Under CICA, after Supreme timely filed its pending protest with the GAO on December 17, 2012, see AR, Tab 8 at 649, the contracting officer was required to “immediately 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) (2006). This cessation of performance, commonly referred to as CICA’s “automatic stay,” is the rule, by command of Congress, lasting through the determination of the protest, see 31 U.S.C. § 3553(d)(3)(B). The stay is legally mandated, until performance is authorized by the head of procurement activity in a written finding that either “performance of the contract is in the best interests of the United States” or “urgent and compelling circumstances that significantly affect interests of the United States will not permit waiting for the decision of the Comptroller General concerning the protest.” 31 U.S.C. § 3553(d)(3)(C)(i).

Instead of the stay kicking in upon notice of Supreme’s protest, until overridden by a D&F, Anham’s performance was never directed to cease. See AR, Tab 9 at 717 (explaining “DLA Troop Support did not issue a stop work order when it received Supreme’s most recent protest”). The head of contracting activity was of the unusual opinion that if a reevaluation of offers occurring under corrective action results in the decision to reaffirm an earlier award, the CICA stay does not apply when this new decision is protested before the GAO (since it will necessarily be more than ten days after the initial award and more than five after the initial debriefing). See id. at 715, 717.8 Thus, the D&F he issued on December 21, 2012, contained the primary determination that the CICA stay did not apply in the circumstances presented. Id. Neither the defendant nor the intervenor defended this aspect of the D&F, which appears to the Court to have clearly been erroneous --- performance of Anham’s contract should have been ordered to cease upon notice of Supreme’s timely GAO protest.

Rather than using the D&F to authorize the resumption of performance of the protested contract, the head of contracting authority used it to rationalize the unceased and continuing performance of that contract. But he also “did consider whether suspending performance under the subject contract was in the Government’s best interest.” Id. at 715. While the premise of this exercise had things backwards --- the issue to be determined was whether a stay should be overridden, not whether one should be imposed --- the result is the same. By determining whether performance of Anham’s contract during the pendency of the GAO proceedings was in the government’s best interests or justified by urgent and compelling circumstances, the head of contracting authority satisfied procedurally the written override requirements (for the period beginning the date the D&F was issued). The question before the Court is whether this D&F substantively met the arbitrary and capricious APA review standard that applies under 28 U.S.C. § 1491(b)(4). See RAMCOR, 185 F.3d at 1290. 

The parties all acknowledge that the variation of this review standard that has been termed the “hard-look doctrine,” see CBY Design Builders v. United States, 105 Fed. Cl. 303, 337 (2012), articulated by the Supreme Court in Motor Vehicle Manufacturers Ass’n v. State Farm Mutual Automobile Insurance Co., 463 U.S. 29, 43 (1983), applies in this context. See Def.’s Br. at 19; Intervenor’s Br. at 13; Pl.’s Opp’n at 9. Under this approach, an agency decision

would be arbitrary and capricious if the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.

Motor Vehicle Mfrs. Ass’n, 463 U.S. at 43; see also Ala. Aircraft, 586 F.3d at 1375.

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After repeated elaboration, it should be beyond controversy that the point of the CICA automatic stay was to enhance the GAO as a forum for bid protests, so that the integrity of the competitive procurement process could be protected. See, e.g., PMTech, 95 Fed. Cl. at 346-47; CIGNA Gov’t Servs., LLC v. United States, 70 Fed. Cl. 100, 112 (2006); PGBA, LLC v. United States, 57 Fed. Cl. 655, 657-58 (2003). Before the stay existed, a contract whose award was the subject of a protest could have been performed for several months while the matter was considered by the GAO. That office’s ultimate determination that the award was improper --- and thus, may not have been the best option for an agency to follow --- would come with a recommendation, not a mandate, that the award be cancelled, which an agency might have been inclined to disregard because of the costs incurred and progress made under the awarded contract. “Thus, ‘the automatic stay is intended to preserve the status quo during the pendency of the protest so that an agency would not cavalierly disregard GAO’s recommendations to cancel the challenged award,’ thereby ‘preserv[ing] competition in contracting and ensur[ing] a fair and effective process at the GAO.’” Reilly’s Wholesale, 73 Fed. Cl. at 710 (alterations in original) (quoting Advanced Sys. Dev., Inc. v. United States, 72 Fed. Cl. 25, 31(2006)).

In light of this purpose, even though the stay may be overridden when in the best interests of the government or when certain urgent and compelling circumstances so require, see 31 U.S.C. § 3553(d)(3)(C)(i), it is hard to see how an override decision could fail to consider “the impact of the override on competition and the integrity of the procurement system,” Reilly’s Wholesale, 73 Fed. Cl. at 711, and still be rational. And since the stay was the rule, and an override the exception, it would make little sense were the latter to be available whenever an agency felt its latest solicitation was an improvement over the previous contract. Competition is, after all, supposed to lead to lower prices and higher quality, see Arch Chems., Inc. v. United States, 64 Fed. Cl. 380, 400 (2005), and agencies would be expected to learn from past procurements when updating solicitations. Thus, if an agency’s belief that the awardee’s proposal offered the best value --- in response to a solicitation that was an advancement over prior procurements --- were sufficient to override the stay, “as a practical matter, the automatic stay would be meaningless in virtually every single instance in which a GAO protest was filed.” University Research Co. v. United States, 65 Fed. Cl. 500, 503 (2005); see also PGBA, 57 Fed. Cl. at 662-63.

From this, it follows that rather than focusing on the benefits of the new contract (particularly since that means performance by a contractor whose award might prove to have been arbitrarily made), agencies should consider the existence of “significant adverse consequences [that] will necessarily occur if the stay is not overridden.” Reilly’s Wholesale, 73 Fed. Cl. at 711. To determine the necessity of contract performance to avoid these consequences, it could hardly be rational for an agency to ignore the existence of “reasonable alternatives to the override” that would also do the job. Id. And in all events, if the costs of an override when a protest might be sustained would outweigh the benefits received through immediate performance of a contract, the override would neither be in the best interests of the United States nor justified by the urgency of the circumstances. If no effort is made to compare these costs and benefits, an agency cannot rationally find an override of the stay to be warranted.

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The Court acknowledges that, particularly in a war zone, conflicting claims on resources may make them unavailable at certain times. But this unavailability, and the resulting impact on the government, is simply not explained in the J&A nor supported in the administrative record. If the need to accomplish transitions quickly when contracts are to be performed in a war zone were enough to justify the override of the CICA stay, this would also seemingly justify ignoring any resulting GAO recommendation --- which the agency disclaims. See AR, Tab 9 at 724. The administrative record contains no evidence supporting an immediate threat of harm to health, safety or welfare, and the explanation regarding the diversion of resources is too implausible to attribute to differing judgment and expertise. Motor Vehicle Mfrs. Ass’n, 463 U.S. at 43. On this record, it was arbitrary for the agency to find that urgent and compelling circumstances justified an override of the automatic stay.

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For the foregoing reasons, the Court concludes that the decision to override the CICA stay of performance issued by DLA Troop Support on December 21, 2012, was arbitrary, capricious and contrary to 31 U.S.C. § 3553(d)(3)(C)(i), and is thus invalid and of no effect.  (Supreme Foodservice GmbH v. U. S. and Anham FZCO, No 13-1, March 4, 2013)  (pdf)

B. Standards for Preliminary Injunction

The court must consider four factors when contemplating whether to grant a preliminary injunction: (1) likelihood of plaintiff’s success on the merits, (2) irreparable harm to plaintiff if an injunction is not granted, (3) the balance of hardships, and (4) the public interest. Sciele Pharma Inc. v. Lupin Ltd., 684 F.3d 1253, 1259 (Fed. Cir. 2012); see also Winter v. National Res. Def. Council, Inc., 555 U.S. 7, 20 (2008). Plaintiff must establish the existence of a reasonable likelihood of success on the merits and irreparable harm in the absence of an injunction, while the last two factors are not required but are weighed in the balance. See Altana Pharma AG v. Teva Pharm. USA, Inc., 566 F.3d 999, 1005 (Fed. Cir. 2009) (“Although the factors are not applied mechanically, a movant must establish the existence of both of the first two factors to be entitled to a preliminary injunction.”). A preliminary injunction is “an extraordinary and drastic remedy, one that should not be granted unless the movant, by a clear showing, carries the burden of persuasion.” Mazurek v. Armstrong, 520 U.S. 968, 972 (1997) (quoting 11A Charles Alan Wright et al., Federal Practice and Procedure § 2948, at 129–30 (2d ed. 1995)) (emphasis in the original).

1. Likelihood of success on the merits.

Plaintiff must demonstrate that it is more likely than not to succeed on the merits of its claim to qualify for a preliminary injunction. See Revision Military, Inc. v. Balboa Mfg. Co., 700 F.3d 524, 526 (Fed. Cir. 2012) (holding that for matters unique to the Federal Circuit, a preliminary injunction with the effect of altering the status quo must meet the standard of “more likely than not,” not a “clear or substantial likelihood” standard as required by certain other circuits in particular types of cases). On the merits, KWV will have to prove that the government’s decision was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. 28 U.S.C. § 1491(b)(4) (adopting the standard of 5 U.S.C. § 706(2)(A)). KWV contends that [VA’s Office of Small and Disadvantaged Business Utilization] OSDBU’s determination was far less searching and careful than the prior verification by [VA’s Center for Veterans Enterprise] CVE, and relied solely, and wrongly, on the assumption that Mr. Maron could not exercise effective control of KWV when he spends six months and a day of each year in Florida rather than Rhode Island. Pl.’s Mem. in Support of Pl.’s Emergency Mot. for Prelim. Inj. (“Pl.’s Mem.”) at 15. The government counters that OSDBU’s decision was neither arbitrary and capricious nor contrary to standards because OSDBU based its decision on a fact unknown to CVE at the time of CVE’s VOSB certification, i.e., Mr. Maron’s residency, which came to light during the OSDBU investigation. Hr’g Tr. 28:20-29:5 (Jan. 4, 2013); see also Def.’s Resp. to Pl.’s Mot. for Preliminary Inj. (“Def.’s Opp’n”) at 6-7. Whether CVE actually lacked this information is disputed by the parties. The record before CVE and produced with its decision does not place Mr. Maron’s residency in any particular state, giving the court no indication as to whether CVE was in fact aware of it at the time. See AR 1-517; Hr’g Tr. 33:14-25 (Jan. 4, 2013); Hr’g Tr. 22:9-23:10 (Dec. 20, 2012).

The OSDBU inquiry was markedly less thorough than that of CVE. The CVE examination included a site visit in December 2011 to KWV’s headquarters to examine KWV’s physical setting and to interview Mr. Maron and others, as well as to provide a context for review of documentary records. See AR 495-515.2 (Letter from Dan Friend to Bruce St. John (Dec. 19, 2011)); AR 1-159 (Initial Application for CVE Verification). Additionally, CVE requested supplemental documentation from plaintiff, beyond what was filed with the application for VOSB verification, and asked specific questions to illuminate certain areas of the application. AR 160-61 (E-mail from Dawn Monahan to James Maron (Sep. 15, 2011)). KWV and Mr. Maron provided the requested information and responded to CVE’s questions. AR 162-450 (Additional Documentation and Correspondence). After CVE initially declined to verify KWV as a VOSB, AR 451-53 (CVE Denial Letter), Mr. Maron was permitted to cure the alleged defects in his application by amending KWV’s by-laws, and to request reconsideration, AR 454- 94 (Correspondence and Documentation Regarding Reconsideration). By the time CVE issued the VOSB certification for KWV on February 7, 2012, CVE had reviewed hundreds of pages of documents, performed a site visit and interviews in December 2011, and had been corresponding with Mr. Maron for nearly five months. See AR 516-17 (CVE Approval Letter). Aspects of the CVE investigation were documented thoroughly and are now in the administrative record before the court.

In comparison, the OSDBU investigation appears to have been cursory. No site visit was conducted by OSDBU. See Hr’g Tr. 10:2-10; 11:19-12:1 (Dec. 20, 2012). No interviews were conducted by OSDBU. Id. OSDBU afforded Mr. Maron an opportunity to respond to the protest but did not follow up with any questions or concerns it may have had. Much of the OSDBU decision is taken up by a word-for-word recitation of regulations found in Parts 819 and 74. AR 568-71. The findings themselves give few clues as to how OSDBU reached its decision, stating merely that “[b]ecause construction requires the direct supervision of the work to be performed, the location of the [veteran] is considered in determining whether the [veteran] controls an applicant construction company.” AR 570 (emphasis added). This statement is followed by a citation to a decision by the Small Business Administration’s ("SBA's") Office of Hearings and Appeals (“OHA”) and a summary of Alares’ bid protest allegations. Id. As will be discussed, the cited decision by SBA supports KWV’s position, not that of OSDBU, and the protestor’s allegations turn on tenuous inferences. Importantly, OSDBU never even purports to determine Mr. Maron’s actual level of involvement in the control of KWV.

By contrast, CVE’s detailed investigation focused on the extent and effectiveness of Mr. Maron’s personal activities in relation to his control of KWV. Nevertheless, the government urges that the OSDBU decision should control because OSDBU knew Mr. Maron resides in Florida for just over half the year. Hr’g Tr. 21:10-17 (Dec. 20, 2012). That fact, plus the general statement that “[t]he nature of construction requires on-site supervision and direct human contact to adequately complete projects,” constitutes the sum of OSDBU’s rationale. AR 570.

The SBA decision, In the Matter of First Capital Interiors, Inc., SBA No. VET-112, 2007 WL 2438401 (2007) (“First Capital”), is instructive for what it decides as well as for what it does not decide. The decision concludes that a service-disabled veteran did not control the applicant construction firm. The veteran resided in Visalia, California, while the construction company was based in Chillicothe, Ohio. 2007 WL 2438401, at *1. OSDBU considered that the First Capital ruling was made simply “because [the veteran] lived thousands of miles from the [company’s] headquarters.” AR 570. In actuality, SBA explicitly rejected the proposition that distance alone could determine control. First Capital, 2007 WL 2438401, at *7 (“[N]either OHA nor SBA maintains a concern cannot manage a job that is 2000 miles away from its headquarters.” (emphasis added)). Rather, SBA took into account additional factors that included the veteran’s seemingly full-time residence three time zones away from the company’s situs, the lack of a long-distance management infrastructure, the absence of management experience on the part of the veteran, and the circumstance that the veteran was simultaneously self-employed at two other jobs, both of which were located in California. Id. at *7-8.

