The Competition in Contracting Act (CICA) prohibits an agency from authorizing performance of a contract while a bid protest is pending if the protest was filed within either ten days after the date of the contract award or within five days after a requested and required debriefing date. The only exception to this requirement is that an agency may authorize performance of a contract notwithstanding a pending protest if it first makes a written finding that performance of the contract is in the best interests of the United States or urgent and compelling circumstances significantly affecting the interests of the United States will not permit waiting for the decision of the Comptroller General concerning the protest.
Although the CICA stay is mandatory, the U.S. Government Accountability Office (GAO) does not have any mechanism for actually enforcing the stay. If an agency violates the CICA stay during a pending GAO proceeding, the protestor must initiate separate litigation in the Court of Federal Claims in order to force the agency to maintain the status quo. This can be a powerful remedy as illustrated by a recent scathing decision by the Court which led the Court to contemplate sanctioning the agency for refusing to institute the stay.
In May 2016, the Defense Intelligence Agency issued a solicitation for three blanket purchase agreements for IT-related services. On September 27, 2016, the agency notified the disappointed bidder, Favor TechConsulting “FTC) that the blanket purchase agreements were awarded to other companies. Ten days later, on October 7, 2016, FTC filed a bid protest with the GAO challenging the agency’s evaluation criteria and asserting that it was entitled to a CICA stay. Six days later, the agency notified the protestor that the blanket purchase agreements were actually awarded on September 26, 2016 and that the automatic CICA stay would not be instituted because the protest was untimely. One day later, FTC took steps to commence an action against the agency in the Court of Federal Claims seeking an injunction requiring the agency to institute the CICA stay while the protest before the GAO was pending. The end result did not go well for the agency.
Remarkably, the agency argued that the automatic stay deadline should be measured from the date of award, regardless of the knowledge of the protestor. The Court rejected this argument, noting that the automatic stay cannot function as intended if potential protestors do not know how long they have to file before they lose their right to an automatic stay. Furthermore, the Court found evidence that the contracts were not actually signed by the contracting officer until September 27, even though the agency’s internal systems indicated they were signed on September 26. Ultimately, the court held that the agency’s refusal not to institute a stay was arbitrary, capricious, contrary to law and an abuse of agency discretion and that the agency must institute the stay until the protestor’s GAO bid protest is resolved. In addition, the court ordered the agency to explain in future briefing why it should not be sanctioned and required to pay the protestor’s legal expenses for refusing to comply with its legal obligations. The protestor’s decision to enlist the court to do what GAO would not do dramatically changed the posture of the bid protest.