January 11, 2021

A Bridge Too Far That Should Draw Greater Concern? An Uptick in the Award of Bridge Contracts to Protested Awardees Highlights a Curious Emerging Trend Across Federal Agencies

13 min

In an ideal world, federal agencies would never issue a "bridge contract"—a short-term contract that covers performance during the period between planned contract awards. In reality, however, circumstances often require agencies to act to prevent a disruption of services necessary to complete their varying projects and missions when faced with a bid protest that can last anywhere from several months to well beyond a year. When a contract is stayed as the result of a bid protest, one such remedy is the issuance of a bridge contract, which is not defined by the FAR, and which often extends the incumbent contractor's work until the bid protest is resolved.1 Yet, over the past several years, the United States Court of Federal Claims (Court or COFC) has experienced an uptick in bid protests where, during the pendency of the protest, the relevant agency elected to award a bridge contract to the non-incumbent, protested awardee, rather than the incumbent plaintiff contractor. With the understanding that protests are more often filed at the U.S. Government Accountability Office (GAO) than with the Court, as acknowledged in a 2018 RAND Report and other sources, this article selectively delves into several COFC decisions with varying procedural and factual patterns in which this curious bridge contract trend both manifests and then faces procedural hurdles—though mostly acceptance—by the Court.

In the bid protest arena, it is well established that the Court "shall set aside the agency action if it is 'arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law.'"2 It is perhaps the great degree of deference accorded to agencies under this standard that has tied the Court's hands in situations where a procuring agency requires continued services but, instead of awarding the bridge contract to the incumbent, the agency instead issues an adequately detailed justification and approval (J&A) (FAR Part 6 or 13.5), a limited sources justification (FAR Subpart 8.4), or an exception to fair opportunity (FAR Subpart 16.5) explanation in awarding a bridge contract to the intended awardee of the contested contract award. Though the DOD has indicated a desire to veer away from the use of bridge contracts, these contract vehicles continue to maintain solid footing in the procurement world, and whether this apparent trend will continue to rise is something of which both the Court and contractors should be mindful.

As early as 2008, the Court began resolving issues arising out of this novel bridge contracting methodology. In Access Systems v. United States, Judge Bruggink was presented with the argument that the Marine Corps Systems Command's issuance of a bridge contract to the defendant‑intervenor constituted a de facto override of the automatic stay.3 After noting that it "ha[d] not been presented with any decisions discussing this question," i.e., whether the bridge contract was functionally equivalent to an override, the Court ultimately found that a bridge contract and an override were not functionally equivalent and upheld the agency's bridge contract award.4 Though the Court acknowledged plaintiff's argument that the bridge contract was for "identical information technology services involved in the original contract," the Court found that fact alone to be "insufficient to prove that the bridge contract is an iteration, in whole or in part, of the original contract and, thus, an override."5 Rather, the Court held that the bridge contract was a "new contract with a distinct character and function," as the agency had issued a stop-work order to defendant-intervenor under the contested contract award, the appropriated funds were separate from those used to fund the original contract, and the contracting officer affirmed that the bridge contract's limited term was an independent action.6 Less than a decade later, Chief Judge Sweeney was presented with a similar issue in Bannum, Inc. v. United States, in which she likewise upheld the Federal Bureau of Prisons' extension of a separate, preexisting contract with the defendant-intervenor during the pendency of the protest, relying on Judge Bruggink's decision and concluding that the subject matter of the two contracts was "the same," but that the contracts were still adequately distinct.7

A more recent decision that highlights this bridge contract phenomenon is ANHAM FZCO v. United States—a decision which Judge Campbell-Smith decided in September of 2019. This case involves an incumbent contractor's post‑award protest of an award by the Defense Logistics Agency (DLA) to KGL Food Services, WLL, the defendant-intervenor, for food distribution services in support of U.S. troops and other personnel in Kuwait, Jordan, and Iraq.8 On August 29, 2019, prior to issuing the September opinion, the Court granted plaintiff's motion for a preliminary injunction.9 Approximately one week later, the agency issued a J&A "'proposing a bridge contract for a four month base period and two, three-month option periods to assure continued service until [the agency] could make a new award determination,'" as "intervenor-defendant 'was the only source that could perform for the term of the short bridge contract.'"10 That same day, plaintiff filed an application for entry of a temporary restraining order (TRO), alleging that the agency violated the Court's August 29, 2019 permanent injunction by continuing certain work. In rejecting plaintiff's application for a TRO, the Court disagreed that DLA had violated the order and held that the "narrowly-defined exceptions [in that order] specifically permitted the agency to continue its [limited] transition and performance activities."11

