Cleveland Assets, LLC v. United States

132 Fed. Cl. 264, 2017 U.S. Claims LEXIS 598, 2017 WL 2384774
CourtUnited States Court of Federal Claims
DecidedMay 22, 2017
Docket17-277C
StatusPublished
Cited by9 cases

This text of 132 Fed. Cl. 264 (Cleveland Assets, LLC v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cleveland Assets, LLC v. United States, 132 Fed. Cl. 264, 2017 U.S. Claims LEXIS 598, 2017 WL 2384774 (uscfc 2017).

Opinion

Keywords: Bid Protest; Tucker Act; 28 U.S.C. § 1491(b); General Services Administration; Request for Lease Proposal; Restrictive Pricing; Prospectus; 40 U.S.C. § 3307; Prudential Standing; Zone of Interests.

OPINION AND ORDER

KAPLAN, Judge.

At issue in this pre-award bid protest is a request for lease proposals (RLP) that the General Services Administration (GSA) issued to secure space to house the Federal Bureau of Investigation’s (FBI) Cleveland Field Office. The FBI currently houses its field office in space leased from Plaintiff, Cleveland Assets, LLC (Cleveland Assets). Cleveland Assets is also an offeror for the RLP at issue here.

In Count I of its complaint, Cleveland Assets complains that certain aspects of the RLP are ambiguous and that GSA engaged in unfair and unequal communications with offerors regarding its terms. In Count II, it contends that several terms of the RLP are contrary to law because the prospectus for which GSA secured Congressional approval as required by 40 U.S.C. § 3307 did not include certain structures that the RLP requires the lessor to provide.

Cleveland Assets’ primary claims are set forth in Counts III and IV of its complaint. In Count III it alleges that the rental cap of $26 per square foot included in the RLP is unreasonably low and imposes an undue restriction on competition. In Count IV it makes a related claim that the rental cap “improperly shifts all risk to the contractor and effectively deletes the technical evaluation factors.”

Currently before the Court are the parties’ cross-motions for judgment on the administrative record, as well as Cleveland Assets’ motion to supplement the administrative record with a declaration and a report prepared by a third-party appraiser. As more fully discussed below, Cleveland Assets lacks standing to bring the claims set forth in Counts I and II of its complaint; accordingly, those claims are DISMISSED without prejudice for lack of jurisdiction. Further, because the declaration and report proffered by Cleveland Assets are not necessary for effective judicial review, its motion to supplement the administrative record is DENIED. Finally, Cleveland Assets’ claims that the rental cap GSA set is unreasonable, imposes an undue restriction on competition, and/or shifts undue risk to the contractor lack merit. Its motion for judgment on the administrative record with respect to Counts III and IV *268 is, accordingly, DENIED, and the government’s cross-motion is GRANTED.

BACKGROUND

I. The Current Lease for the FBI’s Cleveland Field Office

The Cleveland Field Office of the FBI is currently housed in a building on Lakeside Avenue in Cleveland, Ohio. Admin. R. (AR) Tab 1 at 2. The FBI is the sole tenant in that building pursuant to a lease between Cleveland Assets and GSA, See id.; id. Tab 6 at 47; id. Tab 42 at 690. The lease covers 121,912 rentable square feet, which includes 108,860 office area square feet. See id. Tab 1 at 2.

The current lease had an initial ten-year term that began February 1, 2002, and was slated to expire January 31, 2012. Compl. ¶ 6, ECF No. 1. The lease has been extended twice, however, and the current extension is set to expire on January 31, 2018, Id.; see also AR Tab 1 at 2, Pursuant to the terms of the extensions, GSA currently pays annual rent at what both parties acknowledge is a penalty rate of [***] per rentable square foot. See Compl. ¶ 5; Def.’s Cross-Mot. for J, on the Admin. R., and Opp’n to Pl.’s Mot. for J. on the Admin. R. (Def.’s Mot.) at 4, ECF No. 27; AR Tab 1 at 2.

II. The Prospectus

A. Relevant Statutory Provisions

In accordance with 40 U.S.C. § 3307 (and the Anti-Deficiency Act, 31 U.S.C. § 1341), GSA must seek the approval of two Congressional Committees before obligating funds on a lease whose annual rent exceeds $2.86 million. 40 U.S.C. § 3307(a)(2). 1 Thus, § 3307 provides that, with respect to those leases, “appropriations may be made only if the Committee on Environment and Public Works of the Senate and the Committee on Transportation and Infrastructure of the House of Representatives adopt resolutions approving the purpose for which the appropriation is made.” Id. § 3307(a). The statute further provides that “[t]o secure consideration for the approval ... the Administrator of General Services shall transmit to Congress a prospectus of the proposed facility,” which must include specific information set out in the statute, including (among other things) “a brief description of the ... space to be leased” and “an estimate of the maximum cost to the Government of the ... space to be leased.” Id. § 3307(b).

B. GSA’s Preliminary Work

In light of the requirements of § 3307, sometime in 2009 (or possibly earlier), GSA began the process of preparing a prospectus for a replacement lease for the Cleveland Field Office. Thus, the administrative record in this case contains a number of documents reflecting analyses of the real estate market in Cleveland’s business district, whose apparent purpose was to inform GSA’s drafting of its prospectus.

First, the record includes a November 3, 2009 appraisal report analyzing the rental market in the central business district of Cleveland, AR Tab 42. The appraisal was prepared for GSA by Karl E. Karth, a certified general real estate appraiser. Id. at 689, 693. Mr. Karth reported that the “asking rents” for office space in “Class A” buildings located in the downtown area specified by GSA ranged from $17.60 to $30 per rentable square foot per year. Id. at 590. 2 This rental *269 range, Mr. Earth noted, did not include “consideration ... for after hour[s] security, cleaning, utilities, etc.” Id. Further, according to Mr. Earth, tenant improvement (TI) allowances in the private market ranged from $20 to $40 per rentable square foot. See id. Mr. Earth also provided estimates of. operating expenses, real estate taxes, the cost of land, and the cost of parking. Id. at 591. In the conclusion to the appraisal, Mr. Earth opined that total gross rent for the kinds of facilities GSA sought, including the cost of land and parking, ranged from $29.48 to $50.47 per square foot. Id. at 592.

The record also includes copies of a draft prospectus that GSA personnel apparently prepared but which was never approved by GSA’s Administrator or submitted to Congress. Id. Tab 43 at 653. The draft prospectus, which is undated and unsigned, describes “a superseding lease of up to 122,000 renta-ble square feet (rsf) with 175 secured inside and 218 outside parking spaces.” Id.

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132 Fed. Cl. 264, 2017 U.S. Claims LEXIS 598, 2017 WL 2384774, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cleveland-assets-llc-v-united-states-uscfc-2017.