Mr. Maron, unlike the veteran in First Capital, physically is present in Rhode Island, where KWV is based, for nearly half the year and spends the remainder of his time in Florida, both of which are in the same time zone. AR 540. While in Florida, Mr. Maron employs various electronic means to keep track of the day-to-day business of KWV. Id.; Pl.’s Mem. at 16. KWV typically only performs one job at a time, with most of the work being performed when Mr. Maron is in Rhode Island. Id. Additionally, during periods he spends in Florida, Mr. Maron nonetheless travels to Rhode Island for “any meeting in which anything of importance is discussed.” AR 540. He has ample management experience in construction, as his work historyshows. See AR 434. Mr. Maron currently maintains no other jobs or positions, allowing him to focus solely on KWV. See AR 434, 541. There is nothing in the record to suggest credibly that Mr. Maron could not meet the requirements of the control standard found in Part 74 and incorporated into Part 819, and the government has manifestly failed to articulate any other rationale for denying KWV VOSB status. OSDBU neither “provided a coherent and reasonable explanation of its exercise of discretion, Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1333 (Fed. Cir. 2001), nor articulated a ‘rational connection between the facts found and the choice made.’” Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983).

Based on the foregoing analysis, the court finds that plaintiff is more likely than not to succeed in proving that the government’s actions were arbitrary and capricious or not in accordance with law.

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CONCLUSION

For the foregoing reasons, KWV’s motion for a preliminary injunction is GRANTED. OSDBU’s decision dated October 24, 2012, rendering KWV ineligible for awards of contracts as a VOSB, is set aside. VA shall restore KWV to its roster of approved VOSB entities. KWV’s verified eligibility to participate in VA’s Veterans First Contracting Program shall be extended by 72 days, to April 22, 2013, to take account of the days it was wrongfully removed from eligibility.

With the agreement of the parties, the court has adopted an accelerated schedule for consideration of the merits of this protest. This grant of preliminary relief should remain in effect for a relatively brief time, expected to be no more than several months, until the court resolves KWV’s claim for permanent relief and the government’s opposition to that claim. Because this preliminary relief has been structured to avoid the harms that the government indicated might arise with delays in VA’s procurement activities,14 KWV is not required to provide security in any amount.  (KWV, Inc. v. U. S., No. 12-882C, January 25, 2013)  (pdf)

F. A Preliminary Injunction Is Warranted.

The August 20, 2012 Complaint requests that the court “preliminarily and permanently enjoin and set aside the [Army’s] decision, actions, and all findings and conclusions that are alleged to support such decision.” Compl. at 37. Although Linc’s September 19, 2012 Motion For Judgment On The Administrative Record seeks a permanent injunction (Pl. Mot. JAR at 37), the court considers a preliminary injunction more appropriate to the circumstances in this case. See 28 U.S.C. § 1491(b)(2) (authorizing the court to “award any relief that the court considers proper, including . . . injunctive relief”).

In considering whether to issue a preliminary injunction the court is required to weigh four factors, i.e., affect a decision whether to grant a preliminary injunction: “(1) immediate and irreparable injury to the movant; (2) the movant’s likelihood of success on the merits; (3) the public interest; and (4) the balance of hardship on all the parties.” U.S. Ass’n of Imp. of Textiles & Apparel v. United States, 413 F.3d 1344, 1346 (Fed. Cir. 2005). “No one factor, taken individually, is necessarily dispositive . . . . [T]he weakness of the showing regarding one factor may be overborne by the strength of the others.” FMC Corp. v. United States, 3 F.3d 424, 427 (Fed. Cir. 1993).

As to the first factor, the Administrative Record evidences violations of the Competition in Contracting Act, FAR, and/or contains no documents showing that the Army even considered some of Linc’s proposed “betterments,” much less any discussion of the merits of those proposed “betterments.” Without injunctive relief, however, Linc will suffer immediate and irreparable harm by losing the opportunity to be awarded a MATOC Contract. See Google, Inc. v. United States, 95 Fed. Cl. 661 (2011) (issuing a preliminary injunction after finding that plaintiff had made a prima facie showing of a violation of the Competition in Contracting Act and relevant FAR provisions); see also Savantage Fin. Servs., Inc. v. United States, 81 Fed. Cl. 300, 306-08 (2008) (same). Therefore, the first factor weighs in favor of an injunction.

As to the second factor, the Administrative Record has established that the Army also evaluated certain of Linc’s proposals in any arbitrary manner that was prejudicial to Linc’s financial interests. Therefore, Linc has met the second test, i.e., a likelihood of success on the merits. See PGBA, LLC v. United States, 57 Fed. Cl. 655, 664 (2003) (“This court has acknowledged that a lost opportunity to compete may constitute an irreparable harm[.]”).

As to the third factor, in many instances, the Administrative Record in this case contains only the perfunctory summaries of the Army’s completed evaluations as reflected in the SSEB’s Consensus Proposal Evaluation Worksheets, but does not contain any internal documents from which the consensus worksheets would have been compiled or documents evidencing whether and how the Army evaluated those documents. “A protest case cannot be efficiently processed until production of the administrative record” is provided. RCFC App. C ¶ 23; see also Google, Inc., 95 Fed. Cl. at 679 (“[T]he Administrative Record should include all relevant documents” relating to the procurement process at issue); PGBA, 57 Fed. Cl. at 663 (“Clearly the public interest in honest, open, and fair competition in the procurement process is compromised whenever an agency abuses its discretion in evaluating a contractor’s bid.”). Therefore, the court has determined that the public interest is served by a preliminary injunction in this case.

As to the fourth factor, unfortunately, the Army has been working on this procurement since September 2010. The Government argues that “an injunction would imperil the agency’s ability to repair and maintain the infrastructure of military medical facilities throughout the world.” Gov’t Resp. to Pl.-Int. at 50. The Government also predicts higher costs to taxpayers and poorer outcomes for the patients served by those facilities. Gov’t Resp. to Pl.-Int. at 50. Linc counters that it will be harmed if the MATOC Contracts go forward, since it will be denied a fair opportunity to compete. Pl. Mot. JAR at 38; Pl.-Int. Mot. JAR at 38. The hardship that a preliminary injunction will impose on the Army is largely attributed to the Army’s lack of care in conducting the evaluation process that has led to two bid protests, both of which, in the court’s judgment, could and should have been avoided. For this reason, the court finds that the balance of the hardships favors granting an injunction.

IV. CONCLUSION.

For these reasons, it is hereby ordered that:

This procurement is remanded to Army “for additional investigation or explanation.” Fla. Power & Light Co. v. Lorion, 470 U.S. 729, 744 (1985) (“If the record before the agency does not support the agency action, if the agency has not considered all relevant factors, or if the reviewing court simply cannot evaluate the challenged agency action on the basis of the record before it, the proper course, except in rare circumstances, is to remand to the agency for additional investigation or explanation.”). The United States Army and its officers, agents, servants, employees, and representatives are preliminarily enjoined from proceeding with or awarding any MATOC Contracts for the design-build of medical facilities in the United States and overseas pursuant to Solicitation No. W912DY-10-R-0005 or any related procurement, solicitation, task order, or activity. (Linc Government Services LLC, et al, v. U. S., et al, No. 12-522, December 28, 2012)  (pdf)

New On October 29, 2010, Google, Inc. and Onix Networking Corporation, a licensed vendor of Google products and solutions (hereinafter collectively “Google”), filed a pre-award bid protest in the United States Court of Federal Claims, challenging an August 30, 2010 Request for Quotation No. 503786 (the “RFQ”) by the Department of the Interior (“Interior” or “DOI”) to provide “hosted email and collaboration services and [Interior’s] supporting ‘Limited Source Justification.’” Compl. ¶ 1-2. After reviewing the Administrative Record from November 5, 2010 and updated through December 21, 2010, Google filed an Amended Complaint on December 30, 2010 to challenge the entire procurement, including a June 10, 2010 Modification No. 0003 to an existing contract with Dell Marketing (“Dell”) to implement a pilot project to migrate the Bureau of Indian Affairs email systems to Microsoft Exchange and two July 15, 2010 Standardization “Determination and Findings” to “establish Microsoft’s Business Productivity Online Suite–Federal as the Department-side standard for Messaging and Collaboration” and Microsoft Desktop and Service Software, as the “Department-wide standard for computer operating, systems desktop and service, office automation, and systems management software.” Am. Compl. ¶¶ 41-48.

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D. The Administrative Record In This Case Supports Issuing A Preliminary Injunction At This Juncture.

On July 15, 2010, the Assistant Secretary-Policy, Management, and Budget signed a “Determination and Findings,” establishing Microsoft’s Business Productivity Online Suite-Federal as “the Department-wide standard for Messaging and Collaboration.” AR 748-56. On that same date, the Assistant Secretary-Policy, Management, and Budget also signed a separate “Determination and Findings,” establishing Microsoft Desktop and Service Software as the “Department-wide standard for computer operating, system desktop and service, office automation, and systems management software.” AR 757-62.

Both July 15, 2010 Standardization “Determination and Findings” are quintessential “non-competitive procedure[s],” that must be justified by the “contracting officer.” 41 U.S.C. § 253(f)(1)(A). In addition, since these Standardization “Determinations and Findings” concern an amount exceeding $50 million (AR 753), they require the additional approval of “the senior procurement executive of the agency.” 41 U.S.C. § 253(f)(1)(B)(iii) (emphasis added).

The Assistant Secretary–Policy, Management, and Budget, however, is neither the “Contracting Officer,” nor appears to be the Department of Interior’s “senior procurement executive.” In fact, the establishment of a “Department-wide standard for messaging and collaboration” and a “Department-wide standard for Office Automation and Systems Management Software” does not appear to fall within the responsibilities of the Assistant Secretary–Policy, Management, and Budget.  On Interior’s website, the job description of the Assistant Secretary–Policy, Management, and Budget is to “oversee[] programmatic, administrative and financial policy for the Department, including budget formulation and implementation.” Department of Interior, Office of Policy, Management and Budget Website, http://www.doi.gov/pmb/about.html (last visited 1/3/2011).

In addition, the General Organizational Chart for the U.S. Department of the Interior shows that the CIO reports directly to the Secretary of the Department of the Interior, not the Assistant Secretary–Policy, Management, and Budget. Instead, the CIO only “receives administrative guidance and support from the Assistant Secretary-Policy, Management, and Budget.”

http://elips.doi.gov/elips/release/images/DM3170CT.htm (last visited 12/27/2010).

Both of the July 15, 2010 Standardization “Determination and Findings,” however, originated from the CIO, but were directed to the Assistant Secretary-Policy, Management, and Budget for approval, circumventing line authority to the Secretary of the Department of the Interior or the Secretary’s Deputy and reversing the roles of the Assistant Secretary-Policy, Management, and Budget and the CIO.

In addition, both of the July 15, 2010 Standardization “Determination and Findings” failed to comply with the requirements of FAR 6.302-1(a), 6.303-1, 6.303-2, and 6.304. Since both the July 15, 2010 Standardization “Determination and Findings” are based on a decision that “only one responsible source . . . and no other supplies or services will satisfy [Interior’s] requirements” (48 C.F.R. § 6.302-1), the contracting officer is prohibited from “commenc[ing] negotiations for a sole source contract . . . unless the contracting officer”: (1) provides a justification per FAR 6.302, the contents of which are specified at FAR 6.303-2; (2) certifies the “accuracy and completeness of the justification”; and (3) “obtains the approval required by [FAR] 6.304.” 48 C.F.R. § 6.303-1(a). As the Administrative Record evidences, negotiations for a sole source contract with Microsoft “commenced” many months prior to July 15, 2010. See, e.g., AR 1039-89 see also AR 1041 (April 8, 2010 Microsoft email to Deputy Assistant Secretary Jackson regarding “Call follow up deliverables.”).

In addition, neither Standardization “Determination and Findings” is accompanied by a proper justification or appropriate approvals. To the extent the Standardization “Determination and Findings” were intended to substitute for a justification, several deficiencies are apparent. First, neither document identifies the “statutory authority permitting other than full and open competition.” FAR 6.303-2(a)(4) (emphasis added).

Second, the “anticipated cost” discussion (AR 753-54) contains no estimate of internal agency cost, e.g., Project Management Office and Independent Verification and Validation costs that apparently will be the subject of a “separate procurement.” AR 767. More importantly, there is no consideration or discussion about the more significant embedded costs associated with what [REDACTED] described in a March 16, 2010 report as the cost of “organizational lock-in . . . making alternative [products] difficult to use.” AR 647. In the context of describing “organizational lock-in” regarding Microsoft Office products, [REDACTED] specifically stated that: [REDACTED]. AR 651; see also AR 677 ([REDACTED]); AR 252 ([REDACTED]). Nevertheless, on July 15, 2010, Interior preceded to standardize on the Microsoft Office desktop productivity suite. AR 762. Google described the effect of “organizational lock-in” in more pragmatic terms: Interior’s decision to standardize the Microsoft Exchange Messaging Solution “provides [Microsoft] technology [with] a significant prejudicial, if not insurmountable, advantage in any future competition.” Compare AR 1004 with e.g., AR 1586 (Interior reporting that “other components of the BPOS-Federal suite will be made available to [Interior] bureaus and offices on an optional basis”). The value of organizational lock-in certainly was not lost on Microsoft. AR 1087 ([REDACTED]) (emphasis added); AR 1040-41 (describing Microsoft as the largest provider of BES services in the world, and 90% of Exchange Online Dedicated customers uses BlackBerry service[.] [REDACTED]). Without considering embedded costs, including the cost of organizational lock-in, it is not surprising that the July 15, 2010 Standardization “Determination and Findings” fails to include the required statement that “anticipated cost to the Government would be fair and reasonable.” FAR 6.303-2(a)(7).

