OPINION OF THE BOARD

Appellant leases a building in Norwood, Ohio to Respondent for use as a post office. The City of Norwood required that the post office’s water meters be removed and brought in for testing. Respondent had the testing done and, in a contracting officer’s final decision, demanded that Appellant pay the cost Respondent incurred to remove and reinstall the water meters plus Respondent’s administrative costs and interest. Appellant refused to pay and appealed the final decision.

The parties elected to submit the appeal on the written record. Respondent filed additional evidence and a brief. Appellant filed nothing beyond its Complaint despite being given the opportunity to do so.

FINDINGS OF FACT

1. Appellant owns and leases to Respondent the premises used as the Norwood Branch Post Office in Norwood, Ohio (Appeal File, Tabs (“AF”) 1, 2, 3).

2. The lease requires the lessor to furnish “lighting fixtures, plumbing and toilet facilities, and gas, water and electric meters, . . .” (AF 1, Lease Paragraph 6).

3. The lease also requires the lessor to

“keep the demised premises, including the building and any and all equipment, fixtures, and appurtenances . . . furnished by the lessor under the provisions of this lease in good repair and tenantable condition including but not limited to any necessary servicing contracts, to the satisfaction of the Post Office Department during its occupancy of the premises, except in case of damage arising from the act or the negligence of the Government’s agents or employees.” (AF 1, Lease Paragraph 7).

4. By letter dated March 13, 1998, the City of Norwood sent a “Dear Customer” letter to Respondent advising of a new City requirement that all water meters in the city be tested. The notice required that meters of the size at the Norwood Branch be removed by a master plumber and brought to the City’s testing contractor. The test was free, but, according to the letter, “[t]he removal and re-installation of the meter will be at your expense.” (AF 6; Declaration of Marcus K. Nielsen (“Nielsen Decl.”) ¶ 4).

5. Without notifying Appellant, the manager of the Norwood Branch contracted with a plumber to remove the water meters for testing. The meters passed the test, and the plumber reinstalled the meters at the post office. Respondent’s cost for the plumbing work was $253.40, which was a reasonable price for such work. (AF 7; Nielsen Decl. ¶ 5).

6. By final decision dated April 23, 1998, the contracting officer asserted a claim against Appellant for the cost of the plumbing service, $253.40. The contracting officer advised that if Appellant failed to reimburse Respondent by May 6, 1998, the fee for plumbing service plus administrative costs of $50 plus interest at 7.3% would be withheld from rents otherwise due Appellant at another postal facility. The administrative costs claimed were the salary expenses incurred by Respondent for the contracting officer’s time, the contract technician’s time and the Postal Service data center’s time necessary to implement the rent offset to collect the claimed debt. (AF 8; Nielsen Decl. ¶¶ 7, 8, 9).

7. Appellant did not reimburse Respondent and filed a notice of appeal on May 22, 1998 (AF 9).

8. At all times relevant, Respondent’s cost of money was 7.3% (Nielsen Decl. ¶ 9).

DECISION

The lease requires Appellant to provide water meters (Finding 2) and to keep the meters in good repair, including any necessary servicing (Finding 3). Under such lease requirements, Appellant, as the owner, is responsible for complying with local laws affecting the property. See Nationwide Postal Management, PSBCA No. 4015, 98-2 BCA ¶ 29,929, recon. denied, 98-2 BCA ¶ 30,089, and authorities cited therein. Therefore, it was Appellant’s responsibility as owner to have the water meters tested.

Appellant argues that Respondent’s failure to give it notice and an opportunity to accomplish the testing (Finding 5) relieves Appellant of any liability for the expenses Respondent incurred. However, Respondent’s performance of Appellant’s lease obligation requires Appellant to reimburse Respondent, and Respondent’s failure to give Appellant notice does not mean that Respondent is entitled to no reimbursement for the testing. Rather, the failure to give notice limits Respondent’s recovery to what it would have cost Appellant to do the work. See J. Leonard Spodek d/b/a Nationwide Postal Management, PSBCA No. 3710, 96-2 BCA ¶ 28,457, recon. denied, 96-2 BCA ¶ 28,608. Appellant has not challenged Respondent’s persuasive evidence showing that the charge for removing and reinstalling the meters was reasonable (Finding 5) or suggested that the work was not necessary or that it could have performed the work for less. Accordingly, Appellant is responsible for payment of the $253.40 charge for the removal and reinstallation of the water meters. See J. Leonard Spodek d/b/a Nationwide Postal Management, PSBCA No. 3710, 96-2 BCA ¶ 28,457, recon. denied, 96-2 BCA ¶ 28,608.

Respondent also claims interest on its cost of testing the meters. Interest may be allowed on moneys owed by Appellant to Respondent under the lease. See J. Leonard Spodek d/b/a Nationwide Postal Management, PSBCA No. 3710, 96-2 BCA ¶ 28,457, recon. denied, 96-2 BCA ¶ 28,608; Electronics & Space Corp., ASBCA No. 47,539, 95-2 BCA ¶ 27,768. However, under the circumstances of this appeal—Appellant had been given no prior notice of the meter testing requirement and the contracting officer allowed Appellant less than two weeks to pay—imposition of interest any sooner than 30 days after Appellant received the contracting officer’s letter would be unreasonable. Cf. Astro-Space Laboratories, Inc. v. United States, 200 Ct. Cl. 282, 470 F.2d 1003 (1972); Stoeckert v. United States, 183 Ct. Cl. 152, 167, 391 F.2d 639, 648 (1968); Flag Real Estate, Inc., HUD BCA No. 84-899-C14, 88-3 BCA ¶ 20,866. Accordingly, Respondent may recover interest at the Postal Service’s then cost of funds, 7.3% (Finding 7), on the $253.40, but only from May 27, 1998, until the debt is (or was) satisfied.

Respondent also seeks recovery of its administrative costs associated with implementing rental deductions to collect the $253.40 from Appellant. Although the Board has allowed recovery from the lessor of administrative costs, such allowance has not extended beyond Respondent’s administrative costs incurred to perform the repair to a leased facility that the lessor was obligated to perform. See The Estate of George J. Rutman, PSBCA Nos. 3697, 3705, 97-2 BCA ¶ 29,115; Real Properties MLP Limited Partnership, PSBCA No. 3453, 95-2 BCA ¶ 27,829 at 138,756; M.R. Kaplan, et al., PSBCA Nos. 1147, 1298, 1303, 1310, 88-3 BCA ¶ 20,827 at 105,319. The administrative costs at issue in this appeal have no relationship to the performance of the water meter testing. Here Respondent claims its in-house costs of collecting from Appellant the costs Respondent incurred for the testing (Finding 6). Under the facts of this appeal, Respondent has not persuaded us that it is entitled to recover the administrative costs it seeks.

Respondent is entitled to recover from Appellant the amount of $253.40 plus interest on that amount at an annual rate of 7.3% from May 27, 1998, until the amount was paid to or collected by Respondent. It may not recover the claimed administrative costs.

The appeal is sustained as to the administrative costs claimed by Respondent and as to the adjustment of the starting date of interest and is in all other respects denied.

Norman D. Menegat

Administrative Judge

Board Member

I concur:

James A. Cohen

Administrative Judge

Chairman

I concur:

David I. Brochstein

Administrative Judge

Vice Chairman