BNUMBER:  B-276787 
DATE:  July 24, 1997
TITLE: 440 East 62nd Street Company, B-276787, July 24, 1997
**********************************************************************

Matter of:440 East 62nd Street Company

File:     B-276787

Date:July 24, 1997

Melinda Carmen, Esq., Carmen & Muss, for the protester.
Emily C. Hewitt, Esq., and Robert J. McCall, Esq., General Services 
Administration,  for the agency.
Paul E. Jordan, Esq., and Paul Lieberman, Esq., Office of the General 
Counsel, GAO, participated in the preparation of the decision.

DIGEST

In procurement of leased office space in Philadelphia, the 
determination by the General Services Administration (GSA) to limit 
consideration to a geographical area within the central business area 
(CBA), thereby excluding protester's building, is unobjectionable 
where GSA reasonably determined that government's needs could be met 
and adequate competition would be obtained by using the defined 
geographical area, and the geographical limitation was not otherwise 
improper. 

DECISION

The 440 East 62nd Street Company (440 East) protests the geographical 
boundaries in solicitation for offers (SFO) No. MPA96211, issued by 
the General Services Administration (GSA) for leased office space to 
house Department of Labor offices in Philadelphia, Pennsylvania.  The 
protester contends that the delineated area is unduly restrictive of 
competition and otherwise improper.  

We deny the protest.

The lease on the space currently occupied by Labor expires on November 
12, 1997.  After developing Labor's requirements, including square 
footage needs, GSA placed an advertisement in The Philadelphia 
Inquirer on August 4, 1996, advising of its interest in leasing 
approximately 117,500 square feet of rentable square feet (RSF) 
(102,000 to 107,000 occupiable square feet (OSF)).  In the 
advertisement, GSA delineated the acceptable geographical area for the 
leased space, only the northern boundary of which is relevant to this 
protest.  That boundary as advertised in August 1996 was John F. 
Kennedy Boulevard.  The protester submitted a letter of interest in 
response, and was advised by GSA that its proposed building, located 
at 401 North Broad Street, was not eligible for consideration, because 
it is located north of John F. Kennedy Boulevard.  The agency 
conducted a market survey, which identified three buildings within the 
delineated area that could meet the agency's requirements.  

The protester requested that the delineated area be expanded to 
include its building and, in October 1996, Labor and GSA 
representatives toured 440 East's building.  After the site visit, 
Labor advised GSA that it was not interested in revising the 
delineated area.  However, since 440 East continued to pursue the 
matter, GSA reviewed its requirements for the delineated area and 
decided (in addition to other changes not relevant here) to shift the 
northern boundary further north, to Vine Street.  This revised area 
still did not include the protester's building, which is situated 
approximately 1/8 mile beyond the revised northern boundary of the 
delineated area.  Accordingly, on April 6, 1997, GSA placed a new 
advertisement in The Philadelphia Inquirer advising of its interest in 
leasing 120,000 RSF/104,000 OSF within the redetermined area.  GSA 
conducted a new market survey and identified more than five buildings 
which could meet the agency's requirements.  The protester again 
expressed interest in the procurement but was advised that GSA would 
not consider 440 East's property, since it was outside the delineated 
area.  This protest followed. 

The protester contends that its building must be included in the 
competition because its building lies within the central business area 
(CBA) of Philadelphia and that GSA is required to consider all 
buildings within the CBA under Executive Order (E.O.) No. 12072, 
August 16, 1978, 3 C.F.R., 1979 Comp., p. 213; the Federal Property 
Management Regulations (FPMR); and the Competition in Contracting Act 
of 1984 (CICA).  In this regard, 440 East argues that the proper 
northern boundary of the CBA is Spring Garden, which is north of its 
property, while the agency maintains that the CBA's northern boundary 
is Vine Street, which is south of 440 East's building.  Thus, the 
central matter placed at issue in this protest is whether 440 East's 
building lies inside the CBA.[1]

Under E.O. 12072, in the acquisition of government space facilities in 
urban areas, GSA is required to give first consideration to facilities 
within a centralized community business area and adjacent areas of 
similar character, including specific areas which may be recommended 
by local officials.  Based on this requirement, the FPMR defines the 
CBA of an urban area as "the centralized community business area and 
adjacent areas of similar character including other specific areas 
which may be recommended by local officials."  FPMR Temp. Reg. D-1, 41 
C.F.R. Ch. 101, Subch. D, App.,  sec.  101-17.205(p)(1)(1996).  GSA is 
required to consult with local officials to identify the CBAs and will 
consider the officials' recommendations for, and review of, general 
areas of possible space or site acquisition.  Id.  sec.  101-17.205(d)(1).  