Third, there is no “listing of sources . . . that expressed in writing an interest in the [procurement].” FAR 6.303-2(a)(10). The failure to list Google’s repeated express interest in this procurement cannot be explained as an oversight.

Fourth, there is no statement of the actions that Interior plans “to remove or overcome [a] barrier to competition before any subsequent acquisition for the supplies or services required.” FAR 6.303-2(a)(11).

By July 22, 2010, however, Interior was aware that Google had a government-only version of the Google Apps product and claimed it had obtained FISMA certification. AR 783-84. Nevertheless, on August 20, 2010, Interior’s CTO, Mr. Corrington, recommended that this information did “not warrant a change in the standardization decision(s) that [were] made on July 15, 2010.” AR 784. None of this is mentioned in the subsequent August 30, 2010 Limited Source Justification, citing the dual July 15, 2010 Standardization “Determination and Findings” as the predicate agency authority for the “Justification.” AR 848. Of course, Mr. Corrington suggests a formal re-evaluation in the second quarter of FY2013. AR 785. By that time, however, the migration of Interior’s email system will be completed and “organizational lock-in” achieved. AR 1584; AR 1616.

On a motion for preliminary injunctive relief, the court must weigh four factors: “(1) immediate and irreparable injury to the movant; (2) the movant's likelihood of success on the merits; (3) the public interest; and (4) the balance of hardship on all the parties.” U.S. Ass'n of Imp. of Textiles & Apparel v. United States, 413 F.3d 1344, 1346 (Fed. Cir. 2005). “No one factor, taken individually, is necessarily dispositive. . . . [T]he weakness of the showing regarding one factor may be overborne by the strength of others.” FMC Corp. v. United States, 3 F.3d 424, 427 (Fed. Cir. 1993) (emphasis added).

As to the first factor, the court has been informed that Interior intends to award a contract, pursuant to RFQ No. 503786 on January 25, 2011. As discussed herein, the July 15, 2010 Standardization “Determination and Findings,” on which the August 30, 2010 Limited Source Justification was based, violate the Competition in Contracting Act and FAR. Without a preliminary injunction, the award will put into motion the final migration of Interior’s email system, achieve “organizational lock-in” for Microsoft, and cost Google the opportunity to compete. Therefore, without injunctive relief, Google will suffer immediate and irreparable harm. See PGBA, LLC v. United States, 57 Fed. Cl. 655, 664 (2003) (“This court has acknowledged that a lost opportunity to compete may constitute an irreparable harm[.]”). Therefore, the first factor weighs in favor of an injunction.

The second factor concerns the likelihood of success on the merits. Based on the allegations set forth in the October 29, 2010 Complaint, as amended on December 30, 2010, the court’s review of the Administrative Record has established that Google has made a prima facie showing that Interior violated the Competition in Contracting Act and relevant FAR provisions and that such violation was prejudicial to Google’s interests. Therefore, Google has met the second test, i.e., a likelihood of success on the merits for a preliminary injunction. See Savantage Fin. Servs., Inc. v. United States, 81 Fed. Cl. 300, 306-08 (2008) (holding that the Department of Homeland Security’s decision to use financial management software systems of two incumbent contractors by means of a brand name justification to standardize the agency’s financial software systems was an improper sole source procurement that violated the CICA, where there were other responsible sources).

As to the third factor, the court has determined that the public interest is served by the issuance of a preliminary injunction to ensure Interior’s compliance with the requirements set forth in the Competition in Contracting Act and the FAR. See PGBA, 57 Fed. Cl. at 663 (“Clearly, the public interest in honest, open, and fair competition in the procurement process is compromised whenever an agency abuses its discretion in evaluating a contractor’s bid.”). In addition, the Administrative Record in this case is far from complete. Apart from specific items noted herein, this procurement concerns more than “RFQ No. 503786.” As the United States Court of Appeals for the Federal Circuit has held the scope of the “procurement or proposed procurement” includes “all stages of the process in acquiring property or services, beginning with the process for determining a need for property or services and ending with contract completion and close out.” Distributed Solutions, 539 F.3d at 1345 (emphasis added).
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As such, the Administrative Record should include all relevant documents from late 2007 to date, including those relating to the 2009 BPOS-Federal Pilot Program, the July 15, 2010 Standardization “Determination and Findings,” the August 30, 2010 Limited Source Justification, as well as the August 30, 2010 RFQ No. 503786. The email communications between Interior and Microsoft establish that the Administrative Record is not complete. The most striking example is the September 24, 2009 email from Interior’s CTO, Bill Corrington, to Microsoft’s Vice President, Federal Government, Ms. Theresa Carlson, and other Microsoft representations, wherein Mr. Corrington expressed a “demonstrated . . . commitment to the success of the project by both DOI and Microsoft. I look forward to . . . continuing to work with the Microsoft team to achieve a successful project outcome.” AR 1088 (emphasis added). The only document that precedes this is a July 31, 2009 email referencing a meeting between Microsoft’s Ms. Justina Glavin, Deputy Assistant Secretary Jackson, and Mr. Corrington. AR 1088. It is inconceivable that Interior decided to commit to “Microsoft’s team to achieve a successful project outcome” within 30 days without other internal documents being generated. In addition, the Administrative Record contains none of the attachments to emails between Interior and Microsoft. See e.g. AR 1035-37, 1041, 1052, 1055, 1064, 1067, 1068, 1073, 1077, 1088. Moreover, the court finds it unusual that the Deputy Assistant Secretary Jackson had “regular monthly one-on-one” meetings with Ms. Carlson, but apparently took no notes or didn’t maintain them. AR 1039. As the Rules of the United States Court of Federal Claims provide: “a protest case cannot be efficiently processed until production of the administrative record” is provided. RCFC App. C ¶ 23. For this additional reason, the court has determined that the public interest is served by a preliminary injunction in this case.

With respect to the fourth factor, Interior has been engaged in a process to ascertain the requirements of a new email, calendaring, and collaboration system at least since 2007. See, e.g., AR 1-2, 97, 150, 154-68, 175, 184, 748-56, 762, 765-72, 844-51, 855, 1584. As of July 19, 2010, Ms. Debra Glass, Division Chief, Acquisition Services Directorate, National Business Center advised Google that it would be impossible to complete this procurement in fiscal year 2010. AR 1016. Under these circumstances, any de minimis inconvenience to Interior caused by the court’s Preliminary Injunction is outweighed by the above referenced public interest and the secondary competitive harm to the Google. During this period, the Secretary of the Department of the Interior will have an opportunity to correct the deficiencies herein cited, with the advice of the Solicitor and the Inspector General. The Secretary also may wish to seek the independent views of outside experts as to whether reconsideration of the July 15, 2010 Standardization Decisions is warranted in light of the subsequent availability of Google’s Apps offering, if for no reason other than continued congressional appropriations will be required to implement the procurement, whether it is delivered by Microsoft, Google, or some other contractor. See General Accountability Office Report to the Committee on Oversight and Government Reform, House of Representatives, “Federal Contracting: Opportunities Exist to Increase Competition And Assess Reasons When Only One Offer Is Received,” GAO-10-833 (July 2010); see also AR 1531-75 (Inspector General’s FY2009 FISMA Evaluation Report).

The court emphasizes that it has made no judgment as to whether Interior’s basis for this procurement was rational or whether the procurement was conducted in a manner that was arbitrary and capricious. The court, however, discerns no basis in the present Administrative Record to support Google’s allegations of bad faith, [REDACTED]. Likewise, the court discerns no improper conduct by Microsoft, the actions of which show only competitive zeal and interest in customer satisfaction.

IV. CONCLUSION.

For the reasons set forth herein, it is hereby ordered that: the United States of America, the Department of the Interior, and their officers, agents, servants, employees, and representatives are preliminarily enjoined from proceeding with or awarding a contract to implement a Microsoft Business Productivity Online Suite-Federal Messaging solution, pursuant to RFQ No. 503786 or any related procurement, solicitation, task order, or activity, including proceeding with the June 14, 2010 Amendment Modification 0003 to Contract No. GS35F4072D/NBCF09382. See RCFC 65(a).  In addition, this procurement is remanded to Interior “for additional investigation or explanation.” Florida Power & Light Co. v. Lorion, 470 U.S. 729, 744 (1985).  (Google, Inc. and Onix Networking Corporation v. U. S. and Softchoice Corporation, No. 10-743C, January 4, 2011) (pdf)

I. Background

A. Statutory and Regulatory History

GAO (sometimes referred to by the title of its director, i.e., the Comptroller General) has exercised informal authority to adjudicate bid protests essentially since its formation as the Government Accounting Office in 1921. Letter from Comptroller General McCarl to the Postmaster General, Acceptance of Other than the Lowest Bid, A-11757, 5 Comp. Gen. 330, 331 (Nov. 5, 1925). This authority became formal with the passage of the Competition in Contracting Act of 1984, Pub. L. No. 98-369, 98 Stat. 1175 (1984) (codified in scattered sections of 31 U.S.C. and 41 U.S.C.) (“CICA”).

In 1996, however, Congress decided to require the Federal Aviation Administration (“FAA”) to develop its own unique acquisition system, ultimately called the Acquisition Management System (“AMS”). Department of Transportation Appropriations Act of 1996, Pub. L. No. 104-50, § 348, 109 Stat. 436, 460 (1995) (codified as amended in scattered sections of 49 U.S.C.). This act exempted the AMS from “all federal acquisition laws and regulations,” including CICA, and GAO thus no longer possessed jurisdiction to resolve disputes arising out of FAA procurements. Id. The FAA created an Office of Dispute Resolution for Acquisition (“ODRA”) with exclusive jurisdiction over FAA bid protests. See, e.g., Pub. L. No. 108-176, § 224(b), 117 Stat. 2490, 2528 (codified as amended at 49 U.S.C. § 40110(d)(4)); Attachment 1 to Defendant’s Motion to Dismiss and Opposition to Plaintiff’s Motion for Declaratory Judgment (docket entry 15, Dec. 4, 2009) (“Def.’s Mot.”) (memorandum of Sept. 16, 2002 delegating authority to ODRA); Attachment 2 to Def.’s Mot. (memorandum last signed in 2004 delegating authority to ODRA). As of 1996, therefore, there were, as is pertinent here, two separate administrative fora for bid protests, depending upon whether the FAA was the procuring agency.

In November 2001, Congress created the TSA to improve aviation security in the wake of the terrorist attacks that September. Aviation and Transportation Security Act, Pub. L. No. 107- 71, 115 Stat. 597 (2001) (“ATSA”). Congress directed TSA to utilize the AMS, as established by the FAA, for its acquisitions of “equipment, supplies, and materials.” Id. § 101(n), 115 Stat. at 600. Although in 2002 the TSA was placed under the control of the new Department of Homeland Security (“DHS”), the 2002 Homeland Security Act did not alter the handling of TSA procurements through the AMS rather than generally applicable laws and regulations. Homeland Security Act of 2002, Pub. L. No. 107-296, § 424, 116 Stat. 2135, 2185 (2002). In 2005, Congress included “services” among the items TSA was required to procure through the AMS. Department of Homeland Security Appropriations Act of 2006, Pub. L. 109-90, 119 Stat. 2064, 2070 (2005). Because DHS is subject to those generally applicable laws and regulations, including the Federal Acquisition Regulation (“FAR”) and the jurisdiction of GAO, TSA’s use of the AMS created some problems.

In part to place all DHS entities on the same system and thus improve efficiency in contracting, in 2007 Congress repealed the statutory provision placing TSA procurements under the AMS.1 Consolidated Appropriations Act of 2008, Pub. L. No. 110-161, § 568, 121 Stat. 1844 (2007). The change in jurisdiction was to take place “180 days after the date of enactment of this Act”—that is, on June 23, 2008. Id. § 528(b). In response to this new law, DHS promulgated a regulation stating that “TSA acquisitions initiated after June 22, 2008” would be subject to the FAR. 73 Fed. Reg. 30,317 (May 27, 2008) (codified at 48 C.F.R. § 3001.104(b)). GAO issued a final rule stating that it would “hear protests of TSA procurements covered by TSA solicitations issued on or after June 23, 2008.” 73 Fed. Reg. 32,427, 32,429 (June 9, 2008). These are two slightly differing statements of when the new regime begins: when an “acquisition” is “initiated” versus when a “solicitation” is “issued.”

(sections deleted)

The issue presented here deals with the so-called “automatic stay” that applies to protests filed at GAO. Section § 3553 of CICA provides that “if the Federal agency awarding the contract receives notice of a protest in accordance with this section . . . the contracting officer shall immediately direct the contractor to cease performance under the contract. . . . .” 31 U.S.C. § 3553(d)(3)(A)(ii). A “protest” is a “written objection by an interested party to . . . [a] solicitation or other request by a Federal agency for offers for a contract for the procurement of property or services . . . [or] [a]n award or proposed award of such a contract.” Id. § 3551(1). The agency may override the automatic stay if it makes a “written finding that . . . performance of the contract is in the best interests of the United States; or . . . urgent and compelling circumstances that significantly affect interests of the United States will not permit waiting for a decision of the Comptroller General concerning the protest.” Id. § 3553(3)(C)(i)(I) & (II).

(sections deleted)

C. The Automatic Stay Applies When Statutory Requirements Are Met Whether or Not the Protest is Properly Filed at GAO

The parties brief a great deal of law, but do not adequately focus on the language of the statute at issue in this case, CICA. Section 3553(b)(1) of CICA requires GAO to notify the “Federal agency involved” within “one day after the receipt of a protest.” Once that notice occurs, then either (1) the agency must provide a report at a specified time or (2) GAO may dismiss the protest under § 3554(a)(4).

The agency only has a duty to suspend performance under § 3553 if it receives notice from GAO within ten calendar days of contract award or within five days after debriefing of an unsuccessful offeror. See, e.g., Tech. for Commc’ns Int’l v. Garrett, 783 F. Supp. 1446, 1453 (D.D.C. 1992) (concluding that post-award stay provision was not triggered although protester filed protest within ten days of contract award, because GAO did not notify agency until the fourteenth day after contract award). GAO may simply decline to notify the agency if the filing does not meet the definition of a “protest” under 4 C.F.R. § 21.1(c)(4). See Steven W. Feldman, GOVERNMENT CONTRACT AWARDS: NEGOTIATION AND SEALED BIDDING § 31:2 (2007) (noting
GAO can decide not to provide notice when protest fails “to state legal and factual grounds for a complaint”).

