Snead, H&F Managing Director, was notified by a letter dated November 4, 1992 that GSA planned to pursue a lease construction project on a site within the CBA. On December 8, 1992, H&F submitted a formal protest to the General Accounting Office ("GAO").
On January 13, 1993, GSA Assistant Regional Administrator Earl Eschbacher, Jr. wrote to H&F stating that no final decision had been made, that its facility had not been excluded from the bid process and that all previous correspondence suggesting otherwise should be disregarded. On January 15, 1993, the GAO dismissed H&F's protest as premature.
In a letter dated January 25, 1993, GSA informed the VA that it had decided to select a CBA site for the new VA regional office. Plaintiff was informed of this decision on March 4, 1993. On March 10, 1993, H&F filed a second protest with the GAO. In a July 13, 1993 decision, GAO denied plaintiff's protest finding that GSA's decision to limit consideration of sites to the CBA was proper and reasonable. Matter of H&F Enter., B-251581.2, July 13, 1993, 93-2 C.D. P 16, 1993 WL 274032 (C.G.).
In June 1993, and again in August 1995, an environmental assessment was conducted. Following additional consultations with Waco city officials and the VA, the CBA was redefined to avoid sites within the city's floodplain.
On August 10, 1995, GSA issued a solicitation for offers to construct and lease back a building where the successful bidder would purchase the property owned by the First Baptist Church, which is located within the CBA, construct a building and lease the space to GSA. In September 1995, H&F filed suit in this Court for declaratory and injunctive relief, alleging that GSA violated the Administrative Procedure Act ("APA").
II. STANDARD OF REVIEW
A. Motion for Summary Judgment
Summary judgment should be granted pursuant to Fed. R. Civ. P. 56 only if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). In ruling upon a motion for summary judgment, the Court must view the evidence in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986); Bayer v. United States Dep't of Treasury, 294 U.S. App. D.C. 44, 956 F.2d 330, 333 (D.C. Cir. 1992). Likewise, in ruling on cross-motions for summary judgment, the court shall grant summary judgment only if one of the moving parties is entitled to judgment as a matter of law upon material facts that are not genuinely disputed. Rhoads v. McFerran, 517 F.2d 66, 67 (2d Cir. 1975). The cross-motions for summary judgment pending before the Court present no genuinely disputed material facts that would preclude summary judgment.
B. Review of Agency Action
The standard of review is whether the agency action was "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law." 5 U.S.C. § 706(2)(A) (1989). This standard requires plaintiff to demonstrate that the agency action "had no rational basis" or "involved a clear and prejudicial violation of applicable statutes or regulations." Kentron Hawaii, Ltd. v. Warner, 156 U.S. App. D.C. 274, 480 F.2d 1166, 1169 (D.C. Cir. 1973).
The scope of review is narrow and the Court is expected to exercise restraint in deciding whether to set aside agency actions. Delta Data Sys. Corp. v. Webster, 240 U.S. App. D.C. 182, 744 F.2d 197, 203-04 (D.C. Cir. 1984); Saratoga Dev. Corp. v. United States, 777 F. Supp. 29, 39 (D.D.C. 1991), aff'd, 305 U.S. App. D.C. 351, 21 F.3d 445 (D.C. Cir. 1994). If a rational basis exists for the agency's decision, the Court cannot substitute its judgment for that of the agency, Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416, 28 L. Ed. 2d 136, 91 S. Ct. 814 (1971), merely because the Court believes the procurement decision "ill-considered," M. Steinthal & Co. v. Seamans, 147 U.S. App. D.C. 221, 455 F.2d 1289, 1299-1301 (D.C. Cir. 1971).
Moreover, the Court should not overturn agency decisions "on the ground that the procuring agency potentially or actually violated applicable law in some trivial way--the violation must have been clear and prejudicial." Elcon Enter., Inc. v. WMATA, 298 U.S. App. D.C. 197, 977 F.2d 1472, 1478 (D.C. Cir. 1992) (citations omitted). The D.C. Circuit has held that:
When a statute requires agencies to "consider" particular factors, "it imposes upon agencies duties that are essentially procedural . . . . The only role for a court is to insure that the agency has considered the factor."
