BNUMBER: B-278965
DATE: April 20, 1998
TITLE: Helmsman Properties, Inc., B-278965, April 20, 1998
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Matter of:Helmsman Properties, Inc.
File: B-278965
Date:April 20, 1998
Edward V. Gregorowicz, Esq., and Frederick P. Hink, Esq., for the
protester.
Robert J. McCall, Esq., Public Building Service, General Services
Administration, for the agency.
Scott H. Riback, Esq., and John M. Melody, Esq., Office of the General
Counsel, GAO, participated in the preparation of the decision.
DIGEST
General Services Administration properly may limit leasehold
acquisition to a city's central business area (CBA) based on Executive
Branch policy embodied in Executive Order No. 12,072, which was
intended to promote economic growth within major central cities; in
following this policy, agency has determined, essentially, that
location in CBA is part of the government's needs.
DECISION
Helmsman Properties, Inc. protests the terms of solicitation for
offers (SFO) No. 7MD0095, issued by the General Services
Administration (GSA) for the lease of approximately 33,000 square feet
of office space in Baltimore, Maryland, for the Defense Contract
Management Command (DCMC). Helmsman argues that the SFO improperly
limits the delineated area for the acquisition to the central business
area (CBA) of Baltimore City.
We deny the protest.
Helmsman is the current lessor of space occupied by DCMC, with the
lease due to expire in July 1998. Helmsman's building is located in
the business district of Towson, Maryland, a suburb of Baltimore
located approximately 3 miles outside of the city limits. DCMC
initially contacted GSA and requested that it be permitted to remain
at its current location. GSA responded that it was required to
compete the requirement. DCMC then requested that the competition
include a delineated area comprised of Baltimore City and several
surrounding suburban areas. GSA conducted a telephone market survey
that produced 15 expressions of interest from firms in the delineated
area requested by DCMC. Thereafter, however, citing Executive Order
No. 12,072, 3 C.F.R., 1979 Comp., p. 213, reprinted in 40 U.S.C. sec. 490
(1994), GSA advised DCMC that it would limit its consideration to
property located in the CBA of Baltimore City. GSA then consulted
with Baltimore City officials to help define the boundaries of the CBA
and conducted a market survey that was limited to the Baltimore CBA.
GSA received five expressions of interest, two of which were for
buildings located within the city limits, but outside the delineated
CBA. GSA subsequently issued the SFO, and received one offer by the
date set for the receipt of initial offers (and an additional offer
after the initial closing date).
Helmsman filed an agency-level protest, maintaining that limiting the
competition to the Baltimore CBA was unduly restrictive of
competition. GSA denied Helmsman's protest, finding that it had
properly applied Executive Order 12,072 in limiting the acquisition to
the CBA. This protest to our Office ensued.
Helmsman contends that limiting this acquisition to the Baltimore CBA
is the result of GSA's misapplication of Executive Order 12,072 which,
Helmsman contends, nowhere requires GSA to limit acquisitions to the
CBAs of central cities. According to the protester, since Towson is
situated in the CBA of Baltimore County, an "urban area" within the
meaning of the Executive Order and its implementing regulations,
leasing its building would be consistent with the Executive Order.[1]
Helmsman further contends that GSA improperly failed to consult with
Baltimore County officials, as allegedly required by the Executive
Order, before making its decision about the CBA.
Executive Order 12,072 requires that GSA give first consideration to a
city's CBA, and adjacent areas of a similar character, in meeting
federal real estate requirements in urban areas; its purpose is to
"strengthen the Nation's cities" and "conserve existing urban
resources and encourage the development and redevelopment of cities."
Executive Order 12,072, section 1-101. As we previously have noted,
President Carter, in signing the Executive Order, commented that it
was designed to help place federal buildings in urban areas to
encourage the migration of jobs, people, opportunities and growth to
abandoned central city areas; the objective is to "strengthen the
backbone of our major cities and to build up jobs and further
investments there." 14 Weekly Comp. of Pres. Doc. 1,427-1,428 (Aug.
16, 1978); H&F Enters., B-251581.2, July 13, 1993, 93-2 CPD para. 16 at 5.
The purpose of the Executive Order--to encourage economic growth in
"major" central cities through locating federal facilities within the
cities' CBAs--is clear, and Towson simply is not a major city's CBA.
Materials prepared by the Towson Business Association and submitted by
Helmsman describe Towson as the county seat of Baltimore County, 2
miles beyond the Baltimore City/County line with a population of
approximately 50,000. We conclude, based on its location and size,
that Towson--and Baltimore County more generally--cannot reasonably be
described as a major central city area. As noted by the District
Court in Jane D. v Soc. Sec. Admin., No. 87-1867 (E.D. La. 1987):
to read Executive Order 12072 as allowing an agency to give
consideration to an area within a prospering suburb over
appropriate areas within the central city to which the suburb
attaches would wholly, unreasonably, and impermissibly
misconstrue the obvious meaning and purpose of [the Executive
Order].
See also H&F Enters., Ltd. v. United States, 973 F. Supp. 170, 177
(D.D.C. 1996) (plaintiff's description of its property as located
within a "suburban" area foreclosed any compelling argument that
plaintiff is located in an adjacent area of similar character to the
CBA, where the CBA is by definition an urban area).
