GSA Lease Protester Wins Battle, Loses War

While government real property leases may be subject to many of the ordinary rules that apply to federal procurements, in certain key ways they are different.  In particular, General Services Administration (GSA) real property leases do not necessarily contain typical termination for convenience provisions, but do typically contain termination for default provisions.  At times GSA has maintained that federal leases are not funded (directly) by appropriated dollars - but are funded with money obtained from “other” sources, such as other agencies and sales of GSA property.  This explains why government shut-downs do not necessarily affect GSA real estate leases in the same way they affect other government contracts.

The “uniqueness” of GSA leasing became extremely important in a recent GAO protest decision.  GSA found that GSA had improperly awarded a lease to a bidder that did not comply with certain solicitation requirements relating to public transportation.  While it sustained the protest, GAO did not recommend that the GSA lease award be cancelled, because the lease was already signed and did not include a termination for convenience provision.  However, GAO did recommend that GSA pay the protester’s bid and proposal and protest costs, including reasonable attorney fees.

This GAO decision leaves some questions unresolved.  For example, could the protester could have obtained more meaningful relief from the U.S. Court of Federal Claims (COFC)?  Could the protester have found a basis to argue that the award was not merely incorrect, but void or fraudulent?  Also, would protest procedures and results have been different under a U.S. Army Corps of Engineers (USACE) or United States Postal Service (USPS) lease protest? 

If you are considering challenging a GSA (or other agency) real property lease award, it is important to do so carefully and with a full understanding of the various strategy, timing, and cost issues that can arise.  If you have recently won an award, you should understand the extent to which this GAO decision might or might not protect your hard-won award.  For more information about government real property leasing/GSA leasing, please contact us.