Application for a preliminary injunction to enjoin performance of a contract is denied. The plaintiff filed a GAO protest challenging FEMA’s award of a sole-source contract for COVID-19 testing of federal employees. The protest triggered the automatic CICA stay, but FEMA decided to override the stay and continue performance. The plaintiff asked the court to enjoin FEMA’s decision overriding the stay. But the court found that all four injunction factors favored FEMA. To prevail on the merits, the plaintiff would have to show that no adverse consequences would result if the stay were reinstated. The court, however, noted that if the stay was allowed to stand, it could hamper FEMA’s ability to mitigate spread of the virus and jeopardize safety of FEMA employees. Also, the court found the plaintiff would not be harmed by the injunction, and even it was, the plaintiff’s harm did not outweigh the government’s interest in conducting rapid COVID testing. Finally, the public’s interest in health and wellness during a pandemic weighed in favor of allowing performance to proceed.
FEMA issued a sole-source contract to Wellness Coaches USA, LLC to provide rapid antigen COVID-19 testing for federal employees. Comprehensive Health Services, LLC (CHS) filed a protest with GAO challenging the sole-source award. CHS argued that FEMA was unable to show that the use of other than full and open competition was justified.
The protest triggered the automatic stay of performance under the Competition in Contracting Act. Due to the unusual and compelling urgency of the COVID pandemic, FEMA decided to override the stay and continue with performance of the contract. CHS filed suit with the Court of Federal Claims, asking the court to enjoin FEMA from proceeding with performance of the contract.
The court noted the four factors weighed in deciding whether to grant an injunction: (1) plaintiff’s likelihood of success on the merits, (2) prospect of irreparable injury to the plaintiff, (3) balance of hardships, and (4) the public interest.
CHS alleged that it was likely to prevail on the merits because FEMA had failed to weigh the impact of the override on the competition and the integrity of the procurement system. The court noted that another COFC case, Reilly’s Wholesale Produce v. United States, 73 Fed. Cl. 25 (2006), provided a useful analytical tool for reviewing whether a stay override is arbitrary. Under Reilly, the court considers: (1) whether significant adverse consequences will occur if the stay is not overridden, (2) whether reasonable alternative exist to the override, (3) costs associated with the override, and (4) the impact of the override on competition.
The court that FEMA’s override decision adequately considered these factors. Indeed, as to the first, significant-adverse-consequences factor, the FEMA had stated that any break in testing would hamper the agency’s ability to detect positive COVID cases, hinder efforts to mitigate spread of the virus, and jeopardize the agency’s ability to operate in safe conditions. As to potential cost, FEMA found that override was necessary to prevent human suffering of agency personnel and their close contacts. While the decision did not specifically consider the impact of the override on competition, it did consider the consequences if GAO were to sustain the protest, which indicated to the court that FEMA had not excluded the possibility of impact.
With regard to the irreparable injury, CHS claimed that it would suffer a competitive injury because it would lose the opportunity to compete for this contract as well as the experience and profit gained from performance. The court rejected this, finding that allowing performance to continue would not affect CHS’s ability to perform a contract or lose an opportunity to compete for a later contract. CHS was not the incumbent and it was not on-site ready to perform.
As to the balance of the hardships, the court found that the hardship njunctive relief would pose on the government outweighed the harm to CHS. If the court enjoined performance, FEMA would no longer be able to conduct rapid COVID testing. It would likely have to forgo COVID testing, suffer the adverse consequences of the virus, and seek a new testing contract. This disruption would impose a financial hardship on FEMA and negatively impact the number of people to be tested.
Finally, the court found, the public interest weighed against an injunction. During the uncertain times of a global pandemic, the public had an important health and wellness interest in allowing FEMA to issue rapid testing for responders.
CHS is represented by Elizabeth N. Jochum, Todd M. Garland, and Jessica L. Nejberger of Smith Pachter McWhorter PLC. The government is represented by John M. McAdams, III, Douglas K. Mickle, Robert E. Kirschman, Jr. and Jeffrey Bossert Clark of the Department of Justice as well as Rafael Lara, Matthew Lane, and Bruce James of the Federal Emergency Management Agency.
