CS 321 East 2nd Investors, LLC

Decision

Matter of: CS 321 East 2nd Investors, LLC

File: B-423215

Date: March 10, 2025

DIGEST

1. Protest challenging terms of a lease solicitation as unduly restrictive of competition is denied where the record shows that the provisions are reasonably necessary to meet the agency’s legitimate needs.

2. Protest challenging a lease solicitation’s area of consideration is dismissed where the protester fails to establish that it is an interested party to challenge the area of consideration where its building is within the area and the protester effectively argues for more restrictive specifications.

CS 321 East 2nd Investors, LLC, a small business of New York, New York, protests the terms of request for lease proposals (RLP) No. 2CA1644, issued by the General Services Administration (GSA) for the lease of office space. The protester challenges certain terms of the RLP as unduly restrictive of competition or otherwise failing to adequately reflect the agency’s requirements.

We deny the protest in part and dismiss it in part.

BACKGROUND

The RLP, issued on October 22, 2024, seeks proposals for the lease of office space for the Federal Public Defender (FPD) in Los Angeles, California. Contracting Officer’s Statement (COS) at 1. FPD’s current office space in Los Angeles is in two buildings, located at 321 East 2nd Street and 200 South San Pedro Street, with the total leased space comprising 66,981 American National Standards Institute (ANSI)/Building Owners and Management Association (BOMA) Occupant Area (ABOA) square feet.[1] Id. at 1‑2. FPD occupies the entirety of 321 East 2nd Street, comprising 50,130 ABOA square feet over 10 floors. Id. at 1; Memorandum of Law (MOL) at 2. At 200 South San Pedro Street, FPD occupies 16,851 ABOA square feet over two full floors and the majority of a third floor. COS at 2; MOL at 2. The protester is a co‑owner of the building at 321 East 2nd Street. COS at 1‑2.

The RLP, which the agency has amended four times, seeks proposals for the lease of a minimum of 57,558 ABOA square feet to a maximum of 60,435 ABOA square feet of contiguous space in a single building for a term of 15 years and two 5‑year options located in a defined area of Los Angeles. COS at 1; Second Supp. COS at 2; Agency Report (AR), Tab 62, RLP at 4. As initially published, the RLP required that the leased space be located on no more than four floors, which the agency then amended to five floors. RLP at 70; AR, Tab 63, RLP amend. No. 1. The agency has further amended the RLP to remove the maximum number of floors requirement. Second Supp. COS at 2; AR, Tab 71, RLP amend. No. 4 at 1. The RLP states that the agency will award the lease on a lowest‑priced, technically acceptable basis. RLP at 20. Proposals in response to the RLP were due on December 6, 2024, at 5:00 p.m. Pacific time. Id. at 15.

On December 6, the protester timely protested to our Office, challenging various terms of the RLP as unduly restrictive of competition. That same day, the protester also submitted a proposal in response to the RLP. COS at 5.

DISCUSSION

The protester challenges the RLP’s square footage requirement, single‑building requirement, and area of consideration, contending that those requirements are not reasonably necessary to meet the agency’s needs.[2] Protest at 8‑12.

As our Office previously has stated, the determination of a contracting agency’s needs and the best method of accommodating them are matters primarily within the agency’s discretion. BHB Ltd. P’ship & Indiana Assocs. Ltd. P’ship, B‑417760 et al., Oct. 9, 2019, 2019 CPD ¶ 356 at 4. Where a protester challenges a specification as unduly restrictive, that is, challenges both the restrictive nature of the specification and the agency’s need for the restriction, the agency has the responsibility of establishing that the restrictive specification is reasonably necessary to meet its legitimate needs. Id. The adequacy of the agency’s justification is ascertained through examining whether the explanation is reasonable and withstands logical scrutiny. Id. Once the agency establishes support for the challenged solicitation term, the burden shifts to the protester to show that it is clearly unreasonable. Id. The fact that a requirement may be burdensome or even impossible for a particular lessor to meet does not make it objectionable if the requirement properly reflects the agency’s needs. C‑III Asset Mgmt., LLC, B‑414498, June 27, 2017, 2017 CPD ¶ 207 at 4.

