the parties’ agreement.
RESTATEMENT (SECOND) OF CONTRACTS § 235(3) (Tent. Drafts Nos. 1-7, 1973) provides:
Where the parties reduce an agreement to a writing which in view of its completeness and specificity reasonably appears to be a complete agreement, it is taken to be an integrated agreement unless it is established by other evidence that the writing did not constitute a final expression.
Admittedly, in determining whether or not the writing in issue constitutes a complete integration, a court should not restrict itself to a mere interpretation of the words of that writing. The writing itself is not conclusive in this respect, but it is an influential factor to be considered. Extrinsic evidence that may subsequently be barred for purposes of varying or contradicting a writing by the parol evidence rule, may be admissible for purposes of determining whether or not that writing was intended as a complete integration by the parties. 3 corbin, contracts §§ 581-82 *433(I960). However, utilizing the extrinsic evidence at issue for the limited purpose of determining the degree of integration, I can only conclude that the April 11th lease agreement constituted a complete integration of the parties’ agreement.
The lease agreement of April 11, in addition to setting forth the amount of space leased at a specified price and incorporating a Services, Utilities and Maintenance Schedule, includes the following language:
General Specifications, dated March 5, 1968, the Lessor’s offer dated March 8, 1968, and the Government’s acceptance letter dated April 11, 1968 are incorporated into and made a part hereof by reference.
Such language creates a strong presumption that the parties intended the April 11th writing to be a complete integration of their agreement, a presumption unrebutted by the facts of their prior negotiations.
The trial judge reached his determination that "the lease agreement [did] carry with it a contractual obligation, on plaintiffs part, to furnish a cafeteria” principally on the basis of the prior March 7th letter from plaintiff to defendant, which was written in an attempt to have defendant reconsider plaintiffs original offer. In this letter, plaintiff listed ten "Construction Features” and eleven "Amenity Features” of its building. In addition to the "Amenity Feature” providing for "[c]omplete food service including restaurant, cafeteria, and drug store * * *” emphasized by the trial judge, these extra features included such generalities as: "[s]hopping plaza for employee convenience and benefit”, "[exceptionally high quality landscaping * * "[qjuality carpeting throughout * * "[a]ll electric operation provides no air pollution * * etc. These extra features constitute general plans plaintiff had for the building, and cannot be construed as specific components of an offer to which plaintiff intended to be bound.
Subsequent negotiations between the parties further emphasize that plaintiff should not be contractually bound to furnish a cafeteria. Neither the negotiations following plaintiffs March 7th letter, plaintiffs March 8th offer, defendant’s March 13th confirmation of the agreement *434reached in principle, plaintiffs April 11th letter agreeing to certain additional requirements, defendant’s April 11th acceptance, nor the lease agreement itself dealt with a cafeteria requirement. Nor can it be said that the cafeteria issue was of such significance so as to be taken for granted in the negotiations.
By the same token, the negotiations subsequent to the March 7th letter did deal with specific matters of relatively minor import. The March 8th offer by plaintiff obligated plaintiff to perform certain carpeting and partitioning tasks. Following the agreement reached in principle as expressed in defendant’s March 13th letter, further negotiations were conducted between the parties on such additional requirements as access and restroom provisions for the physically handicapped, and installation of a sprinkler system. This was evidenced by plaintiffs April 11th letter to defendant confirming its willingness to conform with these additional requirements. Defendant’s April 11th letter of acceptance specified that a set minimum number of parking spaces for Government employees be set aside. These provisions, dealing with specific matters, were incorporated by reference into the lease agreement.
The negotiations and writings between the parties did not constitute a series of separate agreements, but were viewed as preliminaries to the execution of the April 11th lease agreement, which encompassed all agreements between the parties. In light of the factors incorporated by reference into the lease agreement, that writing cannot be construed as only dealing with one aspect of the parties’ agreement (e.g., the actual rental of floor space).
Thus, the parties incorporated into the lease agreement the relevant aspects of the negotiation process, but not a cafeteria requirement. The items incorporated into the lease agreement in turn dealt with specifics (e.g., the parking spaces specified in defendant’s April 11th acceptance letter; the reference in that letter to the acceptance of other additional requirements by plaintiff in its April 11th letter to defendant; and the carpeting and partitioning requirements set out in plaintiffs March 8th offer).
*435The lease agreement of April 11, in itself, constitutes a complete integration of the agreement of the parties. The fact that certain extra features discussed in plaintiffs March 7th letter were not incorporated into the finalized agreement reached on April 11 does not render that agreement a mere partial integration. Where both the written agreement and extrinsic evidence establish that the writing constitutes á complete integration of the parties’ agreement, the parol evidence rule bars the utilization of such extrinsic evidence to vary or contradict the terms of the written agreement. Consequently, since no cafeteria requirement is found in the April 11th lease agreement, including the documents it incorporates by reference, plaintiff is not contractually obligated to provide a cafeteria.
Assuming arguendo that the trial judge’s interpretation of the parol evidence rule, as applied to the facts of this case, is correct, it must still be established that there was an actual agreement between the parties that plaintiff was to provide a cafeteria before plaintiff can be said to be contractually bound to such a provision. There is no doubt that, at the time of the negotiations, plaintiff anticipated that a cafeteria would be furnished for the building. However, in this same regard, plaintiff never assented to contractually binding itself to provide such a cafeteria.
