First Crystal Park Associates Limited Partnership v. United States, 130 Fed. Cl. 260

Background

First Crystal Park Associates (First Crystal) leased office space to GSA (tenant: DoD) under Lease No. GS-11B-02077 (2009); SLA 1 (2009) expanded the leased premises to include third-floor space and amended the renewal option to cover all space (total ~26,671 BRSF).
Lease contained a 5-year government renewal option requiring written notice at least 270 days before term end; SLA 1 increased the renewal rent and square footage covered.
Feb 28, 2012: GSA lease contracting specialist James Joiner emailed First Crystal stating the Government "hereby exercises its renewal option" but described a renewal covering only the 11th-floor (20,240 BRSF) and proposed terminating the 3rd-floor expansion early.
First Crystal replied by email rejecting a selective renewal but offered to accept renewal of the 11th floor subject to conditions (including a two-week rent-free hold of the 3rd floor); further email and some alleged verbal communications followed, but no supplemental lease agreement (SLA) was ever executed.
Contracting Officer (CO) Beverly later concluded Joiner lacked authority to exercise the option and that Joiner’s Feb 28 communication was a counter-offer; First Crystal sued the United States asserting breach based on the alleged exercise of the option and alternative theories; both parties moved for summary judgment.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether GSA validly exercised the lease renewal option	Joiner’s Feb 28 email exercised the option; First Crystal reasonably relied on it	Joiner was not a contracting officer and his email materially altered the option (selective renewal), so it was a counter-offer	Held: Not exercised — Joiner’s email was a counter-offer because it changed terms (space and rent) from SLA 1
Whether parties formed an enforceable agreement later (oral or otherwise) to renew 11th-floor only	First Crystal: Joiner and Redding reached a verbal agreement; First Crystal relied and refrained from marketing space	Government: Any verbal agreement contemplated a written SLA; only a warranted CO can bind the Government; no SLA was signed	Held: No enforceable contract — parties contemplated a written SLA; Joiner lacked authority to bind GSA and no CO ratification occurred
Whether Joiner had actual, implied, or apparent authority to bind the Government	First Crystal: Joiner’s prior conduct (terminations, marketability program) created apparent/implied authority; First Crystal relied on it	Government: Regulations and GSA desk guide reserve lease-entry/amendment authority to warranted contracting officers; terminations cited did not obligate funds or were memorialized by CO signatures	Held: Joiner lacked authority (actual or implied) and no ratification by a contracting officer was shown
Whether other BRAC-affected leases were invalidly terminated by non-COs (Count VI)	First Crystal (alternative): If Joiner lacked authority, other terminations were invalid and damages follow	Government: Those other leases were ultimately terminated by SLAs signed by officials with authority; documentary evidence supports valid terminations	Held: Government entitled to judgment on Count VI — SLAs show valid terminations

Key Cases Cited

First Commerce Corp. v. United States, 335 F.3d 1373 (Fed. Cir.) (mirror-image rule: acceptance must match offer)
Lockheed Martin IR Imaging Sys., Inc. v. West, 108 F.3d 319 (Fed. Cir.) (partial/ selective exercise of an option is improper)
Alliant Techsystems, Inc. v. United States, 178 F.3d 1260 (Fed. Cir.) (changes to option terms convert exercise into no binding obligation)
4737 Conner Co. v. United States, [citation="65 F. App'x 274"] (Fed. Cir.) (exercise with different terms is a counter-offer)
Mil-Spec Contractors, Inc. v. United States, 835 F.2d 865 (Fed. Cir.) (agreements with the United States are not binding unless made by an official with authority)
SCM Corp. v. United States, 595 F.2d 595 (Ct. Cl.) (oral understandings contingent on a written document are not binding contracts)
Harbert/Lummus Agrifuels Projects v. United States, 142 F.3d 1429 (Fed. Cir.) (silence by an authorized official does not establish acceptance/ratification)
Schism v. United States, 316 F.3d 1259 (Fed. Cir.) (elements required for ratification)
Winter v. Cath-dr/Balti Joint Venture, 497 F.3d 1339 (Fed. Cir.) (no implied authority where regulations reserve function to contracting officers)
Iselin v. United States, 271 U.S. 136 (U.S.) (offer/acceptance principles under government contract law)