from the United States Court of Federal Claims in No.
1:17-cv-00277-EDK, Judge Elaine Kaplan.
D. Gordon, Holland & Knight, LLP, Washington, DC, argued
for plaintiff-appellant. Also represented by Mary Beth Bosco,
Gordon Griffin, Robert C. MacKichan, Jr.; Elizabeth Jochum,
Westercamp, Commercial Litigation Branch, Civil Division,
United States Department of Justice, Washington, DC, argued
for defendant-appellee. Also represented by Chad A. Readler,
Robert E. Kirschman, Jr., Deborah A. Bynum.
Moore, Hughes, and Stoll, Circuit Judges.
Assets, LLC appeals the United States Court of Federal
Claims' ("Claims Court") order dismissing its
pre-award bid protest claim and granting the government's
motion for judgment on the administrative record that General
Services Administration's choice of maximum rental rate
in its acquisition was not arbitrary or capricious or lacking
a rational basis. For the reasons discussed below, we affirm.
Federal Bureau of Investigation ("FBI") is
currently the sole tenant in a building in Cleveland, Ohio,
pursuant to a lease between Cleveland Assets and the General
Services Administration ("GSA"). The current lease
began on February 1, 2002, and was originally set to expire
on January 31, 2012. Due to delays in securing a new lease,
the existing lease with Cleveland Assets has been extended
multiple times. Pursuant to the terms of the extensions, GSA
has paid, and continues to pay, Cleveland Assets a penalty
rate of $44.72 per rentable square foot ("PSF")
since the expiration of the original 10-year period.
accordance with 40 U.S.C. § 3307, GSA must seek the
approval of the Senate Committee on Environment and Public
Works and the House Committee on Transportation and
Infrastructure before obligating funds on a lease exceeding
an amount published at GSA's Annual Prospectus Threshold.
GSA Annual Prospectus Thresholds,
secure consideration for approval by the congressional
committees, GSA must send the congressional committees a
prospectus of the proposed facility, including a brief
description of the space and "an estimate of the maximum
cost to the Government." 40 U.S.C. § 3307(b).
2009, GSA began preparing a congressional prospectus for a
new lease for the Cleveland FBI office. A series of documents
demonstrate GSA considered a range of rental values for
inclusion in its prospectus. A November 2009 appraisal report
concluded that the total gross rent for the type of facility
sought by the FBI ranged from $29.48 to $50.47 PSF. An
unsigned, undated draft prospectus prepared before 2010 but
not approved by GSA, along with a series of other undated and
unsigned documents, estimated a maximum proposed rental rate
of $42.00 PSF. An undated document titled "Lease Project
Data Sheet - FY 2010 Program" projected a maximum rental
rate of $50.47 PSF. And a document titled "Analysis of
Replacement Lease Rental Rate" set forth an estimated
rental rate of $26.00 PSF.
December 21, 2010, GSA approved a prospectus with a maximum
proposed rental rate of $26.00 PSF and an escalation clause
for inflation. By the end of September 2011, both the
United States Senate Committee on Environment and Public
Works and the United States House of Representatives
Committee on Transportation and Infrastructure adopted
resolutions approving the prospectus at the $26.00 PSF rate.
March 10, 2016, GSA issued a request for expressions of
interest in leasing a building for the FBI's Cleveland
office. GSA directly invited a subset of the responses
received, including Cleveland Assets, to submit proposals to
the subsequent Request for Lease Proposals No. 6OH0241
("RLP"), which was posted on December 7, 2016. The
RLP stated that, in accordance with 40 U.S.C. § 3307,
GSA would "only award a lease pursuant to this RLP if
the offered rental rate d[id] not exceed the
Congressionally-imposed rent limitation" of $26.00 PSF.
J.A. 1070. The RLP also indicated that negotiations may be
conducted, and "GSA will negotiate the rental price for
the initial term, any renewal periods, and any other aspect
of the offer as deemed necessary." J.A. 1075. It
indicated any offeror "will be provided a reasonable
opportunity to submit revisions to their initial offer
including any cost or price, technical, or other revisions
that may result from the negotiations." Id. The
RLP stated the lease "will be awarded to the responsible
Offeror whose offer will be most advantageous to the
Government, " considering a combination of factors
including technical quality, site characteristics, and the
offeror's qualifications and past performance.
Id. For a proposal to be considered responsive, the
RLP stated it must include a proposed rental rate "under
the prospectus threshold." J.A. 1077.
February 28, 2017, the last day proposals under the RLP could
be submitted, Cleveland Assets filed the suit underlying this
appeal in the Claims Court. Relevant to this appeal, Count II
of Cleveland Assets' complaint asserted that the RLP is
unlawful because it exceeds the scope of GSA's authority
to solicit offers under 40 U.S.C. § 3307. In Counts III
and IV of its complaint, Cleveland Assets alleged that the
rental cap of $26.00 PSF is unreasonably low, imposes an
undue restriction on competition, and shifts all risk to the
contractor, thereby negating the technical factors.
Claims Court dismissed Count II. The court noted that
"[i]t is unclear" whether Cleveland Assets'
allegations were sufficient to establish its status as an
"interested party" for the purposes of 28 U.S.C.
§ 1491(b), but "even assuming that such an injury
has been alleged, " it held Cleveland Assets failed to
demonstrate that it was within the zone of interests
protected by 40 U.S.C. § 3307. Cleveland Assets, LLC
v. United States, 132 Fed.Cl. 264, 275 (2017). The
Claims Court also granted judgment on the administrative
record in favor of the ...