For the dealings between the parties (in particular, the March 7th letter) to be regarded as imposing a contractual obligation on plaintiff, it must be established, as a minimum, that the parties intended plaintiff to be contractually bound to furnish a cafeteria. The trial judge’s ultimate decision cannot be reconciled with his Finding of Fact No. 21 (adopted by the court majority) that:
[A]t the time it leased space to the Government, plaintiff did then intend to provide a cafeteria in the building. By the same token, plaintiff did not consider that it was contractually obligating itself to provide a cafeteria since it did not regard its March 7th letter to be part of the lease agreement. [Emphasis added].
If, as was found, plaintiff did not consider that it was contractually binding itself to provide a cafeteria, it is self-contradictory to assume that the parties reached an *436"agreement” on the cafeteria issue in the form of a binding contract. At least in the absence of a specific writing to the contrary, any manifestation of mutual assent is lacking.
For the foregoing reasons, I would hold that plaintiff was not contractually bound to furnish a cafeteria for the Nassif Building.
FINDINGS OF FACT
1. Plaintiff is a partnership with its principal place of business located at 100 Boylston Street, Boston, Massachusetts, and with an office in the District of Columbia located at 407 6th Street, S.W., Washington, D.C.
2. Plaintiff is in the business of property development and ownership and is sole owner of the Nassif (Department of Transportation) Building, 400 7th Street, S.W., Washington, D.C. (hereinafter "Nassif Building” or "building”), which houses the secretariat and other principal offices of the Department of Transportation (hereinafter DOT).
3. On April 11, 1968, following negotiations between them, plaintiff and the General Services Administration (hereinafter GSA) executed a lease of the building, with the Government as lessee, for a term of 20 years. The lease was executed on Standard Form 2, 1965 Edition, U. S. Government Lease For Real Property; it was designated Lease No. GS-03-B-5564. At the time of lease execution, construction of the building had not been completed.
4. Prior to March 7, 1968, plaintiff had communicated with GSA on a number of occasions concerning the possible leasing of the Nassif Building to the Federal Government upon, or near to the end of, the building’s completion. On one of these occasions, Mr. Donald T. Kirwan, a partner in Nassif Associates, showed Mr. Richard Gaskins, the GSA Region 3 contracting officer, a brochure of the building. Among the building features illustrated in the brochure was a cafeteria.
5. On March 5, 1968, GSA issued a solicitation for the rental of office space. Schedule D of this solicitation (otherwise entitled "Miscellaneous Provisions”) set forth in paragraph 12 a series of "Award Factors” that were to be considered by the contracting officer "in addition to the rental proposed and conformity of the space offered to the specific requirements.” Among these award factors was the following:
c. Eating facilities must be available, either in the building in which the space offered is located, or within reasonable walking distance there from as determined by *437the Government (normally the Government lunch period does not exceed 30 minutes).
6. On March 7, 1968, plaintiff, through Mr. Kirwan and its president, Mr. David Nassif, Sr., met with Mr. Gaskins at the GSA regional office. At this time, plaintiff offered to lease the Nassif Building to the Government at $4.96 per square foot for office space and $2.75 per square foot for storage space, both spaces to be fully serviced (meaning, the lessor provides janitorial services, building maintenance, and utilities). Mr. Gaskins maintained that GSA would not pay more than $4.65 per square foot for office space; hence, the offer was rejected.
7. Immediately following the March 7th meeting with Mr. Gaskins, a letter from Mr. David Nassif, Sr., was hand-delivered to Mr. Lawson B. Knott, Administrator, General Services Administration. This letter, after first pointing out that plaintiffs per square foot price was well in line with current market prices, then went on to delineate with specificity the "extra features, not found in other buildings, [which] are provided in our space at no increased cost to the Government.” The letter recited the building’s particular "Construction Features” as well as its "Amenity Features” and, among these last it listed: "Complete food service including restaurant, cafeteria, and drug store, and if desired, a staff dining room will be operated by the commercial tenant.” The letter concluded by saying: "In light of these extra features and the recent prices paid by GSA, we respectfully ask that you review our offer with a view towards acceptance which I believe will assure the greatest possible savings to GSA in its lease acquisition program.”
8. At the time of its submission, the letter of March 7, 1968, from David Nassif, Sr. to Lawson B. Knott was intended to outline what plaintiff then considered would be the definitive features of the building, meaning, in other words, features that plaintiff then intended to include in the completed building.
9. Mr. Knott read the letter of March 7, 1968, but made no commitment to plaintiff with respect to it. Instead, he set up a meeting between plaintiffs representatives and Mr. Loy M. Shipp, Jr., then Deputy Assistant Commissioner for Space Management, Public Building Service, GSA.
10. According to Mr. Shipp’s testimony, the meeting with plaintiffs representatives which Mr. Knott had arranged took place that same afternoon, that negotiations also took place that same afternoon and that the matter was then turned over to Mr. Gaskins, the contracting *438officer, for finalization the next day. According to plaintiffs witness, the meeting with Mr. Shipp did not take place until the following morning, March 8,1968, and that, at this time, Mr. Gaskins was also present. These differences in recollection are unimportant. What matters is that Mr. Shipp was prompted to open negotiations on a firm basis with plaintiffs representatives because of the desirability of the rental space that had been outlined in plaintiffs letter of March 7, 1968, to Mr. Knott.
11. In their negotiations (which, as noted, commenced either on March 7 or March 8, 1968), the parties discussed price, escalation clauses, frequency of escalation, the duration of the lease, space partition requirements and building access on a 24-hour basis. The parties did not discuss a cafeteria requirement. However, both Mr. Shipp, the administrator responsible for beginning serious negotiations with plaintiff, and Mr. Gaskins, the contracting officer who carried those negotiations to a final conclusion on March 8, 1968, each held the understanding that the office space for which they had been negotiating would be serviced by a cafeteria to be located in the same building.
