The U.S. Government Accountability Office (GAO) has upheld the General Services Administration’s (GSA) decision regarding the setback and co-location requirements in its request for lease proposals to house multiple federal agencies at a Wilmington, North Carolina location. The GAO dismissed a protest from 721 Medical Center Property LLC (MCP) that argued the lease terms were overly restrictive and unnecessary.

The GSA’s procurement needs include accommodating several agencies – U.S. Immigration and Customs Enforcement (ICE), U.S. Customs and Border Protection (CBP), and the U.S. Coast Guard – in one building. Currently, MCP leases around 20,000 square feet in a facility adjacent to a daycare, with plans to expand the leased space by 17,000 square feet to meet the agencies' needs. MCP contested the GSA’s requirement for this additional space and a 200-yard buffer from protected areas, including schools, daycares, and churches, which it claimed unnecessarily restricted competition.

In its decision, the GAO affirmed the GSA’s rationale, recognizing that co-location of agencies would enable them to share common spaces like fitness, training, conference, IT, and security facilities, which would ultimately help reduce the overall government footprint. The GAO rejected the claim that the co-location requirement was unnecessary to meet the agencies’ operational needs, noting that it aligned with the Department of Homeland Security’s policy objectives.

Additionally, the GAO upheld the GSA’s setback requirement, which had been reduced from an even stricter 250-yard buffer. MCP had argued that the daycare facility’s long-established proximity to the building should exempt the project from such a setback, especially given the company’s offer to install a concrete barrier between the two properties. However, the GAO found that the setback was essential to comply with ICE facility design guidelines and to meet the agency’s operational and safety requirements, particularly in light of a memo issued by former Homeland Security Secretary Alejandro Mayorkas in 2021, which prohibits immigration enforcement actions near sensitive locations such as daycares and schools.

The GAO’s decision emphasized that disagreements over the GSA’s judgment on how to best accommodate agency needs do not constitute sufficient grounds for overturning the requirements.