Under § 3554(a)(4) and GAO’s implementing regulations, “[t]he Comptroller General may dismiss a protest that the Comptroller General determines is frivolous or which, on its face, does not state a valid basis for protest.” See M.B. Shaw Co.-Reconsideration, B-247247, 92-1 CPD ¶ 182, 1992 WL 30871 (Comp. Gen. Feb. 12, 1992) (“Since Shaw’s protest did not on its face state a valid basis for protest, there was no need for us to obtain a report from the agency.”); Beretta USA Corp.-Reconsideration, B-232681 et al., 89-1 CPD ¶ 16, 1989 WL 240292, at *3 (Comp. Gen. Jan. 9, 1989) (“[W]e consistently rely on section 21.3(m) as the basis for dismissing protests which, like Beretta’s, lack merit on their face.”). GAO thus possesses ample authority to deal with frivolous or facially deficient protests, and the defendant is simply incorrect in predicting a parade of horribles if the Court were to find in favor of the plaintiff. The decision to give notice or utilize the § 3554 dismissal process, however, is entirely within GAO’s province.

As for the application of the stay itself, § 3553(d)(3)(A)(ii) provides that once “the Federal agency awarding the contract” receives proper notice of a GAO protest, then “the contracting officer shall immediately 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.” A “protest” is “a written objection by an interested party” to, among other things, the “award or proposed award” of a contract. 31 U.S.C. § 3551(1).

The parties do not dispute that the prerequisites to the application of the automatic stay have been met: (1) GAO has provided (2) timely notice to (3) the “federal agency” (that is, TSA), that (4) a protest (i.e., a written objection to an award) has been filed with GAO. Moreover, GAO has not dismissed the protest as facially deficient or frivolous. Defendant argues, citing no authority, that “protest should be read to mean a protest that is properly before GAO.” Def.’s Mot. at 14. That is not what the statute says: by its plain terms, when an agency receives notice of a protest filed at GAO the automatic stay kicks in, even if the protest is ultimately determined to be beyond the jurisdiction of GAO. See, e.g., Meyers Cos., Inc., B-275963, 97-1 CPD ¶ 148, 1997 WL 196349 (Comp. Gen. Apr. 23, 1997) (noting agency’s stay of performance in case ultimately dismissed for lack of jurisdiction).

Defendant and intervenor rely upon five protests of TSA procurements filed at GAO prior to the June 23, 2008 termination of TSA’s authority to conduct AMS acquisitions. In each case, GAO properly took jurisdiction of the protest in order to determine its jurisdiction, resulting in a decision dismissing the protest. Laser Shot, Inc., B-310406 (Comp. Gen. Oct. 4, 2007); Worldwide Recruiters, Inc., B-298570 (Comp. Gen. Aug. 8, 2006); Knowledge Connections, Inc., B-298172, 2006 CPD ¶ 67, 2006 WL 1319542 (Comp. Gen. April 12, 2006); Rimpau Enters., B-298463 (Comp. Gen. July 18, 2006); Seal-It, Inc., B-294422 (Comp. Gen. Aug. 25, 2004).

After the conclusion of briefing, the Court asked defendant to report whether performance had continued during the pendency of these five protests at GAO. That is, did the parties treat the CICA stay as applicable to those protests of AMS procurements regardless of GAO’s lack of jurisdiction? For four of the five pre-2008 cases, defendant could not ascertain whether performance had continued during the pendency of the protest at GAO. In the fifth case, Laser Shot, “[a] stop-work order was issued and remained in place until GAO dismissed the protest. At that point, the stop-work order was cancelled.” Def.’s Response to Dec. 10, 2009 Order at 2.

For the four cases where it lacks evidence regarding whether work stopped during the GAO protest, defendant notes that “when TSA received notice of a protest at GAO over which GAO lacked jurisdiction, it would file a motion to dismiss within ten days of receiving notice of the protest.” Id. at 2. GAO would then “ordinarily dismiss[] the protest within ten days of TSA’s motion to dismiss.” Id. Because only 20 days elapsed between the filing of the protest and GAO’s dismissal, “even if contract performance proceeded, very little contract performance actually occurred while the protest was pending.” Id. at 3. This is consistent with GAO’s practice of “promptly dismiss[ing] protests that do not state a valid legal basis or are otherwise procedurally defective, consistent with [their] broad statutory authority.” Report to Congress on Bid Protests Involving Defense Procurements, B-401197 (Comp. Gen. Apr. 9, 2009). GAO is obliged to consider the “serious potential disruption that protests have on the procurement process,” and thus utilizes § 3554 and its regulations to warn protestors that failing to set forth legal and factual grounds for protest will result in a quick dismissal. The Honorable Eldon Rudd House of Representatives, B-22061, 1986 WL 65105, at *1 (Comp. Gen. Feb. 10, 1986).

In Laser Shot, the procurement was conducted entirely under the Federal Supply Schedule and the solicitation did not include any reference to the AMS. Def.’s Mot. at 17. It was therefore not clear that the procurement had been conducted under the AMS, and TSA did not challenge GAO’s jurisdiction to entertain the protest. Id. TSA issued a stop-work order for the duration of the GAO protest, though GAO ultimately determined that the acquisition was a procurement under the AMS to which CICA did not apply and dismissed the case for lack of jurisdiction. Id. That is, TSA treated the CICA stay as applicable where the GAO arguably had jurisdiction. Based upon Laser Shot and the initial stop-work order in this case, it does not appear that TSA has previously taken the position that TSA is exempt from CICA and its stay requirement. But that is precisely the effect of the Government’s argument here.

Whether an AMS procurement is subject to CICA and whether TSA is subject to CICA are two different questions, as demonstrated by Laser Shot and Resource Consultants, Inc., B-290163, 2002 CPD ¶ 94, 2002 WL 1335283 (Comp. Gen. June 7, 2002).9 The ATSA, which created the TSA, mandates that the AMS “shall apply to acquisitions . . . by the Transportation Security Administration.” Pub. L. No. 107-71, § 101(n), 115 Stat. at 602. The earlier statute creating the AMS dictates that the CICA (of which 31 U.S.C. § 3553 is a part) “shall not apply to the new acquisition management system developed and implemented” by the FAA. 49 U.S.C. § 40110(d)(2)(E). But this language is directed to the AMS itself, not TSA. That is, it does not render TSA exempt from following the directive to a “federal agency” contained in § 3553 when a protest of an acquisition conducted under the AMS is filed at GAO. See Resource Consultants, Inc., 2002 WL 1335283, at *3 (TSA is “federal agency” under CICA). It simply renders CICA inapplicable to an AMS acquisition, which in turn leads GAO to dismiss the protest as filed in the wrong forum. The properly presented question in this case is not whether the Phase 2 solicitation is an AMS acquisition, but whether CICA applies to TSA when a protest of the Phase 2 solicitation is filed at GAO. Because TSA is a “federal agency” within the meaning of CICA and the other statutory prerequisites to the application of the automatic stay have been met, the answer is yes.

The parties focus their briefing on such matters as the timing of the termination of TSA’s AMS authority, whether Phase 2 is a new “acquisition” within the meaning of the TSA regulation versus a new “solicitation” under the GAO rule, and the terms of the Phase 2 Solicitation language versus the terms of the EAGLE contract. These arguments go to whether GAO possesses merits jurisdiction over the task order—i.e., whether the Phase 2 solicitation is an AMS procurement. As defendant correctly notes, this is not a question within the court’s purview. Def.’s Mot. at 14 (“[T]he Court need not directly decide whether GAO possesses jurisdiction, rather, the Court must determine whether the automatic stay provision of 31 U.S.C. § 3553 applies . . . . As this Court has noted, it lacks authority to directly review GAO’s determination of its own jurisdiction.”); see also Centech Group, 78 Fed. Cl. at 498 n.6. At minimum, GAO possesses jurisdiction to determine its jurisdiction (i.e., as in the cases cited above). See, e.g., 13D Charles A. Wright et al., FED. PRAC. & PROC. § 3536 (3d ed. 2008). When the proper notice is given, the automatic stay applies. Because TSA must comply with the automatic stay provision whether or not the protest is properly filed at GAO, it acted contrary to law in failing to abide by § 3553.

D. The Court Declares that TSA’s Actions Did Not Comply with the Law and Orders TSA to Implement a Stay of Performance Until GAO Resolves the Protest or TSA Makes the Statutorily Required Override Findings

Where the agency fails to either implement the automatic stay or properly override the stay, this court will undertake the now-familiar four-part analysis to determine whether to grant an injunction enforcing the stay: (1) plaintiff’s success on the merits; (2) irreparable injury to plaintiff; (3) balance of hardships; and (4) the public interest. ES-KO, 44 Fed. Cl. at 435-36. If the court determines, as it does in this case, that the automatic stay applies, the Government’s failure to heed that requirement establishes the protestor’s success on the merits. Id. at 435. Furthermore, “plaintiff’s injury is adequately established by the denial of its right to an automatic stay.” Id. The third factor to be considered in granting an injunction is the balance of hardships, but the “inclusion of this override exception builds consideration of defendant’s potential hardship” into the system. Id. at 436. That is, if the defendant concludes it will suffer an undue hardship from the stay, it has a remedy, and that remedy is not to ignore the automatic stay. Thus TSA’s decision to ignore the stay results in a balance of hardships favoring plaintiff. The final factor, the public interest, likewise favors plaintiff when the law is simply ignored. Id. (“To a large extent, this inquiry too is subsumed within the override exception . . . .”). Congress’s policy judgment is that there shall be a stay unless the agency makes the requisite findings. Where there are no findings, then the public interest requires adherence to the law.

Plaintiff has shown entitlement to a declaratory judgment that the CICA automatic stay applies and to an injunction requiring TSA either to comply with the automatic stay provision of § 3553 or seek to make a proper override determination in accord with the terms of that statute.  (Unisys Corp. v U. S. and Computer Sciences Corporation, No. 09-800c, December 18, 2009) (pdf)

Plaintiff, The Analysis Group, LLC, is before this Court seeking reinstatement of a Competition in Contracting Act automatic stay of performance pending its Government Accountability Office protest of a Task Order award to Science Applications International Corporation. Plaintiff argues that the Defendant failed to justify the General Services Administration’s decision to override the mandatory stay. In response, the Government asserts that it was in the best interests of the United States to perform the contract and that imposing a stay of performance would jeopardize the Air Force’s ability to meet its ongoing national security obligations.

(sections deleted)

On August 7, 2009, TAG filed its post-award bid protest with the Government Accountability Office (GAO) which triggered a mandatory stay under the Competition in Contracting Act (CICA). 31 U.S.C. § 3553(d)(3)(A) (2006). On August 14, 2009, GSA FEDSIM announced its decision to override the automatic stay finding that it was in the best interests of the United States. AR482-91.

(sections deleted)

II. DISCUSSION

Usually, the filing of a protest action by a disappointed bidder on a federal contract triggers an automatic stay of performance under CICA. 31 U.S.C. § 3553(d)(3)(C). However, there are instances were CICA permits an agency to override the automatic stay provision provided that there is a written finding that either: (1) “performance of the contract is in the best interests of the United States;” or (2) “urgent and compelling circumstances which significantly affect interests of the United States will not permit waiting” for the bid protest decision. RAMCOR Servs. Group, Inc. v. United States, 185 F.3d 1286, 1287 (Fed. Cir. 1999). Here, GSA FEDSIM found that performance of the contract was in the best interests of the United States and overrode the automatic stay. Plaintiff asks this Court to reinstate that stay.

A. The Four APA Factors for Override Decisions

Review of override decisions are guided by the standards as set forth in the Administrative Procedure Act (APA), 5 U.S.C. § 706(A)(2) (2006), 28 U.S.C. §1491(b)(4) (2006). Under the APA, a decision may be overturned only upon finding the agency’s action to be “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” Id. In determining whether the decision was arbitrary or capricious, four factors must be considered. Specifically, the Court must determine whether GSA FEDSIM: (1) relied on factors that Congress did not intend it to consider; (2) entirely failed to contemplate an important aspect of the problem; (3) offered an explanation for its decision that runs counter to the evidence; or (4) offered an explanation so implausible that it could not be ascribed to a difference in view or the product of agency expertise. E-Management Consultants, Inc. v. United States, 84 Fed. Cl. 1, 4 (2008) (quoting Motor Vehicle Mfrs. Ass’n of the United States v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)).

B. The Four Reilly Factors for Override Decisions

In past cases involving CICA override decisions, this Court has identified four factors for consideration of whether an agency properly determined to override a CICA stay. See Reilly’s Wholesale Produce v. United States, 73 Fed. Cl. 705, 711 (2006). The four Reilly factors are: (1) whether significant adverse consequences would occur absent the override; (2) whether reasonable alternatives to override were available; (3) the potential costs of proceeding with the override relative to the purported benefits; and (4) the effect of the override on the competition and integrity of the procurement. See id. However, while these four additional factors may be helpful in analyzing the agency’s override decision, they are not dispositive.

In PlanetSpace Inc. v. United States, 86 Fed. Cl. 566 (2009), the Court held that when considering injunctive relief in override cases, the Court should only apply the APA four-factor test for injunctive relief and not the additional four Reilly factors. Id. at 567. Planetspace held that “Congress limited the court’s review on an agency’s decision in a CICA override action to the Administrative Procedure Acts standards.” Id. This Court agrees. Even so, if the Court applied the Reilly factors in this case, it is clear that GSA FEDSIM justified its override of the stay.

1. Significant Adverse Consequences Absent Override?

In its D&F, GSA FEDSIM seriously considered all of the important aspects of the contract and its need for continuity, and concluded that if required to impose the stay, such a stay would jeopardize A5XP’s mission. Specifically, GSA FEDSIM found that significant lapses in the continuous services provided would be comprised, such as its on going international treaties, health and welfare of military personnel, H1N1 virus planning, troop deployments, air flight planning for military operations in Afghanistan and similar locations, Air Force Counter-Radiological Warfare capabilities, and the implementation of toxins handling procedures and recommendations. Although TAG asserts that there would not be a problem with continuity since most of the current employees on the project were also on the project previously through TAG, it appears to the Court that lapses in services could occur as TAG and SAIC no longer have a working relationship. Therefore, the decision--that significant adverse consequences would likely occur absent the override--was not an unreasonable conclusion.