Here, there is apparently no pre-established, authoritative definition 
of the CBA which GSA could rely on.  Instead, the agency established 
the CBA's northern boundary for purposes of this procurement on the 
basis of information gathered from various sources, including 
consultations with officials from Philadelphia.  Specifically, it 
relied on a census of retail trade which it obtained from the 
Philadelphia Planning Commission in February 1997, at the time it was 
determining the delineated area for this procurement.  According to 
the census, the northern boundary of the central business district of 
Philadelphia is Vine Street.  In addition, GSA had contacted the 
Philadelphia Commerce Department regarding all space actions in 
Philadelphia and the Pennsylvania suburbs prior to this procurement.  
While various different delineated areas were used in these prior 
procurements, here GSA decided that for all future space procurements, 
it would delineate a single area which could be expanded to meet a 
tenant agency's requirements.  Before creating the boundaries of the 
delineated area, GSA reviewed several recent procurements to identify 
previous delineated areas, compared those areas with the commercial 
district as defined by private sector market reports and maps 
identifying commercial office buildings, consulted with Labor on its 
minimum needs for space, and discussed the boundaries of the 
delineated area with city officials.[2] 

While the agency acknowledges that the delineated area does not 
encompass the entire CBA, the northern boundary (Vine Street), which 
is essentially all that is at issue here, is the same as the northern 
boundary of the central business district reflected in the census 
document.[3]  The record indicates that the central commercial core of 
Philadelphia lies south of Vine Street, and that area is zoned for 
intense office use and includes nearly all available Philadelphia 
office space.  City officials considered the area delineated by GSA to 
constitute the commercial core for development purposes, and agreed 
with the boundaries that GSA delineated.  Since the agency was 
required to consult with the city in determining the CBA and the city 
provided the census document to reflect what it considered the central 
business district, the agency reasonably concluded that the northern 
boundary of the CBA was Vine Street, as stated in the census document, 
and not Spring Garden as the protester would have it.  Thus, GSA 
reasonably determined that the protester's building was outside the 
CBA.

The protester argues that its building is inside the CBA because the 
CBA is coextensive with that area of Philadelphia denominated "Center 
City" by the Philadelphia Planning Commission.[4]  It is also inside 
an area denominated by the city as the "Center City District" (CCD), a 
business improvement district.  The CCD was established in 1990 as a 
private sector-directed municipal authority.  (Owners within the CCD 
pay an extra 5 percent assessment in order to receive cleaning, roving 
uniformed patrols, promotion, and other services in addition to those 
provided by the city.)  However, nothing in the record establishes 
that either Center City or the CCD necessarily defines the CBA of 
Philadelphia for purposes of this procurement.[5]

The protester also argues that its building is in an area that should 
be included within the CBA because it is both "adjacent" to and of 
"similar character" to the "centralized community business area."  
FPMR Temp. Reg. D-1, supra,  sec.  101-17.205(p)(1).  We find this argument 
unpersuasive.  While the protester's building currently is used for 
office space, it is located in a "light industrial" zone which has few 
commercial office buildings nearby.  A city map submitted by the 
protester supports this assessment.  The map shows and names numerous 
office buildings south of Vine Street, but identifies very few north 
of that street.  Further, while 440 East refers to its building as the 
"largest office building in Philadelphia" its building is neither 
indicated nor designated on the map, although the Philadelphia 
Inquirer Building, which is across the street, is shown.  Thus, while 
the protester insists that its building is in a "similar area" to the 
area south of Vine Street, the protester has failed to provide 
evidence or information which substantiates this conclusion.  There is 
no basis to conclude that the agency improperly excluded the site of 
the protester's building from the CBA.

We have also examined the record to determine whether GSA was 
reasonable in not expanding the delineated area outside the CBA.  
While, pursuant to the 41 C.F.R.  sec.  101-18.100(d), GSA is required to 
obtain full and open competition among suitable available locations 
meeting minimum government requirements, E.O. 12072 provides a 
reasonable basis to limit competition for space acquisition to an 
urban area's CBA.  H&F Enters., B-251581.2, July 13, 1993, 93-2 CPD  para.  
16 at 5-6.  The determination of the proper scope of a geographical 
restriction is a matter of the agency's judgment, which we will review 
only in order to ensure that it has a reasonable basis.  Canal 
Claiborne Ltd., B-244211, Sept. 23, 1991, 91-2 CPD  para.  266 at 2.  Based 
upon our examination of the record, we find that GSA's determination 
to exclude the area containing the protester's building was 
reasonable. 

Under E.O. 12072, in addition to giving first consideration to the 
CBA, the agency is required to consider the impact a site selection 
will have on improving the social, economic, environmental, and 
cultural conditions of the communities in the urban area.  E.O. No. 
12072,  sec.  1-102, 1-103.  GSA is also required to consider 
compatibility of the site with local development and redevelopment 
objectives; the impact on economic development and employment 
opportunities in the urban area including utilization of human, 
natural, cultural, and community resources; and the availability of 
adequate public transportation.  E.O. 12072,  sec.  1-104. 

