Court Upholds Bid Protest Stay Override

October 24, 2014

Earlier this week, the U.S. Court of Federal Claims ruled against a bid protester seeking to stop performance on NASA’s $6.8 billion commercial space program. The court’s ruling upheld NASA’s unusual decision to override the automatic stay of contract performance during a GAO bid protest.

Sierra Nevada Corp. protested to the GAO its exclusion from continuing NASA efforts to fund development of commercial spacecraft. NASA awarded the continuing work to Boeing Co. and Space Exploration Technologies.

Typically, disappointed offerors or bidders file bid protests with the GAO because of the federal statute known as the Competition in Contracting Act (CICA). Among other things, CICA requires agencies to stop performance of contracts that are timely protested — commonly known as the “CICA stay.” However, the statute also provides that agencies may override the CICA stay upon a written finding that “performance of the contract is in the best interests of the United States,” or “urgent and compelling circumstances that significantly affect interests of the United States will not permit waiting for the decision” by the GAO.

While a GAO protest triggers the CICA stay, only a federal court maintains the authority to direct a federal agency to enforce the stay. So, if an agency like NASA decides to override the stay, then the protester’s only recourse is to request an injunction from the U.S. Court of Federal Claims. The court this week could have enjoined NASA from continuing in performance of its contract. Instead, the court sided with NASA and allowed NASA to continue working with Boeing and SpaceX pending the protest decision.

 In addition to highlighting an unusual wrinkle in the normal bid protest process, this case also underscores the importance of venue selection in bid protests. Protests generally may be filed with the GAO, the Court of Federal Claims or the agency itself. Filing at the court usually is slower, more expensive and does not trigger the automatic CICA stay. On the other hand, as part of its bid protest procedure, the court can grant an injunction prohibiting the agency from moving forward. An agency might well face a tougher fight arguing against an injunction than it would in overturning the CICA stay.