2. Reasonable Alternatives to Override?

Plaintiff further argues that reasonable alternatives did exist, mainly, that the Air Force could have extended Plaintiff’s contract through various means. Plaintiff asserts that the decision not to extend the contract was based on a number of faulty assumptions and, therefore, was unreasonable. Although the Court agrees that on its face Plaintiff’s argument does have some merit, the bottom line is that GSA FEDSIM, after reviewing the information it had received and the interviews it had conducted, concluded again that the continuity of the contract would be in jeopardy resulting in an increased risk to essential Air Force operations. While it is certainly possible that continuity might not have been threatened by an extension of TAG’s contract, it is by no means a logically required conclusion. The Court is unable to say that the agency’s concerns were unreasonable in light of the working relationship issues. This is sufficient to hold that the agency’s decision was not arbitrary or capricious.

3. The Potential Cost of Override and Impact on the Procurement System?

With regard to the last two prongs, potential cost of the override and impact on competition and the integrity of the procurement system, the Court again holds that the agency’s decision was reasonable. However, Plaintiff does raise an issue that the Court feels it must address, that is, the argument that award was intentionally timed to foreclose the Government’s options. Here, the contract was awarded to Intervenor one day before the expiration of Plaintiff’s contract. It is clear that this left the Defendant with no choice but to override the stay in order for continuity of the contract and for the safety and protection of the United States. Although the Defendant gives its reasons for the lateness of the award, the Court suggests that in the future GSA FEDSIM awards contracts in a more timely manner in order for the bid protest process to be preserved. The Government’s delay also raises questions about the integrity of the process. While there is no evidence of specific bad intent here, a pattern of such late awards would raise troubling issues.

C. Injunctive Relief Denied

Lastly, the Court addresses Plaintiff’s request for injunctive relief. In order to obtain a preliminary equitable relief, a party must demonstrate: (1) a substantial likelihood of success on the merits; (2) specific, irreparable harm; (3) the balance of the hardships tips in its favor; and (4) that the preliminary injunction is in the public interest. Anton/Bauer, Inc. v. PAG, Ltd., 329 F.3d 1343, 1348 (Fed. Cir. 2003).

Even though it seems to the Court that it would have made more sense for the Defendant to extend the previous Task Order, the Court cannot say that the decision was arbitrary and capricious in light of the balance of delay. The possibility of delay was not insignificant. If the Court were to award injunctive relief it would cause an immediate work discontinuity. The length of time for TAG to reassemble its team is unclear, which would leave many of A5XP’s critical functions, as discussed above, without support. These concerns, therefore, favor the denial of injunctive relief as the balance of the hardship weighs in favor of the Defendant. Further, even if it is ultimately found by the GAO that TAG is entitled to the award, the balance of the hardships weighs in the agency’s favor. More damage would be done to the Government by a stay that was not overridden when circumstances justified an override, than to the Plaintiff by an overridden stay that was followed by a reinstatement of Plaintiff’s contract. In one case, Plaintiff loses money for a limited period and perhaps some staff. In the other case, the Government could lose critical continuity.  (The Analysis Group, LLC, v. U. S. and Science Applications International Corporation, No. 09-542c, November 5, 2009) (pdf)

On request for preliminary injunctive relief, the court must weigh the following four factors: (1) the likelihood of plaintiff’s success on the merits; (2) irreparable harm to plaintiff if the injunction is not granted; (3) the balance of hardships on all the parties; and (4) the public interest. Erico Int’l Corp. v. Vutec Corp., 516 F.3d 1350, 1353-54 (Fed. Cir. 2008) (vacating trial court’s grant of preliminary injunction); see also Abbott Labs. v. Sandoz, Inc., 544 F.3d 1341, 1344-45 (Fed. Cir. 2008) reh’g and reh’g en banc denied (Feb. 23, 2009) (affirming trial court’s grant of preliminary injunction). No single factor is determinative, and “the weakness of the showing regarding one factor may be overborne by the strength of the others.” FMC Corp. v. United States, 3 F.3d 424, 427 (Fed. Cir. 1993).

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As discussed in the court’s earlier opinion, defendant’s principal argument is that plaintiff cannot establish jurisdiction. Jurisdiction, of course, is the predicate to qualify for a substantial likelihood of success on the merits. U.S. Ass’n of Imp. of Textiles & Apparel v. United States, 413 F.3d 1344, 1348 (Fed. Cir. 2005) (finding error in trial court’s ignoring jurisdictional arguments in ruling on motion for preliminary injunction). Defendant’s penultimate contention – made during a March 25, 2009 off-the-record telephone conference (defendant later submitted a motion to dismiss on April 2, 2009, arguing mootness) – that plaintiff’s failure to submit a response to the Solicitation renders plaintiff a non-interested party is not convincing. Defendant cited Rex Serv. Corp. v. United States, 448 F.3d 1305 (Fed. Cir. 2006). In Rex the United States Court of Appeals for the Federal Circuit held that Rex was not an actual or prospective bidder because although Rex could have submitted bid it chose not to bid on the contract. Id. at 1307-08. Similarly, Rex did not achieve status as an interested party by submitting a timely bid protest establishing that it expected to bid, prior to the close of the solicitation, but was prevented from doing so because of improper agency action. Id. at 1308. The Federal Circuit also ruled that Rex did not possess direct economic interest as a putative bidder. Id. Rex could not establish that it had a substantial chance of receiving the contract because Rex did not bid; therefore, even if Rex prevailed on its protest a reevaluation of the procurement would not result in giving Rex the opportunity to secure the procurement. Id.

As plaintiff contends, Rex is factually distinguishable from this case. Plaintiff in the case at bar protested the Air Force’s decision to not solicit a small business for the NSS procurement, and “[t]he Air Force’s decision to issue a solicitation providing for full and open competition is precisely what the protest was intended to prevent. Unlike Rex Service, [plaintiff’s] protest was already pending when the Solicitation was issued.” Pl.’s Br. filed Mar. 31, 2009, at 3. Plaintiff is a prospective bidder for the NSS procurement, but it did not “submit[] a proposal in response to” the Solicitation because plaintiff was improperly and unfairly “pre-judged” by the Air Force to be “incapable of satisfying its requirements, and [plaintiff] could not afford the significant expense and effort of proposal preparation, given the apparent futility of such effort.” 4/ Supplemental Declaration of Anthony J. D. Contri, Mar. 25, 2009, ¶ 5. The question of jurisdiction “closely affects” plaintiff’s likelihood of success on the merits. See U.S. Ass’n of Imp. of Textiles & Apparel, 413 F.3d at 1348. The court thoroughly addressed defendant’s jurisdictional arguments in RhinoCorps., 2009 WL 320642, at *5-6, 10, and plaintiff has established that jurisdiction will not be a bar to consideration of plaintiff’s arguments on the merits.

Having moved for injunctive relief prior to the Solicitation’s due date for submission of proposals, plaintiff seeks to enjoin the Air Force from evaluating the one response to the Solicitation. Plaintiff summarizes its position stating that it filed its protest months before the Solicitation was issued and before the Air Force issued its “after-the-fact D&F. This protest properly laid the axe at the root of the problem – the Air Force’s failure to continue to procure the services at issue using a small business set-aside, follow-on contract.” Pl.’s Br. filed Mar. 31, 2009, at 6.

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Defendant did not file an opposition to plaintiff’s renewed motion for preliminary injunctive relief on April 2, 2009, as ordered. See Order entered Mar. 26, 2009, ¶ 3. 2). While the court cannot discount the reasonableness of the D&F, as supplemented by the earlier Declaration of Shirley D. Lindom, USAF, Mar. 27, 2009, and the Declaration of Capt. James D. Norman, USAF, Mar. 26, 2009, the court deems that plaintiff has made compelling showings with respect to the three other factors that outweigh the prognostication of plaintiff’s ultimate success on the merits of its complaint for permanent injunctive relief. See Amoco Prod. Co. v. Vill. of Gambell, 480 U.S. 531, 546 n.12 (1987) (noting that standard for permanent injunction is essentially same as temporary injunction, except actual success replaces need to show likelihood of success on merits). Moreover, defendant has focused its attention on jurisdiction. 5/ With respect to this challenge, plaintiff has carried its burden. See RhinoCorps, 2009 WL 320642, at *5-6, 10.

Regarding the second and third factors – immediate and irreparable injury to plaintiff and balance of hardships on all the parties – plaintiff has shown that the irreparable harm it would suffer if an interim injunction is denied outweighs the harm the Air Force will suffer if this relief is declined. Defense counsel represented during the April 6, 2009 argument that the Air Force “desperately needs” to get a contract in place, but defendant did not file on April 2, 2009, an opposition with a declaration in response to plaintiff’s renewed motion. Rather, defendant ratcheted up the anxiety level of this protest by moving to dismiss because the contracting officer wanted to issue a new D&F based on the same record.

The delay contemplated will not unduly prejudice the Air Force. Although the contracting officer completed the D&F on or about October 1, 2008, 6/ the Solicitation was not issued until almost five months later on February 23, 2009; defendant agreed to a briefing schedule that called for argument on May 22, 2009 (see Order entered Feb. 10, 2009); and the latest revision to the briefing schedule, entered this date, calls for argument on May 13, 2009. No showing has been made why a decision (as promised by the court) by May 18, 2009, will not be timely, given that the Air Force previously agreed to a decision based on May 22, 2009 date for argument.

In contrast, the risk of harm associated with continuing with the procurement poses greater danger to plaintiff in terms of both expense and opportunity cost: first, the longer the Air Force is allowed to proceed with this procurement, the more likely additional interested parties to this procurement will arise resulting in further litigation and greater expense to plaintiff; second, courts have found consistently that the loss of an opportunity to compete for a contract on a level playing field sufficiently establishes irreparable harm. “An action at law only allows recovery of ‘bid preparation costs in a suit for damages, but not loss of anticipated profits,’ leaving a bid protestor irreparably harmed.” Bannum Inc. v. United States, 60 Fed. Cl. 718, 730 (2004) (denying permanent injunctive relief), aff’d, 404 F.3d 1346 (Fed. Cir. 2005) (quoting Essex Electro Eng’rs, Inc. v. United States, 3 Cl. Ct. 277, 287 (1983), aff’d, 757 F.2d 247 (Fed. Cir. 1985)).

Finally, the public interest will be served by assuring that the Air Force is following a mandatory procurement procedure when the record shows that initially the Air Force deemed the procedure to be inapplicable.

CONCLUSION

Accordingly, based on the foregoing, IT IS ORDERED, as follows:

1. Plaintiff’s Amendment to and Renewal of Application for Temporary Restraining Order and Preliminary Injunction, filed on March 25, 2009, as supplemented on March 31, 2009, is granted insofar as defendant, through the United States Air Force, its officers, agents, employees, and all other persons acting in connection therewith, shall not proceed to evaluate any offer submitted in response to Solicitation No. FA9453-09-R-0001, for full and open competition for the procurement of services for the 709th NSS Counterproliferation and Nuclear Weapon requirement, pending the entry of an order on plaintiff’s complaint for a permanent injunction, which the court commits to issue by midnight on May 18, 2009.

(Rhinocorps LTD, Co., v U. S. 08-410C, April 7, 2009) (pdf)

An agency may override the mandatory CICA stay if it shows “urgent and compelling circumstances” affecting interests of the United States. 31 U.S.C. § 3553(d)(3). We review CICA override decisions pursuant to the Tucker Act, 28 U.S.C. § 1491(b). The Tucker Act grants this court jurisdiction to hear objections to agency decisions to override the mandatory stay provisions. RAMCOR Servs. Group, Inc. v. United States, 185 F.3d 1286, 1290 (Fed. Cir. 1999). We “review the merits of an override independent of any consideration of the merits of the underlying contract award.” PGBA, LLC v. United States, 57 Fed. Cl. 655, 658 (2003) (citing RAMCOR, 185 F.3d at 1291).

The Supreme Court explained that a decision is arbitrary and capricious “if the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is . . . implausible . . . .” Motor Vehicle Mfrs. Ass’n. of the United States, Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983). The agency’s decision must be “based on a consideration of the relevant factors.” Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416 (1971).

Plaintiff offered arguments regarding four factors courts normally consider in deciding whether to grant an injunction. It contended that NASA did not consider four additional “Reilly factors” in making its decision. See Reilly’s Wholesale Produce v. United States, 73 Fed. Cl. 705, 711 (2006) (listing factors “an agency must consider in making an override decision based upon urgent and compelling circumstances.”). We did not consider the Reilly factors at the hearing because Congress limited the court’s review of an agency’s decision in a CICA override action to the Administrative Procedure Act standards. See, e.g., Chapman Law Firm Co. v. United States, 65 Fed. Cl. 422, 424 (2005) (stating that “it would be contrary to the legislative scheme to impose such an additional requirement . . . in order to reinstate the statutory stay applicable during the GAO protest period.”); Advanced Sys. Dev., Inc. v. United States, 72 Fed. Cl. 25, 36-37 (2006) (holding that the factors for injunctive relief are not needed in a CICA override determination because “declaratory judgment achieves the same effect.”).

NASA justified its override of the stay by reference to Presidential policy decisions concerning the shuttle program and international commitments pertaining to the space station. Plaintiff argued that the President could reverse the policies if necessary and that the international partners could contribute to the supply program. However, such considerations are speculative.

