B-217042, FEB 15, 1985, 85-1 CPD 204

B-217042: Feb 15, 1985

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

GEOGRAPHIC RESTRICTION IS UNREASONABLE WHERE THE RECORD DOES NOT ESTABLISH THAT ONLY THE DESIGNATED AREA WILL MEET THE AGENCY'S ACTUAL MINIMUM NEEDS. MID-AMERICA PROTESTS THAT THE SFO IS OVERLY RESTRICTIVE OF COMPETITION. THAT THE GSA'S DELINEATION OF A GEOGRAPHICAL AREA FOR WHICH IT WOULD ACCEPT PROPOSALS WAS ARBITRARY. THE GSA'S SOLICITATION IS ON BEHALF OF THE INTERNAL REVENUE SERVICE (IRS). THE IRS WILL BE CONSOLIDATING ITS OPERATIONS INTO THREE NEW CIDS FACILITIES. A SITE LOCATION CONSULTANT WAS HIRED TO RECOMMEND SPECIFIC LOCATIONS FOR THE THREE NEW CENTERS. THE RECOMMENDATION WAS BASED ON COMPUTER MODELING. SINCE NO EXISTING FACILITIES WERE FOUND TO BE APPROPRIATE. THIS RESTRICTION OSTENSIBLY WAS BASED ON CONSIDERATIONS SUCH AS ACCESSIBILITY TO THE POTENTIAL LABOR FORCE.

B-217042, FEB 15, 1985, 85-1 CPD 204

CONTRACTS - COMPETITIVE SYSTEM - RESTRICTIONS ON COMPETITION - GEOGRAPHIC DIGEST: FEDERAL PROCUREMENT POLICY REQUIRES THAT COMPETITION FOR GOVERNMENT CONTRACTS BE MAXIMIZED, PROVIDING QUALIFIED SOURCES AN EQUAL OPPORTUNITY TO COMPETE. GEOGRAPHIC RESTRICTION IS UNREASONABLE WHERE THE RECORD DOES NOT ESTABLISH THAT ONLY THE DESIGNATED AREA WILL MEET THE AGENCY'S ACTUAL MINIMUM NEEDS.

MID-AMERICA INDUSTRIAL PARK, INC.:

MID-AMERICA INDUSTRIAL PARK, INC. (MID-AMERICA), PROTESTS SOLICITATION FOR OFFERS (SFO) NO. GS-05B-14260 ISSUED BY THE GENERAL SERVICES ADMINISTRATION (GSA) FOR A LONG-TERM LEASE OF OFFICE SPACE IN BLOOMINGTON, ILLINOIS. MID-AMERICA PROTESTS THAT THE SFO IS OVERLY RESTRICTIVE OF COMPETITION, AND THAT THE GSA'S DELINEATION OF A GEOGRAPHICAL AREA FOR WHICH IT WOULD ACCEPT PROPOSALS WAS ARBITRARY.

WE SUSTAIN THE PROTEST.

THE GSA'S SOLICITATION IS ON BEHALF OF THE INTERNAL REVENUE SERVICE (IRS), WHICH REQUIRES A SITE OF APPROXIMATELY 18 ACRES TO ESTABLISH ONE OF THREE NEW CENTRALIZED INVENTORY AND DISTRIBUTION SYSTEM (CIDS) FACILITIES. IN ORDER TO CENTRALIZE AND AUTOMATE ITS PRINTED MATERIAL WAREHOUSING AND DISTRIBUTION OPERATIONS, THE IRS WILL BE CONSOLIDATING ITS OPERATIONS INTO THREE NEW CIDS FACILITIES. A SITE LOCATION CONSULTANT WAS HIRED TO RECOMMEND SPECIFIC LOCATIONS FOR THE THREE NEW CENTERS. AFTER CONDUCTING DETAILED STUDIES, THE CONSULTANT RECOMMENDED THAT THE CIDS FACILITY FOR THE CENTRAL PORTION OF THE COUNTRY BE LOCATED IN BLOOMINGTON, ILLINOIS. THE RECOMMENDATION WAS BASED ON COMPUTER MODELING, STATISTICAL/DEMOGRAPHIC ANALYSIS AND ON-SITE SURVEYS. SINCE NO EXISTING FACILITIES WERE FOUND TO BE APPROPRIATE, THE STUDY SUGGESTED THE CENTERS BE DESIGNED AND CONSTRUCTED TO FIT THE IRS'S NEEDS.

