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).