CONCLUSION

NASA considered all important aspects of the contracts and showed that delay would adversely affect the interests of the United States. Plaintiff’s arguments to the contrary do not diminish the fact that NASA’s determination was not arbitrary or capricious but considered fully and thoroughly. The Agency’s conclusions are reasonable.  (Planetspace Inc., v. U. S., Orbital Sciences Corporation, and Space Exploration Technologies Corporation, No. 09-0099C, April 2, 2009)  (pdf)

D. Was DEA’s Override Decision Arbitrary and Capricious?

1. CICA’s automatic stay provision

When a bid protest action is initiated at the GAO, an automatic stay of the protested contract award is triggered under CICA until the protest action is resolved. 31 U.S.C. § 3553(c)(1). This automatic stay serves the important purpose of preserving “competition in contracting and ensur[ing] a fair and effective process at the GAO.” Reilly’s Wholesale Produce, 73 Fed. Cl. at 710 (citing Advanced Sys. Dev., Inc. v. United States, 72 Fed. Cl. 25, 31 (2006)). The automatic stay has been described as CICA’s “teeth,” and was included in the Act to prevent agencies from circumventing the procurement process. PGBA LLC v. United States, 57 Fed. Cl. 655, 658 (2003). Without the automatic stay, agencies could proceed to perform a contract while it was being protested at the GAO, and then later reject the GAO recommendation because it would be in the “best interest” of the agency to continue the contract. Id. Thus, the automatic stay provision “preclude[s] such fait accomplis and . . . facilitate[s] a fair and equitable remedy to venders who are illegally denied Government contracts.” Id. at 657 n.3 (citing H. Rep. No. 99-138, at 4-5 (1985)).

Nevertheless, an agency may override an automatic stay if it notifies the GAO in writing that either “performance of the contract is in the best interests of the United States,” or “urgent and compelling circumstances that significantly affect interests of the United States will not permit waiting for the decision of the Comptroller General concerning the protest.” 31 U.S.C. § 3553(d)(3)(C). When asserting that urgent and compelling circumstances require immediate performance of a contract, there are several factors an agency must consider, including: (1) “whether significant adverse consequences will necessarily occur if the stay is not overridden;” (2) “whether reasonable alternatives to the override exist;” (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 the integrity of the procurement system, as reflected in CICA. Reilly’s Wholesale Produce, 73 Fed. Cl. at 711; see also Superior Helicopter, 78 Fed. Cl. at 189. Failure by an agency to consider just one of these factors is fatal to an override decision based on urgent and compelling circumstances. When considering a best interests determination, there must be some rationale asserted by the agency that is above and beyond its original purpose when it solicited bidders for the procurement, and “that absolves the agency of its obligation to await the GAO’s recommendation.” Advanced Sys. Dev., 72 Fed. Cl. at 31 (citing PGBA, 57 Fed. Cl. at 662).

2. Urgent and compelling circumstances

Under the first prong of an “urgent and compelling circumstances” inquiry, an agency must show that significant adverse consequences will occur if the stay is not overridden. Defendant asserts its override decision is proper here because its IT systems are of [*] importance to the performance of DEA’s law enforcement mission, and urgent and compelling circumstances affecting the interests of this nation will not permit waiting for the recommendation of the GAO. D&F at 2, ¶ 8. Defendant’s basic contention is that the current bridge contracts are no longer a viable option because of staffing shortages: “as EMS award neared, employers for the ‘bridge’ contracts began experiencing difficulty retaining qualified employees who were familiar with, knowledgeable about, and cleared to work on DEA’s secure, law enforcement IT equipment.” D&F at 3, ¶ 10.

Plaintiff contests defendant’s findings, claiming that they are without factual support. Plaintiff asserts that staffing levels have “remained adequate to perform the required tasks.” Mem. Of P. & A. In Supp. Of Pl.’s Application, at 16-17. Specifically, plaintiff claims that DEA’s own data “shows that NGS has maintained a consistently high level of performance without any significant impact on the level of service,” and cites to DEA metrics data, which shows that DEA server and network availability has been consistently greater than 99% since January 2007. Id. at 17 (citing First Smith Decl. ¶ 4). Moreover, plaintiff contends that staffing levels are consistent with contractual requirements. See Id. at 18 (In the EMS procurement, DEA states a need for 57 onsite systems administrators; currently, the incumbent contractor employs 65. Furthermore, “the current help desk staffing level is based on a competitive bid selected by DEA in August 2007").

In the D&F, the first and second declarations of Dennis R. McCrary, and in Mr. McCrary’s testimony at oral argument on October 7, 2008, defendant cites to several specific examples of how NGS staff shortages have adversely affected DEA’s law enforcement mission. Plaintiff, however, claims that the examples and incidents listed by defendant bear no relation to services provided under the bridge contracts. The Court will address each incident in turn.

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The decision in Advanced Systems Development is instructive here. See 72 Fed. Cl. 25. In that case, the plaintiff was an incumbent provider of IT solutions to the Department of Defense, and was protesting the award of a consolidated IT support contract at the GAO. Id. at 27. The defendant there asserted three primary reasons justifying an override of the CICA stay: “inefficiency of the current model, the need for a smooth transition by permitting the awardee to immediately hire incumbent personnel, and avoiding a loss of IT services to the customer.” Id. Like the case at bar, the D&F in that case stated “[t]heir current employer, even with a contract extension, could not offer stable employment for more than a few months and these individuals would likely seek other opportunities elsewhere.” Id. at 28. The court expressed that while “loss of service might be a valid concern,” there was no indication that service would be jeopardized, and defendant’s concern regarding the availability of personnel during the transition period was not sufficient to justify an override of the CICA stay. Id. at 31-32. Moreover, the court found that the defendant’s justification on the basis of “an exodus of required specialists” was internally inconsistent, because defendant had asserted that the awardee could fully staff the job, and then voiced “the unfounded concern that incumbent workers who might otherwise be interested in accepting employment with [the awardee], will be placed in limbo.” Id. The court found that this justification for lifting the stay presented “the very type of competitive disadvantage that the CICA seeks to prevent.” Id. at 32.

Similarly here, defendant bases its override decision on alleged staffing shortages. Nonetheless, defendant does not allege that there will be a loss of IT service; rather, its most severe contention is that DEA’s current IT O&M support has deteriorated. D&F at 6, ¶ 6. Plaintiff has shown, however, that current staffing levels are adequate and that they are able to hire additional employees as needed. Tr. at 17-18. The specific examples provided by defendant allegedly demonstrating deterioration of IT services due to staffing shortages, are without support in the record. In order for the court to uphold an override decision, the agency must “not only sort between the relevant and irrelevant factors, but must also render findings with respect to those that are relevant that do not ‘run[] counter to the evidence before the agency.’” Reilly’s Wholesale Produce, 73 Fed. Cl. at 711 (citing Motor Vehicle Mfrs. Ass’n, 463 U.S. at 43 (additional citations omitted)). Moreover, defendant has failed to provide any support for its bald assertion that the current bridge contracts leave DEA open to [***]. Perhaps even more importantly, however, defendant has not given any indication as to how proceeding with the EMS contract will alleviate these concerns. See Superior Helicopter, 78 Fed. Cl. at 188-89. SRA itself noted during oral argument that it will be staffing the contract with employees from NGS as well as from the other bridge contractors. Tr. at 74-76. Thus, while the staffing situation under the protested contract may be preferable to defendant, defendant has failed to show that significant adverse consequences make proceeding with the contract necessary.

As a corollary to this Court’s finding that there are no significant adverse consequences to maintaining the status quo that necessitate the override, and for the reasons explored in detail above, the bridge contracts provide a reasonable alternative to proceeding with the EMS contract. Defendant, however, failed to even consider whether reasonable alternatives to the override exist, stating only that “these ‘bridge’ contracts are no longer a viable option and there are no other alternatives available.” D&F at 3, ¶ 10. Therefore, defendant also fails to satisfy the second prong of the urgent and compelling circumstances inquiry. Additionally, the Court notes that these bridge contracts have been in place for 22 months. During that time, three contract awards, including the one currently at issue, have been protested at the GAO; yet, until now, DEA has never attempted to override the stay. Therefore, during the previous bid protests, DEA must have found the bridge contracts to be a reasonable alternative to proceeding with the protested contract awards. The record reveals no drastic change in the performance of the bridge contracts over the past 22 months that would alter this determination, aside from defendant’s preference to begin performance of the EMS contract. While frustration with the prolonged nature of this solicitation is understandable, it alone is not sufficient justification to override the stay.

The third prong of the inquiry requires an agency to fully consider how the potential cost of proceeding with the override, specifically the costs associated with the possibility that GAO sustains plaintiff’s protest, balance against the benefits associated with proceeding to perform the protested contract. Defendant fails to do so here. With regard to the pending protest at the GAO, the D&F states:

I have considered the possibility that the GAO could sustain NGS’ protest. In the event that should happen, any corrective action directed would naturally result in additional costs and effort by DEA. Notwithstanding those costs and energies, it is essential that DEA have in place a sustainable IT O&M capability now and in the future. By proceeding with this contract, DEA would have that capability and would be able to maintain it, albeit at higher cost and effort, even if corrective action is ordered.

D&F at 5, ¶ 16. This statement is problematic for several reasons.

First, defendant gives unacceptably brief treatment to the potential costs of a GAO recommendation sustaining the protest. This is particularly disturbing in light of defendant’s assertions regarding the extreme difficulties of recruiting and hiring IT personnel in a timely manner, the fact that “the personnel security clearance requirement generally adds an additional 90 days to the process,” and defendant’s concern over employees leaving the bridge contractors to seek more “stable” employment. D&F at 4, ¶¶ 11-12. Overriding the stay will do nothing to alleviate the issue of instability in employment; until the GAO issues its decision, employees of SRA will have no more job security than employees of the current bridge contractors. Moreover, the difficulty in hiring and obtaining security clearance for IT staff, which defendant cites as an incentive to begin performance on the new contract immediately, actually counsels against overriding the stay. Defendant emphasizes the cost of finding and screening new employees, which consequently presents a great risk to defendant if it proceeds with the contract and, in two months, the GAO sustains the protest.

Second, the D&F refers to DEA’s ability to maintain its IT O&M capability in the future - even in the face of a recommendation invalidating the contract award - by proceeding immediately with contract performance. This indicates an attempt by defendant to circumvent the competitive process by exactly the type of action Congress intended the automatic stay provision of CICA to prevent. See Advanced Sys. Dev., 72 Fed. Cl. at 31 (“The automatic stay is intended to preserve the status quo during the pendency of the protest so that an agency would not cavalierly disregard GAO’s recommendations to cancel the challenged award”).

This, of course, indicates the fourth factor an agency must consider when issuing an override decision based on urgent and compelling circumstances: “the impact of the override on competition and the integrity of the procurement system.” Reilly’s Wholesale Produce, 73 Fed. Cl. at 711; see also Superior Helicopter, 78 Fed. Cl. at 189. Defendant essentially asserts a national security argument regarding the necessity of the override:[***]. D&F at 3, ¶ 9. Nonetheless, the record fails to demonstrate that abiding by the CICA stay will compromise the safety and welfare of agency personnel. Moreover, defendant does not consider the impact of its override decision on competition at all. “Ultimately, the public’s interest in a fair, competitive federal procurement system outweighs unsubstantiated claims, even those related to the public safety.” Superior Helicopter, 78 Fed. Cl. at 200 (citing Reilly’s Wholesale Produce, 73 Fed. Cl. at 716). Thus, defendant’s interest in overriding the stay here is outweighed by the public’s interest in maintaining competition and the integrity of the procurement system. In light of defendant’s failure to meet any of the four prongs of an urgent and compelling circumstances inquiry, defendant’s override on this basis is invalid.

3. Best interests of the United States

Defendant also maintains that overriding the stay and proceeding with the new contract is in the best interests of the United States. D&F at 6, ¶ 1. In order for a stay override to be proper under a best interests justification, “[t]here must be some rationale - above and beyond the principle aim originally sought when [the agency] decided to engage bidders in the competitive procurement - that absolves the agency of its obligation to await the GAO’s recommendation. Advanced Sys. Dev., 72 Fed. Cl. at 31. Thus, simply stating that the new contract is better or more cost effective is not enough to justify overriding the stay. Id. The Court has already concluded that defendant’s assertions with regard to the necessity of overriding the stay amount to nothing more than defendant’s strong preference to begin performance of the protested contract. Mr. McCrary testified at oral argument that his problem is with the “bridge contract construct,” which supports this finding. Tr. at 60:6-7. In support of its best interests override decision, defendant has also asserted a cost savings of approximately [*] per month if it is able to proceed with performance of the new contract, rather than continue under the bridge contracts. Nonetheless, similar amounts have been found insufficient to support a best interests override. See Automation Techs., Inc. v. United States, 72 Fed. Cl. 723, 728-29 (2006); PGBA, 57 Fed. Cl. 655. Defendant has therefore failed to establish that overriding the stay is in the best interests of the United States.

Because defendant has failed to establish that overriding the stay is necessary because of urgent and compelling circumstances, or because it is in the best interests of the United States, defendant’s override decision is invalid. DEA failed to consider important, relevant aspects of the override analysis, and offered explanations that run contrary to evidence before it. Defendant’s decision to override the automatic CICA stay is consequently arbitrary, capricious, and contrary to law.  (Nortel Government Solutions, Inc., v. U. S. and Systems Research and Application Corporation, No. 08-682C, October 20, 2008) (pdf)

III. Application of Legal Standards to This Case

The court analyzes whether NHTSA’s decision to override was “arbitrary and capricious” by examining NHTSA’s OM in the light of the Motor Vehicle factors, as further elaborated by the CICA cases in this court as to the “important aspect[s] of the problem” prong:

(1) whether significant adverse consequences would occur if the agency did not override the stay (2) whether reasonable alternatives to the override were available, (3) how the benefits of overriding the stay compared to the potential cost of the override, including costs associated with the potential that the protester might prevail before GAO, and (4) the impact of the override on the competition and integrity of the procurement system.

Superior Helicopter, 78 Fed. Cl. at 189 (citing Reilly’s Wholesale, 73 Fed. Cl. at 711).

A. Significant Adverse Consequences

The first factor to consider is whether the agency analyzed “whether significant adverse consequences will necessarily occur if the stay is not overridden.” Reilly’s Wholesale, 73 Fed. Cl. at 711; see also Chapman Law Firm Co. v. United States (Chapman 2004), 62 Fed. Cl. 464, 468 (2004) (discussing, in a “best interests” case, how the agency’s consideration of consequences of abiding by an automatic stay influenced the court’s decision).

