On April 15, the Federal Circuit issued a decision clarifying the burden a protestor must meet when challenging an agency’s override of the Competition in Contracting Act’s (CICA) automatic stay of performance. In Life Science Logistics, LLC v. United States, the court held that when challenging an override of CICA’s automatic stay of performance after a protest is filed at the GAO, a protestor need not demonstrate entitlement to an injunction under the standard four-factor equitable relief test. Instead, the protestor only needs to show that the agency’s override decision was arbitrary and capricious.
The decision is significant because CICA’s automatic stay is one of the benefits of filing a timely GAO protest. When a GAO post-award protest is filed in time to trigger CICA’s automatic stay, contract performance must stop while the protest is pending. For pre-award protests, the CICA stay prohibits award while the protest is pending. Because by statute, protests must be resolved within 100 days, the stay of performance may only last 100 days. An agency may override the stay only after making a written finding that performance is in the best interests of the United States or that urgent and compelling circumstances significantly affecting the interests of the United States will not permit waiting for GAO’s decision.
While an agency can override a stay for either reason, overrides based on urgent and compelling circumstances impose a higher bar because of the impact on relief should the underlying GAO protest ultimately be sustained. Where an agency overrides on best interests grounds, if the GAO sustains the protest, CICA allows the GAO to make a recommendation “without regard to any cost or disruption from terminating, recompeting, or reawarding the contract.” 31 U.S.C. § 3554(b)(2). In contrast, CICA authorizes the GAO to “take such costs or disruption into account when deciding what to recommend” in terms of relief after sustaining a protest where a stay is overridden due to urgent and compelling circumstances. Id.
The Life Science Logistics Decision
The case arose from a GSA procurement for the operation of a Strategic National Stockpile facility in the National Capital Region. After GSA awarded the contract to Integrated Quality Solutions LLC, Life Science Logistics filed a timely GAO protest, triggering CICA’s automatic stay of performance. GSA then issued a determination and findings overriding the stay based on both urgent and compelling circumstances and the best interests of the United States. Life Science Logistics challenged the override at the Court of Federal Claims, arguing that the agency’s determination was arbitrary and capricious in violation of the Administrative Procedure Act.
The Court of Federal Claims agreed with Life Science Logistics and issued a declaratory judgment finding the override arbitrary and capricious, therefore the CICA stay of performance was reinstated. The court rejected the government’s argument that Life Science Logistics also had to prove that it was entitled to an injunction using the traditional four-factor equitable relief test: likelihood of success on the merits, irreparable harm, balance of hardships, and public interest. On appeal, the Federal Circuit affirmed. The court explained that CICA creates a statutory default rule that, when a timely GAO protest is filed, performance is automatically stayed for up to 100 days. The agency may override that stay only if it makes one of the findings authorized by CICA. If a court concludes that the override was arbitrary and capricious, the override is invalid and the statutory stay is restored.
The Federal Circuit emphasized that “there is no place in this statutory regime” for courts to add the judge-made four-factor test as an additional burden on the protestor, and Congress did not impose it as a condition of the CICA stay. Rather, the timely filing of the GAO protest itself triggers the stay. In the Federal Circuit’s view, Congress likely did not intend for a protestor to face an additional burden after proving that an agency unlawfully overrode the CICA stay. Once the protestor shows that the override was arbitrary and capricious, the protestor should not also have to prove irreparable harm, favorable equities, and that relief would serve the public interest.
The Federal Circuit also held that the appeal was not moot, even though GAO had already sustained Life Science Logistics’ protest and GSA had withdrawn the override. The court applied the “capable of repetition yet evading review” exception, reasoning that CICA stay override disputes are inherently short-lived because GAO must decide protests within 100 days. The court also found a reasonable expectation that Life Science Logistics and the government could face a similar dispute again, given the company’s repeated participation in Strategic National Stockpile procurements.
