By: Lindsay Simmons
Under the Competition in Contracting Act’s (CICA’s) automatic stay, agencies, upon receiving notice that the award is being protested, must “direct the contractor to cease performance under the contract and to suspend any related activities that may result in additional obligations being incurred by the United States under that contract.” 31 U.S.C. § 3553(d)(3)(A)(ii)(2). Although CICA gives the agency certain limited options to override a CICA stay, importantly, a protestor can challenge the agency’s override in the Court of Federal Claims (COFC), where, in general, the Court’s focus is on whether the agency’s decision is rational and whether the agency has considered the relevant factors. What are those factors? Earlier this month the COFC reminded us, in Safeguard Base Operations, LLC v. U. S. and B&O Joint Venture, LLC, No. 18-1515C, November 5, 2018.
In Safeguard, the protestor challenged the decision of the U.S. Department of Homeland Security, Federal Law Enforcement Training Centers (the Agency), to override the automatic stay of performance required by CICA upon the protestor’s filing of a bid protest at the GAO. The protestor alleged that the Agency’s override justification was not rational or defensible under the factors established by the COFC. The Court acknowledged these factors – what it termed a template – as a “useful tool to help analyze the Agency’s decision to override the automatic stay based on urgent and compelling circumstances”. Under this template the Court examines the following factors:
(1) whether significant adverse consequences will necessarily occur if the stay is not overridden;
(2) whether reasonable alternatives to the override exist that would adequately address the circumstances presented”;
(3) how the potential cost of proceeding with the override, including the costs associated with the potential that the GAO might sustain the protest, compare to the benefits associated with the approach being considered for addressing the agency’s needs; and
(4) the impact of the override on competition and integrity of the procurement system.
Safeguard Base Operations, LLC v. U. S. and B&O Joint Venture, LLC, No. 18-1515C, November 5, 2018, citing to Reilly’s Wholesale Produce v. United States, 73 Fed. Cl. 705 (2006).
The Court also repeated certain factors that are not relevant to the analysis of whether an override is rational, notably that:
(i) the new contract would be better than the old one; and
(ii) the override and performance of the new contract is “otherwise simply preferable to the agency”.
According to the protestor, based on these factors, the Agency’s decision was not rational. The Court disagreed. Why? The Court found that the Agency “had no reasonable alternatives” to overriding the CICA stay because the incumbent contract for the required services had expired and a “further bridge contract [was] not possible.” A bridge contract would have required Congressional notification and could not have been accomplished without a “break” in services – a break that would negatively impact mission-critical training of law enforcement officials. At the end of the day the Court agreed with the factors the protestor argued must be considered, but not the facts. And an override challenge is fact-specific.
Lindsay Simmons is responsible for the content of this Article.
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