________________________________________________________ CROSS-MOTIONS FOR SUMMARY RELIEF DENIED: August 6, 1997 ________________________________________________________ GSBCA 13120 GRANITE TOWER, Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Harrison Fagg, Co-owner of Granite Tower, Billings, MT, appearing for Appellant. M. Leah Wright, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. Before Board Judges BORWICK, WILLIAMS, and VERGILIO. WILLIAMS, Board Judge. In this appeal Granite Tower, the lessor of a building to a government tenant, seeks compensation for the tenant's additional utility consumption due to the tenant's installation and increased usage of computers and related office equipment. Appellant claims that in 1976, the tenant, the Bureau of Land Management (BLM), had three computers running in Granite Tower, but that by the end of 1993, BLM had at least 260 computers and 62 printers operating therein, and many more copiers and facsimile machines. Appellant claims the increased office machinery with associated cooling costs have resulted in additional electrical costs to the lessor, in the amount of $238,139.31 through February 1994. This matter comes before the Board on the parties' cross- motions for summary relief. Appellant requests that the Board rule that the lease provisions entitle it to adjustments or increases in rent due to the Government's increased utilities usage. Respondent contends that because the lease included a fixed operating costs escalator which covered the increases in utility costs and the parties negotiated a supplemental lease agreement covering increased computer usage, there is no basis under the lease for appellant to recover. Alternatively, because the lessor waited eighteen years during a twenty-year lease to seek reimbursement, respondent contends that appellant waived its right to recover, even if the lease would permit reimbursement. Because there are genuine issues of material fact regarding appellant's entitlement, we deny both motions. Further, we conclude that in the context of this motion respondent has not demonstrated that appellant waived its right to seek reimbursement under the lease. Background The Lease On February 19, 1976, the General Services Administration (GSA) entered into lease number GS-08B10722 with Harrison G. and Darlene B. Fagg for the rental of 32,180 square feet of office and storage space for BLM for ten years at an annual rent of $206,698. Appeal File, Exhibit 1. On April 27, 1976, BLM moved into the Granite Tower building in Billings, Montana. The lease provided that it could be renewed at the option of the Government for a ten- year period. Id. A renewal notice was issued on April 4, 1985, for a ten-year period ending April 26, 1996. Respondent's Supplemental Appeal File, Exhibit 64. By Supplemental Lease Agreement 17 signed by both parties, the Government renewed the lease at an annual rent of $345,309.06 effective April 27, 1986. Appeal File, Exhibit 19. The lease included five parts: (1) General Provisions, (2) Schedule B, General Building Requirements and Specifications, Parts I, II, and III, (3) Schedule C, Services, Utilities and Maintenance, (4) Operating Costs Escalator, and (5) a Real Estate Tax Escalator. Appeal File, Exhibit 1 at 1-32. Part III of Schedule B, "Mechanical-Electrical," Paragraph 8, "Lighting," states, in pertinent part: e. Whenever the energy situation warrants a modification of operating practices within the design criteria set forth above for the heating, air- conditioning, mechanical ventilation, and lighting, the lessor shall upon written notice from the Government take necessary action to provide the required services not later than 30 days after receipt of said notice. f. Payment to the lessor or adjustment to the rental will be considered only when it can be clearly demonstrated that increased costs have resulted as a direct result of the Government's action. In any event, additional payments or rental increases will be limited to the increased costs directly attributed to the change in operating practices and any resultant increase in utility consumption. Appeal File, Exhibit 1 at 17. Schedule C of the original lease, entitled "Services, Utilities and Maintenance," contains the following introductory paragraph: The following service utility and maintenance requirements are in addition to and in conjunction with the building requirements of Schedule B. . . . Appeal File, Exhibit 1 at 19. Paragraph 1 of Schedule C of the original lease is entitled "SERVICES." Subparagraph (f) states: f. Overtime Services. The Government shall have access to the leased premises and the right to the intermittent use of the space beyond normal working hours specified above, and on Saturdays, Sundays and Federal holidays including the use of elevators, toilet facilities, chilled drinking water and electricity for lights and operation of small office and business machines (such as electric typewriters, adding machines, calculators, etc.) with additional payment. If janitorial services, heat and/or airconditioning are required by the Government on a regularly scheduled overtime basis beyond the above specified hours, they will be furnished by the lessor upon the Government's request and payment to the lessor for such additional services will be made at the rate per square foot established at the time offer is accepted, and to be based upon information provided on GSA Form 1217. Appeal File, Exhibit 1 at 20-21. Paragraph 2 of Schedule C of the lease is entitled "UTILITIES." Subparagraphs a and b provide: a. Lessor-Furnished Utilities. The lessor shall provide all utilities necessary for operating, maintaining