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Override of Automatic Stay Did Not Address All Factors

The government's override of an automatic stay of a services contract was set aside by the Court of Federal Claims because the rationale for the override decision was arbitrary, capricious, and an abuse of discretion. The underlying Government Accountability Office protest arose from a contract award for services involving seized, blocked, and forfeited personal property. After the protest was filed, the head of the contracting activity authorized an override of the automatic stay of contract performance imposed by the Competition in Contract Act (31 USC 3553). According to the Determination & Findings, the services were critical and the override was in the government's best interests because the contractor's resources were needed to handle seizures of potentially contaminated goods that might otherwise enter the stream of commerce, and to process seized weapons, explosives, and hazardous substances that impacted public safety. The D&F also asserted that, without the contractor's warehousing services, backlogs leading to mistrials in pending criminal and civil court cases could occur.

Alternatives Not Considered

The court declared the override void and reinstated the automatic stay, finding the government did not seriously consider two of the four factors set forth in Reilly's Wholesale Produce v. U.S. ( 50 CCF 78,648). First, the government did not consider any alternatives to an override. The awardee was the incumbent that had been performing under a sole source bridge contract that contained an unexercised option. However, the government made no attempt to exercise the option, and it did not discuss the possibility of another bridge contract with the incumbent. Second, the government made no serious attempt to analyze the effect of the override on the integrity of the procurement system. Since the awardee stood to gain financially from the override, the government's "cursory" conclusion the awardee would not achieve a significant competitive advantage was unsupported by the record and constituted a failure to "consider an important aspect of the problem." Finally, the court was "troubled" by the contracting officer's failure to discuss cost in the decision-making document presented to the HCA. ( URS Federal Services, Inc. v. U.S., et al., FedCl, 56 CCF 79,715)




(The news featured above is a selection from the news covered in the Government Contracts Report Letter, which is published weekly and distributed to subscribers of the Government Contracts Reporter. )


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