12. On March 8, 1968, as a result of the discussions with the GSA officials, plaintiff submitted a written offer to lease. The proposal offered office space to the United States at $4.67 per square foot and storage space at $2.30 per square foot — a composite square foot rate of $4.559, excluding metered utilities (electricity and water). The offer stated that it was submitted in accordance with the solicitation of March 5, 1968, "excepting its provisions for performance bond and the specific items hereinafter mentioned.” The "specific items” that were mentioned concerned carpeting requirements (together with appropriate maintenance schedules), partitioning requirements and Government access to the building on a 24-hour, no additional cost, basis. These several exceptions to the solicitation’s specifications restate those subjects to which the parties had given particular consideration during their negotiations.
13. Except for those specific exceptions that it called out, plaintiffs offer of March 8th did not modify any other provisions of the solicitation. Neither did that offer modify or withdraw any of the building features that had been outlined in plaintiffs letter of March 7th.
Although plaintiff contends that the cafeteria provision of the March 7, 1968, letter was contingent upon acceptance of the price terms contained in that letter, the amenity features that had been referred to in that letter, including the cafeteria, were neither modified nor *439withdrawn by plaintiff at the March 8th meeting or in the lease as finally signed. Moreover, there was nothing in the March 7, 1968, letter explicitly stating that the terms it offered were each contingent upon acceptance of all of the terms. However, the letter itself was not discussed in the March 7 — March 8 negotiations, and it was never specifically incorporated into the written terms of the later executed lease.
14. The March 7, 1968 letter, which quoted office space at a rental of $4.96 per square foot, was based upon standard operation during a normal work day. This figure included the utility costs for such operation. In a utility cost computation estimate for plaintiff, PEPCO, the local electric utility, had estimated these costs to be $.198 per square foot for electricity (standard work day operation) and $.0094 for water. Consequently, based upon these estimates, plaintiff would have realized a rental income of $4.75 per square foot after payment of utility costs. By contrast, the figure of $4.67 for office space — the revised amount set forth in plaintiffs March 8th offer — did not include the costs of utilities. (Both parties contemplated that the Government would spend about $.33 per square foot for utilities on the basis of 24-hour per day operation.) Therefore, the figure finally negotiated (i.e., the figure quoted in plaintiffs March 8th offer) reflected a price concession on plaintiffs part of approximately $.08 per square foot on office space.
15. On March 13, 1968, the Government wrote David Nassif Associates to confirm "the agreement reached, in principle, during our negotiations on March 8,1968 * * *.” The letter went on to recite the various details that had been discussed as well as those that remained to be negotiated and concluded by saying that a formal lease would be executed when all details had been worked out. This letter did not mention a cafeteria requirement. Neither, however, did it specifically address any of the other amenity features which plaintiff had initially called out in its letter of March 7, 1968, to GSA’s Administrator.
16. On April 11, 1968, plaintiff wrote to Mr. Richard Gaskins to confirm its willingness to conform with certain additional requirements (i.e., amendments to the solicitation) that the parties had discussed. These additional requirements dealt with such matters as access provisions from streets or sidewalks for the physically handicapped, a sprinkler system for the lower level storage spaces and the penthouse, and, increases in the number of specified toilets and drinking fountains.
*44017. By letter of April 11, 1968, plaintiff was informed that "[t]he Government hereby accepts your offer, dated March 8, 1968, as amended April 11, 1968 * * * and will lease the entire second through tenth floors and 50,000 square feet of storage space on lower levels one and two and the penthouse, being a total of 1,065,000 net usable square feet of space in the Nassif Building * *
18. The lease was executed the same day, April 11,1968. Among other things, the lease recited that "General Specifications, dated March 5, 1968, the Lessor’s offer dated March 8, 1968, and the Government’s acceptance letter dated April 11, 1968 are incorporated into and made a part hereof by reference.”
19. The Nassif Building contains two million square feet of which the Government sought to lease, and leased, only one million. The building’s basement or lower level had available 24,000 square feet utilizable for a cafeteria, for storage, or, for any other use suitable to an underground location.
20. Plaintiffs building plans, incorporated by reference in its lease proposal to GSA (plaintiff’s letter of March 8, 1968) showed many blank areas, one of which had been labeled "Cafeteria.” This area was not part of the area that plaintiff had proposed to lease to the United States. Plaintiffs purpose in labeling this area in the manner indicated was to show a location in the building where plaintiffs architect felt such a facility could be located. Similarly, the plans also contained several areas that had been designated as "Storage” areas. Again, these included areas outside of the leased space that had been designated in this manner simply to indicate a possible use for the particular space location. It is not clear in the record whether plaintiffs building plans, particularly plans bearing the designated "Cafeteria” space, were made available to or seen by GSA prior to the execution of the lease. However, after the lease had been executed, schematic drawings were furnished by plaintiff to GSA. Two of these drawings — each dated December 15, 1967 — referred to a cafeteria. Drawing No. A-2-5 contained a reference note which said: "FOR CAFETERIA DETAILS SEE DWG NO A-4-5”; drawing No. A-4-5 was specifically entitled "CAFETERIA PLAN AND DETAILS.”
21. The space devoted on the plans to a cafeteria could have been rented by plaintiff as storage space and, at the time of lease execution, such an end use would have permitted plaintiff to earn $2.30 per square foot. However, plaintiff anticipated that it would earn a higher per square foot return through a cafeteria operation, and, therefore, at the time it leased space to the Government, plaintiff did *441then intend to provide a cafeteria in the building. By the same token, plaintiff did not consider that it was contractually obligating itself to provide a cafeteria since it did not regard its March 7th letter to be part of the lease agreement.