Considering that standard, we examine each of the protester’s challenges in turn.

Square Footage Requirement

The record reflects that the lease requirement developed through conversations between FPD, the Office of the Circuit Executive (OCE) for the United States Courts for the Ninth Circuit, and GSA. As initially conceived, FPD sought approximately 69,246 to 72,000 usable square feet of space, representing an increase over its current footprint of 66,981 ABOA square feet. AR, Tab 2 at 1, Email from OCE to GSA, June 14, 2022 (reflecting space requirement of 69,246 usable square feet); Tab 4 at 1, Email from GSA to OCE, June 22, 2022 (reflecting space requirement of approximately 72,000 usable square feet). Through consultation with OCE, FPD refined its space requirement, reducing the total square footage to 57,558 usable square feet, or approximately 14 percent less than FPD’s office space currently occupies across two buildings. AR, Tab 23 at 1, Email from OCE to GSA, Feb. 8, 2023 (stating that the revised space requirement is for 57,558 usable square feet); id. at 7, Email from OCE to GSA, Feb. 9, 2023 (stating that FPD confirmed the revised space requirement); AR, Tab 26 at 1, Email from OCE to GSA, FPD, Mar. 1, 2023 (“The Circuit worked with FPD to get their scope of work refined and reduce their square footage requirement. They have finalized the program at 57,558 USF [(usable square feet)] and we have shared the detailed room break‑out with GSA.”). In developing the requirement, FPD accounted for both its current staffing of 189 employees and its 15‑year projected staffing of 201 employees. AR, Tab 32, Work Chart for Space Needs at 2. As detailed in the RLP, the agency allocated standard amounts of space for employee offices or workstations, depending on the nature of their positions, as well as square footage for a number of support spaces, such as conference rooms and workrooms. RLP at 70‑72. The requirement for 57,558 ABOA square feet represents the total of those space allocations. Id. at 72.

Although the RLP’s requirement for 57,558 ABOA square feet represents a reduction from FPD’s current office footprint, the protester contends that the square footage requirement is overstated and does not reflect the agency’s actual requirements. The protester marshals several arguments in support of this contention. First, the protester argues that the square footage requirement fails to take into account the increase in telework by federal employees, and therefore that the agency could meet its requirements through hoteling and consolidated workspaces, which would reduce space needs. Protest at 9; Comments at 6. The protester also contends that square footage requirements for records, files, and a library are unreasonable, arguing that they are obviated by the use of online research tools and electronic court filings and records. Protest at 10; Comments at 9‑10. The protester further argues that square footage requirements for legal secretaries, paralegals, and administrative assistants are based upon duplicative line items for those classes of personnel, and that the need for support staff is declining with the advent of new technologies, such as artificial intelligence. Protest at 10; Comments at 10. Lastly, the protester contends that a requirement for six, 6‑ to 8‑person conference rooms is duplicative of other requirements for larger and smaller conference rooms, and therefore is unreasonable. Protest at 10; Comments at 10.

With respect to telework, the record reflects that GSA and FPD discussed the potential effects of telework on FPD’s space requirements. See AR, Tab 20 at 1, Email from GSA to FPD, Sept. 2, 2022 (“I’d like to get a better feel for how your group runs your space program as well as any anticipated space or operational changes resulting from the pandemic.”); id. at 4 (attached GSA Workplace 2030 handout discussing guiding principles arising from “the success of widespread telework [that] prompted the federal community to reassess the traditional workplace”). In that regard, the contracting officer states that FPD has a hybrid telework policy allowing employees to work from home two days per week. COS at 2. While employees can choose which days they will telework, all employees are required to be in the office on Wednesdays. Id. As the contracting officer states, because FPD’s mission is the defense of criminal cases, it assigns closed offices to its employees, as they require confidentiality for communications and the storing of files. Id. As a result, the space reductions that might result from hoteling and consolidated workspaces would not meet the agency’s needs, given the requirements for confidentiality and the accommodation of all employees on at least one day per week. On this record, we conclude that the agency’s justification is reasonable and withstands logical scrutiny. Furthermore, the protester has not presented sufficient evidence that, given the needs of the agency--in particular the dual needs of confidentiality and accommodating all employees on at least one day per week--the determination not to make allowances for hoteling or consolidated workspaces was clearly unreasonable. See generally Protest at 9; Comments at 6.