THE CONSULTANT'S STUDY DID NOT RECOMMEND THAT THE FACILITY LOCATION BE RESTRICTED TO ANY ONE AREA OF THE CITY, AND NOTED THAT THE BLOOMINGTON METROPOLITAN AREA INCLUDED FIVE MAJOR INDUSTRIAL PARKS. THE IRS PROJECT DIRECTOR, HOWEVER, AFTER CONFERRING WITH THE MCLEAN COUNTY ECONOMIC DEVELOPMENT COUNCIL, /1/ REQUESTED THAT GSA LIMIT THE SOLICITATION TO A SPECIFICALLY DELINEATED AREA ON THE EAST SIDE OF BLOOMINGTON. THIS RESTRICTION OSTENSIBLY WAS BASED ON CONSIDERATIONS SUCH AS ACCESSIBILITY TO THE POTENTIAL LABOR FORCE; THE AVAILABILITY OF POSSIBLE SITES; ZONING EXPECTATIONS, AND PROXIMITY TO POSTAL FACILITIES, TELECOMMUNICATION FACILITIES, FIRE STATIONS, MUNICIPAL SERVICES, MEDICAL FACILITIES, COMMERCIAL SERVICES AND THE AIRPORT. SIMILAR PARAMETERS WERE CONSIDERED IN THE CONSULTANT'S STUDY, HOWEVER, WITHOUT PROPOSING ANY RESTRICTIONS WITHIN THE BLOOMINGTON METROPOLITAN AREA.

OUR OFFICE HAS HELD THAT A LEASING AGENCY HAS THE PRIMARY RESPONSIBILITY FOR SETTING FORTH ITS MINIMUM NEEDS, INCLUDING THE LOCATION OF THE FACILITY, AND WE WILL NOT OBJECT UNLESS ITS DETERMINATION LACKS A REASONABLE BASIS. CHARLES HENSLER AND HELEN KREEGER, B-195501, MAY 23, 1980, 80-1 CPD PARA. 356. HOWEVER, THE AGENCY CANNOT IMPOSE A GEOGRAPHIC RESTRICTION OR SELECT A DELINEATED AREA WHICH DOES NOT REPRESENT ITS ACTUAL NEEDS. SEE DR. EDWARD WEINER, B-190730, SEPT. 26, 1978, 78-2 CPD PARA. 230.

IN THIS CASE, THE CONSIDERATIONS CITED AS THE BASIS FOR SELECTING THE EAST SIDE OF BLOOMINGTON DO NOT SATISFY THIS STANDARD, AND DO NOT JUSTIFY CONFINING THE COMPETITION TO THIS PORTION OF THE CITY. THESE CONSIDERATIONS CONSIST PRIMARILY OF GENERALIZED STATEMENTS OF NEEDS WHICH THE DELINEATED AREA MEETS, RATHER THAN EVIDENCE THAT THESE NEEDS CAN ONLY BE MET WITHIN THE DELINEATED AREA.

FOR EXAMPLE, ONE CONSIDERATION CITED AS A REASON FOR THE GEOGRAPHIC RESTRICTION IS THAT "THE SELECTED AREA HAS SEVERAL HUNDRED ACRES OF UNDEVELOPED LAND WITH NUMEROUS SITES WHICH COULD REASONABLY BE EXPECTED TO BE OFFERED FOR THE PROJECT." WE DO NOT UNDERSTAND HOW THIS CONSIDERATION JUSTIFIES THE RESTRICTION; THERE IS NO INDICATION THAT AVAILABLE SITES ARE NOT PRESENT ELSEWHERE IN THE METROPOLITAN AREA.