Getty v. Federal Sav. and Loan Ins. Corp., 256 U.S. App. D.C. 346, 805 F.2d 1050, 1055 (D.C. Cir. 1986) (quoting Strycker's Bay Neighborhood Council, Inc. v. Karlen, 444 U.S. 223, 227, 62 L. Ed. 2d 433, 100 S. Ct. 497 (1980)). Accord City of Reading, Pa. v. Austin, 816 F. Supp. 351, 359-61 (E.D. Pa. 1993).
As a general rule, Courts should be reluctant to overturn agency actions validated on the merits by the GAO, which is "an arm of the legislature which is independent of the executive branch, and has an accumulated experience and expertise attested to by a substantial volume of bid protest cases filed and decided." M. Steinthal, 455 F.2d at 1305. But cf. Latecoere Int'l, Inc. v. U.S. Dep't of Navy, 19 F.3d 1342, 1356 (11th Cir. 1994) (uncritical deference to GAO decisions is not proper because it would, in effect, repeal Congress' grant of jurisdiction via APA).
In so defining the standard of review, the Court is not abdicating all of its powers of review, but rather recognizing the limits under which it operates and the deference due to those branches of the Government with the expertise and discretion to interpret and apply agency regulations. Saratoga, 777 F. Supp. at 37.
In applying the standard, review must focus on the administrative record before the agency at the time of its decision. Overton Park, 401 U.S. at 419-20. The Court may consider background evidence outside of the administrative record only to clarify information before the agency at the time of its decision. Reading, 816 F. Supp. at 361. The affidavits submitted by both sides should therefore be treated as mere background evidence to be used only to clarify the administrative record.
The Administrative Procedure Act ("APA"), 5 U.S.C. §§ 551-706, grants a right of judicial review to persons "adversely affected or aggrieved by agency action within the meaning of a relevant statute." 5 U.S.C. § 702 (1989). To have standing to obtain review of an agency action, plaintiff must allege injury in fact caused by arbitrary and capricious administrative action to an interest within the "zone of interests" protected by statute, executive order or regulation. Clarke v. Securities Indus. Ass'n, 479 U.S. 388, 394-96, 93 L. Ed. 2d 757, 107 S. Ct. 750 (1987).
The seminal case of Scanwell Lab., Inc. v. Shaffer, 137 U.S. App. D.C. 371, 424 F.2d 859 (D.C. Cir. 1970), recognized that disappointed bidders are afforded standing under the APA to challenge agency actions. However, a standing inquiry is dependent on the factual background. See Foundation on Economic Trends v. Lyng, 291 U.S. App. D.C. 365, 943 F.2d 79, 82 (D.C. Cir. 1991) (quoting United States ex rel. Chapman v. FPC, 345 U.S. 153, 156, 97 L. Ed. 918, 73 S. Ct. 609 (1953) (Frankfurter, J.) (standing is "more or less determined by the specific circumstances of individual situations")).
While the present case arises out of the grant of a government contract through lease procurement competition, it is the atypical disappointed bidder action. Although plaintiff had the opportunity to bid for the lease construction of the chosen CBA site, it chose not to participate in the procurement competition. Nevertheless, plaintiff challenges not only the government's decision to select a site from within the CBA, but also defendant's final site selection.
Defendant contends that any alleged injury is limited to GSA's decision to locate the VA regional office inside of the CBA, which was delineated by Waco city officials. Pursuant to defendant's theory, any further actions on the part of GSA in selecting a final site did not result in any injury to plaintiff. The Court is persuaded by defendant's argument and concludes that plaintiff only has standing to challenge the decision to select a site from within the CBA, and does not have standing to challenge the final site selection.
Having made that determination, the Court must determine exactly when the decision was made to select a site from within the CBA. Plaintiff argues that GSA made its decision to relocate the VA regional office in 1992, prior to complying with the E.O. mandate that adjacent areas and enumerated factors be considered.
