Cleveland Assets, LLC v. United States
133 Fed. Cl. 108
| Fed. Cl. | 2017Background
- GSA leases a Cleveland building from Cleveland Assets that houses the FBI; the existing lease was extended through January 31, 2018, covering ~121,912 rentable sq ft.
- Under 40 U.S.C. § 3307, GSA required congressional prospectus approval for leases with annual rent over $2.85M; a prospectus approved in 2011 set a $26/rsf annual rental cap (with escalation).
- GSA issued a Request for Lease Proposals (RLP) in December 2016 stating awards would not exceed the congressionally-imposed $26 cap; RLP allegedly added features not listed in the prospectus (visitor screening facility, auto annex, hazardous materials foundation).
- Offers were due Feb 28, 2017; Cleveland Assets filed a bid protest that same day alleging (1) the $26 cap was unreasonably low and (2) the RLP exceeded the prospectus scope under § 3307.
- The Court of Federal Claims denied Cleveland Assets’s motion for judgment on the administrative record and granted the government judgment, concluding Cleveland Assets lacked standing under the zone-of-interests to challenge the § 3307 claim and that the $26 cap selection was reasonable.
- Cleveland Assets appealed and moved to stay the Court’s decision and enjoin GSA from further procurement activity pending appeal; the Court denied the motion to stay.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a stay/injunction pending appeal should issue | Cleveland Assets argued a stay is needed to prevent irreparable harm and protect its opportunity to compete while appeal proceeds | Government argued injunction is extraordinary, would harm procurement, and plaintiff is unlikely to succeed on appeal | Denied — movant failed to show substantial likelihood of success or likely irreparable harm; public interest and government harm weigh against stay |
| Whether GSA’s $26/rsf rental cap was unreasonable | Cleveland Assets contended the cap was unreasonably low and procurement requirements could not be met at that rate | Government showed market surveys, appraisals, and analyses supporting the cap; agency decision is subject to deferential review | Court found agency’s process reasonable; plaintiff not likely to succeed on appeal regarding cap |
| Whether the RLP exceeded the scope of the congressionally-approved prospectus under 40 U.S.C. § 3307 | Cleveland Assets argued RLP included additional premises/features not in the prospectus, violating § 3307 | Government contended plaintiff lacked standing under the zone-of-interests to bring a § 3307 challenge | Court held Cleveland Assets lacked standing under the zone-of-interests test and thus cannot press the § 3307 claim on appeal |
| Whether plaintiff will suffer irreparable harm absent relief | Plaintiff claimed loss of opportunity and potential profits from the procurement | Government noted award might still go to plaintiff and that enjoining procurement causes government/public harm and procurement attrition | Court found plaintiff’s harm speculative and tied to merits; not enough to show likely irreparable harm |
Key Cases Cited
- Telos Corp. v. United States, 129 Fed. Cl. 573 (2016) (discussing injunctions pending appeal in bid protest context)
- Standard Havens Prods., Inc. v. Gencor Indus., Inc., 897 F.2d 511 (1989) (four-factor test for preliminary injunctions)
- E.I. DuPont de Nemours & Co. v. Phillips Petroleum Co., 835 F.2d 277 (1987) (framework for equitable stay analysis)
- Nken v. Holder, 556 U.S. 418 (2009) (standards for stays pending appeal)
- Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7 (2008) (likelihood of irreparable harm requirement)
- Motor Vehicle Manufacturers Ass’n v. State Farm Mutual Auto. Ins. Co., 463 U.S. 29 (1983) (arbitrary-and-capricious standard for agency action)
- Advanced Data Concepts, Inc. v. United States, 216 F.3d 1054 (2000) (deference to agency rational explanations)
- C.A.C.I., Inc.-Federal v. United States, 719 F.2d 1567 (1983) (zone-of-interests discussion in procurement cases)
- Keco Indus. v. United States, 492 F.2d 1200 (1974) (limitations on procurement-regulation-based claims benefiting bidders)
- Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324 (2001) (development of bid protest jurisdiction)
- Springfield Parcel C, LLC v. United States, 124 Fed. Cl. 163 (2015) (analyzed § 3307; Court here respectfully disagreed with aspects of that analysis)