Next, the RLP allocates space to a single line item comprising both “[r]ecords and [f]iles” and “[l]ibrary[,]” which constitutes 2,520 square feet of the required space. RLP at 71. As the contracting officer explains, this line item “is a measurement of . . . case storage rooms . . . and also the individual file cabinets and bookshelves throughout all floors.” COS at 3. To that end, the RLP indicates that “[r]ecords and [f]iles” are “filing cabinets and 3’ bookcases or shelving units[,]” and that “[l]ibrary” is “standard bookshelves (3’ wide; 7 shelves)[,]” with a further statement that this line item is meant to encompass “[n]on‑hi[gh]‑density filing and shelving[,]” half of which is to be allocated into a closed room, with the remainder located in corridors outside of offices. RLP at 71. The contracting officer states that these physical storage requirements are necessary because, while FPD digitizes some of its files, achieving a completely paperless environment is not feasible. COS at 4. For example, the contracting officer states, FPD’s capital habeas unit handles exclusively decades‑old cases inherited from various attorneys and agencies, and FPD receives the records of those cases in physical form, often arriving in multiple boxes. Id.

On this record, we conclude that the agency’s articulated need for file storage is reasonable and withstands logical scrutiny. The protester also has not demonstrated that the agency’s justification is clearly unreasonable. As the agency makes clear, this requirement is driven by the need for file storage, not the provision of a legal research library that the protester contends is made unnecessary by the use of online research tools. Additionally, while the protester suggests that file storage needs can be alleviated by an existing FPD lease for document storage, Comments at 10, the agency’s offsite storage space is located approximately one mile from FPD’s current locations at 321 East 2nd Street and 200 South San Pedro Street, and the agency states that personnel therefore typically must drive to retrieve files, MOL at 2‑3. It is not clearly unreasonable for the agency to require ready access to files on which its personnel are working. This argument therefore also provides no basis to sustain the protest.

Turning next to support staff, as explained by the agency, the plain terms of the RLP refute the protester’s argument that square footage requirements for legal secretaries, paralegals, and administrative assistants are based upon duplicative line items for those classes of personnel. There are two divisions within FPD, referred to as traditional (TRAD) and the capital habeas unit (CHU). COS at 4. Reflecting those divisions, the RLP’s space allocation identifies whether those positions are assigned to the traditional division or the capital habeas unit. RLP at 70. Thus, for example, the RLP contains line items for both “Clerical, Legal Secretaries (TRAD)” and “Legal Secretary(ies) (CHU).” Id. Accordingly, contrary to the protester’s contention, the RLP does not duplicate space allocations for those positions, but, rather, reflects personnel working for FPD’s two divisions. Furthermore, while the protester contends that the need for support staff is declining in light of technological developments, the protester has not demonstrated that FPD either currently is reducing or has imminent plans to reduce its support staff numbers. The protester’s argument, therefore, is not a challenge to the agency’s space needs, but rather to the agency’s staffing decisions, a matter that is not within our jurisdiction to consider.