Why PGBA Did Not Control
The Federal Circuit rejected the government’s reliance on PGBA, LLC v. United States, which held that, in some bid protests, a request for declaratory relief may be treated as the functional equivalent of injunctive relief. In PGBA, the protestor sought a declaration that the agency’s award decision was unlawful and an order setting aside the award. Since that requested relief would have displaced the awardee and had the same practical effect as an injunction, the Federal Circuit held that the protestor had to satisfy the traditional equitable factors.
The court distinguished PGBA on two grounds. First, PGBA did not involve a CICA stay override. Second, Life Science Logistics sought narrower relief. It did not ask the Court of Federal Claims to vacate the award to Integrated Quality Solutions or direct the agency to award the contract to Life Science Logistics. Instead, it sought a declaration that GSA’s override determination was arbitrary and capricious. That distinction mattered because the declaration did not itself command the agency to take, or refrain from taking, any action. Rather, once the override was declared unlawful, CICA’s default rule took over, and the automatic stay was restored.
In other words, the Federal Circuit viewed the practical effect of the declaratory judgment as reinstating the statutory requirement as opposed to coercive judicial relief. The court therefore held that requiring Life Science Logistics to satisfy the four-factor test would improperly add a non-statutory burden to CICA’s automatic stay framework. The decision leaves PGBA intact for cases where a protestor seeks declaratory relief to obtain what is, in substance, coercive injunctive relief, such as setting aside an award.
Active Deployment Systems Shows the Importance of Framing the Relief
A recent Court of Federal Claims decision, Active Deployment Systems, LLC v. United States, illustrates the significance of Life Science Logistics. There, Active Deployment Systems (ADS) challenged an override of the CICA stay after filing a GAO protest concerning a procurement for temporary housing and related facilities for Customs and Border Protection trainees at the Federal Law Enforcement Training Centers’ Artesia, New Mexico facility. The agency relied on urgent and compelling circumstances, citing the need to house and train additional agents.
The Court of Federal Claims denied ADS’s motion for a temporary restraining order and preliminary injunction, and because ADS requested preliminary injunctive relief, the court applied the four-factor test. The court concluded that ADS was unlikely to show that the override was arbitrary and capricious, that any irreparable harm was weakened by ADS’s delay in filing suit, and that the balance of harms and public interest favored continued performance, considering the government’s asserted training and national security interests.
Importantly, the court acknowledged Life Science Logistics and explained that Life Science Logistics did not eliminate the need to analyze the four factors because ADS had moved for preliminary injunctive relief. Instead, the lesson was that ADS “could have simply moved for a declaratory judgment and avoided the four factors altogether.” That said, it seems unlikely that the strategy would have changed the result, given the conclusion that ADS failed to show the override was arbitrary and capricious.
But the distinction may matter in future CICA override challenges. A protestor seeking to restore the stay should consider whether declaratory relief is sufficient. If the requested relief is framed as a preliminary injunction, the Court of Federal Claims may still apply the more difficult four-factor test.
Active Deployment Systems also cites the Court of Federal Claims and Federal Circuit decisions in Safeguard Base Operations, a case in which Bass, Berry & Sims represented the awardee-intervenor, B&O Joint Venture. The court cited the Court of Federal Claims Safeguard decision for the traditional preliminary injunction standard and the Federal Circuit’s Safeguard decision for the proposition that the Reilly’s Wholesale factors do not bind the Court of Federal Claims and are not an indispensable aspect of agency rational basis.
For a more in-depth look at Safeguard, see our prior coverage here.
Key Takeaways
Life Science Logistics gives protestors a clearer path to challenge CICA stay overrides. If the goal is to restore the stay, a protestor may seek declaratory relief and focus on whether the agency’s determination and findings satisfy the arbitrary and capricious standard. The protestor does not need to separately satisfy irreparable harm or satisfy the traditional injunction framework.
At the same time, Active Deployment Systems is a reminder that timing matters. Contractors challenging an override should act quickly, especially where performance is already underway, or work could make later relief more difficult.
Please contact the author if you have any questions.