22. At the time of lease execution, plaintiff did not have any particular size cafeteria in mind, and, at no time prior to lease execution, had it attempted to place in the building a cafeteria of any particular seating capacity.
23. At the time GSA negotiated the lease in question, it did not, as a matter of policy, contract with a concessionaire to operate a cafeteria in leased buildings. Such a practice would have allowed GSA to more closely control the operator. Instead, at that time, GSA relied upon a so-called "award factor” in gauging the suitability of the eating facilities that could be expected to service the building personnel. Today, GSA handles its cafeteria requirements by providing in the written terms of its leases that under certain circumstances the lessor is to provide a cafeteria with the size of the facility being based upon the number of people in the building. Also, the present proviso makes it clear that, where a cafeteria is to be present in a building, the space that it requires is not under lease to the Government. Thus, under present procedures, the lessor provides the space and the cafeteria and then GSA contracts with a concessionaire to manage the operation. Such procedures were not followed here.
24. As a matter of subjective intent, GSA officials were of the understanding, at the time of signing of the lease, that plaintiff had agreed to and was under an obligation to provide a cafeteria in the building. Mr. Gaskins, the contracting officer, had considered each of the award factors itemized in the March 5th solicitation (including a cafeteria facility) prior to execution of the lease and was satisfied that they had been met. He would not have leased the building absent a belief on his part that a cafeteria was going to be provided.
25. At the time of lease execution, GSA believed that plaintiff would install a cafeteria of a size appropriate to accommodate the building population. However, during the negotiations, the contracting officer never gave consideration to any particular cafeteria size except to the limited extent that he envisioned the cafeteria to be of a size sufficient "as a matter of business judgment * * * to meet the demand.”
26. In early 1969, plaintiff began its efforts to locate a cafeteria concessionaire. On February 25, 1969, plaintiff wrote to Mr. Arthur T. Hall, Regional Manager, Stouffer Restaurant - Inn Division, offering space in the Nassif *442Building for a restaurant and cafeteria. At this time, plaintiff stated that the cafeteria area consisted of "approximately 25,000 [square feet] * * * located directly below on the first lower level.” The letter enclosed plans showing the "respective areas outlined in red.” This letter to Mr. Hall was one of seventeen similar solicitations that plaintiff sent to potential operators on this same date.
27. By May 1969, a cafeteria operator had not yet been located thus giving rise to concern among GSA officials as to the time that the cafeteria would become available in light of the expected dates of occupancy of the building. The matter was discussed between the parties and, on the occasion of one such discussion — a meeting of June 11, 1969, involving representatives of Nassif, GSA and DOT— Mr. Kirwan pointed out that all prospective food service operators had expressed an unwillingness to undertake the financial investment involved if the Government were to follow through with its intention to install vending machine facilities and "blind stands” (meaning snack items sold by sightless vendors) in the office space areas it had leased. To eliminate this troublesome point, and at the same time aid in making a food service operation in the Nassif Building more economically attractive, Mr. Kirwan proposed that the Government relinquish control of the planned vending facility locations, and instead, that Nassif be allowed to offer these designated locations to a prospective cafeteria operator as a means of generating additional income. During the course of this discussion, a representative of DOT stated that a cafeteria in the building was essential, and therefore, a modification in the number of planned blind stands together with the Government’s relinquishment of its vending alcoves should be the course to follow. As a result, Nassif was allowed to take over control of the vending facility locations, and, with respect to the blind stands, it was agreed that the products these stands would be allowed to sell would not compete with food and over-the-counter beverages.
28. Despite these adjustments, plaintiff was not able to attract a food service operator for the Nassif Building. Consequently, on September 12, 1969, plaintiff wrote Mr. Loy M. Shipp, Jr., to advise of its unsuccessful efforts and that a cafeteria in the lower level of the building would not become available. Plaintiff explained the situation this way:
All efforts in this regard have resulted in a failure to obtain any cafeteria concessionaire. Based on market surveys by several of the firms negotiated with, the number of meals expected to be served in the cafeteria is *443insufficient to amortize the necessary expenses for rental of the space and for equipping the cafeteria. These companies have indicated that it is doubtful that total income from the cafeteria on a one-meal basis would amortize the equipment costs alone, even without any rental. Specific examples of loss operations were pointed out in the L’Enfant Plaza Complex and the HUD Building where a new government cafeteria is unable to produce enough revenue to operate at a profit.
We have explored prospective cafeteria operators whose names have been submitted by Regional Concessionaire officials as well as several not presently involved in government operations, including Holiday Inns, General Mills, Restaurant Associates, Zabo Foods, S&W Cafeterias, and the answer is the same from all. It therefore appears that a cafeteria in the lower level of the building will not be available.
The letter went on to point out that prospective operators had placed the cost of a fully equipped 25,000 square foot cafeteria "some where between $500,000 to $800,000.” This amount, it was noted "would be in addition to the basic rental costs of $2.50 [per] square foot for shell space.”
29. Notwithstanding its letter of September 12, 1969, plaintiff did continue its search for a food service operator but its efforts, though always promising at the start, were, for a time, always unsuccessful. For example, on October 17, 1969, it had occasion to advise GSA that "[w]e are now concluding negotiations for the operation of a cafeteria * * * a restaurant * * * and seventeen vending rooms * * * with a major national corporation presently engaged in the food service business.” However, on October 25, 1969, ARA Services, Inc. — the "national corporation” that had been referred to but not otherwise identified in plaintiffs letter — orally notified plaintiff that, based upon a market survey which it had performed, a cafeteria in the Nassif Building would not be profitable. Negotiations were then abandoned.
