Matter of: H&F Enterprises File: B-251581.2 Date: July 13, 1993

B-251581.2: Jul 13, 1993

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PROCUREMENT Bid Protests GAO procedures Preparation costs Administrative remedies PROCUREMENT Specifications Minimum needs standards Geographic restrictions Office space Determination to limit consideration of proposals for office space to those offering space within an urban area's central business district is proper where determination is based on agency's consideration of social. BACKGROUND The VA regional office serving the Waco area is currently located outside Waco's CBA in office space leased from the protester. The existing lease was entered into in 1964 and will expire in 1995. That H&F's existing location outside the CBA will not be considered. GSA argues that H&F's protest should be dismissed as premature in that it is protesting a GSA solicitation which has not yet been issued.

Matter of: H&F Enterprises File: B-251581.2 Date: July 13, 1993

PROCUREMENT Bid Protests GAO procedures Preparation costs Administrative remedies PROCUREMENT Specifications Minimum needs standards Geographic restrictions Office space Determination to limit consideration of proposals for office space to those offering space within an urban area's central business district is proper where determination is based on agency's consideration of social, economic, environmental, and cultural factors as required by Executive Order.

Attorneys

DECISION

H&F Enterprises protests the General Services Administration's (GSA) decision to limit its consideration of office space sites for the Department of Veterans Affairs (VA) in Waco, Texas to those within Waco's central business area (CBA). H&F maintains that GSA's determination improperly restricts competition.

We deny the protest.

BACKGROUND

The VA regional office serving the Waco area is currently located outside Waco's CBA in office space leased from the protester. The existing lease was entered into in 1964 and will expire in 1995.

Anticipating the expiration of the current lease, GSA sought the views of the VA regarding its future needs for office space. Among other things, GSA sought information regarding the geographic area within which VA's needs could be met. GSA advised VA officials that, pursuant to the provisions of Executive Order 12072, 43 Fed. Reg. 36,869 (1978), and the regulations implementing that Executive Order, the VA should submit to GSA any mission-related justifications for obtaining space outside the CBA.[1] VA officials responded that VA's needs could be met through acquisition of office space within Waco's CBA.

In addition to consulting the VA, GSA met with various local officials to discuss the potential impact of relocating the VA office to the Waco CBA. Upon obtaining and considering those views GSA decided to limit its consideration of sites to those within the CBA. In pursuing that approach, GSA began negotiating with the City of Waco to obtain an assignable purchase option for a particular piece of undeveloped property within the CBA. On obtaining such an option, GSA intends to conduct a competitive procurement for the lease/construction of a build-to-suit facility for the VA.[2] Consistent with this plan, GSA advised H&F by letter dated March 4, 1993, that H&F's existing location outside the CBA will not be considered. This protest followed.

DISCUSSION

H&F objects to GSA's determination to limit its consideration of sites to those within the CBA and its ongoing negotiations with the City of Waco to obtain an assignable purchase option for a specific piece of undeveloped property. H&F protests that these GSA actions overly restrict competition and fail to give proper consideration to the potential cost savings that could be achieved by considering the costs associated with leasing H&F's property.

As a preliminary matter, GSA argues that H&F's protest should be dismissed as premature in that it is protesting a GSA solicitation which has not yet been issued. See Aeronautical Components, Inc., et al., B-253719 et al., June 17, 1993, 93-1 CPD Para. ; Aguirre Architects, Inc.-- Recon., B-230256, May 19, 1988, 88-1 CPD Para. 478 (the General Accounting Office will not consider bid protests regarding an agency's future actions). We decline to dismiss H&F's protest, since we interpret the protest as challenging GSA's ongoing negotiations with the City of Waco to acquire an interest in property within WACO's CBA. H&F's protest timely challenges the geographic restriction associated with that acquisition. See, e.g., Fairplain Development Co. et al., 59 Comp.Gen. 409 (1980), 80-1 CPD 293; Vicksburg Fed. Bldg. Ltd. Partnership, B-230660, May 26, 1988, 88-1 CPD Para. 515.

Regarding the substance of H&F's protest, GSA maintains that its determination to locate the VA office within Waco's CBA is reasonably based on the fact that VA's needs can be met by acquisition of space within the CBA, and on GSA's consideration of the factors identified in Executive Order 12072. GSA also notes that, although its authority to acquire sites for construction of public buildings is not subject to the requirements of the Competition in Contracting Act (CICA),[3] its acquisition plan will, in fact, result in significant competition because the planned procurement will not be limited to offerors who own or control existing sites.

The FPMR provides that, in leasing an interest in real property, an agency must obtain competition to the maximum extent practical among suitable locations that meet the government's minimum needs. 41 C.F.R. Sec. 101-18.100 (1992). An agency leasing an interest in real property has the primary responsibility for establishing its minimum needs, including the location of the facility to be leased. Our Office will not object to an agency's determination regarding the proper location for its facility unless the determination lacks a reasonable basis. Fairplain Development Co. et al., supra; Vicksburg Fed. Bldg. Ltd. Partnership, supra; Dr. Edward Weiner, B-190730, Sept. 26, 1978, 78-2 CPD Para. 230.

