For each bid protest filed, the Competition in Contracting Act (CICA) requires the contracting officer to “immediately direct the contractor to cease performance under the contract and to suspend any related activities that may result in more obligations being incurred by the United States under that contract.” See 31 USC 3553(d)(3)(A)(ii) (2006) which governs the automatic stay override.
Many government contractors mistakenly believe that the stay is automatic at every court. This is not the case at the agency or the US Court of Federal Claims. Other companies wonder whether agency can avoid bid protest litigation by using the automatic stay exceptions. However, although GAO or COFC may still hear the case, companies should later decide whether the ultimate remedy of getting another ‘bite at the apple’ would even be available after the litigation is over.
- The CICA Automatic Stay is contingent upon a protest that is filed on time.
The cessation of performance, commonly defined as CICA Stay “automatic stay override,” is the rule, by command of Congress, lasting through the determination of the protest. 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.”
Mistakes Made By Contracting Agencies with CICA Automatic Stay Override
Sometimes, as a result of the Agency’s corrective action decision, the contracting officer may make the mistake of simply deciding to simply reaffirm the previous award decision. This can be grounds to win a protest. See Supreme Foodservice, GmbH v. United States, No. 13-001 (Mar. 4, 2013) (successful protest of declaratory judgment that override of (actually failure to implement) CICA Act automatic stay during GAO protest of results of corrective action in response to prior protest was not adequately justified in the D&F under either the “best interests of the Government” or the “urgent and compelling circumstances” tests).
Instead, the head of government contracting activity was of the mistaken opinion that if a reevaluation of offers occurring under corrective action results in the decision to reaffirm an earlier award, the CICA automatic stay does not apply when this new decision is protested before the GAO.
The Court of Federal Claims found that the Agency’s legal analysis “had it backward — the issue to be determined was whether a stay should be overridden, not whether one should be imposed — the result is the same.”
- To invoke the CICA automatic stay override in a case on the GAO docket, the Agency must show that such a decision is “in the government’s best interests or justified by urgent and compelling circumstances.”
In the Supreme Foodservice case, the Agency simply did not invoke the stay despite the filing of a new protest. Nor did the contracting agency make the required showing to legally justify the Automatic Stay override. See also helpful information about deciding to file a government contract protest.
Urgent and Compelling Automatic Stay Override Requirement
When the Agency decides to invoke the CICA Automatic Stay override under urgent and compelling grounds, the head of government contracting procurement activity must find “urgent and compelling circumstances that significantly affect interests of the United States [which] will not permit waiting for the decision of the Comptroller General concerning the protest.” 31 USC 3553 (d)(3)(C)(i)(II). This generally referred to as a motion for relief from stay at the COFC level.
- The Agency cannot simply justify half of the’equation.’
- Instead, it has to also show why it cannot wait until GAO makes a decision.
- This is yet one common mistake that contracting agencies make when trying to justify the automatic CICA automatic stay override.
- When considering the CICA Automatic Stay override, the Agency should consider bridge contracts and other available tools that can continue performance.
Congress intended a balance of the public’s rights and not just the agency’s sole interest. This is where government contracting agencies sometimes make serious mistakes. See information about TRO requirements at the COFC.
Court’s Decision on Automatic Stay Override Issues
In the Supreme Foodservice case, the U.S. Court of Federal Claims ruled that the Automatic Stay Override mistakes made by the contracting agency were arbitrary and capricious. Therefore, the protestor won.
- Although the government does have great discretion with Automatic Stay Overrides, it does make mistakes.
For questions or representation about filing a bid protest, and whether the agency CICA Automatic Stay Override is lawful, call our GAO bid protest law firm at 1-866-601-5518.