Unlike bid protests filed at the Government Accountability Office (“GAO”), there is no automatic Competition in Contacting Act (“CICA”) stay that applies to protests filed at the U.S. Court of Federal Claims (“COFC”). Instead, a protester wishing for the contract award to be halted during the pendency of a COFC protest has two avenues of relief: (1) the government agrees to voluntarily stay contract performance/award during the pendency of the protest, or (2) seek a temporary restraining order (“TRO”) or preliminary injunction from the COFC enjoining contract performance/award during the pendency of the protest. Until now, obtaining a TRO required, at minimum, the protester demonstrate a likelihood of success on the merits (and that it will suffer irreparable harm absent injunctive relief). But, a COFC decision this week may reflect a significant change to the COFC’s standard for granting a TRO in a bid protest case.
The Traditional Standard
In deciding to whether to grant a TRO, the COFC will weigh four factors: (1) whether the protester is likely to succeed on the merits of the case; (2) whether the protester will suffer irreparable harm if the Court withholds injunctive relief; (3) whether the balance of hardships to the respective parties favors the grant of injunctive relief; and (4) whether it is in the public interest to grant injunctive relief.
While this is a four factor balancing test, the COFC (just last year) stated that a TRO could not be issued in a bid protest case unless, at minimum, the protester demonstrated a likelihood of success on the merits.
The Standard Applied in Continental Services Group v. United States
In Continental Services Group, Inc. v. United States (No. 17-449 March. 29, 2017) the COFC granted a TRO in favor of a protester without a showing of likelihood of success on the merits.
In the subject case, Continental Services Group (“ConServe”) had initially filed a bid protest at GAO, which triggered an automatic CICA stay. But on March 28, ConServe withdrew its GAO protest (thereby ending the automatic CICA stay associated with ConServe’s GAO protest) and filed a bid protest complaint at the COFC. The next day ConServe filed a motion for a TRO. According to ConServe, the government had been undermining the automatic CICA stay by transferring work to be performed under the stayed contracts to other contractors to circumvent or moot ConServe’s pending bid protest. The government advised the COFC that it could not currently commit to a voluntary stay of performance pending resolution of ConServe’s bid protest before the COFC.
In considering ConServe’s motion for a TRO, the COFC held that the first, third and fourth factors all weighed in favor of injunctive relief. However, the COFC elected not to consider the second factor (protester’s likelihood of success on the merits) at all:
Regarding the second factor, since the Government has not yet produced the Administrative Record and the parties have not had an opportunity to brief the merits of this bid protest, the court is not in a position to decide Continental Services’ likelihood of success.
Nevertheless, the COFC concluded that “the weight of the factors is in favor of injunctive relief” and granted the TRO, even without a finding of likelihood of success on the merits.
There is no question that the COFC’s decision is a departure from its prior case law, which required a finding of likelihood of success on the merits in order to grant a TRO. Why is the COFC changing its tune? It’s possible that the COFC is putting additional emphasis (due to another recent case) on ensuring that a protest is not potentially mooted by the government allowing performance to continue during the pendency of the protest.
It’s probably too early to tell if this really represents a change to the standard applied by the COFC, or if this new standard will be isolated to a single case. It’s also unlikely that this new standard could be applied to preliminary injunctions (as opposed to TROs, which are more limited in duration), given Federal Circuit precedent on that issue. However, if this new standard is applied in future cases where protesters seek TROs, then COFC may become a more inviting forum for protests, and it may shift some bid protest traffic from GAO to the COFC.