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General Accountability Office denies 721 Medical Center Property's protest against General Services Administration's lease requirements in North Carolina; GAO upholds 200-yard setback rule and co-location mandate for three federal agencies

May 7, 2025 Targeted News Service 3 min read

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May 7, 2025 (Targeted News Service) –

WASHINGTON, May 7 -- The General Accountability Office (GAO) has denied a protest filed by 721 Medical Center Property LLC (MCP) of Wilmington, North Carolina , challenging the terms of a lease solicitation (RLP) issued by the General Services Administration ( GSA ). The RLP sought office space in a single location for three federal tenant agencies: U.S. Immigration and Customs Enforcement (ICE), U.S. Coast Guard (USCG), and U.S. Customs and Border Protection (CBP). MCP argued that the solicitation's setback restrictions from certain "protected areas" and its requirement for co-location of the three agencies were unreasonable and unduly restricted competition.

In its decision issued March 12, 2025 , the GAO found that the record supported the GSA 's position that these requirements were reasonably necessary to meet the agency's needs.

MCP, the current landlord for the three agencies, argued that the 200-yard setback requirement from facilities like daycare centers (a daycare is adjacent to MCP's property) and the mandate to house all three agencies in one building were merely preferences, not necessities. MCP contended these restrictions limited competition and hindered its ability to secure the new lease. MCP even offered to build a barrier fence to mitigate any concerns related to the adjacent daycare.

However, the GAO sided with the GSA . Regarding the co-location requirement, the GAO found that the GSA adequately demonstrated that housing the three agencies together was crucial for maximizing shared resources, reducing redundant space, achieving cost savings, and aligning with Department of Homeland Security ( DHS ) policy goals for consolidation. The GAO also noted that the new lease would result in a significant reduction in administrative space. The GAO further found that the agency reasonably considered a recent presidential memorandum regarding the return to in-person work and determined that the co-location requirement remained consistent with the agencies' needs.

Concerning the setback requirement, the GAO acknowledged ICE's justification that the restriction was necessary to comply with its facility design guide and a DHS memorandum aimed at avoiding enforcement actions near "protected areas" like daycare facilities. The GAO recognized the agency's efforts to balance security and policy considerations with the need to maximize competition by adjusting the initial setback distance. The GAO concluded that MCP's disagreement with the agency's approach and its offer to build a fence did not render the setback requirement unreasonable or unduly restrictive, as the agency's policy objectives prioritized distance over physical barriers. The GAO also dismissed MCP's argument based on the agency's past lease history at the same location, noting that each procurement stands independently and that agency needs and policies can evolve over time.

Ultimately, the GAO denied the protest, finding that the GSA had provided reasonable justifications for both the co-location and setback requirements, and that these requirements were not unduly restrictive of competition.

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Primary source of information - GAO: https://www.gao.gov/products/b-423227%2Cb-423227.2

Publicly Released on: Apr 11, 2025 Published: Mar 12, 2025

Diana Parks , Esq., and Hadeel N. Masseoud , Esq., Curran Legal Services Group, Inc. , for the protester.

Jessica A. Gunzel , Esq., Adrienne E. Washington , Esq., and Tammi Snyder-Queen , Esq., General Services Administration , for the agency.

Thomas J. Warren , Esq., and Alexander O. Levine , Esq., Office of the General Counsel , GAO, participated in the preparation of the decision.

TARGETED NEWS SERVICE (founded 2004) features non-partisan 'edited journalism' news briefs and information for news organizations, public policy groups and individuals; as well as 'gathered' public policy information, including news releases, reports, speeches. For more information contact MYRON STRUCK , editor, editor@targetednews.com, Springfield, Virginia ; 703/304-1897; https://targetednews.com

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