Federal Circuit Rejects Proposed Heightened Standard for Challenging CICA Stay Overrides

Article by: Nicholas Hopkins, Associate

In its recent Life Science Logistics, LLC v. United States decision, the Federal Circuit resolved an important question about the standard that applies to an agency’s attempt to override a Competition in Contracting Act (CICA) stay of contract award.

The CICA Stay, and How the Government Can Override It

At GAO, CICA’s automatic stay of contract award is one of the most important procedural protections available to government contractors. When a contractor files a timely GAO protest, CICA requires the agency to automatically pause the award or performance of the contract while the protest is pending. 31 U.S.C. § 3553(c). This stay preserves the status quo and ensures meaningful GAO review without artificial time pressure. Agencies may “override” the automatic CICA stay only based on a written finding that award or performance is in the “best interests of the United States” or that “urgent and compelling circumstances” justify moving forward. 31 U.S.C. § 3553(c)(2); (d)(3)(C).

The Contractor’s Remedy if the Government Overrides the CICA Stay

When the agency makes this determination, the protester must file an action at the Court of Federal Claims (COFC) challenging this decision in order to reinstate the stay. To succeed, the protester must establish that the agency’s decision was “arbitrary and capricious” under the Administrative Procedure Act. The government must have considered whether significant adverse consequences will occur if the stay is not overridden, if reasonable alternatives to the override exist, a cost benefit analysis of the override, and the impact of the override on competition and integrity in government procurement. If these factors were not considered, COFC will find that the decision to override the stay was arbitrary and capricious, and reinstate the stay. Overall, the process to reinstate the stay in the face of the government’s decision to override it is fairly complex, requiring the initiation of an action in a separate court outside of GAO, and scrutiny by a federal judge.

The Government’s Attempt to Raise the Bar for Contractor Challenges of Stay Overrides

In Life Science, the government appealed a ruling from the Court of Federal Claims that an agency’s CICA override determination was arbitrary and capricious. The government argued that the CICA stay was “coercive” and that the protester should be required to make the more comprehensive showing of harm required to obtain a preliminary injunction.  A preliminary injunction requires a showing of a likelihood of success on the merits, irreparable harm, a balance of the equities, and advancement of the public interest.

The contractor is not required to satisfy the traditional four‑factor test for injunctive relief, which is a much higher bar.

The court’s decision turned on Congress’ intention when crafting the statutory language. CICA deliberately creates an automatic stay that applies upon the filing of a timely GAO protest. If a protester shows that the agency arbitrarily or capriciously overrides that stay, the override is a nullity and the statutory stay is restored. Thus, the Federal Circuit determined the four-factor preliminary injunction test clashes with the intention of CICA. The Court held: “There is no place in this statutory regime for courts to superimpose the judge-made four-factor test governing equitable relief as an additional burden on the protestor. Congress explicitly imposed no burden whatsoever on the protestor in CICA.” In sum, courts may not add extra, judge‑made requirements that Congress did not include.

Takeaways for Contractors

This clarification matters significantly for contractors. The government’s position in this case would have required contractors to make a full injunctive‑relief showing to challenge improper overrides, which would have emboldened agencies to override stays with more regularity. The Federal Circuit specifically warned that such a rule would undermine CICA’s structure and shift unwarranted burdens onto protesters. This decision confirms that courts will focus on the legality and reasonableness of the agency’s override decision: when an agency fails to justify an override, contractors can obtain restoration of the stay without clearing additional hurdles.

Navigating GAO protests, CICA stays, agency overrides, and the Contractor’s burden in opposing the overrides requires timing and careful judgment, including careful attention to the agency’s CICA override rationale. If you have questions about CICA and how it impacts your options in the bid protest process, our team is ready to discuss how these rules apply to your procurement and your business objectives.