30. On October 29, 1969, plaintiff met with personnel of the Canteen Corporation and shortly thereafter addressed a letter to this corporation outlining some of the general terms that would govern the leasing of the space. The letter noted that "[t]he installation of food service facilities is quite urgent * * *.” In the meantime, the recognized urgency of the situation prompted another round of discussion between plaintiff and Government officials in November 1969. The record does not reveal the specifics of this discussion. However, on December 3, 1969, GSA wrote *444to express surprise at learning "a few days ago that David Nassif Associates had suspended negotiations for the providing of food service to the Nassif Building.” (Presumably, by this reference to "a few days ago” the Government had in mind the parties’ November 1969 meeting.) At any rate, GSA’s letter went on to say, as follows:
It is our view that you have á contractual obligation to provide food service to that building. In the General Specifications dated March 5, 1968, to which Mr. Nassif responded on March 8, 1968, one of the award factors listed in Schedule D, Paragraph 12c, was:
"Eating facilities must be available, either in the building in which the space offered is located, or within reasonable walking distance there from as determined by the Government (normally the Government lunch period does not exceed 30 minutes).”
In a letter to the Administrator of General Services, dated March 7, 1968, Mr. Nassif offered as part of his general inducement for the lease of the Nassif Building that it would offer "Complete food service including restaurant, cafeteria, and drugstore, and if desired, a staff dining room will be operated by the commercial tenant.” Throughout the subsequent days of negotiations which culminated in Lease No. GS-03-B-5564, this offer to provide food service, including a restaurant and cafeteria, was never withdrawn or modified by any spokesman for David Nassif Associates. It is subsequently our view that you are required under the lease to provide a restaurant and cafeteria in the Nassif Building.
The letter concluded by informing plaintiff that the Government was suspending its plans for a large-scale move into the Nassif Building in January 1970 "unless and until you assure us that you have entered into arrangements to provide adequate food service in that building, in accordance with your undertaking to do so.”
31. In a reply to GSA dated December 10, 1969, plaintiff observed that it had been attempting for many months to secure a food service operation but was not able to do so. The letter further stated that, based upon counsel’s advice, David Nassif Associates did not have a contractual obligation to provide food service for the Nassif Building. In support of this position, the letter referred first to that requirement in the solicitation which said that "[e]ating facilities must be available, either in the building in which *445the space offered is located, or within reasonable walking distance there from as determined by the Government (normally the Government lunch period does not exceed 30 minutes).” Second, the letter said that "[w]e have found, based on our own survey of eating facilities available within a reasonable walking distance, that the above-mentioned requirement is fulfilled by virtue of our building’s location.” The letter then went on to enumerate eleven different eating facilities which plaintiff considered to be within reasonable walking distance. These locations included other Government buildings (which offered both cafeterias and executive dining rooms), as well as commercial restaurants.
Based upon this itemization of facilities, plaintiff stated:
Even though all of these facilities would be in large competition with a new restaurant cafeteria in our building, we have made extensive efforts to find a food service operator. However it appears that with the principal competition from the GSI cafeterias, a commercial operation of an additional cafeteria is a non-economic venture and could only be predicated on a subsidized operation. David Nassif Associates is not in a position to subsidize such an operation. We will continue our efforts to find an operator, however after discussions with at least 17 commercial operations the possibility of securing such appears to be minimal.
32. In addition to the above matters, plaintiffs letter of December 10, 1969, also addressed a prior agreement between the parties pursuant to which the Government had agreed to assume occupancy of the building on a floor-by-floor basis in return for plaintiffs interim funding, i.e., until building completion, of approximately $1,700,000 worth of Government-requested extras involving such items as a communications center, a health and dental clinic and automatic data processing facilities. The letter pointed out that plaintiff had complied with the Government’s extra requirements. Hence, the decision stated in the Government’s letter of December 3, 1969 — to postpone occupancy until some indefinite time in the future — led plaintiff to request "that you advise immediately when the Government intends to proceed with acceptance of space with particular reference to the three floors presently completed.”
33. At no time prior to September 1969, had plaintiff ever advised GSA that a cafeteria would not be located in the Nassif Building, and, up to that time, GSA had the firm and distinct impression that a cafeteria would be provided. By the same token, at no time prior to its receipt of the *446Government’s letter of December 3, 1969, did plaintiff have actual knowledge that GSA considered the furnishing of a cafeteria to be plaintiffs contractual obligation. However, GSA and DOT officials had, on more than one occasion, expressed a clear expectation that a cafeteria was to be provided.
34. As a result of the impasse between the parties respecting the cafeteria requirement, plaintiff proposed, and the Government accepted, a supplemental agreement that would allow for a temporary accommodation of the opposing interests. This proposal recited that the Government had accepted and was paying rent on three floors in the Nassif Building but that, as of January 11, 1970, the four additional floors which had been tendered for acceptance, had been declined by the Government. The proposal stated that this refusal to assume occupancy represented a weekly loss to plaintiff of $11,000 per floor. The proposal then went on to offer the following points:
(i) that "Nassif forthwith will negotiate a lease with a food service firm to place in the Building a cafeteria of not less than 800-seat capacity”; the cafeteria to be ready "no later than September 1, 1970. For every day on and after November 1, 1970, for which the cafeteria is not fully available, Nassif shall pay to the United States $100 per day as liquidated damages;”
(ii) that "GSA will accept forthwith any floors tendered for acceptance and acceptable and will commence paying rent on floors accepted;”
(iii) that "Nassif and the United States reserve all of their rights and remedies, * * * legal or equitable * * * to test the contention of the parties whether Nassif is obligated to provide a cafeteria in the Building.”