Lastly, the RLP allocates 1,800 square feet to six informal conference rooms and areas meant to accommodate six to eight people. RLP at 71. Each conference room is sized at 300 square feet, with three conference rooms to be open, lounge seating collaboration areas and three to be enclosed by walls and doors. Id. The protester contends that these requirements are duplicative of other larger and smaller conference room requirements, and therefore unnecessary. Protest at 10; Comments at 10. The agency responds that these requirements are necessary based on current usage patterns of FPD’s existing five conference rooms, which the contracting officer states are in high demand not just for internal use, but also for Criminal Justice Act panel attorneys,[3] out‑of‑district client hearings and attorney meetings, and small and large training events. COS at 4. Based on that existing usage, the agency accounted for these six huddle spaces, which will permit the four larger spaces--three 450 square foot conference rooms with a 12‑person capacity, and one 2,000 square foot conference/training room meant to accommodate 20 or more people--to be used for their intended purposes. Id.; RLP at 71.

The agency’s justification for this requirement is reasonable. With respect to the protester’s contention that these needs can be met in part by the RLP’s requirement for smaller conference rooms, that requirement is for five 150 square foot rooms, meant to accommodate only two to four people. RLP at 71. It is not clearly unreasonable for the agency to require larger conference rooms to meet its needs based on current usage patterns. It also is not clearly unreasonable for the agency to include the requirement for these six conference rooms to ensure that the largest conference rooms are available for their intended purposes. Accordingly, this argument does not provide a basis to sustain the protest.

In its comments, the protester also cites the Utilizing Space Efficiently and Improving Technologies (USEIT) Act, which was included in the Thomas R. Carper Water Resources Development Act of 2024, Pub. L. No. 118‑272, 138 Stat. 2992, enacted on January 4, 2025, approximately a month after this protest was filed. In particular, the protester points to requirements to provide reporting on “the utilization percentage of each . . . federally‑leased space . . . , comparing the capacity to the actual utilization rate based on a utilization benchmark of 150 usable square feet per person[,]” and to “ensure building utilization in each . . . federally‑leased space is not less than 60 percent on average over each 1‑year period.” Comments at 6‑8 (quoting Pub. L. No. 118‑272, § 2302(c)(1)(C), (d)(1)). If the utilization percentage falls below the 60 percent target, “the [GSA] Administrator shall, in consultation with the [Office of Management and Budget (OMB)] Director, take steps to reduce the space of the tenant agency[.]” Id. at 8 (quoting Pub. L. No. 118‑272, § 2302(d)(3)). Based on these statutory directives, the protester contends that the agency is limited to leasing 150 usable square feet per person, or 30,150 total usable square feet based on FPD’s projected 201 personnel. Id. at 9. The protester argues that the agency therefore will “be in violation of the statutory mandate immediately upon execution[,]” and that the leased “space would be subject to re‑allocation or downsizing immediately.” Id.

The essence of the protester’s argument is that the agency’s square footage requirements will result in noncompliance with the USEIT Act’s provisions relating to leased space utilization, and consequently cannot be reasonably necessary to meet the agency’s legitimate needs. To whatever extent the USEIT Act might place limits on the agency’s legitimate space needs--and consequently whether the square footage specification is reasonably necessary to meet those needs--we conclude that it does not do so here because the statute was enacted after issuance of the RLP and the due date for proposals.

The statute, which as discussed above was enacted on January 4, 2025, contains no statement as to its effective date.[4] It is well established that when a statute has no effective date, absent a clear direction by Congress to the contrary, it takes effect on the date of its enactment. Johnson v. United States, 529 U.S. 694, 702 (2000); Gozlon‑Peretz v. United States, 498 U.S. 395, 404 (1991); Robertson v. Bradbury, 132 U.S. 491, 493 (1889). Further, our Office has concluded that in the absence of an express statement in the statute providing for it, retroactive application is disfavored by law. See Analytic Strategies LLC; Gemini Indus., Inc.--Recon., B‑413758.4, B‑413758.5, Mar. 9, 2017, 2017 CPD ¶ 87 at 5‑6 (citing Technatomy Corp., B‑405130, June 14, 2011, 2011 CPD ¶ 107 at 6; KPMG Peat Marwick, LLP--Costs, B‑259479.4, July 25, 1996, 96‑2 CPD ¶ 43 at 4; Use of the Chief Administrative Officer’s Salaries and Expenses Appropriation to Pay Certain Child Care Center Expenses for Fiscal Year 2003, B‑300673, July 3, 2003, 2003 U.S. Comp. Gen. LEXIS 234, at 7).