ANOTHER CITED CONSIDERATION IS THAT A LARGE PROPORTION OF THE ZONED LAND IN THE DELINEATED AREA IS ZONED INDUSTRIAL, AND ASSURANCES HAVE BEEN MADE THAT MOST OF THE UNZONED LAND CAN QUICKLY BE APPROVED FOR INDUSTRIAL USE. THERE IS NO EVIDENCE, HOWEVER, THAT OTHER LAND ZONED FOR INDUSTRIAL USE IS UNAVAILABLE IN THE METROPOLITAN AREA, OR THAT QUICK APPROVAL CANNOT BE OBTAINED FOR INDUSTRIAL ZONING OF UNZONED LAND LOCATED ELSEWHERE IN THE AREA.

AS PREVIOUSLY NOTED, PROXIMITY TO A FIRE STATION; AVAILABILITY OF MUNICIPAL SERVICES (SUCH AS ADEQUATE SEWER, WATER AND HIGHWAY ACCESS); PROXIMITY TO AN AIRPORT AND TO POSTAL AND MEDICAL FACILITIES, AND AVAILABILITY OF COMMERCIAL SERVICES NEEDED BY EMPLOYEES (SUCH AS RESTAURANTS AND DRY-CLEANERS) ARE ALSO CITED AS CONSIDERATIONS JUSTIFYING THE GEOGRAPHIC RESTRICTION. WHILE WE DO NOT QUESTION THE LEGITIMACY OF THESE NEEDS, NOTHING IN THE RECORD DEMONSTRATES THAT ONLY THE DELINEATED AREA CAN MEET THEM.

WE ALSO NOTE THAT GSA'S LEGAL OPINION SPECIFICALLY STATES THAT GSA IS NOT CONTENDING THAT THE DELINEATED AREA IS THE ONLY ONE THAT CAN PROVE THE NECESSARY SERVICES. RATHER, THEIR STATED POSITION IS "THAT IRS' MINIMUM REQUIREMENTS CAN BE MET IN THE CHOSEN AREA ... AND THAT COMPETITION WILL MOST PROBABLY BE OBTAINED." THUS, WE BELIEVE IT IS APPARENT THAT THERE IS NO REASONABLE BASIS FOR THE GEOGRAPHIC RESTRICTION HERE.

ADDITIONAL SUPPORT FOR OUR CONCLUSION IS PROVIDED BY THE PROTESTER. FOR EXAMPLE, IN DISCUSSING ITS TELECOMMUNICATIONS NEEDS, THE IRS INDICATED THAT ONLY THE DELINEATED AREA COULD BE ADEQUATELY SERVICED BY THE LOCAL TELEPHONE COMPANY AT REASONABLE COSTS. THE PROTESTER ASSERTS, HOWEVER, THAT THE TELEPHONE COMPANY HAS ADVISED IT THAT SERVICES COULD BE PROVIDED TO ANY PART OF THE METROPOLITAN AREA AT THE SAME COST. SIMILARLY, THE PROTESTER ASSERTS THAT MEDICAL SERVICES ARE NO MORE ACCESSIBLE FROM THE EAST SIDE THAN FROM THE OTHER INDUSTRIAL PARKS, AND THAT A FIRE STATION IS SCHEDULED FOR CONSTRUCTION AT ITS OWN INDUSTRIAL SITE. ALTHOUGH THE IRS RAISED ZONING CONSIDERATIONS, THE PROTESTER INDICATES THAT LESS THAN 15 PERCENT OF THE ZONED LAND IN THE SELECTED AREA IS ZONED INDUSTRIAL, MUCH OF WHICH LAND IS ALREADY IN USE, AND THAT ZONING PROCEDURES AND HEARINGS WOULD BE NECESSARY TO DETERMINE WHETHER THE REMAINDER OF THE AVAILABLE LAND COULD BE USED FOR THE PROJECT.