As noted above, Executive Order 12072 mandates that agencies obtaining office space in urban areas give first consideration to space within "a centralized community business area," and the FPMR requires that agencies must provide affirmative justification for consideration of locations outside such a central business area. Temp. Reg. D-76, Sec. 101-17.205(f). Section 1-102 of the Executive Order requires that, in identifying the proper location for a federal facility within an urban area, GSA must consider "the impact a site selection will have on improving the social, economic, environmental, and cultural conditions of the communities in the urban area." More specifically, section 1-104 of the Executive Order directs consideration of: "[the] compatibility of the site with State, regional, or local development, redevelopment, or conservation objectives," and consideration of "[the facility's] impact on economic development and employment opportunities in the urban area, including the utilization of human, natural, cultural and community resources." Finally, section 1-203 of the Executive Order requires that GSA consult with local government officials, and consider their recommendations regarding a proposed site selection.

In signing Executive Order 12072, President Carter stated: "[This Order] will help to put Federal buildings in urban areas . . . [and] will have a great beneficial impact. It will tend to move jobs and people and opportunities and growth down to the formerly abandoned central city areas . . . that were being abandoned in a slow and inexorable way." 14 Weekly Comp. of Pres. Doc. 1427-1428, Aug. 16, 1978. Clearly, Executive Order 12072 was aimed at revitalizing central city areas, and its implementation requires consideration of local social, economic, environmental and cultural concerns. Id.; Fairplain Development Co. et al., supra.

Here, we do not find GSA's determination to locate the VA office within Waco's CBA to be unreasonable. First, in making its determination, GSA properly considered whether VA's needs for office space could be met from within the CBA. Upon determining that issue in the affirmative based on input provided by VA, GSA properly consulted with local government officials concerning the impact that relocation of the VA office to Waco's CBA would have on the social, economic, environmental, and cultural conditions of that area. The local officials advised GSA that the City of Waco is committed to the redevelopment of the downtown area, and that relocation of the VA office to Waco's CBA would provide a much-needed stimulus to assist in the City's ongoing efforts to revive and revitalize the downtown area and to reverse the decaying tax base in the surrounding neighborhoods.[4] The local officials ardently recommended relocation of the VA office to a site within Waco's CBA, noting there were indications that other developers will locate within the CBA if the VA project is constructed.

It is clear that GSA's determination to relocate the VA office to Waco's CBA was based on the fact that VA's needs can be met from within the CBA and on GSA's consideration of the social, economic, environmental, and cultural factors identified in Executive Order 12072. Executive Order 12072, which does not require or address a relative assessment of the cost of achieving the policy goals it is intended to further, provides a reasonable basis for limiting competition for space acquisition to an urban area's CBA. Fairplain Development Co. et al., supra.

The protest is denied.

1. Executive Order 12072 prescribes policies and directives for the planning, acquisition, utilization and management of federal facilities.

Among other things, the Executive Order states:

"1-101. Federal facilities and Federal use of space in urban areas shall serve to strengthen the Nation's cites and to make them attractive places to live and work. Such Federal space shall conserve existing urban resources and encourage the development and redevelopment of cities.

"1-103. Except where such selection is otherwise prohibited, the process for meeting Federal space needs in urban areas shall give first consideration to a centralized community business area and adjacent areas of similar character, including other specific areas which may be recommended by local officials."

A portion of the regulations implementing Executive Order 12072 states:

"In satisfying agency requirements in an urban area, GSA will review agency requested delineated areas to ensure that the areas are within the centralized community business areas (CBAs) and adjacent areas of similar character, including specific areas which may be recommended by local officials in accordance with Executive Order 12072 . . . . If the delineated area requested is outside the CBA, in whole or part, the client agencies must provide GSA with adequate justification to support the delineated area." Federal Property Management Regulation, Temp. Reg. D-76, Sec. 101-17.205(f), 41 C.F.R. Part 101-21, Subch. D, Appendix (effective date extended by 57 Fed. Reg. 56,994 (1992)).

2. Pursuant to GSA's acquisition plan, GSA will transfer the assignable purchase option to the successful offeror under the competitive build/lease procurement. That offeror will acquire title to the property and lease the property and building to GSA under the terms specified in the solicitation and its proposal.

3. GSA's acquisition of interests in real property is authorized under the Public Buildings Act of 1959, 40 U.S.C. Sec. 601 et seq. (1988), which states:

"The Administrator [of GSA] is authorized to acquire . . . such lands or interests in lands as he deems necessary for use as sites, or additions to sites, for public buildings authorized to be constructed or altered under this chapter.

". . . the Administrator . . . is authorized . . . to acquire such site without regard to Title III of the Federal Property and Administrative Services Act of 1949, as amended [by CICA] . . . ." 40 U.S.C. Sec. 604.

4. Among other things, the City recently initiated a major effort to encourage grass roots citizen participation in the stabilization of the older residential neighborhoods surrounding the CBA; specifically, the City assisted in the creation of 10 neighborhood organizations representing areas of approximately 3,000 citizens each.