35. On January 14, 1970, when the proposed supplemental agreement was submitted to GSA, plaintiff was losing approximately $44,000 in weekly rentals. Had the supplemental agreement not been executed, plaintiffs loss of rental income would have increased as additional floors of the building became available for Government occupancy.
36. At the time the supplemental agreement was proposed, plaintiff was paying construction loan interest to Riggs National Bank and Morgan Guaranty of New York— the two construction lenders — in the approximate amount of $200,000 monthly. In construction loan interest alone, plaintiff was paying out approximately $35,000 more than the total rent then being received from GSA. Also, at this time, the loan interest reserve was nearly exhausted. Thus, if the Government had not agreed to resume acceptance of floors on an "as completed” basis, plaintiff would have faced foreclosure. However, plaintiff did not communicate *447this fact to GSA. Nor, for that matter did it inform Riggs National Bank of the difficulties it was having with the Government for fear of the possibility of a foreclosure.
37. In addition to alleviating the interest burden of the construction loan, the Government’s acceptance of space on a rent paying basis was also a condition necessary to settlement of the permanent loan on the building.
38. On January 13, 1970 (one day before the supplemental agreement was sent to GSA), ITT Canteen Corporation presented plaintiff with a letter of intent to enter into an agreement for the provision of "food and vending services in the Nassif Building.” Further details were furnished by the ITT Canteen Corporation in follow-up letters of January 15, 1970 and January 23, 1970.
39. In its letter of January 15, 1970, Canteen Corporation expressed its willingness to enter into a "20-year firm term lease, subject only to a 5-year buy back clause”; it offered to provide a 16,000 square foot cafeteria, and, to pay rent at $2.50 per square foot for this cafeteria. Additionally, Canteen Corporation offered to pay $6.00 per square foot for a 5,600 square foot restaurant and also for the vending alcoves.
40. On March 17, 1970, plaintiff submitted a proposed lease to the Canteen Corporation covering the cafeteria. By letter of April 14, 1970, this proposed lease was rejected by Canteen Corporation on the ground that "[t]he terms and requirements of the lease were far in excess of what we had expected.” In this same letter, Canteen Corporation set forth a counter offer which, among other things, would have required that plaintiff bear the interest expense associated with the investment necessary for equipment and special facilities. This letter effectively terminated the negotiations.
41. The record is insufficient to determine the reason for the breakdown in the negotiations between Nassif and the Canteen Corporation. In November 1969, Canteen Corporation officials are reported (in a Government memorandum) to have expressed enthusiasm for the cafeteria operation while, at the same time, voicing complaint to GSA officials because Nassif was insisting upon the installation of a restaurant-cocktail lounge — a venture which, from Canteen Corporation’s point of view, seemed an unprofitable undertaking. However, it was also testified that Canteen Corporation officials had obtained a copy of a GSA survey of neighborhood eating facilities and, based upon the availability of seating capacities reflected in this survey, had stated to plaintiff that there already were enough cafeterias in the area. Based upon these opposing declarations, it would be a matter of speculation to say that it had *448been Nassifs insistence on a restaurant facility that had soured the deal rather than Canteen Corporation’s own growing disenchantment with a cafeteria.
42. Following the unsuccessful round of negotiations with Canteen Corporation, plaintiff resumed negotiations with ARA Services, Inc. On April 22, 1970, this corporation submitted a proposed lease to plaintiff which provided for the operation of a cafeteria and vending areas — but mentioned no restaurant. It was testified that the net effect of this proposed lease — identified as an "off the top” lease — would have been a denial of all profit to plaintiff. This second (and final) round of negotiations between plaintiff and ARA Services, Inc. was as unsuccessful as their earlier negotiations had been.
43. On April 30, 1970, plaintiff began discussions with Drug Fair, Inc. On May 14, 1970, Drug Fair proposed to lease approximately 13,000 square feet for use as a drugstore, approximately 25,000 square feet for use as a cafeteria and fourteen rooms, one on each floor, to be used for vending machines. Nassif responded the next day with a proposal that included the specified drugstore space, thirteen vending alcoves and "approximately 19,000 square feet to be used as a cafeteria to seat at least 800 people.” This proposal was accepted by Drug Fair.
44. The requirement for an 800-seat cafeteria did not originate with plaintiff. Rather, that seating requirement reflected the figure which GSA came to insist upon shortly prior to the time that parties entered into their supplementary agreement of January 1970. The record does not reveal how, or upon what criteria, GSA decided that 800 seats represented the number necessary to accommodate the DOT personnel housed in the Nassif Building.
45. Milton Elsberg, president of Drug Fair, Inc., negotiated the lease with Nassif. The cafeteria lease was linked to the negotiation of a lease for a Drug Fair drugstore and, absent the right to operate a drugstore in the building, Mr. Elsberg would not have agreed to the cafeteria lease. Under the terms of their arrangement, plaintiff was required to pay all special facility construction costs.
46. Drug Fair began its cafeteria operation in the Nassif Building in August 1971. The Drug Fair drugstore was also opened for business in the Nassif Building. (The record does not disclose the opening date for the drugstore.) For a time, the combination of the two operations proved to be profitable, that is to say, the drugstore proved to be profitable.' However, Nassif was eventually forced to remove the drugstore as a result of a court order in another case, L’Enfant Plaza North, Inc. v. District of Columbia Redevelopment Land Agency, 345 F.Supp. 508 (D.D.C. 1972), *449aff'd, 486 F.2d 1314 (D.C. Cir. 1973), thus leaving Drug Fair with only its cafeteria operation.
