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Protesting Competition Restrictions on Procurements Lacking Advanced Acquisition Planning

Acquisition planning on U.S. federal contracts requires the contracting activity to coordinate and integrate the efforts of all personnel responsible for the acquisition via a comprehensive plan that fulfills the government’s requirements in a timely manner and at reasonable cost. The Competition in Contracting Act (CICA) of 1984, implemented by Federal Acquisition Regulations (FAR) Part 6, mandates full and open competition in federal procurement. Consequently, while there are limited exceptions enumerated in FAR 6.3, federal agencies must generally use competitive procedures in procuring products and services. Furthermore, federal agencies are expressly prohibited from entering contracts for property or services by utilizing non-competitive procedures when they have failed to properly plan the procurement in advance.

Contractors looking to challenge the Government’s use of non-competitive procedures in such improperly planned procurements must be prepared to demonstrate that the agency’s decision was unreasonable under the particular circumstances of that procurement. In 2014, the Bureau of Indian Affairs (BIA), an agency under the Department of Interior (DOI), was involved in a procurement contract for technology services. The procurement at issue was a Buy Indian Set-Aside conducted under the Buy Indian Act of 1910, and the eventual contract was awarded to an eligible non-incumbent contractor. However, a week before the conclusion of the predecessor contract, the incumbent contractor timely protested the award at the Government Accountability Office (GAO). In response, the BIA informed the GAO that it intended to take corrective action and requested that the GAO dismiss the incumbent’s protest.

BIA’s corrective action involved (i) termination of the awardee’s contract for the Government’s convenience, (ii) cancellation of the solicitation, (iii) revaluation of the agency’s procurement approach, and (iv) the issuance of new solicitation(s) to fulfill the requirement. Since the revaluation of the procurement approach and issuance of new solicitation required additional time, the BIA issued a bridge contract on a sole source basis to the incumbent contractor responsible for the GAO protest. The bridge contract was issued for a six-month base period along with a six-month option allegedly designed to meet BIA’s information technology (IT) needs in the interim. The awardee filed a complaint at the Court of Federal Claims (COFC) the same month requesting that the Court issue a temporary restraining order and a preliminary injunction enjoining the BIA from procuring IT services at issue through the sole-source bridge contract. As the plaintiff at COFC, the awardee alleged that the BIA’s corrective action in response to the incumbent’s protest, including the sole-source award of the bridge contract by restricting competition, was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.

The COFC agreed with the awardee and found it sufficiently likely that the agency failed to follow competitive procedures to issue a preliminary injunction enjoining performance on the bridge contract. The Court began its analysis by outlining the four factors a plaintiff must establish to obtain a preliminary injunction, stating that while no one factor is dispositive to the Court’s inquiry, a factor's weakness may be overcome by the strength of other factors. Notably, however, the plaintiff must establish the existence of the first two factors to be entitled to a preliminary injunction as they are deemed most critical.

o The plaintiff is likely to succeed on the merits.

o The plaintiff is likely to suffer irreparable harm in the absence of preliminary relief.

o The balance of equities tips in the plaintiff’s favor.

o The injunction would be in the public interest.

· Likelihood of Success on the Merits

Initially, as required by the first factor, the Court needed to determine whether it would likely overturn the bridge-contract award decision under the Administrative Procedure Act’s (APA) arbitrary and capricious standard. In explaining the requisite standard for the inquiry, the Court noted that it may overturn any procurement decision where either the procurement official’s decision lacked a rational basis or the procurement procedure involved a violation of regulation or procedure. The Court determined that the bridge-contract award decision would likely be overturned because the procedure under which it was awarded likely involved an inappropriate use of the sole-source regulations. The Court reasoned that by awarding the new contract so close to the conclusion of the preceding contract, the BIA failed to adequately plan the procurement in advance. Due to this lack of advanced planning, a timely GAO protest by the incumbent required the BIA to invoke sole-source procurement procedures in the incumbent’s favor. The Court noted that while the BIA was not obliged to plan the procurement in a completely perfect or even an error-free fashion, it nevertheless had to conduct advanced planning in a manner that avoided the present scenario where the incumbent contractor could, through a timely GAO protest obtain the work on a sole-source basis for an additional year. In the Court’s view, such an outcome would turn the framework of sole-source procurement rules on its head, especially since federal agencies are expressly prohibited from utilizing sole-source procedures due to a lack of advanced planning. Since the BIA likely violated sole-source regulations in awarding the bridge contract, the Court determined that the plaintiff carried its burden for the first factor in proving that it was likely to succeed on the merits.

· Potential of Irreparable Harm

The second factor required the plaintiff to prove that it would likely suffer irreparable harm without preliminary relief. That is, the plaintiff would not have an adequate remedy without an injunction. The plaintiff likely met its burden for the second factor as well since the Court found that the BIA had alternative procurement methods at its disposal that would have avoided competitive harm to the plaintiff.

· Balance of Equities

In deciding the third factor, the Court ruled that the balance of equities was also in the plaintiff’s favor. The Court reached this determination by considering the harm an injunction would cause to the BIA and the incumbent contractor and balancing it with the harm caused to the plaintiff. The court pointed to the fact that BIA had alternative procurement methods at its disposal to procure the IT services under the contract. Additionally, its lack of advanced planning caused the present scenario. Therefore, any short-term delays that the BIA suffered due to the injunction were more than balanced out by the plaintiff and the general public’s long-term interests of ensuring federal contracts are awarded competitively and that exceptions such as the sole-source exception at issue were only used when necessary.

· Public Interest

Finally, the Court also agreed with the plaintiff on the fourth and final factor in deciding that granting a preliminary injunction would be in the public interest. The Court reiterated the general public interest in honest, open, and fair competition in the procurement process. It decided that the BIA abused its discretion by authorizing a sole-source bridge contract and limiting competition in favor of the incumbent contractor. Since preserving the integrity of the competitive process is firmly in the public interest, the Court decided that an injunction enjoining performance on the sole source bridge contract until a follow-on contract was awarded was also in the public interest.

The Court ultimately found that the prerequisites for issuing a preliminary injunction were met, and performance on the sole source bridge contract was enjoined, reducing its eventual performance period from one year to a little over three months. While the Court’s decision in this case was primarily based on a lack of advanced procurement planning by the Government, it also involved an improper use of sole-source procurement procedures. When protesting procurements based on lack of advanced planning, prospective contractors should show that the Government failed to take necessary actions to promote competition. This can include inadequate acquisition planning procedures that unduly restrict competition. In such situations, Contractors should remember that a lack of advanced planning does not excuse the government from its obligations to ensure competitive procedures are followed in federal procurement.

This Bid Protests Insight provides a general summary of the applicable law in the practice area and does not constitute legal advice. Contractors wishing to learn more are encouraged to consult the TILLIT LAW PLLC Client Portal or Contact Us to determine how the law would apply in a specific situation.