However, the Court is not persuaded that the record shows that GSA made a final decision to relocate the VA facility to the CBA in 1992.
The affirmative indication from GSA that it had decided to select a site from within the CBA comes from an October 21, 1992 letter from Leonard Murphy, GSA Real Estate Division Director, to Lois High, the VA Regional Office Director. In the letter, Murphy indicated that the VA facility would be located on a site in the Waco CBA. However, on January 13, 1993, Earl Eschbacher, Jr., GSA Assistant Regional Administrator, wrote to H&F stating that no final decision had been made, that its facility had not been excluded from the bid process and that all previous correspondence suggesting otherwise should be disregarded. In a letter dated January 25, 1993, GSA informed the VA that it decided to select a CBA site for the new VA regional office. Plaintiff was notified of this decision on March 4, 1993. The Court is persuaded that the representations made in the January 13, 1993 letter from Eschbacher were accurate and concludes that the final decision to select a CBA cite was made on or about January 25, 1993.
The issue then becomes whether GSA complied with the E.O. to the extent required before making its decision to select a CBA site.
B. Sufficiency of the Administrative Record
Before addressing plaintiff's claims that GSA's decision to select a site within the CBA was arbitrary and capricious for failure to comply with the Executive Order, the Court must first address plaintiff's claim that the administrative record is incomplete. Plaintiff contends that the administrative record fails to include relevant documents necessary for the Court to render a decision. The Court has thoroughly reviewed the record and has determined that the record is sufficient for the Court to render a decision on whether defendant's decision to select a site from within the CBA was arbitrary and capricious. The Court notes that documents referring to the final site are unnecessary because the propriety of the final site selection is not an issue before the Court. Likewise, GSA's dealings with other client agencies does not bear on whether GSA's decision to select a site from within the CBA in this case was arbitrary and capricious. In claiming that the record is incomplete, plaintiff provides a laundry list of alleged relevant documents missing from the administrative record. After reviewing the list and the record, the Court finds that the alleged missing documents are either non-existent or if in existence, were not relied upon by GSA in reaching its decision to locate the VA regional office within the CBA or are not necessary for the Court to reach a decision. See James Madison Ltd. by Hecht v. Ludwig, 317 U.S. App. D.C. 281, 82 F.3d 1085 (D.C. Cir. 1996), rh'g en banc denied, (July 3, 1996). Having concluded that the administrative record is sufficient, the Court addresses the merits of this action.
C. GSA's decision to select a site from within the CBA.
When selecting a facility for a federal agency, GSA must comply with Executive Order No. 12072 and with its implementing regulations. E.O. 12072 expressly provides that:
Federal facilities and Federal use of space in urban areas shall serve to strengthen the Nation's cities 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.
Executive Order No. 12072 § 1-101, 43 Fed.Reg. 36869 (August 16, 1978). The purpose of the E.O. was to strengthen the Nation's cities by encouraging the location of Federal facilities in the Nation's central cities. According to President Carter, this Order was intended "to move jobs and people and opportunities and growth down to the formerly abandoned central city areas of those that were being abandoned in a slow and inexorable way." 14 Wkly. Comp. Pres. Doc. 1427, 1428 (August 16, 1978).
The initial regulations promulgated pursuant to the E.O. provide that:
First consideration shall be given to a centralized business area and adjacent areas of similar character in the central city of Standard Metropolitan Statistical Areas (SMSA) defined by the Department of Commerce publication (Government Printing Office Stock Number 041-001-00101-8), including other specific areas of a city recommended by the elected chief executive officer of the local government or a designees, except where this type of consideration is otherwise prohibited.
41 C.F.R. § 101-17.002(c)(1) (1987). In 1991, Temporary Regulation D-76 was promulgated which provided that:
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 other specific areas which may be recommended by local officials in accordance with Executive Order 12072. When developing the requested delineated area, the client agency shall comply with the requirements of Executive Order 12072 which requires that first consideration be given to CBAs and other designated areas. 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. GSA will consult with local officials to identify CBAs. Each GSA regional office will provide, upon agency request, a description of the identified CBA for the community in which the agency requires space.