Fed. Circ. Implies Narrowing Of Claims Court Jurisdiction

In 2016, an Ohio property developer brought a bid protest at the Court of Federal Claims objecting to a lease solicitation from the General Services Administration. The developer claimed that the property description in the solicitation had changed from the description the GSA submitted to Congress to obtain funding. According to the developer, the GSA violated 40 U.S.C § 3307, the statute requiring submission of the description to Congress. The COFC denied the protest, ruling that the developer did not stand within the "zone of interests" defined by the statute, thus failing to satisfy the independent requirement of "prudential standing."1

The developer appealed, and the Federal Circuit was expected to rule on the issue of prudential standing and resolve the disagreements among COFC judges regarding whether the doctrine of "prudential standing" applies to COFC protests, or whether the Tucker Act's "interested party" requirement provides the only test for standing in a protest at COFC. Instead of addressing prudential standing, however, the circuit's March 5, 2018, decision rested on a basis that neither party argued — denying standing to the developer because § 3307 was not a "procurement statute," and "says nothing of how GSA must run its procurement."2 This implies a narrowing of the COFC and Federal Circuit's previous broad interpretations of the Tucker Act's jurisdiction over challenges to statutory violations "in connection with a procurement or a proposed procurement."3

Background

Cleveland Assets arose from a Government Services Administration request for lease proposals (RLP) seeking a secure space for the Federal Bureau of Investigation's Cleveland Field Office. The FBI Cleveland Field Office has been housed in a building leased by Cleveland Assets since February 2002. The lease was initially set to expire in January 2012, but has been extended multiple times to the present day.4

Under 40 U.S.C. § 3307, the GSA must seek approval of two congressional committees before obligating funds on a lease where the annual rent will exceed $2.85 million. This statute requires the GSA to submit a prospectus describing (among other things) the property it intends to lease and an estimate of the price it will ultimately pay:

40 U.S.C § 3307. Congressional Approval of Proposed Projects

(a) Resolutions Required Before Appropriations May Be Made.—The following appropriations may be made 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:

...

(2) An appropriation to lease any space at an average annual rental in excess of $1,500,000 for use for public purposes.

(b) Transmission to Congress of Prospectus of Proposed Project.—To secure consideration for the approval referred to in subsection (a), the Administrator of General Services shall transmit to Congress a prospectus of the proposed facility, including—

(1) a brief description of the building to be constructed, altered, or acquired, or the space to be leased, under this chapter;

(2) the location of the building or space to be leased and an estimate of the maximum cost to the Government of the facility to be constructed, altered, or acquired, or the space to be leased;

In 2009, the GSA began preparing for a new lease for the FBI Cleveland Field Office. It provided the congressional committees with a final prospectus in December 2010 that set forth an estimated rental rate of $26.00 per square foot. By September 2011, the relevant committees adopted resolutions approving the prospectus at that rate. Over five years later, the GSA issued a RLP, which, pursuant to § 3307, stated the GSA would only award a lease if the offered rental rate did not exceed the "Congressionally-imposed rent limitation" of $26.00.[[N:Id. at *3-4.] For context, the Federal Circuit's decision explained that pursuant to the lease extensions, the "GSA has paid, and continues to pay, Cleveland Assets a penalty rate of $44.72 per rentable square foot ("PSF") since the expiration of the original 10-year period."5

The COFC Decision

Cleveland Assets filed a pre-award protest at the COFC challenging the terms of the RLP.6 Cleveland Assets argued that the RLP is contrary to law because it exceeds the GSA's leasing authority under § 3307, stating that the RLP included "additional space and structures not identified in the prospectus GSA submitted to the Congressional Committees for the FBI's new lease."7 Judge Elaine Kaplan held that, while it was possible that Cleveland Assets was an "interested party" for purposes of the COFC's Tucker Act jurisdiction, it lacked the required "prudential standing" necessary to bring this claim.8

Prudential standing is a judge-made standing doctrine arising from the administrative law context. It is not rooted in the Article III case or controversy requirement, and therefore can be adjusted or eliminated by clear congressional direction. Even if a plaintiff challenging the government's violation of a statute has some interest in the government's action, in order to have "prudential" standing, they must be within the "zone of interests protected or regulated by the statutory provision" at issue — i.e. the statute must have, in some sense, been enacted to protect or control entities in the plaintiff's position.9 Judge Kaplan found that Congress had not exempted the Tucker Act from the prudential standing requirement, and that Cleveland Assets' interest in keeping the current FBI lease (or winning a new one) is not within the "zone of interests" protected by the appropriations rules set out in § 3307:

[§ 3307(a)] requires GSA to secure the approval of Congressional Committees in order to obtain appropriated funds for leases above a set annual dollar amount. 40 U.S.C. § 3307(a). Its purpose is obviously to enable Congress to oversee how the money it appropriates is spent. ... The statute does not mention private parties or government contractors, and does not remotely suggest an intent to confer a right to judicial review.10

In taking this position, Judge Kaplan was continuing a split among the COFC judges on the application of prudential standing in the Tucker Act context. Several contemporary cases have declined to apply prudential standing to the COFC's jurisdiction over bid protests under § 1491(b) of the Tucker Act.11

Appeal to the Federal Circuit

Cleveland Assets appealed to the Federal Circuit. With respect to Cleveland Assets' claim that the RLP violated § 3307, the parties' briefing focused entirely on whether the COFC correctly applied the prudential standing requirement...