The Court additionally concluded that the plaintiff failed to provide the necessary evidence that the agency was unduly delayed in responding to the Court's order where the agency "issued a detailed J&A within one week of the court's opinion," and, "in less than two weeks," awarded a bridge contract and "finalized a corrective action plan."12 More significantly, however, the Court explained that while it "understands plaintiff's disappointment that it was not awarded the bridge contract," the Court's injunction "did not include any such requirement" and that, "[t]o the extent that plaintiff has filed its motions in an attempt to challenge the bridge contract award to intervenor-defendant, its challenge is misplaced" because, "[i]n order to mount a new challenge to a new contract award, plaintiff must file a new bid protest action."13 The Court accordingly declined to review the merits of the agency's bridge contract award decision, thereby dictating that, where an agency executes a bridge contract in response to a TRO, a plaintiff must file a separate protest should it wish to contest that award, even where the events that directly gave rise to the bridge contract award occurred as a result of protest of the underlying, related contract award. Thus, because of plaintiff's procedural misstep, the protested awardee was able to continue performing work under the bridge contract.

One month later, Judge Smith heard a similar issue in Harmonia Holdings Group, LLC v. United States.14 This case began as a result of the U.S. Customs and Border Protection's award of a bridge contract to the defendant-intervenor, Dev Technology Group, Inc., after months of litigation in earlier filed protests by three separate plaintiffs contesting the underlying General Services Administration Federal Supply Schedule task order award.15 Upon learning of the bridge contract award, plaintiff took the affirmative step to file a separate complaint with the Court in order to challenge the agency's decision to award the bridge contract to defendant-intervenor—the protested awardee in the three protests of the original contract award.16 Given this procedural history, plaintiff alleged, inter alia, that the agency circumvented the voluntary stay by allowing defendant‑intervenor, who was not an incumbent contractor,17 "to immediately begin performing under the original contract under the guise of a bridge contract" that the agency awarded during the pendency of the original protest;18 it is important to note that the protest of the underlying task order award was extended by several months because of the agency's repeated motions for extension of time to extend the stay and remand for purposes of further assessing its evaluation of offerors' proposals.19

As an initial matter, the Court determined that plaintiff had standing, as the parties did not dispute that Harmonia would have competed for the bridge contract or was a qualified bidder under the original contract, that "the bridge contract and the original contract involve[d] the exact same scope of work and are funded by the same source," and that, "as Harmonia submitted a responsive proposal for the original contract, and the Agency had that information at the time of the bridge contract award, plaintiff [was] also a qualified bidder for a bridge contract covering the same scope of work."20 On the merits, the Court upheld the agency's award decision, rejecting plaintiff's varied arguments that the agency violated the FAR.21 The Court then concluded that the agency's justification for issuing the bridge contract was sufficient, as "an 'urgent and compelling need' exists in maintaining services for a system that 'helps to identify and select import cargo shipments that appear to have a higher likelihood of being associated with terrorism or possibly containing implements of terrorism, narcotics or other contraband.'"22 This decision is thus significant in at least three different ways.23

First, in a bid protest contesting the award of a bridge contract to the protested awardee of the original contract award, the government will not prevail on an argument that a plaintiff lacks standing where the plaintiff "submitted a responsive proposal for the original contract" and the agency had such information at the time it awarded the bridge contract, as those facts demonstrate that the plaintiff was "also a qualified bidder for a bridge contract covering the same scope of work."24 Second, based in part on that conclusion, a protester could prevail on the merits of its bridge contract protest should the agency not provide a limited sources justification, or equivalent explanation, that both lacks a sense of urgency, such as by detailing national security or safety concerns, and fails to adequately explain the reasons why the agency selected the non‑incumbent, protested awardee for a bridge contract award. Meaning, it is possible that the award of a bridge contract to the protested contract awardee might not withstand judicial scrutiny if the work is not for national security or safety-related services and the language of the justification suggests the agency is merely creating a workaround in the wake of a protest. Last, a plaintiff might also succeed if the agency fails to sufficiently explain why none of its multiple incumbent contractors could perform the bridge contract and only the non-incumbent, contested awardee could perform the relevant services, as such a scenario makes it difficult for the agency to explain how no other contractor could perform the services outlined in a solicitation for a sole-sourced bridge contract.