and servicing the space leased by the Government, including but not limited to the following: . . . . (2) Electricity - Electricity used for lighting or for powering special equipment used by the Government or any building equipment operated in connection with the space leased. b. Utilities Furnished by the Government. Where a utility, public or private, is to be paid for by the Government, the lessor shall at his expense, furnish and install a separate meter for measuring each utility consumed in servicing the space leased or for any special purposes, as required in the Solicitation. The lessor shall further insure that utility meters so provided, shall meter only Government usage and that no other usage by other occupants of the building will be recorded on the same meter for the purpose of pro rata payment by the lessor of utilities consumed by other occupants. Appeal File, Exhibit 1 at 21. The Original Lease's Operating Costs Escalator The original lease contained an "Operating Costs Escalator," which was in effect approximately six years, from 1976-1982, until it was replaced by Supplemental Lease Agreement 10. The original operating costs escalator provided: The resultant lease will provide that at the end of the first five years, at the end of the first ten years, and at the end of the first fifteen years of Government occupancy, the rental will be adjusted to provide for increases or decreases in the lessor's costs of furnishing janitorial services and utilities as further defined in Schedule C of this solicitation. The operating costs per net usable square foot for these services (and utilities) shall be determined through negotiations with the successful offeror prior to commitment to determine the initial base cost from which future adjustments shall be made. Appeal File, Exhibit 1 at 30. In Supplemental Lease Agreement 10, the parties calculated a rental increase under the original operating costs escalator clause for the period April 27, 1981, to April 26, 1982, in the amount of $8,543.26. Appeal File, Exhibit 11. The New Operating Costs Escalator Supplemental Lease Agreement 10 also deleted the original operating costs escalator and, effective April 27, 1982, replaced it with a new operating costs escalator. Appeal File, Exhibit 11. The new operating costs escalator provided that utility costs would be escalated yearly based upon the cost of living index (CLI), rather than upon the actual cost of utilities. Id. It stated, in pertinent part: The Government shall also pay to the lessor, as additional rent, for the second lease year and each lease year thereafter an amount determined by multiplying the total first year's estimated cost of the following items as negotiated and established for the first lease year prior to the award of the lease contract: Cleaning services and Heating supplies and material, Electricity, Elevator maintenance, Administrative expenses for trash removal, building engineers and/or landscaping, buildings managers water and sewer charges, by the percentage of increase, if any, in the cost of living index over and above the cost of living index (base figure hereinafter defined) at the commencement of the lease term. Id. at 3. Calculations Under the "New" CLI Operating Costs Escalator Supplemental Lease Agreement 10 established a base operating cost of $1.83 per square foot, for the period beginning April 27, 1981. Appeal File, Exhibit 11. The rental adjustment due after the first year under the new CLI escalator was $5,258.30. Id., Exhibit 12. Supplemental Lease Agreement 12 increased the base operating cost for services, utilities, and supplies to $1.98 per square foot effective April 27, 1982. Id., Exhibit 13 at  6. Supplemental Lease Agreement 12 also provided for the construction of a computer room at Granite Tower and an increase in the rental. Appeal File, Exhibit 13 at 3. The new computer room consisted of 1,600 square feet and included a 600-square-foot raised platform. The specifications provided for a Data General M600 computer, a Honeywell Level 6 minicomputer and associated peripheral and telecommunications equipment. Id. at 4. Specifications for the computer room also included lighting, a controlled environment, a separate cooling system, and its own fire and smoke detection system. Id. Supplemental Lease Agreement 12 also delineated the types of equipment for which all necessary utilities were to be provided by the lessor -- including tape drives, cartridge disks, printers, storage units, and an air conditioning system. Appeal File, Exhibit 13 at 6. Supplemental Lease Agreement 12 provided an increase in the annual rental of $970.92 for providing the additional utilities associated with the computer room. The increase was to be subject to escalation in accordance with CLI escalation clause made part of the lease by Supplemental Lease Agreement 10. In Supplemental Lease Agreement 15, the parties agreed to increase the rental based upon escalating the utility costs for the computer room which had not previously been done. Supplemental Lease Agreement 15 provided: "The Government shall pay the lessor a lump sum amount of $954.84 to correct the paid balance for increased utility cost for computer room use in 1983 and 1984." Appeal File, Exhibit 17. The Government made annual upward adjustments to the rent pursuant to the CLI escalator clause of the lease from 1982 until 1994. The base operating cost portion of the rent was multiplied by the appropriate CLI increase each year and added together to derive the total operating costs increase to be added to the rent. By 1994, the net rent equaled $303,352.20, and the escalated cost of services and