United States: Stays Of Contract Award And Performance (Post-Award Protest Primer #6)

Last Updated: August 23 2017
Article by Daniel E. Chudd and James A. Tucker

Today we'll discuss stays of award and performance during the pendency of a bid protest. There are two kinds of protest stays: pre-award stays and post-award stays. Although the former are outside the scope of this primer, we'll briefly address them first for the sake of completeness.

Stay of Contract Award

Pre-award protests, as a reminder, usually involve challenges to the terms of a solicitation or to exclusion of an offeror from the competitive range. Generally, in GAO and agency-level protests, challenges to the solicitation must be filed before the date set for submission of proposals (or, for improprieties introduced by an amendment, by the date set for the next revisions to proposals), and all other grounds must be raised within ten days of when the protester knew or should have known of the basis of protest.

When a protest is filed with the GAO or directly with an agency before contract award, the contracting officer is generally prohibited from proceeding to award the contract until the protest is resolved. FAR 33.103(f)(1); FAR 33.104(b)(1). This is the pre-award stay of contract award. It does not apply to protests filed at the Court of Federal Claims.

This stay prevents contract award, but it does not prevent the agency from proceeding with the other pre-award stages of the procurement, including receiving proposals, conducting discussions, and evaluating offers. And, as we'll see in a moment, agencies can override both the pre-award and post-award stays under certain circumstances.

Stay of Contract Performance

For protests filed with an agency or the GAO after contract award, there is a stay of contract performance, provided the protester meets special timeliness standards. This is sometimes referred to as the "Competition in Contracting Act (CICA) stay." It does not apply to protests filed at the Court of Federal Claims. Congress intended the CICA stay to preserve the status quo during the pendency of a GAO bid protest. Without the stay (as was often the case before the stay was instituted), the challenged awardee might begin and perhaps complete a substantial portion of the work by the time the protest is adjudicated. If the protest was meritorious, the absence of the performance stay often would result in the victorious protester being left with a less meaningful remedy, or no meaningful remedy at all. That remains true today in protests where the stay is not triggered or is overridden.

When a protest is received by the agency within ten days after contract award or within five days after a required debriefing (when that exception applies), the contracting officer must direct the awardee to stop performance of the contract until the protest is resolved. FAR 33.103(f)(3); FAR 33.104(c)(1). Pursuing an agency-level protest first does not toll the clock for obtaining a stay of a later-filed GAO protest: If your post-award agency-level protest is denied after the ten-day/five-day clock has run out (as it almost always will have done), you can still go to the GAO for a second try, but you will not get a stay of performance.

Note that, to trigger the stay in a GAO protest, the agency must receive notice of the protest from the GAO within ten days after award or within five days after a required debriefing. If the agency receives notice directly from the protester on the last day, but does not hear from the GAO until the following day, the agency is not required to stay performance. That means a protester cannot wait until the close of business on the last day to file its protest. To be sure to obtain the stay, it is a good practice to aim for a filing no later than noon on the last day. That gives the GAO ample time to notify the agency of the protest, and gives the protester the opportunity to contact the GAO after a few hours to be sure that the Agency has been notified.

It's also worth repeating a point we made when discussing GAO timelines in general: the deadline for triggering a stay of performance runs on different rules from the deadline for filing a timely GAO protest. Usually (but not always), the deadline for the CICA stay is prior to the deadline for filing a timely GAO protest.

A practical effect of the performance stay is that an incumbent contractor often is given a contract extension (or a bridge contract) to continue the old contract while award of the new contract is sorted out. Some critics of the current bid protest system have pointed out the moral hazard presented if an incumbent that has lost a recompetition can eke out 100 more days of performance simply by filing a protest. Although that sort of litigation gamesmanship undoubtedly occurs, in our experience it is quite rare that an incumbent will protest a loss unless the incumbent believes in good faith that the procurement was flawed.

COFC Protests

Neither of the automatic stays applies to protests filed at the Court of Federal Claims. To get a "stay" at the court, the protester must file for a preliminary injunction. The court considers injunctions to be extraordinary equitable relief, to be granted only upon an initial showing that the usual injunction factors (likelihood of success on the merits, balance of hardships, irreparable harm, and the public interest) weigh in favor of the protester. That is a very high bar to meet, especially before the administrative record has been produced. Occasionally the Department of Justice, working with the procuring agency, will voluntarily agree to a stay, thus avoiding the need to file and argue a motion for a preliminary injunction. The difficulty in obtaining a preliminary injunction at the court is one of the reasons that GAO is a far more popular forum for filing protests.

Stay Overrides

As with most things in this primer, the award and performance stays occur as a general rule, and there are exceptions. The governing statute and regulations provide that an agency may override stays. It is fairly rare for this to happen, and the statute foresees that only extraordinary circumstances will justify an override, but overrides do occur.

For pre-award protests, an agency may override a stay of award if the head of the contracting activity, on a nondelegable basis, makes a written finding that: (i) urgent and compelling circumstances which significantly affect the interest of the United States will not permit awaiting the decision of the GAO; and (ii) award is likely to occur within 30 days of the written finding. FAR 33.104(b)(1). For post-award protests, an agency may override a stay of performance if the head of the contracting activity, on a nondelegable basis, authorizes performance upon a written finding that (i) performance will be in the best interests of the United States; or (ii) urgent and compelling circumstances that significantly affect the interests of the United States will not permit waiting for the GAO's decision. FAR 33.104(c)(2).

In the unlikely event of a stay override, a protester may bring a direct challenge against the override by filing a new suit in the Court of Federal Claims. A significant body of case law has developed tracing the contours of what an agency may (and what it must) consider when determining that "the best interests of the United States" or "urgent and compelling circumstances" justify an override of the statutory stays. That discussion is outside the scope of this GAO protest primer, but we will dedicate a future blog post to this topic.

Up until now, we've mainly been discussing procedural matters. Our next post will begin to dive into the substantive grounds of protest.

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Daniel E. Chudd
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Emails

From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.