In simplest terms, the USEIT Act had not been enacted at the time the agency defined its needs, issued the RLP, or received proposals in response to the RLP. The statute contains no statement suggesting that it is to be applied retroactively, and the agency therefore was not required to consider its provisions in specifying the square footage requirement. We additionally note that the USEIT Act imposes its reporting and utilization requirements on “federal agencies,” and that it defines the term “federal agency” as “an executive department covered by the Chief Financial Officers Act of 1990 (Public Law 101‑576; 104 Stat. 2838).” Pub. L. No. 118‑272, § 2302(a)(6). FPD is established by the federal courts, see 18 U.S.C. § 3006A(g), and therefore does not fall under any of the executive departments listed in the Chief Financial Officers Act of 1990, see Pub. L. No. 101‑576, § 901(b). Accordingly, the protester’s argument provides no basis to sustain the protest.

For the foregoing reasons, we deny the protester’s challenge to the RLP’s square footage requirements.

Single Building Requirement

As discussed above, the RLP requires that the minimum 57,558 ABOA square feet be provided in a single building. RLP at 4. The protester contends that this requirement does not reasonably reflect the agency’s needs, citing the fact that FPD’s Los Angeles office currently occupies two buildings. Protest at 9. The agency responds that the single building requirement is necessary for the purpose of efficient space planning. MOL at 8. The protester points to the fact that FPD’s traditional division is currently located in the 321 East 2nd Street building and its capital habeas unit is currently located in the 200 South San Pedro Street building, arguing that there is no efficiency to be gained from consolidating FPD’s offices in a single building because those divisions do not have overlapping responsibilities. Comments at 4.

The record contains a client project agreement between GSA and FPD, with OCE acting as the point of contact for the latter, which contains discussion of how the space to be leased supports FPD’s mission and operation needs. AR, Tab 29 at 10‑13, Email from GSA to OCE, May 3, 2023 (attached client project agreement). That agreement states that “[h]aving all FPD components in one building is more efficient for work flow[,] as well as access to the [c]ourthouse and document storage[.]” Id. at 10. Efficiency considerations also are reflected in GSA’s project management and acquisition plan, a document prepared by the contracting officer discussing the nature of the project and the procurement strategy. See AR, Tab 48, Project Management and Acquisition Plan at 1 (citing “more efficient space planning needs” among the reasons for consolidating the existing two leases into a single lease).

Additionally, the agency has provided an email from FPD detailing the considerations underlying the single‑building requirement. See Second Supp. COS, attach. 1, Email from FPD to GSA, OCE, Feb. 11, 2025.[5] For example, FPD states that maintaining multiple buildings has required duplication of security and information technology infrastructure costs, such as perimeter doors and surveillance systems, and network equipment such as switches, servers, and audio/video systems that require periodic replacement. Id. at 1. Similarly, FPD cites the added administrative burden associated with operating in two buildings, such as addressing maintenance issues, security concerns, and location‑specific requirements, which require coordination with multiple building owners, managers, and onsite staff. Id. at 2. FPD states that consolidating into a single building will reduce those burdens and streamline processes. Id. Additionally, FPD points to increased staff unity and reduced management challenges, noting that its upper management and human resources departments are currently located in the 321 East 2nd Street building, which creates challenges for the provision of supervision and employee assistance, particularly with respect to employees located in the 200 South San Pedro Street building. Id. at 1‑2.