AS A FURTHER EXAMPLE, THE IRS ARGUED THAT THE SELECTED AREA IS MOST CONVENIENT TO THE TWO UNIVERSITIES FROM WHICH THE AGENCY EXPECTS TO ATTRACT THE MAJORITY OF ITS PART-TIME EMPLOYEES. HOWEVER, THE PROTESTER POINTS OUT THAT DIRECT PUBLIC TRANSPORTATION FROM THE SCHOOLS IS NOT AVAILABLE TO THE EAST SIDE, BUT ONLY TO THE INDUSTRIAL PARK WHERE THE PROTESTER'S SITE IS LOCATED. ON THE QUESTION OF MUNICIPAL SERVICES, THE PROTESTER NOTES THAT WATER AND SEWER LINES ARE NEITHER AVAILABLE NOR PLANNED FOR A PORTION OF THE DELINEATED AREA. IN ADDITION, THE PROTESTER ASSERTS THAT THE ENTIRE BLOOMINGTON AREA IS RELATIVELY SMALL, AND THAT ONLY RELATIVELY MINOR DIFFERENCES EXIST BETWEEN THE AVAILABLE SITES. GSA HAS NOT REBUTTED THE PROTESTER'S CONTENTIONS AND UNDER THESE CIRCUMSTANCES, WE FIND NOTHING IN THE RECORD SUFFICIENT TO JUSTIFY THE PROPOSED RESTRICTIONS.

WE RECOGNIZE THAT GSA ADVERTISED THE PROJECTS WITH THE PROPOSED RESTRICTIONS IN ORDER TO MEASURE THE AVAILABLE COMPETITION. THE AGENCY RECEIVED 24 EXPRESSIONS OF INTEREST AND MET WITH 16 OF THE POTENTIAL OFFERORS. NONE OF THE OFFERORS ACTUALLY CONTROLLED A PROPOSED SITE, BUT WERE NEGOTIATING OPTIONS FOR SITES. MANY PROPOSED OFFERS INVOLVED THE SAME GENERAL SITE LOCATIONS. GSA ASSERTS THAT OFFERORS WOULD COMPETE THROUGH CONSTRUCTION COSTS, FINANCING, SERVICE AND UTILITY COSTS, ETC., RATHER THAN BY OFFERING DIFFERENT SITES. THE AGENCY THEREFORE CONCLUDES THAT ADEQUATE COMPETITION WILL BE AVAILABLE DESPITE THE GEOGRAPHIC RESTRICTION, AND CONTENDS THAT ACCORDINGLY, THE RESTRICTION IS REASONABLE.

THE FEDERAL PROPERTY MANAGEMENT REGULATIONS GOVERNING THE ACQUISITION OF SPACE BY LEASE, HOWEVER, REQUIRE THAT COMPETITION BE OBTAINED TO THE MAXIMUM EXTENT PRACTICAL AMONG SUITABLE AVAILABLE LOCATIONS MEETING MINIMUM GOVERNMENT REQUIREMENTS. 41 C.F.R. SEC.101 18.100(C) (1984). HERE, THE GEOGRAPHICAL RESTRICTION WOULD NEEDLESSLY EXCLUDE POTENTIAL COMPETITORS WHO MIGHT WELL SATISFY THE IRS'S ACTUAL REQUIREMENTS, AND IT THEREFORE UNDULY RESTRICTS COMPETITION.

FINALLY, WE NOTE THE AGENCY'S OBJECTION TO THE DELAYS WHICH MIGHT RESULT FROM MAKING A CHANGE IN THE SOLICITATION AT THIS POINT. THE RECORD INDICATES, HOWEVER, THAT THE PROTESTER AND LOCAL OFFICIALS OBJECTED TO THE RESTRICTIONS SEVERAL MONTHS BEFORE THE SOLICITATION HAD EVEN BEEN ISSUED. THE AGENCY'S FAILURE TO TAKE CORRECTIVE ACTION AT THAT TIME CANNOT NOW BE USED TO PERPETUATE THE ERROR. MOREOVER, WE FIND THAT THE POLICY OBJECTIVE OF PROMOTING FULL AND FREE COMPETITION IN FEDERAL PROCUREMENTS OUTWEIGHS THE AGENCY'S INTEREST IN AVOIDING ANY DELAYS.

WE THEREFORE SUSTAIN THE PROTEST AND RECOMMEND THAT THE GSA OPEN ITS SOLICITATION TO ALL OFFERORS WITHIN THE BLOOMINGTON METROPOLITAN AREA.

/1/ MCLEAN COUNTY ECONOMIC DEVELOPMENT COUNCIL IS AN ASSOCIATION REPRESENTING COMMERCE AND INDUSTRY INTERESTS IN MCLEAN COUNTY, INCLUDING THE BLOOMINGTON METROPOLITAN AREA.