In a recent bid protest, A.T. Kearney Pub. Sector & Def. Servs., LLC v. United States,[1] the U.S. Court of Federal Claims (COFC) created a wrinkle in its precedent when it denied the protester’s motion for a preliminary injunction. While obtaining permanent injunctive relief is arguably the most important goal of any bid protest brought at the COFC, obtaining preliminary injunctive relief, a stay of award or performance while the protest is resolved, can sometimes be equally significant for business purposes. The COFC’s decision in Kearney may signal a shift in its evaluation of motions for preliminary injunction, which could impact future outcomes for protesters who seek a stay until the protest is resolved.
The COFC considers four factors when deciding whether to grant a preliminary injunction:
- whether the protester is likely to succeed on the merits;
- whether the protester will suffer from irreparable harm if an injunction is not granted;
- whether the balance of hardships tips in the protester’s favor; and
- whether the public interest favors injunctive relief.
A protester “must establish the existence of both of the first two factors to be entitled to a preliminary injunction.”[2]
In Kearney, the COFC appears to have made it more difficult for protesters to establish that they will suffer irreparable harm by not being able to compete for task order awards under a multiple-award indefinite delivery, indefinite quantity (IDIQ) contract while the protest is pending. This may in turn make it more difficult for protesters to stop the government from issuing task orders under such contracts during that time.
For background on Kearney, the government issued a solicitation, seeking to award IDIQ contracts to all offerors that the government deemed acceptable under three evaluation factors. The government rated the protester’s proposal as unacceptable in one area, and the protester filed a post-award bid protest with the COFC challenging the agency’s evaluation and award decision.
After the protester filed its protest, the government issued a task order solicitation to the contract awardees. The expected value of the task order was $18.7 million and, according to the government, a portion of the task order is “one of the highest priorities within the [Department of Defense] and the Navy.” The protester, accordingly, filed a motion for a preliminary injunction, seeking to stop the government from issuing task orders under the IDIQ until the COFC resolved the protest, which could potentially result in the protester being eligible to compete for such task orders.
The COFC denied the protester’s motion. Regarding whether it would suffer irreparable harm without the injunction, the protester asserted that “if it is not granted injunctive relief, it will suffer irreparable harm because it will be deprived of the opportunity to compete for the currently projected task order under the contract as well as future task orders solicitations.”
The COFC, however, disagreed, holding:
A movant must establish more than just a “possibility” of irreparable harm and instead must show that irreparable harm is “likely.” Kearney has failed to meet this burden. The task order that has been identified is minimal in comparison to the ceiling value of the entire contract; the task order is valued at $18.7 million, less than ten percent of the entire contract value. Missing out on just the possibility to receive a small fraction of the overall award is not enough to constitute irreparable harm.
The COFC’s decision appears to depart from other COFC decisions that stand for the proposition that the lost opportunity to compete for future task orders does cause irreparable harm to protesters.[3] Indeed, Kearney is the only COFC case of which we are aware where the court has looked at the value of a task order in relation to the ceiling amount of an IDIQ contract to assess irreparable harm. Further, Kearney leaves an open question as to what evidence a protester must provide to establish that it will suffer irreparable harm if the COFC does not preliminarily prohibit the government from awarding task orders under a multiple-award IDIQ contract in a protest of that procurement, especially if the contemplated task orders are valued at less than ten percent of the entire contract.
Perhaps Kearney is an outlier, or perhaps it signals a shift in the COFC’s scrutiny of whether economic harm is sufficient to establish irreparable injury (especially in the context of a multiple-award IDIQ). In either case, until the COFC issues more guidance in this area, potential protesters should account for how their company will be irreparably harmed if unable to compete for and secure the award of certain task orders and why they likely would receive such awards if given the opportunity to compete. A well-crafted declaration from a company official might go miles in providing the COFC the evidence it needs to find for the protester under the irreparable harm factor, and the COFC’s decision might buy the protester the ability to compete for a “crucial” task order like the one at issue in Kearney.
For assistance with filing or defending a bid protest, please contact Katie Burrows or Eric Valle, the authors of this blog, or a member of PilieroMazza’s Bid Protests or Government Contracts practice groups.
[1] A.T. Kearney Pub. Sector & Def. Servs., LLC v. United States, No. 21-2121, 2021 WL 5984424 (Fed. Cl. Dec. 9, 2021).
[2] Altana Pharma AG v. Teva Pharms. USA, Inc., 566 F.3d 999, 1005 (Fed. Cir. 2009).
[3] See Bilfinger Berger AG Sede Secondaria Italiana v. United States, 97 Fed. Cl. 96, 158 (2010); KWR Constr., Inc. v. United States, 124 Fed. Cl. 345, 363 (2015).