Here, after considering these matters, GSA determined that all its 
minimum needs could be met within the CBA.  Further, city officials 
advised GSA that it is not sensible to include areas other than the 
commercial core (the delineated area) and that it was in the best 
interest of the city to fill the existing vacancies in the core office 
market to strengthen that segment and keep it viable.  In the city's 
view, GSA's locational decisions have a profound effect on the 
economic health of Philadelphia.  Federal employees in the delineated 
area constitute a crucial segment of the consumer market, providing 
much needed support to the city's retail and service industries.  They 
also help to create a "critical mass" of people who can support a high 
level of workforce-related amenities such as expanded choices in 
shopping, transportation, entertainment, and services.  In this 
regard, the delineated area supports agency missions, urban 
redevelopment, and local plans; encourages transit use; and places 
federal offices where they are accessible to taxpayers and workers at 
all income levels.  These all represent reasonable considerations in 
determining the delineated area.  In these circumstances, where the 
agency has determined to restrict the competition to an area within 
the CBA based on the fact that its needs can be met within the CBA and 
on the agency's consideration of the social, economic, environmental, 
and cultural factors identified in E.O. 12072, we find no violation of 
the CICA requirement for full and open competition.  41 U.S.C.  sec.  
253(a) (1994).

The protester also contends that the delineated area will result in a 
limited competition which is likely to result in higher lease costs.  
The record suggests otherwise.  The market survey identified a number 
of buildings within the delineated area which could meet the minimum 
requirements outlined in the SFO.  Half of these buildings are not 
currently in GSA's inventory.  Further, using a similar delineated 
area, GSA recently awarded a lease for 108,862 RSF, at a fully 
serviced rental rate which was approximately $2.00 per square foot 
less than the 

average commercial lease rate in Philadelphia.  Half the buildings 
reviewed in GSA's market survey for this SFO quoted comparable RSF 
rates.  Accordingly, the protester's assertion is contradicted by the 
record.[6]

The protest is denied.

Comptroller General
of the United States

1. The protester submitted a number of arguments in support of these 
and other protest grounds; the agency responded to each argument, 
explaining and justifying its actions.  We have reviewed the entire 
record, considered all of the arguments, and find no basis to sustain 
the protest.  Thus, this decision will discuss only the more 
significant of the protester's arguments.

2. In support of its position, 440 East has submitted a statement from 
its real estate agent which quotes the city's Deputy Commerce Director 
as saying that in a March meeting between GSA and city officials, the 
city never intended to exclude the protester or anyone else from 
competing for federal lease procurements.  The agency explains that it 
based its determination of the CBA on consultation with the city's 
Commerce Director and staff in February 1997 and that it reasonably 
relied on that consultation in setting the northern boundary of the 
CBA as Vine Street.  The putative observations of an individual staff 
member, made 3 months later, do not call into question the 
reasonableness of the agency's reliance on the guidance it was given.

3. As explained in our decision, we conclude that the agency 
reasonably determined that the protester's building does not fall 
within the CBA.  Thus, 440 East would not be able to compete even if 
the entire CBA were included.  Accordingly, 440 East is not an 
interested party to object to the agency's failure to include the 
entire CBA in the solicitation.  4 C.F.R.  sec.  21.0(a), 21.1(a) (1997); 
ECS Composites, Inc., B-235849.2, Jan. 3, 1990, 90-1 CPD  para.  7. 

4. The protester has submitted another statement from its real estate 
agent, who asked a member of the Planning Commission what the 
Commission considered to be the CBA.  The agent reports that the 
Commission member advised him that the Commission "defines Center City 
as from Spring Garden to South Street, River to River."  Without 
considering the probative worth of the agent's recitation of the 
Commission member's statement, a definition of "Center City" does not 
necessarily serve to establish the boundaries of the CBA.  

5. In a related argument, 440 East notes that in a prior solicitation 
for leased space for the Environmental Protection Agency, GSA had 
issued a prospectus with a delineated area which included the 
protester's building and corresponded to the boundaries urged by 440 
East in this protest.  The protester also notes a number of other 
solicitations which used different delineated areas that excluded 440 
East's building.  However, each procurement action is a separate 
transaction, and the action taken under one is not relevant to the 
propriety of the action taken under 
another procurement for purposes of a bid protest.  Digital Sys. 
Group, Inc., B-258262.2, Jan. 20, 1995, 95-1 CPD  para.  30 at 3; Aguirre 
Architects, Inc.--Recon., B-230256.2, May 19, 1988, 88-1 CPD  para.  478 at 
2.  

6. In a related argument, 440 East asserted that the agency failed to 
meet its obligations under the Public Buildings Act, 40 U.S.C.A.  sec.  
606(a) (West Supp. 1997), which requires GSA to submit a prospectus 
for approval by the House Transportation and Infrastructure Committee 
and the Senate Environment and Public Works Committee, prior to the 
issuance of a solicitation.  The Public Buildings Act requires a 
prospectus where the lease is expected to exceed $1.5 million, as 
adjusted.  Since the adjusted prospectus threshold for fiscal year 
1997 is $1.74 million, Id.  sec.  606(f), and the estimated rental for the 
lease at issue here is less than $1.6 million, GSA was not required to 
submit a prospectus for Congressional approval.