utilities equaled $173,672.24, for a total annual rent of $477,024.44. Appeal File, Exhibit 45 at 2. Appellant's Investigation of Increased Utilities Costs Appellant's co-owner was informed some time in 1993 by another lessor who leases a building to the federal government that this other owner had received additional rents in a lump sum payment due to increased electrical usage based upon increased computer usage and facsimiles for his building. Affidavit of Harrison G. Fagg (Fagg Affidavit) (Sept. 7, 1995),  2. After appellant's co-owner received this information, he "began an investigation as to whether Granite Tower had incurred additional electrical costs due to increased utility consumption based upon increased computer, facsimile machines, and other office equipment used by the Bureau of Land Management in Granite Tower." Id.,  3. There is no indication in the existing record that appellant reviewed the lease of the other individual or inquired so as to compare terms and conditions which may have permitted compensation. Appellant requested Associated Construction Engineering, Inc. (ACE) to review the power consumption and set up basic calculations for determining additional power consumption for Granite Tower. Supplemental Appeal File, Exhibit 35 at 3. ACE analyzed the power consumption of specific equipment provided to the government tenant. Id. In a report dated February 10, 1994, ACE listed the following ten categories of equipment as well as additional charges for that equipment as follows: EQUIPMENT ITEM ADDITIONAL CHARGE WANG COMPUTERS $ 30,930.23 PERSONAL COMPUTERS 103,118.40 PRINTERS 9,872.06 FAX UNITS 285.81 COPIERS - 30 AMP 2,032.18 COPIERS - 15 AMP 2,378.54 COPIERS - 12 AMP 2,976.53 COMPUTER ROOM 52,003.69 COMPUTER ROOM COOLING 33,918.99 HIGH SPEED PRINTERS 622.88 TOTAL CHARGE $238,139.31 *All information to determine the above costs were provided by the following: Bureau of Land Management, Montana Power. The calculations were completed by Associated Construction Engineering (Electrical Engineers). The dollar figures were a result of these calculations. The hourly usage was taken from lease information along with actual usage. Appeal File, Exhibit 35 at 4. According to ACE's report, the following percentage of 1993 equipment was in place between the years 1986 and 1993: 1986, 50% 1987, 60% 1988, 70% 1989 and 1990, 80% 1991, 1992, and 1993, 100% Appeal File, Exhibit 35 at 5. Calculations also included additional costs for computer room cooling. From this report it appears that ACE made its calculations for increased usage beginning in 1986 and ending in 1993. Id., Exhibit 35. For example, the report indicated that in 1986 BLM had eight Wang computers, nine printers, but in 1993 the agency had a total of 268 computers and 62 printers after discounting material which had been excessed. Id. at 17. Based upon this report, appellant's investigation concluded that as of February 19, 1994, Granite Tower had incurred $238,139.31 in additional electrical costs due to BLM's increased usage. Fagg Affidavit,  4, 5. On February 19, 1994, appellant advised GSA's real estate specialist that the Government owed an additional $238,139.31 for electrical charges over the term of the lease to date for power consumed by equipment such as computers, printers, computer rooms and associated air conditioning. Fagg Affidavit,  5; Appeal File, Exhibit 35. By letter dated May 17, 1994, the contracting officer advised appellant that she had evaluated the operating costs for December 1992 through November 1993 and arrived at a total actual cost of $164,758.51. Appeal File, Exhibit 46. She concluded that the rate being paid was fair and reasonable, and therefore, she would not consider an increase in operating costs. Appeal File, Exhibit 46. By letter dated July 13, 1994, appellant asserted that there was no basis to use the operating costs to determine whether payment should be made on the claim for additional power usage. Appellant contended that the annual CLI escalator increases compensated it for inflationary increases in original costs, not for increased usage from equipment added to the building in excess of that contemplated under the lease. Appeal File, Exhibit 47. The contracting officer issued a decision on September 16, 1994, concluding that the increased usage appellant claims is reflected in the operating expenses. Appeal File, Exhibit 49. On December 9, 1994, Granite Tower appealed the contracting officer's decision to this Board. Appeal File, Exhibit 50. Discussion At issue in this appeal is whether appellant is entitled to additional compensation for increased costs of utilities by the Government due to the Government's installation of additional computer equipment. This matter comes before the Board on the parties' cross-motions for summary relief. Appellant contends that it is entitled to additional compensation under several lease provisions read together: (1) Paragraph 8(f). This paragraph provides for additional payments for increased costs directly attributed to a change in operating practices by the Government and any resultant increase in utility increases. (2) The operating costs escalator as supplemented. The original operating costs escalator provided that rent would be adjusted for increases in the lessor's cost of furnishing utilities; Supplemental Lease Agreement 10 deleted the original operating costs escalator and provided instead that additional rent for each year thereafter would be determined by multiplying the total first year's estimated costs of utilities by the percentage of increase, if any, in the cost of living index over and above the cost of living index at the commencement of the lease term. (3) GSA Form 3517, i.e., the Changes Clause. This clause provides that if a change in the scope of the lease consisting of work or services increases the lessor's cost of performance, the contracting officer shall modify the lease by making an equitable adjustment in the rental rate or a lump sum price adjustment.