Federal Circuit Affirms Ruling That Government Cannot Override Contract Protest Stay Without Cause

The dispute arose from a lucrative 10-year Strategic National Stockpile contract for the National Capitol Region. Life Science Logistics, which has operated multiple SNS sites since 2007 and holds more such contracts than any other entity, lost the contract to competitor Integrated Quality Solutions in October 2023.

When LSL protested the award to the Government Accountability Office, the Competition in Contracting Act automatically stayed performance of the new contract for up to 100 days. But the General Services Administration overrode that stay just 17 days later, determining that "urgent and compelling circumstances now exist that significantly affect the interests of the United States and do not permit waiting for the GAO decision."

LSL sued in the Court of Federal Claims, arguing the override was arbitrary and capricious. The trial court agreed, granting declaratory relief without requiring LSL to prove the traditional four factors for preliminary injunctions: likelihood of success, irreparable harm, balance of equities, and public interest.

Circuit Judge Stark, writing for the unanimous panel, affirmed with forceful language about congressional intent. "In making this determination, we are mindful of the adverse consequences that might arise were we to decide otherwise," Stark wrote. "Were we to hold that a protestor must, even to obtain a declaration that an override is unlawful, prevail on the four-factor test, we would undesirably incentivize the government to override more (if not all) CICA stays."

The Federal Circuit reached the merits despite the underlying dispute becoming moot when GAO sustained LSL's protest in February 2024. The court applied the "capable of repetition yet evading review" exception, noting that CICA disputes unfold too quickly for full appellate review within the statutory 100-day window.

The ruling reinforces that Congress intended CICA's automatic stay provision to provide meaningful protection to bid protesters without additional judicial hurdles when agencies attempt arbitrary overrides.