Ensuring CICA stay overrides are reasonable, supportable, and less vulnerable to attack: practical recommendations in light of recent COFC cases.
Date | 22 December 2007 |
Author | Wilkinson, Kevin J. |
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INTRODUCTION II. THE CICA STAY: PURPOSE AND STANDARDS III. THE CICA STAY AND THE FAR IV. AIR FORCE MANDATORY PROCEDURES FOR HCA OVERRIDES V. JUDICIAL REVIEW OF AGENCY OVERRIDES VI. ANALYSIS: KEYS TO ENSURING OVERRIDES ARE REASONABLE, SUPPORTABLE, AND LESS VULNERABLE TO ATTACK A. Impact on the Air Force if Award or Performance Delayed B. The Incumbent versus the Awardee, and Other Reasonable Alternatives 1. Incumbent Contractor 2. Particular Awardee 3. "All" Reasonable Alternatives C. Likelihood, Risks, and Costs of GAO Sustaining the Protest D. Likelihood and Costs of a Court Overturning the Override E. Competition in Contracting and Congressional Policy F. Lack of Advance Planning and Building in Time for Protest G. The Administrative Record VII. CONCLUSION I. INTRODUCTION
The Competition in Contracting Act of 1984 ("CICA") (1) provides for the automatic stay of a contract award and suspension of performance of a newly-awarded contract after the timely filing of a bid protest at the Government Accountability Office (GAO) and notice to the procuring agency. (2) These stays are known colloquially as "CICA stays." Agencies are required to withhold contract award when they receive notice of a protest from GAO prior to award of the contract, and to suspend performance of an awarded contract when notice of the protest is received from GAO within ten calendar days of the contract award date (3) or within five days of a required debriefing. (4)
An agency can override a CICA stay under certain defined circumstances, (5) and they often do. The override has become so common that it may appear that the exception is swallowing the rule. It is not uncommon for agencies to attempt to justify an override when the circumstances of the procurement do not present truly urgent, compelling, and/or sufficiently significant Government interests, as those standards are interpreted and applied by the courts. As a result, a protester (frequently the incumbent) often turns to the only avenue of relief available and files suit in federal court alleging a violation of CICA. Faced with a request for injunctive or declaratory relief by a protester, the courts do not hesitate to prevent the agency from awarding the contract or continuing performance of an awarded contract where they find the agency's justification for an override decision to be weak or unsupported.
In 2006, the United States Court of Federal Claims (COFC) overturned four CICA stay overrides; (6) in a fifth override-related case, the court let the agency's override stand, but only after the agency's third attempt at demonstrating that the contract at issue involved "interests of national defense and national security." (7)
This article addresses CICA stay override determinations in light of recent case law discussing, if not establishing, the specific factors to be considered in an override decision, the evolution of the standard of review in the COFC for post-award best interests override, and the dicta suggesting where the COFC may be headed in this area. It also discusses United States Air Force guidance to acquisition personnel regarding what it calls "HCA Overrides," (8) the weaknesses in existing Air Force guidance, especially in light of recent cases, and recommendations to override decision makers and reviewers to ensure overrides are reasonable, supportable, and less vulnerable to attack.
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THE CICA STAY: PURPOSE AND STANDARDS
The purpose of the CICA stay is to preserve the status quo during the pendency of a protest and allow a successful protester meaningful relief. (9) Although the stay may result in significant disruption and inconvenience to the agency, it furthers full and open competition and otherwise protects the integrity of the procurement process, all of which serve the interests of the Air Force and of the United States. Recognizing this, Congress purposely set the bar for overriding a stay rather high, intending that overrides be the exception and not the rule.
