The Court of Federal Claims recently announced that it lacks jurisdiction to consider the General Services Administration’s (“GSA”) compliance with House and Senate committee resolutions before publishing a request for lease proposals (“RLP”).  Cleveland Assets, LLC v. United States, 17-277C (Fed. Cl. May 22, 2017).

In its pre-award bid protest, Cleveland Assets alleged that GSA had not obtained Congressional approval of its RLP because it had failed to include information in a lease prospectus required by 40 U.S.C. § 3307(a).  Although the Court acknowledged those requirements, it held that, at least in the pre-award context, contractors have no interest in enforcement of that statute.  Accordingly, the court dismissed Cleveland Assets’ claim that GSA had violated Section 3307.

Cleveland Assets is notable because it provides a rare judicial interpretation of Section 3307— an essential element of GSA lease procurements.  It also provides further clarification of the Court’s bid protest jurisdiction under the Tucker Act.

Section 3307 and the facts of Cleveland Assets

Pursuant to the Public Buildings Act of 1959 (as codified at Section 3307) GSA may use appropriated funds for leases exceeding $2.85 million per year “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.”  See 40 U.S.C.§ 3307(a), (h) (the Public Buildings Act of 1959); GSA Annual Prospectus Thresholds, General Services Administration, (Apr. 25, 2017), https://www.gsa.gov/portal/content/101522 (establishing this limit).  To obtain that approval, GSA must submit a prospectus to those committees explaining the location, rent, and other information relevant to a lease. 40 U.S.C. § 3307(b)(1)-(8).

In Cleveland Assets, GSA presented Congress with a lease prospectus for a new FBI office in Cleveland, Ohio.  The committees approved the prospectus, and GSA proceeded to publish the RLP at issue.

In its protest, Cleveland Assets argued that the RLP contained several requirements (including, for example, a visitor screening facility and a concrete foundation for hazardous materials) that were not identified in the prospectus GSA sent to Congress, thereby violating Section 3307.  Cleveland Assets, slip op. at 11.  Thus Cleveland Assets sought a court order either directing GSA to issue a new RLP or to go back to Congress with a new prospectus.

The Court dismissed the protest, holding that Cleveland Assets did not fall within the “zone of interests” of Section 3307 to give it standing to enforce the statute.  Id. at 14.  Under the Supreme Court’s “zone of interests” test, a plaintiff may allege a violation of statute under the Administrative Procedure Act only if that plaintiff is within the zone of interests protected by that statute.  See Bennett v. Spear, 520 U.S. 154, 162 (1997).  In the Court’s view here, the purpose of Section 3307 is to not to protect contractors, but to “allow the Congress, through the appropriate committees, to exercise a degree of control over leasing arrangements[.]”  Cleveland Assets, slip op. at 14.  The Court noted that the statute did not “mention private parties or government contractors,” and that budgetary statutes generally are not enforceable by private parties. Id.

While Cleveland Assets ruled out pre-award protests alleging violations of Section 3307, the decision left the door open to post-award allegations implicating the same issues under different statutes.  In a footnote, the Court found that “to the extent that the legal violation occurs when the lease is awarded or executed, Cleveland Assets’ claim is not ripe for review[.]” Cleveland Assets, slip op. at 14 n. 13.  The Court elaborated that “the prohibition in § 3307 affects whether Congress will appropriate funds for the lease at issue, not GSA’s authority to solicit proposals for a lease.”  Id. That commentary by the Court suggests that a post-award challenge could implicate different statutory interests, such as the interests embodied in the Anti-Deficiency Act.

Notably, the court has previously declared a lease void as contrary to Section 3307 because it lacked appropriations.  See Springfield Parcel C, LLC v. United States, 124 Fed. Cl. 163, 189 (2015); but see 210 Earll, LLC v. United States, 77 Fed. Cl. 710, 718 (2006) (determining protestor was an interested party to challenge lease award, even though its offer did not comply with GSA’s prospectus, because this statute “does not operate as a bar to award of such a lease”).

Lessons from Cleveland Assets: Forum Matters

While Cleveland Assets instructs that the Court of Federal Claims will dismiss a pre-award protesting alleging that GSA’s lease solicitation violated Section 3307, the U.S. Government Accountability Office has demonstrated a willingness to consider such arguments.  See, e.g., The Charles E. Smith Companies, B-277391, Sept. 25, 1997, 97-2 CPD ¶ 88 (considering protest arguing violation of Section 3307 and finding it untimely); JBG/Naylor Station I, LLC, B-402807.2, Aug. 16, 2010, 2010 CPD ¶ 194 at 6 & n.5 (finding solicitation’s requirement that offerors obtain building permits was not inconsistent with GSA prospectus approved by Congress). The court’s decision will not necessarily disrupt this line of cases.  Notably, GAO has not previously applied the “zone of interests” test.  And, GAO’s Procurement Law Group — the office that decides bid protests — has rejected arguments that it lacks jurisdiction to consider appropriations laws.  See Dep’t of the Navy – Reconsideration, B-401102.3, Aug. 6, 2009, 2009 CPD ¶ 162 at 4 n.2.

Conclusion

The Court of Federal Claims will likely dismiss pre-award protests challenging GSA’s compliance with committee resolutions under Section 3307. However, offerors may still protest this issue at GAO or potentially raise it as a post-award protest ground.