As discussed, the determination of a contracting agency’s needs and the best method of accommodating them are matters primarily within the agency’s discretion. BHB Ltd. P’ship, supra at 4. The agency identifies various reasons supporting its decision to meet the needs of FPD through a single‑building solution. Our review of the record does not cause us to question the agency’s needs here. Moreover, given the needs expressed by the agency, the record reasonably supports the necessity to meet its needs through a single‑building solution. The protester has not presented sufficient evidence that, given the needs of the agency, the determination to move forward with a single‑building solution was clearly unreasonable. See generally Protest at 9; Comments at 3‑5; Supp. Comments at 3‑10. Consequently, the protester’s challenge to the RLP’s single‑building requirement is denied.

Area of Consideration

Finally, the protester contends that the RLP’s area of consideration does not accurately reflect the agency’s requirements. Protest at 12; Comments at 13‑15. The protester contends that the agency expanded the area of consideration from that specified in a pre‑solicitation notice, such that the RLP may allow for the award of a lease to a location that is outside of walking distance to the federal courthouse and therefore does not meet the agency’s needs. Protest at 12; Comments at 13‑15. We dismiss this ground of protest because the protester is not an interested party to raise it.

Under the bid protest provisions of the Competition in Contracting Act of 1984 (CICA), only an interested party may protest a federal procurement. 31 U.S.C. § 3552. That is, a protester must be an actual or prospective bidder or offeror whose direct economic interest would be affected by the award of a contract or the failure to award a contract. Bid Protest Regulations, 4 C.F.R. § 21.0(a)(1). Determining whether a party is interested involves consideration of a variety of factors, including the nature of the issues raised, the benefit or relief sought by the protester, and the party’s status in relation to the procurement. RELM Wireless Corp., B‑405358, Oct. 7, 2011, 2011 CPD ¶ 211 at 2.

The protester’s building at 321 East 2nd Street is within the area of consideration listed in the RLP. In analogous circumstances, we have concluded that an offeror unaffected by an alleged solicitation defect is not an interested party to challenge the alleged defect. For example, we have concluded that a prospective offeror generally is not an interested party to challenge a specification as unduly restrictive in cases where it can meet the requirement set forth in the solicitation, as such a challenge would be, in essence, on behalf of other potential offerors who are economically affected by the specification’s allegedly restrictive nature. See, e.g., DNC Parks & Resorts at Yosemite, Inc., B‑410998, Apr. 14, 2015, 2015 CPD ¶ 127 at 12‑13; Government & Mil. Certification Sys., Inc., B‑409420, Apr. 2, 2014, 2014 CPD ¶ 116 at 4. Consequently, the protester is not an interested party to challenge the area of consideration.

Additionally, the only direct economic interest that appears to be affected by the allegedly improper augmentation of the area of consideration is the protester’s incumbent advantage afforded by its building’s proximity to the federal courthouse. In that regard, the protester stresses the need for FPD’s office to be within walking distance of the courthouse, as the protester’s building is. See Protest at 12; Comments at 13‑15. Thus, the protester seeks to limit the RLP’s area of consideration to the protester’s advantage. We do not find that a protest concerning this type of harm falls within the scope of our jurisdiction under CICA, which requires us to ensure that the statutory requirements for full and open competition are met--not to protect any interest a protester may have in more restrictive specifications. See DNC Parks, supra at 13. In this regard, our Office generally does not permit a protester to use our bid protest function to advocate for more restrictive, rather than more open, competitions for government requirements. See, e.g., New Mexico State Univ., B‑409566, June 16, 2014, 2014 CPD ¶ 228 at 5 (denying an incumbent’s protest challenging an agency’s decision not to require pricing for components for which the incumbent had an exclusive teaming arrangement with the sole manufacturer); Honeywell Tech. Sols, Inc., B‑407159.4, May 2, 2013, 2013 CPD ¶ 110 at 3 (denying an incumbent’s protest that the solicitation should have included more stringent minimum relevance levels under the past performance evaluation factor).

The protest is denied in part and dismissed in part.

Edda Emmanuelli Perez
General Counsel