In the pre-award protest setting, the standard for overriding the stay is that "urgent and compelling circumstances which significantly affect the interest of the United States will not permit awaiting the decision of the GAO." (10) In the post-award protest setting, the same urgent and compelling circumstances standard applies but CICA adds an alternative "best interests" standard, under which an agency may override the stay if "performance of the contract is in the best interests of the United States." (11) The "best interests" standard has provided agencies greater latitude than the "urgent and compelling circumstances" standard in overriding a stay, and at least one federal court went so far as to say that it involved a discretionary determination not reviewable by the courts. (12) Nonetheless, the COFC has since asserted jurisdiction over post-award best interests override decisions (13) and has strongly suggested that the latitude previously afforded a "best interests" decision is inappropriate. (14) Three of the 2006 CICA stay override decisions reviewed and overturned "best interests" decisions. (15)
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THE CICA STAY AND THE FAR
The Federal Acquisition Regulation (FAR) Part 33 sets forth, in general terms, the procedural requirements for CICA stay overrides. Under FAR 33.104(b)(1) and (c)(2), the override authority is the agency Head of Contracting Activity (HCA). (16) The HCA's decision must be based on a written finding (known as a "Determination and Finding" or "D&F") that the applicable override standard is met based on the circumstances presented. (17)
At times, there are both pre-award and post-award protests in the same acquisition. One possible scenario is that a pre-award protest is filed, the stay is overridden, the contract is awarded and a timely postaward protest is filed (perhaps by the original protester), which triggers a second automatic CICA stay. The second protest requires another independent and stand-alone HCA decision and D&F. (18)
The CICA and the FAR require the agency to notify the GAO of its finding and decision prior to awarding the contract, as well as prior to continuing performance under an awarded contract. (19) Although the GAO has no authority to review agency override decisions, the standard used by the agency in its override decision does affect what the GAO may consider in fashioning its recommendation if the protest is sustained. (20) The FAR also requires that the agency provide notice of the override decision to the protester and other interested parties (21) and makes clear that the HCA override determination must be made "in accordance with agency procedures." (22) Accordingly, Federal agencies, including the Air Force, have established procedures for agency override determinations.
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AIR FORCE MANDATORY PROCEDURES FOR HCA OVERRIDES
The Air Force has established procedures for requesting, justifying, and obtaining HCA approval of CICA stay overrides. These procedures are contained in the Air Force Federal Acquisition Regulation Supplement (AFFARS) Mandatory Procedure (MP) 5333.104, Protests to the GAO, paragraph (h). (23) In MP 5333.104, the Air Force acknowledges the different standards for pre-award and postaward stay overrides, noting that "'urgent and compelling circumstances'" may include "delays, work stoppages, or performance degradations that severely impact mission-critical operations," (24) and that the Air Force's discretion in determining what is in its best interests is "broad but not unfettered." (25) Subparagraph (h)(l)(iii)(A) requires that an override request include findings required by FAR 33.104(b) or (c) as well as those required by MP 5333.104(h)(4)(i). Confusingly, FAR 33.104 does not include any required findings; it only states the allowable bases for overrides. It also does not provide detailed guidance as to what the D&F should (let alone must) include. Fortunately, MP 5333.104(h)(4)(i) does list substantive requirements for Air Force D&Fs:
(A) A description of the goods or services requested and the type of contract.
(B) A concise summary of the protest and the Air Force position on the merits.
(C) If applicable, the required award date and rationale.
(D) A statement of the impact on the Air Force if award or performance is delayed 30, 60, or 90 days.
(E) A description of alternative methods for obtaining the required supplies or services (e.g., options, organic capabilities, purchase orders), including a detailed explanation of why such alternatives are not feasible.
(F) An estimate of termination costs if the protest is sustained and the contract terminated 30, 60, or 90 days after award.
(G) The name and telephone number of any point of contact at SAF or HQ USAF who knows the impact of delay in contract award or performance. (26)
This guidance, (27) while helpful, does not capture the depth and breadth of the deliberative process required by the COFC. This leads to one of two results, sometimes both. The first result is override decisions that the COFC deems to be unwarranted. The second is D&Fs that are not sufficiently documented and, thus, particularly vulnerable to challenge. Therefore, in addition to FAR 33.104 and MP 53333.014, Air Force acquisition personnel must consider recent guidance from the COFC and factor it into any override decision and supporting D&F.
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JUDICIAL REVIEW OF AGENCY OVERRIDES
Faced with a suit for declaratory or injunctive relief based on an alleged violation of the CICA, the COFC (28) will review the agency's actions under the Administrative Procedures Act (APA). (29) if the court finds, based on the administrative record, that the agency's justification is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law," (30) and that the protester meets the requirements for injunctive relief, (31) it can - and often does--enjoin award or continued performance. (32)
Some district courts initially refused to review best interests override...
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