47. The present Drug Fair cafeteria in the Nassif Building is unprofitable to Drug Fair as well as to Nassif. It is rarely half-filled. Late in the spring of 1974, plaintiff made a random check of cash register receipts for the cafeteria and found that there were only 800 - 1,100 daily individual sales for that period of time. Attempts to. increase patronage through the introduction of beer service have not helped the situation any. Milton Elsberg testified that he did not anticipate or foresee any reasonable chance for improvement in the cafeteria’s profitability and, along with this, he testified that Drug Fair would not renew its lease at the end of its initial term.
48. Conflicting reasons are given for the unprofitability of the cafeteria operation. A food service specialist from GSA was of the opinion that with certain improvements and better management, Drug Fair would be able to make a profit. Specifically, the Government’s testimony attributes the cafeteria’s unprofitability to two main causes. First, it was said that the food service areas were undersized relative to the cafeteria’s potential customer draw (as estimated by the Government) thus causing congestion at these areas and at the cash registers with a consequent diminution in patronage. Second, it was claimed that the prices charged in the cafeteria exceeded the prices charged in Government cafeterias, in some instances by as much as 50 percent. It’ was said (by the Government’s witness) that the expected price differentials between a Government cafeteria and a privately operated cafeteria should be in the neighborhood of 15 to 20 percent. From the Government’s point of view, unattractively high food prices contributed to the cafeteria’s low patronage.
49. Plaintiffs proof does not challenge the factual accuracy of the Government’s assigned reasons for the cafeteria’s unprofitability. That is to say, plaintiff does not dispute that congestion may have occurred in the food serving areas and at the cash registers nor does plaintiff question that its prices were higher. However, plaintiffs proof does establish that the serving areas in the cafeteria reflected the latest improvement in cafeteria design — the so-called "hollow square” concept — and that use of the old-fashioned cafeteria line would have made customer progress through the cafeteria an even slower affair. In this same connection, the Government’s testimony also reveals that overcrowding at serving areas and cashier stations can, and very often does, result from' the fact that many Government agencies release the majority of their personnel at the noon hour. Thus, even though a cafeteria may *450have adequate seating capacity, this affords no solution to the threshold problems of congestion that result from a concentration of customers all seeking service within a limited time span. There is nothing in the record to suggest that Drug Fair’s congestion problem might not have been due, at least in substantial part, to precisely the same reasons that promoted congestion in the Government’s own cafeterias, namely, non-staggered lunch hours for the building personnel. Moreover, given the fact that overcrowding was observed at the other Government cafeterias in the area, one must question the accuracy of a judgment (that of the Government’s witness, Robert Marcus) that overcrowding and slow service in the Nassif Building cafeteria caused DOT personnel to leave that building for more efficiently run cafeterias elsewhere.
With respect to price differentials, the proof establishes that, unlike Drug Fair’s cafeteria, a Government cafeteria pays no rent for the space it occupies, incurs no expenses for the utilities that it consumes and is not required to make any initial investment in necessary special equipment.
50. From plaintiffs standpoint, the unprofitability of the cafeteria was explained on one ground, namely, that an 800-seat cafeteria represented an unnecessary addition of cafeteria space to a market that was otherwise being adequately serviced by existing facilities. To establish this point plaintiff relies, in part, upon the GSA eating facilities survey previously referred to. This survey was prepared by Mr. Robert Marcus, then Chief of Concessions Branch, Region 3, at the request of the Regional Director of GSA. Among other things, this survey dealt with the subject of "Interim Food Services Available to DOT Personnel.” The survey indicated that, in terms of seating capacity, personnel from DOT who were expected to occupy the Nassif Building could be accommodated, on a temporary basis, in one of five neighboring Government cafeterias all identified as being within a 5-minute walking radius (one way) of the Nassif Building. However, to achieve this temporary accommodation, without overcrowding, it was pointed out that it would be necessary for DOT personnel to avoid arriving at these listed facilities between the hours of 11:45 a.m. and 12:30 p.m., that the hours of service in two of these facilities be extended until 2:00 p.m. each day and that every "additional” seat (meaning every seat beyond the number occupied by each facility’s average daily luncheon patronage) be continuously occupied during the periods of lunch time service.
51. Preliminary estimates showed that approximately 6,500 DOT employees were to be located in the Nassif *451Building. According to GSA guidelines — established by actual body counts and surveys — the average number of Government employees working in downtown areas who could be expected to patronize cafeterias located within their building would be 50 to 60 percent of the building’s population. Consequently, based upon this figure, GSA estimated (for the purposes of its eating facilities survey) that 3,900 DOT employees (i.e., 60 percent of the Nassif Building’s projected population) would use a cafeteria on a daily basis.
52. The information concerning temporary eating facilities that was discussed in GSA’s survey was also presented in that survey in the form of a separate statistical summary captioned "Statistics Concerning Usage Of Feeding Facilities In Government Buildings Located Near The Nassif Building.” The table which follows, with the exception of its explanatory footnotes, copies this statistical summary.