[] Appellant urges the Board to conclude that these lease provisions establish its entitlement to additional compensation for the increased utility costs based upon the mutual intentions of the parties at the time of contracting. Appellant's Brief in Support of Partial Motion for Summary Relief at 2. Respondent contends that appellant has taken the cited provisions out of context and misread them. As to paragraph 8(f), respondent points out that this paragraph must be read in the context of "Lighting, Types of Fixtures, and Energy Requirements." Respondent's Opposition to Appellant's Motion for Summary Relief (Respondent's Opposition) at 7-8. Respondent contends that paragraph 8(f) has no relationship to utilities used by office equipment and that such usage would have been addressed in Schedule C, "Services, Utilities and Maintenance," not Schedule B, "Mechanical-Electrical." Respondent also contends that the revised operating costs escalator clause is based upon cost of living indices, not actual use of utilities, and that this clause does not grant appellant additional money for increased electrical usage due to installation of additional equipment. Respondent's Opposition at 8. Finally, respondent points out that to the extent appellant is arguing increased electrical usage is a constructive change to the lease, citing GSA Form 3517, the requisite facts to establish such a change are not in evidence. In addition to the above-cited lease provisions, appellant relies upon the "past practices of respondent GSA" to claim entitlement. Specifically, appellant cites the June 10, 1982, Supplemental Lease Agreement 12 under which the parties agreed that the lessor would receive an annual increase in rent of $970.92 for providing the additional utilities associated with the newly constructed computer room. Appellant contends that because GSA provided additional compensation for this computer room in the past it must similarly compensate appellant for increased electrical costs due to other additional computers, facsimile machines, and office machines. Respondent argues that appellant's allegation that the parties had a prior course of dealing requires extrinsic evidence to interpret an ambiguous lease and necessitates a factual inquiry which would render summary relief inappropriate. Respondent's Opposition at 8. Motions for summary relief may be granted only if there are no genuine issues of material fact in dispute and the moving party is entitled to judgment as a matter of law. The moving party has the burden of proving the absence of genuine issues of material fact. Griffin Services, Inc., GSBCA 11171, 91-3 BCA  24,156, at 120,872. In addition, doubts as to whether summary judgment is appropriate are to be resolved against the moving party, and all inferences are to be drawn in favor of the nonmoving party. Reliance Insurance Co. v. United States, 931 F.2d 863, 865 (Fed. Cir. 1991); D. L. Auld Co. v. Chroma Graphics Corp., 714 F.2d 1144, 1146 (Fed. Cir. 1983). In interpreting a Government contract, this Board must give reasonable meaning to all parts of the contract and avoid conflict or surplusage of its provisions. Granite Construction Co. v. United States, 962 F.2d 998, 1003 (Fed. Cir. 1992). Looking at the lease as a whole and endeavoring to harmonize all applicable provisions which address utility consumption, operating costs escalation, and changes, we conclude that based on the existing record, the lease does not obligate the Government to pay for increased utility costs arising from additional equipment unless appellant can demonstrate that the additional equipment constituted a constructive change under the contract. On the one hand, clause 8(f) on which appellant relies would suggest that such increased costs could be compensated if it were clearly demonstrated that they directly resulted from a change in the Government's operating practices. However, as respondent points out, this clause is contained in a section of the lease entitled "Lighting," not overall utility consumption compensation, which would militate against the clause having applicability beyond lighting. Furthermore, the term "operating practices" is undefined, and the present record does not establish whether this alleged installation of additional automated machinery constituted a changed "operating practice" within the meaning of this lease. The operating costs escalator clauses also militate against a conclusion that appellant is entitled to additional compensation under the lease. The original operating costs escalator clause clearly made increased utility consumption the subject of that clause by basing rental escalation on increased costs of utilities which in turn were based on increased consumption of utilities. Thus, under the original operating clause appellant's increased utility costs would have been passed through under the agreed upon formula. For some reason unexplained in the current record, the parties agreed to substitute the CLI index which does not depend upon actual utility costs or usage to calculate the operating costs escalator. Thus, because the CLI costs escalator on its face replaced the original cost-based operating costs escalator it would seem to preclude any recovery for additional utility costs above and beyond that awarded under the CLI clause. The