#GovConThoughts: COFC Protest Decision Provides Insight Into the Cardinal Change Doctrine and Bridge Contracts
[My #govconthoughts series provides a quick take on recent developments in the government contracting space.]
A recent U.S. Court of Federal Claims ("COFC") decision granting a protester's motion for preliminary injunction ("PI") is interesting because it outlines how the court analyzed a protest of an agency's decision to modify another contractor's order to add services that, in the protester's view, were outside the scope of the order.
Briefly, the protest of IgniteAction JV vs. United States, No. 24-1386 relates to the U.S. Census Bureau's ("Census") award of a contract (a follow-on effort) to the protester. That award was protested by two unsuccessful bidders. To maintain services during the protests, the agency issued two sole-source bridge contracts to the incumbent contractor, which was a member of a JV that bid on the work. The agency needed another bridge and, for various reasons, was teeing up a bridge contract to a new company. That action is the subject of the instant protest.
Here, the protester challenged the bridge contract because "the work the agency proposes to award to [the new company] is not part of its existing FSS task order and cannot be made part of it by modification." The agency disagreed. The court sided with the protester and rejected the agency's arguments, stating that it is "sympathetic to the agency’s desire to fulfill its mission, but that desire cannot short-circuit the government’s obligations under the FAR."
In finding that the protester was likely to succeed on the merits, the court looked at whether the bridge services were outside the scope of the order – i.e., cardinal change. If it was, the bridge contract would violate CICA's competition mandate. In that respect, while changes typically relate to contract administration, in bid protests "the cardinal change doctrine is applied when the government’s modifications to an existing contract circumvents competition for those additional services."
To determine whether a cardinal change occurred, the court looked at several factors, including for example: whether bidders to the original task order would have reasonably expected the modification to fall within its terms; whether the price will significantly change; whether there are changes in the type of product or service, quantity, and performance period; and whether the end-client would be different.
Under that rubric, the court held that the services were outside the scope of the order. For example, the order was primarily for web services and analytics, customer service principles, and SEO analysis, while the bridge contract involved a host of enterprise-wide IT services for the agency's data dissemination efforts (at a different Census office). Those IT services included, among others, "back-end software development support, production operations support through all environments, systems engineering and integration services, systems design, configuration management, functional and integration testing, incident and problem management, [and] IT security engineering." The court also looked at the personnel involved and LCATs and found that the personnel weren't the same type and that the new company's GSA price list did not include those LCATs.
In the court's view, the "disparity in available services and personnel" showed that the bridge services were not within the scope of the task order. After turning to the remaining factors for injunctive relief, the court granted the protester's PI motion.
Takeaway
While procuring agencies generally enjoy broad deference in their decision-making, they must act within the bounds of applicable law – and regulation (e.g., the FAR) – for their actions to withstand judicial scrutiny. This COFC decision illustrates that while bridge contracts related to bid protest litigation are commonplace, agencies still must adhere to established principles when making decisions to award those contracts.
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