The OM states that the “purpose of the contract is to provide critical [information technology] services throughout the agency.” AR 1. These services include maintaining the grants tracking system (GTS) which tracks NHTSA traffic safety grants to states that are worth “hundreds of millions of dollars.” Id. Without an IT contractor, the OM notes, “the agency has neither the staff nor the requisite expertise to maintain [its IT] systems for several months on its own without outside support,” especially considering “fiscal-yearend closeout activities.” Id. While the court understands that IT is important to maintain these systems, NHTSA failed to address whether, without Centech’s services, the “adverse consequences will necessarily occur.” See Reilly’s Wholesale, 73 Fed. Cl. at 711 (emphasis added). The necessity of engaging the awardee is closely related to the second factor: whether the agency considered reasonable alternatives to overriding the automatic stay. See id. (noting that the second factor is an alternative way of considering the first factor). If the agency had reasonable alternatives to engaging the awardee, adverse consequences to the agency’s mission would not necessarily result from the stay. Here, NHTSA has shown some possible adverse consequences of not having an IT contractor but, in light of the possible availability of reasonable alternatives, the OM does not support the conclusion that such consequences would necessarily occur if NHTSA did not override the automatic stay.

B. Reasonable Alternatives

The second factor the court evaluates is whether the agency considered “whether reasonable alternatives to the override exist that would adequately address the circumstances presented.” Reilly’s Wholesale, 73 Fed. Cl. at 711; see also Alion Sci. & Tech. Corp. v. United States (Alison Sci.), 69 Fed. Cl. 14, 27–29 (2005) (discussing reasonable alternatives in a case where the agency used both “best interests” and “urgent and compelling circumstances” to justify an override).

NHTSA claims to have considered a variety of options. See AR 2. It claims to have evaluated whether it could forego IT services, extend e-Mangement’s contract, or use an “existing procurement vehicle.” AR 2. As noted in Part III.A, NHTSA concluded it could not forego any IT contractor support. AR 1 (“[NHTSA] cannot lose its IT systems for that length of time and continue to successfully carry out its mission.”); see supra Part III.A (noting that without IT services there could potentially be significant adverse effects on the agency). It also concluded that it could not extend e- Management’s current contract. AR 2. NHTSA stated that “absent a waiver” the e- Management contract was capped by the General Services Administration (GSA) at five million dollars, and that amount would have continued the contract only for a few weeks after contract extension. Id. Finally, defendant “reviewed other agency contracts” to assess if other existing contracts could fulfil NHTSA’s IT needs. Id. The OM found that NHTSA did not have any available contracts that would fulfil the needs of the agency. Id.

As to the second option–extending e-Mangement’s contract–the court found that information in the AR in this case is not fully consistent with statements in the OM. Compare AR 118–22, 171, with AR 1–3 (the OM). The AR suggests that NHSTA was ready to abide by the stay and prepared to continue using the existing IT service contractor. AR 118–22, 171. The Chief Information Officer (CIO) of NHTSA, Margaret O’Brien, made statements in email pointing to this conclusion, such as, “We could add more funding to ensure coverage for Centech phase-in and/or protest response decisionmaking. . . . If the current delegation of authority could apply, we could do a mod[ification] for more to cover bringing [e-Mangement employees] and possible others back for 2 or more weeks.” AR 119. Ms. O’Brien also sent an e-mail stating:

E-management is still under contract and could have people here as soon as tomorrow if you so direct them. If you want us to also to do a mod[ification] to the existing contract to add funds under the current ceiling to carry us to the end of September, please let me know.

AR 121. In addition to the possible short-term engagement of e-Management, the AR shows that NHTSA also discussed proceeding under Federal Acquisition Regulation (FAR) section 16.505. AR 118. Section 16.505 of the FAR includes an option for solesource contracting “in the interest of economy and efficiency . . . [as] a logical follow-on to an order already issued.” 48 C.F.R. § 16.505(b)(2)(iii) (2008). Ms. O’Brien, on September 23, 2008, wrote:

I would like to issue a sole source task order under COMMITS for a logical follow-on with e-Management for a period of 6 months. That period will allow time for the protest to be resolved and also for an orderly phase-in to the awardee. Centech ha[s] already hired some of the critical staff, such as the lead for infrastructure and web and GTS developers. They are now without work and could become unavailable altogether. It is essential that we move as rapidly as possible to get e-Management back on board.

AR 122 (emphasis added). Mr. Ross Jefferies, a NHTSA contracting official, replied to the CIO stating, “I am considering all available options to the agency including continuing the work with e-[M]anagement in the short term.” AR 171. The AR does not make clear how and why NHTSA concluded that it could not extend e-Management’s contract.

Notes from a meeting with Rebecca Pennington, the official who signed the OM, do not indicate much discussion of the reasoning stated in the OM. AR 174–78. The notes indicate that the parties discussed “CICA,” AR 174, 175, and the $5 million dollar cap, AR 175, but mention nothing about the substance of the need for an override, AR 174–78. The notes do not reflect discussion of the options for continuing with e-Management, except for noting the GSA cap, AR 175, and containing the statement “[e-Management] personnel critical task support,” AR 178.

The OM says nothing about Ms. O’Brien, the CIO, who, in her September 23, 2008, email, AR 118, suggested that the e-Management contract could be extended under
FAR § 16.505(b)(2). See AR 1–3. The lack of evidence of a serious exploration of options for obtaining temporary IT services appears to the court to veer close to, if not to reach, NHTSA’s “failing to consider an important aspect of the problem.” Motor Vehicle, 463 U.S. at 43.

NHTSA also cannot render findings that “run[] counter to the evidence before [it].” See Advanced Sys., 72 Fed. Cl. at 30 (quoting Motor Vehicle, 463 U.S. at 43). The OM states a conclusion that appears counter to the discussions in the AR. See AR 118–22, 171. The email correspondence in the AR indicates that there may have been reasonable alternatives and NHTSA choose not to pursue them. See AR 118–22, 171. This decision could be considered “arbitrary and capricious.” Nevertheless, it is possible that the discussion about alternatives in the OM fits into the “zone of acceptable results” that “requires only that the final decision reached by an agency be the result of a process which ‘considers the relevant factors’ and is ‘within the bounds of reasoned decisionmaking.’” Reilly’s Wholesale, 73 Fed. Cl. at 709 (quoting Balt. Gas & Elec. Co. v. Natural Resources Def. Council, Inc., 462 U.S. 87, 105 (1983)).

C. Cost-Benefit Analysis

The third factor is whether the agency considered “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.” Reilly’s Wholesale, 73 Fed. Cl. at 711; see Superior Helicopter, 78 Fed. Cl. at 189 (noting that the agency must consider “how the benefits of overriding the stay compared to the potential cost of the override, including costs associated with the potential that the protester might prevail before GAO”); see also Chapman 2004, 62 Fed. Cl. at 468 (discussing, in a “best interests” case, how the cost-benefit analysis influenced the court’s decision). The court views this factor in light of CICA’s legislative history. The legislative history of CICA states that the agencies should consider the costs of GAO’s sustaining the protest before it issues an override:

[T]he head of the procuring activity should consider potential costs to the government from carrying out relief measures as may be recommended by the Comptroller General if the protest is subsequently sustained. This is to insure that if the Comptroller General sustains a protest, such forms of relief as termination, recompetition, or re-award of the contract will be fully considered for recommendation. Agencies in the past have resisted such recommendations on the grounds that the government’s best interest would not be served by relief measures of this sort because of the additional expenses involved. [The automatic stay] is designed to preclude that argument in the future, and thus to avoid prejudicing those relief measures in the Comptroller General’s review.

 H.R. Rep. No. 98-861 at 1436 (Conf. Rep.).

The OM’s cost-benefit analysis is flawed. First, the OM identifies the costs of GAO’s sustaining the protest as “reprocurement costs.” AR 2. These are not the only costs of the override. One additional cost for an agency to consider is the cost to the integrity of the procurement system. See H.R. Rep. No. 99-138, at 4–5 (1985) (noting the importance of the override); Automation Techs., Inc. v. United States (Automation Techs.), 72 Fed. Cl. 723, 730 (2006) (noting that an agency is “constrained by a consideration of relevant factors, including the ramifications of an agency loss in the GAO protest, and the impact of an override on the competition in contracting and bid protest process, as well as respect for the GAO, an important component in the statutory structure of how to address protests to government procurement actions”). The OM discounts reprocurement costs. It compares the costs of the override with the costs of continuing e-Management’s contract. AR 2 (“On balance, I believe that the agency has an equal ([though] small) chance of incurring reprocurement costs, whether or not it extends contract performance with the awardee. Stated another way, extending the protester’s performance . . . would not lesson the agency’s risk of incurring reprocurement costs.”). The agency concluded that the costs were balanced. Id. This is because e-Management was not the “next in line for award” and NHTSA concluded that, if e-Management were successful in its bid protest, then “it would have little choice but to decide to recompete the effort.” Id.

Furthermore, the OM determined that, because NHTSA “has a reasonable chance of prevailing on the merits,” the cost of the override was low. Id. This is an impermissible consideration. This type of balancing would allow an agency to employ the very reasoning that CICA sought to prevent. See H.R. Rep. No. 99-138, at 4–5 (noting the importance of the override in preventing agencies from “ignoring the protest process” and “facilitat[ing] a fair and equitable remedy to vendors who are illegally denied Government contracts”). The government articulated its optimistic view of the likely outcome of the protest to discount the costs of the override.

The OM lists the benefits of overriding the stay as (1) avoiding “termination costs” and (2) “uninterrupted performance beyond the calendar year.” AR 2. These are not the sorts of benefits envisioned in the cost-benefit calculation. If, after considering reasonable alternatives, an agency believes that significant adverse consequences will result if the stay is not overridden, then the “benefit” variable to be used in the calculation is the benefit of avoiding the significant adverse consequences. See Chapman Law Firm v. United States (Chapman 2005), 67 Fed. Cl. 188, 192 (2005) (noting that without the override the agency would lose three million dollars a month and public property would be subject to vandalism and other threats to public safety); Alion Sci., 69 Fed. Cl. at 25, 27, 29 (noting the time-critical nature of the contract and the lack of multiple vendors). There has been no showing, as there was in Chapman 2005, 67 Fed. Cl. at 192, that serious adverse consequences will necessarily befall the government in the absence of an override.

D. Impact on Competition and the Integrity of the Procurement System

The final factor is whether the agency considered “the impact of the override on competition and the integrity of the procurement system, as reflected in the Competition in Contracting Act.” Reilly’s Wholesale, 73 Fed. Cl. at 711; see also Automation Techs., 72 Fed. Cl. at 729–30 (discussing the impact on the procurement system in a “best interests” case). Defendant claims to have “considered the impact on competition and on the integrity of the procurement process” in the OM. AR 2. However, the OM failed to offer any reasoning that shows that it actually considered the integrity of the procurement system Congress created in CICA. See id. at 2–3. The text of the paragraphs in which the consideration is mentioned reads in full as follows:

I considered the impact on competition and on the integrity of the procurement process, should the agency decline to suspend performance.

In my view, the competition process is best served by allowing the awardee to proceed. As noted above, I conclude from discussions with the relevant agency officials that the agency has a reasonable chance of prevailing. Moreover, the protester is not next in line for award. Taken together, these two points lead me to conclude that allowing the awardee to proceed is the fairest approach. As an extra safeguard, however, the awardee’s performance will be limited to essential efforts during the pendency of the protest.

Id.

The claimed consideration of the impact on the procurement system do not recognize or vindicate the purpose of the automatic stay. NHTSA first states that it “has a reasonable chance of prevailing.” Id. at 3. This observation does not relate to the integrity of the procurement system. It relates to the merits of the protest, not to the automatic stay in CICA. NHTSA also states that the protestor is not “next in line.” Id. Again, this is not an appropriate evaluation of the impact of the override on the procurement system. The purpose of the procurement system as envisioned in CICA is a fair process in which disappointed bidders can seek review at GAO. GAO was given the automatic stay in CICA to promote these policies. See H.R. Rep. No 98-861 at 1435–36 (Conf. Rep.). NHTSA then states that it has “limited [Centech’s performance] to essential efforts during the pendency of the protest.” AR 3. Again, this statement has nothing to do with the integrity of the procurement process. The CICA stay was meant to prevent the “fait accompli” of a contractor establishing a relationship in a new contract with an agency long before GAO issued its decision. See H.R. Rep. No. 99-138, at 4–5. Limiting the contractor to “essential efforts,” AR 3, does not address Congress’ concerns.

The court finds that NHTSA, by failing to consider the impact of its override on the procurement system, has “failed to consider an important aspect of the problem,” Motor Vehicle, 463 U.S. at 43, and has, therefore, failed to act rationally and in accordance with law. NHTSA’s Override Memorandum fails to meet even the deferential standards of APA review and the court must set aside the override.  (E-Management Consultants, Inc., v. U. S. and Centech Group, Inc., 08-680C, October 14, 2008) (pdf)

The threshold inquiry in this case is whether there has indeed been an override of the automatic stay imposed on the original contract. Plaintiff alleges that the bridge contract between MCSC and Avineon is the counterpart to an override and that, in essence, defendant is using the bridge contract as a method of circumventing the formal requirements of 31 U.S.C. § 3553(d)(3)(C)(i). Defendant contends that the CO’s affidavit and testimony confirm that the bridge contract is distinct from the original contract and does not constitute a de facto override. At the conclusion of the hearing, the court announced its finding that the bridge contract between defendant and Avineon did not constitute an override of the automatic stay. Our reasons for so finding are summarized herein.

The automatic stay was “intended to preserve the status quo during the pendency of the protest so that an agency would not cavalierly disregard the GAO's recommendation to cancel the challenged award.” Advanced Sys. Dev., Inc. v. United States, 72 Fed. Cl. 25, 30-31 (2006) (citing PGBA, LLC v. United States, 57 Fed. Cl. 655, 660 n.8 (2003)). Furthermore, “‘Congress included these bid protest provisions to help ensure that the mandate for competition would be followed and that vendors wrongly excluded from Federal contracts would receive fair relief.’” Reilly’s Wholesale Produce v. United States, 73 Fed. Cl. 705, 710 n.8 (2006) (quoting H. Rep. No. 99-138 (1985)). The automatic stay therefore was intended to guarantee that plaintiffs could receive “fair relief” and would not be prejudiced in their protest before the GAO.