risk of increased usage was placed on the appellant. Appellant has not demonstrated on the record before us why it would be entitled to additional compensation when the revised operating costs escalator clause shifted the method of compensating the lessor for increased utilities costs from a cost-based mechanism to the CLI index mechanism, thus placing the risk for additional usage and costs over and above the CLI increases on appellant. Appellant, however, also appears to be arguing that there was such a fundamental change in the character of usage in the building by the installation of the additional computer equipment that it is entitled to compensation under the changes clause, despite the CLI operating costs escalator clause. Appellant has not demonstrated entitlement under a constructive change theory based upon the existing record. Nor has appellant explained why it would be entitled to additional compensation for utility costs associated with the computer room which were expressly part of its agreement in Supplemental Lease Agreement 12. Not only were the utility costs associated with the computer room the subject of that agreement, but also were the escalation costs. Finally, appellant has not explained why it would be entitled to additional rent after it executed a bilateral agreement renewing the lease at increased rent for another ten years in 1986. By 1986, the tenant had installed 50% of the computers it had installed by 1993. This raises the issue of the intentions of the parties at the time they agreed to increase the rent for the ten-year renewal period. In sum, because appellant has not demonstrated the absence of genuine issues of material fact or its entitlement as a matter of law, and because all inferences must be drawn in favor of the Government, we deny appellant's motion for summary relief. Nor can we agree with respondent that the lease conclusively prohibits appellant from recovering increased utility costs based upon the record before us. In considering respondent's motion, we must draw all inferences in appellant's favor. It is possible that appellant might establish that the installation of the computer equipment constituted a constructive change under the contract. Although this allegation has not been proved on the record before us, it necessarily involves factual determinations, making summary relief inappropriate. Did Appellant Waive Its Right to Claim Reimbursement for Increased Utilities Consumption by Waiting Eighteen Years to Seek Reimbursement? Respondent contends that appellant has "waived" its right to seek compensation for increased utility consumption under the lease by waiting eighteen years to file its claim. Respondent has cited no precedent in which a party to an ongoing lease was prevented from raising a claim during the tenure of the lease under a waiver theory. While appellant waited a long time to seek compensation for increased utility consumption, respondent has not demonstrated, on the record before us, that appellant's delay was an intentional relinquishment of a known right to such compensation. Rather, the record, as we must view it in the context of respondent's motion, suggests that appellant did not know that the lease could be construed to authorize additional rental until 1993, some seven years after the lease renewal took effect. Moreover, appellant's co-owner testified that appellant did not know that Granite Tower had incurred additional electrical costs due to increased utility consumption until appellant performed an investigation which was completed in February 1994. Fagg Affidavit,  2, 3. Nor is there sufficient evidence establishing that appellant should have known of the increased utility consumption based upon the Government's installation and usage of additional computer-related equipment. Respondent cites Gresham & Co. v. United States, 470 F.2d 542 (Ct.Cl. 1972), a case in which the contractor failed to furnish detergent dispensers on dishwashers and the Government approved the machines even though they did not meet the specifications. That precedent is fundamentally different from the instant case. Gresham involved a performance specification and the Government's knowing, intentional waiver of that specification. This is not a case where the Government failed to perform a known obligation under the lease with appellant's acquiescence. Here, the fact that appellant paid the utility bills on an ongoing basis does not mean it waived its right to seek reimbursement from its lessee for the proportionate share of that cost. Respondent does not argue that this claim is time-barred. If, as respondent suggested, this claim may be viewed as a claim for a constructive change and appellant raised this claim under an ongoing lease, we cannot conclude that appellant has waived its rights to file the claim. Finally, respondent has not introduced sufficient factual evidence supporting its assertion of prejudice due to appellant's failure to seek compensation for the increased utility usage for so many years. Thus, in the context of this motion, respondent has failed to demonstrate that appellant waived its right to claim increased utility costs. In sum, genuine issues of material fact preclude the entry of judgment at this juncture for either party. Decision The parties' cross-motions for summary relief are DENIED. The Board will convene a telephonic conference on August 20, 1997, at noon, ET, to discuss further scheduling in this appeal. ______________________________ MARY ELLEN COSTER WILLIAMS Board Judge We concur: ____________________________ ____________________________ ANTHONY S. BORWICK JOSEPH A. VERGILIO Board Judge Board Judge