Cleveland Assets, LLC v. United States
883 F.3d 1378
Fed. Cir.2018Background
- The FBI occupies a Cleveland building leased from Cleveland Assets; lease extensions have paid a post-10-year penalty rate of $44.72/PSF.
- Under 40 U.S.C. § 3307, GSA must submit a prospectus to congressional committees including an "estimate of the maximum cost" for leases above a prospectus threshold; GSA approved a prospectus listing a $26.00/PSF maximum (with inflation escalation).
- GSA solicited offers via a Request for Lease Proposals (RLP) stating awards would not exceed the congressionally imposed $26.00/PSF cap and that GSA would negotiate price and consider best value factors.
- Cleveland Assets filed a pre-award bid protest (suit in the Court of Federal Claims) before proposal deadline, alleging: (Count II) the RLP exceeded GSA authority under § 3307; (Counts III–IV) the $26.00/PSF cap was unreasonably low, restricted competition, and negated evaluation factors.
- The Claims Court dismissed Count II and granted the government judgment on the administrative record for Counts III–IV; Cleveland Assets appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Claims Court has jurisdiction under 28 U.S.C. § 1491(b)(1) to review an alleged violation of 40 U.S.C. § 3307 (Count II) | § 3307 violations can be challenged under § 1491(b)(1); Cleveland Assets is an "interested party" | § 3307 is an appropriations statute, not a procurement statute; § 1491(b)(1) covers only procurement-related challenges | Dismissed Count II: § 1491(b)(1) does not reach appropriation statutes like § 3307 |
| Whether GSA’s adoption of a $26.00/PSF rental cap was arbitrary, capricious, or lacking rational basis (Counts III–IV) | The cap is unreasonably low, restricts competition, and shifts risk to offerors, undermining technical evaluation factors | GSA reasonably relied on pre-solicitation/prospectus materials supporting $26.00/PSF; procurement discretion and presumption of regularity apply | Judgment for government: selection of $26.00/PSF was not arbitrary or capricious; Claims Court judgment affirmed |
Key Cases Cited
- United States v. Menasche, 348 U.S. 528 (canon to give effect to every clause and word of a statute)
- Distributed Sols., Inc. v. United States, 539 F.3d 1340 (§ 1491(b) limited to government actions initiating procurement)
- Res. Conservation Grp., LLC v. United States, 597 F.3d 1238 (relief under § 1491(b)(1) unavailable outside procurement context)
- Palladian Partners, Inc. v. United States, 783 F.3d 1243 (arbitrary-and-capricious standard in bid protests)
- Croman Corp. v. United States, 724 F.3d 1357 (deference to procurement officials in best-value awards)
- Butler v. Principi, 244 F.3d 1337 (presumption of regularity for public officers)
- American Fedn. of Gov't Emps. v. United States, 258 F.3d 1294 (standing/"interested party" concept under procurement jurisdiction)