*452

*45353. Milton Elsberg testified that, at the time Drug Fair entered into the cafeteria lease, the company was under the impression that market statistics would support the requirement for an 800-seat cafeteria. Accordingly, Drug Fair, which operates approximately 50 cafeterias and about 350 separate eating facilities throughout the Metropolitan Washington, D.C. area, made no customer .survey of its own. Mr. Elsberg testified too that, had he been aware of the contents of the GSA eating facilities survey (i.e., the summarizing table set out in finding 52), it would have altered his decision to install a cafeteria in the Nassif Building. As he put it: "seeing this [meaning the summarizing table], I would say that we would have to depend [for customer draw] on the Nassif Building almost in its entirety. And based on that, I would say that the cafeteria just could not make it based on the knowledge that the average food operator would have of what happens in Government buildings.” The record does not establish whether Mr. Elsberg would have come to this same conclusion had he also been given the background material that appeared in the GSA survey which explained that, to avoid overcrowding, the accommodations of the Nassif Building employees in neighborhood eating facilities would require their arriving at other than the normal lunch time period, i.e., between 11:45 a.m. and 12:30 p.m.
54. Based upon the industry turnover figure of three seatings per chair during a normal lunch period, the 800-seat Nassif Building cafeteria would have an overall capacity of 2,400 customers — a figure which represents approximately 37 percent of that building’s total population. Judged in light of GSA guidelines, which project employee patronage of in-house cafeterias in the magnitude of 50 to 60 percent of a building’s population, it would appear, on the face of it at least, that GSA did not insist upon installation of an over-sized cafeteria when it demanded the installation of an 800-seat facility. However, the evidence reveals that rather than being a guideline appropriate for general application, the 50 to 60 percent patronage rule is not supportable in many situations. For example, in the case of the Government cafeterias listed in the GSA survey, the proof shows that a close-to-60 percent employee patronage level was achieved in only one of the five buildings listed in that survey. As to the remainder, the combined patronage figures (cafeteria and executive dining room) fell below the guideline projection. The actual patronage levels that were realized at the eating facilities listed in the GSA survey are shown below.

*454

*45555. The Government’s witnesses testified that patronage levels experienced at Government cafeterias remain fairly constant; hence the average daily luncheon patronage reported in the GSA survey would not be expected to vary by any significant number. Consequently, the figures reported in that survey as representing additional luncheon capacity (the difference between the recorded actual daily luncheon patronage and the total seating capacity as measured by number of seats times the turnover rate of 3) identify the actual additional cafeteria seating available in the area of the Nassif Building. This total additional cafeteria seating capacity, measured without regard for any extension of hours, amounts to 2,511 seats. If the additional executive dining room capacity is also added, the total becomes 3,255 seats or, in all, a figure equal to 50 percent of the total Nassif Building population.
56. If the Government is correct in its contention that cafeteria patronage levels are influenced by food prices then it is reasonable to account for the Nassif Building cafeteria’s unprofitability — as plaintiff does — on grounds that there are competing facilities with available seating that offer lower prices. This consideration, taken together with the patronage levels actually experienced in the neighboring Government facilities, suggests that a privately operated 800-seat cafeteria in the Nassif Building may have introduced additional seating capacity beyond the levels supportable by current demand. Drug Fair’s operating experience goes to support this conclusion.
57. From the Government’s point of view, the additional seating capacity available in the neighborhood Government eating facilities should not be considered in determining eating facility requirements for the Nassif Building employees since this additional seating capacity requires, on the average, a 10-minute walk (5 minutes each way) and therefore restricts the employee to a 20-minute lunch period. In this connection, however, the Government offered no evidence to support the position that, in their daily business routine, Government employees actually do adhere to the 30-minute lunch period prescribed by general Government policy.
58. The Nassif Building cafeteria was not completed and made operational by September 1, 1970, as required by the terms of the supplemental agreement of January 1970. As indicated, the cafeteria was first operational on August 9, 1971. Consequently, in accordance with the terms of the supplemental agreement, GSA deducted liquidated damages from November 1970 until April 30, 1971, at which time the Government agreed to postpone the further deduction of liquidated damages until the cafeteria became *456operational. Hence, the United States has not collected $10,000 in liquidated damages for the period from April 30, 1971 to August 9, 1971, and a counterclaim for that amount is now being asserted in this suit.
59. On February 25, 1972, plaintiff filed a claim for an equitable adjustment with GSA, seeking payment of the sum of $662,543. Under date of September 13, 1972, the contracting officer issued his unilateral decision rejecting plaintiffs claim. On October 12, 1972, plaintiff timely filed its Notice of Appeal with the General Services Administration, Washington, D.C., and simultaneously filed its Motion to Dismiss for Lack of Jurisdiction. Under date of December 8, 1972, the GSA Board of Contract Appeals granted plaintiffs Motion to Dismiss.
ULTIMATE FINDING
60. Plaintiff contractually obligated itself to provide a cafeteria in the Nassif Building. However, the expected size of that cafeteria was never defined by the parties in their agreement. Nor, for that matter, does the record reveal anything as to the parties’ expectations in this regard save for the fact that the cafeteria was intended to be a profit-oriented operation and one which, as a matter of business judgment, would be sized to meet demand. Under these circumstances, a cafeteria of a reasonable size was called for. The 800-seat cafeteria facility which the Government insisted upon is unreasonable in size and the Government, therefore, required more than what it was contractually entitled to receive.
CONCLUSION OF LAW
Based upon the trial judge’s findings and opinion, which are adopted by the court, the court concludes as a matter of law (i) that plaintiff is contractually obligated to provide a cafeteria in the Nassif Building, (ii) that under the factual circumstances of this case a cafeteria of a reasonable size was called for, and (iii) that the cafeteria which the Government required plaintiff to install was in excess of reasonable size requirements.
The matter is remanded to the trial judge for the conduct of further proceedings to decide on the basis of the parties’ evidence, the size of the cafeteria that plaintiff should have been obliged to install, and, also, to determine the amount of damages due plaintiff in light of such a redefined *457obligation. The issue raised by the Government’s counterclaim is to be dealt with as part of the subsequent proceedings.