Section 3553(d)(3)(C), however, allows the “head of the procuring activity” to override an automatic stay and authorize performance of the contract if performance “is in the best interests of the United States” or if “urgent and compelling circumstances . . . will not permit waiting for the decision of the [GAO].” Id. § 3553(d)(3)(C)(i). The head of the procuring activity must first deliver a written finding to the Comptroller General. Id. The government and the contract awardee may then commence performance despite disturbing the status quo and possibly prejudicing the protesting offeror at the GAO.

No such finding was made in this case, however, because the agency takes the position that it was unnecessary. This case is therefore unlike traditional override cases in that we are asked to decide whether the bridge contract represents the functional equivalent of an override. We have not been presented with any decisions discussing this question, but in our view the relevant question is whether the bridge contract shares the same character or function as a formal override and, thus, whether the bridge contract could prejudice plaintiff in its protest before the GAO or in subsequently performing the work if it is successful in its protest.

The facts here demonstrate that the character of the bridge contract is distinctly different from an override because the bridge contract does not disturb the status quo with respect to the original contract. The testimony and affidavit of the CO clearly show that she issued a stop-work order to Avineon, preventing further performance on the original contract. While an override is meant to authorize performance on the protested contract because of special circumstances, a bridge contract can be a separate, self-contained contract. In this case, it was. MCSC will receive information technology services only during the pendency of the GAO protest. The appropriation used to fund the bridge contract is also separate from that used to fund the original contract, and the appropriated funds for the original contract remain untouched. The CO has also affirmed that the bridge contract’s 120-day term is independent of the term of the original contract. The bridge contract’s term will thus not lessen the amount of work. Although, as plaintiff points out, the bridge contract is for the identical information technology services involved in the original contract, this fact alone is insufficient to prove that the bridge contract is an iteration, in whole or in part, of the original contract and, thus, an override. Contracts may share the same subject matter and yet remain separate and distinct from one another. We therefore conclude that the bridge contract is not a partial iteration of the original contract but is a new contract with a distinct character and function. The status quo with respect to the original contract remains unchanged.

There is also no reason to think that the award to Avineon will prejudice plaintiff in the action before the GAO. Moreover, if plaintiff is successful at the GAO, the original contract, in its entirety, will still be available to plaintiff.

For these reasons, the court finds that the bridge contract between MCSC and Avineon is not an override of the automatic stay as provided for by section 3553(d)(3)(C)(i). The court is therefore not required to reach the merits of an override. Accordingly, the Clerk is directed to enter judgment for the United States and to dismiss the complaint.  (Access Systems, inc., v. U. S. and Avineon, inc., No. 08-708C, October 10, 2008) (pdf)

Generally, a reviewing court does not disturb an agency award unless it is arbitrary, capricious, an abuse of discretion, or otherwise violates applicable procurement law. 28 U.S.C. § 1491(b)(4); 5 U.S.C. § 706; Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1332 (Fed. Cir. 2001). Alion offers several reasons why DISA’s award to ITT was arbitrary, capricious, and an abuse of discretion. The court was concerned primarily with two of these. First, we were uncertain whether DISA meaningfully considered the extent and impact of the OCIs in ITT’s proposal. Alion maintains that DISA relied heavily on ITT’s assurances that its firewalling of subcontractors would mitigate such conflicts without reaching an independent conclusion. Second, we were bothered by the source selection authority’s use of term “stranglehold” to describe Alion’s incumbent status. This statement could suggest that DISA awarded the contract upon consideration of factors other than those in the Solicitation. We considered these issues fully. Alion is unlikely to succeed on the merits, especially considering the deferential standard of review to which this court is bound in analyzing “best value” procurements. See, e.g., Bean Stuyvesant, LLC v. United States, 48 Fed. Cl. 303, 320 (2000). (Alion Science and Technology Corporation v. U. S. and Advanced Engineering & Sciences, a division of ITT Corporation, Defendant-Intervenor, No. 06-682C, October 11, 2006)

Given the ability and willingness of the incumbent contractor to continue to perform M&M services for Illinois and Indiana under its existing contract, which has been extended through December 13, 2004, together with any added services which HUD deems necessary for the launch of the Chicago Homeownership Rehabilitation Program, it is concluded that the HUD override determination of August 31, 2004, lacks a rational basis on the record submitted as supplemented. The situations cited do not present urgent and compelling circumstances in that all of the required services can efficiently be obtained without performance of the new contract during the GAO protest period. The record also lacks the objective analysis required to support a determination that performance of the new contract is in the best interests of the United States. HUD’s override determination is based almost entirely on the performance of a limited aspect of the contract in a limited portion of the contract area, and no relevant or substantial adverse financial or administrative impact has been established from continuation of a stay during the GAO protest period.  (Chapman Law Firm Co., v. U. S., No. 04-1418c, October 13, 2004 (pdf)

Contrary to a case in which conclusions of the agency are “rational and supported by the record,” Sierra Military Healthcare Servs., Inc. v. United States, 58 Fed. Cl. 573, 581 (2003), the purported basis to justify the override decision was not mentioned at all in the May 28, 2004, override memorandum approved by the Deputy Assistant Secretary. There is only one mention in the documents supporting the override decision that reflects a concern with plaintiff’s legal capacity to perform. A May 26, 2004, memorandum by Brigadier General Green includes the statement that the “current purchase order arrangement with three different contractors expires on May 31, 2004 with no legal extension available.”10 The memorandum provides no support for that assertion. Further, the memorandum goes on to imply in error that maintaining the status quo would involve a five-month delay. These facts alone indicate that the agency has “offered an explanation for its decision that runs counter to the evidence before the agency . . . .” Motor Vehicle Mfrs., 463 U.S. at 43. On the basis of the record before the court and the arguments made at the June 4, 2004, hearing, the court determines that the VA’s decision to override the automatic stay is unsupported by the evidence, without rational basis and, therefore, cannot be sustained. Accordingly, the status quo as of May 31, 2004, must be maintained.  (Altos Federal Group, Inc., v. U. S. and Intelistaf Healthcare, Inc., No. 04-936C, June 10, 2004) (pdf)

The Court ORDERS that the December 24, 2002 cancellation of IFB No. DACW21-02-B-0005 is hereby SET ASIDE. Defendant, the Army Corps of Engineers, its officers, agents, servants, employees, and representatives, and all persons acting in concert and participating with them on IFB No. DACW21-02-B-0005 are hereby PERMANENTLY ENJOINED from proceeding with performance of the contract with any entity other than GLDD provided that the Corps finds GLDD to be a responsible contractor. Each party shall bear its own costs. (Great Lakes Dredge & Dock Company v. U. S., No 03-1891C, April 13, 2004, Reissued April 20, 2004) (pdf)

Balancing the hardships between the government and WPS on the one hand and PGBA on the other, the Court determines that adequate justification does not exist to set aside the contract and require a new round of solicitation. This procurement has already lasted nearly one and one half years, from the issuance of the RFP in September 2002 to the anticipated work commencement date of April 1, 2004, and WPS avers that it has expended significant resources preparing for implementation. Interv.-Def.’s Opp. at 63; Interv.-Def.’s Reply at 24. Revoking the contract and requiring a new solicitation would likely engender an additional delay of at least the same length. In light of these considerations, the Court determines that the balance of 30 hardships weighs in favor of denying PGBA’s request for declaratory relief. In a bid protest case, 28 U.S.C. § 1491(b)(2) provides that “[t]o afford relief in such an action, the court[] may award any relief that the court considers proper, including declaratory and injunctive relief except that any monetary relief shall be limited to bid preparation and proposal costs.” In the circumstances of this case, the Court has determined that PGBA is entitled to recover its reasonable costs incurred in preparing its proposal for the TDEFIC solicitation. “[A]losing competitor may recover the costs of preparing its unsuccessful proposal if it can establish that the Government’s consideration of the proposal submitted was arbitrary or capricious or in violation of applicable statute or regulation.” Gentex Corp., 58 Fed. Cl. at 656 (citing CSE Constr. Co. v. United States, 58 Fed. Cl. 230, 262- 3 (2003); 28 U.S.C. § 1491(b)(2)). In light of the errors discussed above and because PGBA was prejudiced by such errors, PGBA may recover its bid preparation and proposal costs. The amount of such recovery shall be determined through further proceedings in this action. (PGBA, LLC,v. U. S. (Defendant) and Wisconsin Physicians Service Insurance Corporation (Intervening-Defendant); No. 03-2773C, March 31, 2004, Reissued April 22, 2004.) (pdf)

Absent a valid override decision the stay mandated by 31 U.S.C. § 3553(d) remains in effect. However, the fact that the stay has remained in effect does not, itself, create an urgent and compelling circumstance which would now support an immediate, fresh override decision by the BOP. As purchase orders can be used to meet the continuing BOP needs, an award of such an order to Dismas or Keeton to meet BOP needs during the protest period could be used even if its performance of the contract under protest remained stayed. Keeton has no existing contractual right to perform the service and is not entitled to an automatic extension of purchase orders. If purchase orders are continued to be used during the stay period once a second facility in Memphis was available, the BOP would be under an obligation to seek competition for each purchase order. See 13 C.F.R. § 13.104. The BOP may also limit the number of sources from which it solicits bids if the agency’s need for these services has an unusual and compelling urgency. See 13 C.F.R. § 6.302-2. However, the agency is not limited to entering into purchase orders only with Keeton during the stay period. See Bannum v. United States, 56 Fed. Cl. 453, 456 (2003) (“That limitation is for the benefit of the procuring agency and offers no support for directing an extension of plaintiff’s contract by purchase order at the behest of the contractor.”). While the agency has not shown any valid urgent and compelling circumstances which would support overriding the automatic CICA stay, the rationale for limiting its consideration for purchase orders to either Keeton or Dismas during the stay period is based on the fact that these are the only two available facilities. The agency is faced with the unusual circumstance where an incumbent’s contract has expired yet the agency cannot proceed with the new contract because of the stay.  (Keeton Corrections, Inc. v. U. S. and Dismas Charities, Inc. (No. 04-132C, March 17, 2004) (pdf)

What remains of the Director’s rationale for his override decision is his claim that the new contracts will provide better and more efficient services to TRICARE beneficiaries. Plaintiff does not contest this finding. Nonetheless, without more, the court does not believe that the mere fact that the new contracts would be better than the old is enough to support the override decision under either prong of section 3553. Certainly, given the possibility of either extending the existing contracts or shortening the period for the transition into the new contracts, the desire to receive sooner, rather than later, such contract benefits does not constitute “urgent and compelling circumstances that significantly affect interests of the United States [and that] will not permit waiting for the decision of the Comptroller General concerning the protest.” Nor, without more, does the court believe that this sort of benefit is what Congress had in mind in allowing an override in the “best interests of the United States.” In deed, were the fact that a new contract is better than the old sufficient for this purpose, little would be left of Congress’ efforts in CICA to strengthen the stay provisions and, with that, promote the integrity of the GAO review process. In this regard, the court notes that the statute does not allow the agency to override the stay when it is in the bests interests of that agency or the agency’s contracting officials. Rather, the best interests of the “United States” must be involved and those interests necessarily include weighing the benefits Congress obviously felt were furthered by bolstering the bid protest process and, in turn, promoting competition in contracting. In the instant case, the public’s interest likewise lies in preserving the integrity of the competitive process – such, indeed, clearly was Congress’ view in providing that, except in circumstances not yet demonstrated here, the automatic stay should prevail. In so holding, the court is mindful of the benefits that the new contracts might offer to TRICARE beneficiaries. But, those same beneficiaries, as well as the public at large, also have a long-term interest in ensuring that the new contract represents the best overall value to the government. Given the fact that there is no real indication that reinstituting the stay will impair services to a significant extent, the court believes that these long-term interests are paramount here and are best served by issuing the proposed injunction. See Metcalf Constr. Co. v. United States, 53 Fed. Cl. 617, 645 (2002); DTH Management Group v. Kelso, 844 F. Supp. 251, 255 (E.D.N.C. 1993).  (PGBA, LLC,v. U. S. (Defendant) and Wisconsin Physicians Service Insurance Corporation (Intervening-Defendant); No. 03-1986C, September 15, 2003, Reissued September 29, 2003)

To gain injunctive relief, plaintiff must establish: 1) that it has achieved actual success on the merits, 2) that it will suffer irreparable injury if injunctive relief were not granted, 3) that the harm to plaintiff outweighs the harm to the Government and third parties if the injunction were not granted, and 4) that granting the injunction serves the public interest.  FMC Corp. v. United States, 3 F.3d 424, 427 (Fed. Cir. 1993). No one factor is dispositive in the court’s analysis. Id.  Defendant at argument was unable to answer the court’s queries regarding the specific impact of a 30-day delay on national security issues. See Tr. at 49-50. However, plaintiff was also unable to provide an explanation as to how such a delay would not impact national security, stating instead that it “assumed” that a resolicitation could occur “expeditiously and effectively, without any disruption to the services” required by the Corps. Id. at 23. In light of the parties’ inability to provide the court with specific information regarding the impact of delay, the court must defer to the claim that national security concerns counsel against a grant of injunctive relief.  Thus, the court finds that the grant of a permanent injunction would not be in the public interest. When considered in light of the asserted possibility that a reprocurement would disrupt the Corps’s ability to provide the facilities covered by the instant contract, the court must deny plaintiff’s motion for a permanent injunction.  (Al Ghanim Combined Group Co. Gen. Trad. & Cont. W.L.L., v. U.S., No. 03-271C, May 22, 2003)  (pdf)

The court must "give due regard to the interests of national defense and national security" when considering bid protests. 28 U.S.C. § 1491 (b)(3). There is no specific irreparable injury to SDS, and any harm to SDS is outweighed by the harm that will be suffered by the United States.  (SDS International, Inc., v. U. S. and CDB Training, Inc., No. 03-214C, February 6, 2003)