Motion for a temporary restraining order and preliminary injunction barring the agency from overriding an automatic stay of performance pending the outcome of a bid protest is denied, where the agency reasonably concluded that it would prevail on the merits of the protest case and where the services provided supported an urgent and compelling law enforcement need. The agency also reasonably concluded that it should not award a sole-source bridge contract to the incumbent—a non-8(a) eligible small business—to provide services on a procurement that had been set aside for 8(a) firms.
Safeguard Base Operations LLC moved for a temporary restraining order and preliminary injunction enjoining the Department of Homeland Security Federal Law Enforcement Training Centers from overriding an automatic stay of performance of a contract for dormitory maintenance services, pending the outcome of its challenge to the award of this contract to B&O Joint Venture LLC.
The procurement at issue has been subject to multiple protests and corrective actions. After both a pre-award and post-award protest, the agency took corrective action to reevaluate proposals. During each corrective action, the agency temporarily extended the incumbent contract of SRM Group Inc., one of the members of the Safeguard Base Operations join venture, to allow services to continue. After the agency affirmed its initial decision to award the contract to B&O, Safeguard protested a third time. However, this time the agency allowed SRM’s contract to expire. The agency then proceeded with the transition of services to B&O, overriding the mandatory CICA stay of performance.
Safeguard challenged the override, seeking a temporary restraining order and preliminary injunction blocking the agency from continuing performance with B&O pending the outcome of its third protest. The plaintiff argued the override decision was arbitrary and that neither of the agency’s justifications were rational or defensible under the four-factor test for a CICA override.
Safeguard argued that it was likely to succeed on the merits of its case and that the agency had not shown that its override decision was supported by an urgent and compelling need. DHS reasoned that delaying performance could lead to the cancelation of classes at the center, which it concluded would be detrimental to the public good of training law enforcement officers. However, Safeguard argued that this possible consequence did not reflect a threat of immediate harm. Further, Safeguard noted this harm could be avoided if DHS simply extended SRM’s incumbent contract for a third time.
Safeguard also argued the agency failed to support its assertion that an additional bridge contract would not be feasible or proper. In its decision, DHS asserted that Safeguard’s costs under the previous bridge contracts had risen dramatically from the cost to perform the base contract. However, Safeguard noted that B&O’s proposed price for the new contract was higher than its own proposed price, and higher than what it would charge under the bridge award. Further, the plaintiff argued that the agency cannot justify a CICA override based on alleged cost difference of this type.
In response, the agency maintained it reasonably concluded Safeguard’s protest was unlikely to succeed on the merits. The agency also argued that the risk to its training classes and the resulting harm were real, as a delay in service would likely result in the cancelation of classes and delay in the deployment of new federal law enforcement personnel. DHS also noted that it previously determined to award SRM the sole-source bridge contracts based on this same unusual and compelling urgency.
The agency also noted that while the Safeguard JV was an eligible 8(a) small business, SRM had graduated from the program since its original contract was awarded in 2012. The government argued it was inappropriate to continue to award the incumbent bridge contracts to perform on a procurement intended for 8(a) firms.
The agency also explained the value of a bridge contract required to cover the 120-day period required to complete the GAO protest process would exceed $1 million and therefore it would have been required to provide written notice of the award to Congress five days before performance began. However, based on the date of Safeguard’s most recent protest filing, the agency did not have five dates to prepare a notification prior to the expiration of the final bridge contract. Because DHS had already notified Congress of the award to B&O after the initial source selection decision, the agency decided to proceed with performance.
The court denied the motion, finding that Safeguard had not demonstrated the agency’s decision to override the CICA stay was arbitrary or capricious.
First, the court found the agency reasonably examined the protest grounds and concluded that Safeguard was unlikely to succeed on the merits. The agency explained the protester failed to price a series of CLINs in the amount of $6.1M as specifically directed by the solicitation, which rendered its price proposal non-compliant. Also, because the FAR prohibits changing an offerors price as a result of a price realism analysis, the agency could not compare Safeguard’s price to other proposals in the trade-off analysis. Further, B&O’s proposal was more highly rated technically. Given the difference in technical ratings and the inability to compare Safeguard’s price during the best value tradeoff, the agency concluded it was likely to prevail in the protest.
The court also found the agency reasonably considered the impact of an override on the integrity of the procurement process. The court found the agency’s concern about a break in services to be reasonable and sufficient to justify an override. The agency also reasonably concluded that commencing performance on the follow-on contract would allow B&O to immediately commence required upgrades to the facility, which were needed to alleviate overcrowding.
The court also found reasonable the agency’s concerns about awarding a bridge contract to a non-8(a) participant when the requirement was set aside for such firms. Regardless of whether Safeguard prevails on its second post-award bid protest at the GAO, SRM cannot be the awardee under the solicitation because it is not eligible to receive an 8(a) set-aside contract. Inevitably, the agency was going to have to transition away from SRM Group, and the agency’s decision to transition to the current awardee was rational. Therefore, the court agreed that the agency reasonably concluded that override was in the best interest of the government.
The court also found that Safeguard would not suffer irreparable harm. Because Safeguard is not the incumbent nor is prepared to provide the services, the court held that the protester will not lose the ability to perform or compete for the work. Further, Safeguard’s ability to seek a remedy through GAO is preserved. If GAO sustains Safeguard’s bid protest, its opportunity to compete for a contract or a portion of a contract under the solicitation will be maintained. Additionally, the court found that SRM would not be harmed, noting that its incumbent contract expired in December 2017, notwithstanding its continued performance under sole-source bridge contracts, and that it did not have a right to further bridge contracts.
The court also found the balance of hardships weighed in favor of the agency, which would be prevented from receiving necessary services from B&O should a TRO be granted. The agency would have to forgo these services until the protest is resolved or until it could award a new bridge contract. As the court already found the agency was reasonably concerned about a break in services, it agreed that the balance of hardship fell towards the agency.
Finally, in weighing the public interest, the court found the agency’s ability to provide law enforcement training to be a compelling interest. Further, the agency also will further maintain the integrity of the 8(a) program by having an 8(a) contractor provide services that have been set-aside for 8(a) eligible contractors. Finally, although the automatic stay is no longer in place, the GAO process to review the agency’s procurement process remains active and in place.
Safeguard Base Operations LLC is represented by Alexander B. Ginsberg, Alex D. Tomaszczuk, Aaron S. Ralph, and Kevin R. Massoudi, Pillsbury Winthrop Shaw Pittman, LLP, and by Diana Parks Curran and Hadeel Masseoud, Curran Legal Services. The government is represented by P. Davis Oliver, Senior Trial Attorney, Commercial Litigation Branch, Civil Division, Department of Justice, with whom were Douglas K. Mickle, Assistant Director, Commercial Litigation Branch, Robert E. Kirschman, Jr., Director, Commercial Litigation Branch, and Joseph H. Hunt, Assistant Attorney General. Of counsel was James C. Caine, Attorney, Federal Law Enforcement Training Centers, Glynco, GA.
B&O Joint Venture is represented by Richard W. Arnholt and Todd R. Overman of Bass, Berry & Sims PLC.