We also find that GSA was not required to consult with Baltimore
County--as opposed to Baltimore City--officials in determining the
parameters of the CBA. The regulations implementing the Executive
Order provide that "GSA will consult with local officials to identify
CBAs." Federal Property Management Regulations (FPMR), Interim Rule
D-1, sec. 101-17.205(d)(1), 62 Fed. Reg. 42,071 (1997). Given that, as
discussed above, the purpose of the Executive Order is to promote
economic growth in urban areas, we read this language as referring to
local officials in the urban area under consideration, who are in a
position to assist GSA in identifying the parameters of a suitable
CBA. As discussion with officials outside the CBA would not promote
this aim, there is no basis for concluding that such discussion is
required.[2]
Helmsman contends that, since DCMC's needs are being met at its
current location in Towson, the CBA limitation is unnecessary to meet
the government's legitimate needs, and thus constitutes an unjustified
restriction on competition in violation of the Competition in
Contracting Act (CICA), 41 U.S.C. sec. 253-253b (1994). Helmsman further
contends that the level of interest expressed in the agency's first
market survey which included Baltimore County, as compared to the
level of interest expressed in the market survey for Baltimore City,
clearly shows that significantly greater competition will be achieved
if the delineated area is expanded to include Baltimore County. In
this latter regard, Helmsman maintains that GSA did not obtain
adequate competition within the city and that, since it has at this
point satisfied its obligation to give the Baltimore City CBA "first
consideration," it should now expand the CBA to include Baltimore
County. Helmsman directs our attention to the implementing
regulations, FPMR, Interim Rule D-1, sec. 101-17.205 (h), (l), supra, in
support of its position that GSA must obtain adequate competition when
acquiring leaseholds consistent with the policies of the Executive
Order.
While GSA is required to obtain full and open competition among
suitable available locations meeting minimum government requirements,
the Executive Order provides a reasonable basis to limit competition
for space acquisitions to an urban area's CBA. 440 East 62nd St. Co.,
B-276787, July 24, 1997, 97-2 CPD para. 30 at 5. Stated another way,
based on the Executive Order, an agency properly may define its needs
for a particular space acquisition as including a location within an
urban area CBA. This is what GSA has done here, and there thus is no
basis for concluding that the CBA requirement improperly restricts
competition, or otherwise violates CICA. The fact that there are
prospective offerors outside the delineated area capable of otherwise
satisfying the agency's requirements is immaterial where, as here, the
agency has a legitimate basis for imposing the additional requirement.
See generally Millbrook Indus. Contracts, Ltd., B-277883, Oct. 29,
1997, 97-2 CPD para. 129 (agency requirement that painting operations be
conducted at contractor facilities rather than in mobile paint booths
brought to the agency's facility was a reasonable restriction based on
agency's environmental policy concerns); T&S Prods., Inc.,
B-261287, Aug. 14, 1995, 96-2 CPD para. 97 at 2-3 (the fact that very
few--or even only one--firm can meet agency's requirements does not
demonstrate that requirement is improper, so long as the requirement
reflects agency's minimum needs).
The regulation cited by Helmsman does not change our conclusion.
FPMR, Interim Rule D-1, sec. 101-17.205(l), supra, reads in relevant part
as follows:
GSA may consider whether restricting the delineated area to the
CBA will provide for competition when acquiring leased space.
Where it is determined that an acquisition should not be
restricted to the CBA, GSA may expand the delineated area in
consultation with the requesting agency and local officials.
While under this provision GSA may consider the level of competition
in deciding whether to impose a CBA restriction, or expand the
delineated area beyond the CBA, nothing in the provision requires GSA
to expand the delineated area. That is, the regulation does not
require GSA to compromise its legitimate needs--which include
restricting the acquisition to properties within the CBA--solely in
order to increase the number of potential offerors. In any case, GSA
specifically determined --based on its market survey that showed that
there were at least three potential acceptable sites within the
CBA--that there would be adequate competition within the CBA, and GSA
ultimately received two offers of property within the delineated area.
The protest is denied.
Comptroller General
of the United States
1. The City of Baltimore is geographically surrounded by Baltimore
County, but is a distinct political subdivision.
2. Helmsman argues at length regarding various language changes in the
current version of the implementing regulations, as compared to an
earlier version of the regulations, maintaining that these language
changes suggest a policy shift. For example, earlier versions of the
regulation referred to identifying a "CBA," whereas the current
version refers to "CBAs"; Helmsman contends that this reflects a
change in policy designed to respond to situations such as the one
here, where there are two "competing" CBAs. However, there is no
indication in the regulations or elsewhere that these changes were
made pursuant to a change in policy, or were intended for any other
purpose than clarification. Meanwhile, it is clear that the essential
purpose of the Executive Order remains; as recently as 1996, President
Clinton reaffirmed the Executive Branch's commitment to the policies
embodied in the Executive Order. See Executive Order No. 13,006, 3
C.F.R., 1996 Comp., p. 195, reprinted in 40 U.S.C.A. sec. 601a (West
Supp. 1998).