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Small Business Contractor Entitled to Preliminary Injunction

A preliminary injunction was granted in a pre-award bid protest seeking to enjoin the government from evaluating a proposal solicited using full and open competition because, according to the Court of Federal Claims, the protester had a chance to succeed on the merits and demonstrated it would suffer irreparable harm if it did not receive equitable relief, the balance of the hardships weighed in favor of the protester, and the injunction served the public interest. The small business protester was the incumbent contractor on a contract to provide programmatic services in support of a weapon systems development. After the government chose to open the procurement to non-small businesses, the contractor challenged the decision, arguing the government's action was unreasonable and violated applicable procurement law, specifically the "Total small business set-asides" provision in the Federal Acquisition Regulation (FAR 19.502-2). In ruling on preliminary injunctive relief, a court weighs four factors: the likelihood of protester's success on the merits, irreparable harm to protester if the injunction is not granted, the balance of hardships on all the parties, and the public interest.

"Compelling Showings"

Here, the government challenged the protester's likelihood of success on the basis the court lacked jurisdiction, which is a predicate to qualify for success on the merits. The court, however, had previously rejected the government's jurisdictional challenge (53 CCF 79,067), and found unconvincing the government's argument the protester's failure to submit a response to the solicitation rendered it a non-interested party. An affidavit submitted by the protester stated it did not submit a proposal because it was unfairly "pre-judged" by the government to be "incapable of satisfying [the government's] requirements." Although the reasonableness of the government's determination and findings in support of using full and open competition could not be discounted, the court concluded the protester "made compelling showings with respect to the three other factors that outweigh the prognostication of [the protester]'s ultimate success on the merits." With regard to the second and third factors, the protester showed the irreparable harm it would suffer if the interim injunction were denied outweighed the harm the government might suffer. The contemplated delay would not unduly prejudice the government, but the risk of harm associated with continuing the procurement posed a greater danger to the protester in terms of both expense and opportunity costs. Finally, the public interest would be served by assuring the government follows appropriate procurement procedures. (Rhinocorps Ltd. v. U.S., FedCl, 53 CCF 79,095)

(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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