Protest challenging agency’s decision to override CICA stay is denied. The court found that the contract at issue provided IT services essential to national security. The agency did not have reasonable alternatives to overriding stay. Also, the cost of proceeding with the override did not outweigh the benefits of the override. Moreover, the override did not have an adverse impact on competition or the integrity of the procurement process.
The Army awarded a task order to Science Applications International Corp. (SAIC) to provide network operations and maintenance services focused in South Korea. An unsuccessful offeror, STG, filed a protest with GAO challenging the award. As a result of the protest, the automatic stay under the Competition in Contracts Act precluded the Army from proceeding with performance of the task order.
The Army asked the incumbent, General Dynamics, if it was amenable to continue performance under a bridge contract during the stay, but the company declined. The Army then issued a Determinations and Findings stating that override of the CICA stay was warranted because performance of the task order was necessary to maintain the Pacific Command’s IT network in South Korea.
STG filed a complaint with the Court of Federal Claims challenging the Army’s decision to override the stay. STG claimed that the Army’s Determinations and Finding contained only generic unsupported statements that did not justify the override. SAIC intervened, and the parties moved for judgment on the administrative record.
As an initial matter, the government argued that STG was not an interested party with standing to challenge the stay. The court quickly disposed of this argument, noting that by bidding on a procurement that was stayed pending a GAO protest, a protester has enough of a direct economic interest in the procurement and has standing to challenge a CICA stay at the COFC.
As to the merits of STG’s arguments, the court noted that in Reilly’s Wholesale Produce v. United States, 73 Fed. Cl. 705 (2006), the court had set forth factors for evaluating an override determination. While the Reilly factors were not binding, the court found that they provided a useful template for evaluating STG’s challenge to the override because the Army had relied on those factors in its Determination and Findings.
The first Reilly factor is whether significant adverse consequences will occur if the stay is not overridden. STG argued that the Army had failed to explain how overriding the stay would protect American interests from adverse consequences. But the court found that IT services at issue were important and necessary to the success of operations in Korea, and the lack of services would have far-reaching consequences if the stay were not overridden.
The second Reilly factor is whether reasonable alternatives exist that adequately address the circumstances. The court found that reasonable alternatives did not exist. The Army had asked the incumbent, General Dynamics, to continue performance with a bridge contract, but the company declined. STG claimed that the Army made no attempt to negotiate with General Dynamics. But the court reasoned that General Dynamics may not have been able to successfully perform the contract anyway. General Dynamics’ performance as the incumbent had been on a downward trend. Even if the company had been awarded the bridge contract, there was little evidence that it would have been able to retain qualified staff, and there was a high risk of mission failure. The court determined that the Army’s decision to not continue with General Dynamics was rational.
The third Reilly factor asks how the cost of proceeding with the override, including the cost associated with GAO sustaining the protest, compares to the benefits of the override. STG complained that the Army’s analysis did not provide any actual cost data. The court, however, found that the benefits at issue—namely, the Army’s readiness, the safety of the American and South Korean public—could not be quantified. They were, nonetheless, worthy of consideration. The court found that the Army’s cost benefit analysis was rationale.
Finally, the fourth factor of the Reilly test considers the impact of the override on competition and the integrity of the procurement system. The court found that the Army had sufficiently considered the effect of the stay on competition and the procurement system. In fact, the Army had not initially sought an override; rather, it had wanted General Dynamics to continue with a bridge contract. Ultimately, the Determination & Findings adequately demonstrated the Army had considered the impact on competition.
STG is represented by Jamie F. Tabb, Tyler Robinson, Elizabeth Krabill Macintyre, and John Satira of Vinson & Elkins LLP. The intervenor, SAIC, is represented by James McCullough and Michael Anstett of Fried, Frank, Harris, Shriver & Jacobson LLP. The government is represented by Amanda L. Tatum, Douglas K. Mickle, Robert E. Kirschman, Jr., and Joseph H. Hunt of the Department of Justice as well as Major Abraham Young of the U.S. Legal Services Agency.