Most recently, in 2019, Chief Judge Sweeney issued a decision in HVF West, LLC v. United States, a case in which the plaintiff protested the award of a mixed‑transaction services contract.25 In that decision, Chief Judge Sweeney granted plaintiff's motion for judgment on the administrative record, enjoined the DLA "from continuing performance of the contract awarded to Lamb [Depollution, Inc. ('Lamb'), the incumbent contractor,] pursuant to the solicitation at issue in [the] protest," and directed the contracting officer to "cancel the contract awarded to Lamb" and either "select a new awardee from among the existing bidders" or issue a new solicitation.26 Rather than cancelling the contract, DLA instead issued a stop-work order and then an interim solicitation for a new "bridge contract in anticipation of an appeal of Chief Judge Sweeney's decision to the United States Court of Appeals for the Federal Circuit, which appeal was filed on January 30, 2020."27

With the appeal pending, plaintiff subsequently filed its second protest, over which Judge Horn presided, contesting DLA's award of the bridge contract to the protested awardee from the prior litigation.28 Plaintiff's principal argument in the second protest challenged its recent non-responsibility determination, which resulted from an "unannounced inspection of the [its work] site in response to an anonymous complaint," alleging that such determination was irrational and evidenced disparate treatment, and that it unfairly precluded plaintiff from receiving the newly solicited bridge contract award that, once again, the DLA awarded to Lamb.29 In concluding that the agency's finding of plaintiff's non-responsibility was not unreasonable and that plaintiff failed to demonstrate disparate treatment, the Court upheld the agency's non-responsibility determination and award to defendant‑intervenor, who was the next-highest bidder; the Court additionally noted that plaintiff did not protest the award to Lamb.30 The most notable aspect of this case is that the Court very likely would have found that plaintiff lacked standing to protest the award given its non-responsibility determination. In practice, this means that plaintiff could not have challenged the agency's chosen course of action, and that only one of the few remaining eligible offerors with a substantial likelihood of success could have challenged the actual award decision. The result once again stands for the proposition that the agency was able to issue and maintain a bridge contract award—a contract tool that is supposed to be used only in limited circumstances—to the originally protested awardee. Though circumstances that give rise to protests and the duration of such protests are not always predictable, necessitating the issuance of a bridge contract award, the biggest takeaway from these cases is that federal agencies should continue to prudently plan, as far in advance as possible, all of their respective procurements, whether for entirely new projects or for iterations of routinely completed work.

* * * * * * * * * *

While the COFC has generally upheld the award of a bridge contract to the protested awardee, it is possible that a plaintiff with strong facts and a procedural posture similar to that of the cases above may be able to prevail on a protest of a bridge contract award to a protested awardee, putting an end to an emerging trend of bridge contract awards made to the intervenor-awardee that effectively defeat the purpose of the bid protest automatic stay rule. Though more nuanced lessons can be derived from a close reading of each of the above cases, the biggest takeaway is that, absent regulatory modification to when and how bridge contracts may be awarded—vehicles which remain undefined in the FAR—federal agencies must implement their own defined processes for the planning, issuance, and award of bridge contracts so as to limit the overall number of bridge contract awards. In fact, upon observing the increasing number of bridge contract awards, entities such as the Defense Acquisition University have explained, as recently as September of 2020, that agencies' continued use of bridge contract awards not only imposes higher costs on themselves "due to inefficiencies and [the] cost of administering bridge contracts" but also "strain[s] . . . the contracting workforce due to the fact that bridge contracts had to be justified and awarded while a follow-on contract was sought"—facts that are made clear by evidence outlined in multiple GAO reports.31 Most importantly, however, the Defense Acquisition University made clear that the continued use of bridge contracts results in "the loss of benefits associated with full and open competition."32 As a result, in a future bridge contract protest, a plaintiff may want to show the Court precisely how an agency's poor planning was the direct and immediate cause for the agency to urgently need a bridge contract and how these contracting practices undermine the goal of full and open competition.

[1] See Dennis P. Longo, Bridge Contracts, Def. Acquisition Univ. (Sept. 1, 2020), https://www.dau.edu/library/defense-atl/blog/Bridge-Contracts.

[2] E.g., Banknote Corp. of Am. v. United States, 365 F.3d 1345, 1350–51 (Fed. Cir. 2004) (citing Advanced Data Concepts, Inc. v. United States, 216 F.3d 1054, 1057–58 (Fed. Cir. 2000)).

[3] 84 Fed. Cl. 241, 242 (2008).

[4] See id. at 243.

[5] Id.

[6] See id.

[7] 121 Fed. Cl. 543, 550–52 (2015).

[8] 145 Fed. Cl. 108, 109 (2019).

[9] Id.

[10] Id. at 111 (first quoting ECF No. 188 at 3; and then citing ECF No. 188 at 4, 13–21).

[11] See id. at 111.

[12] Id. at 111–12.

[13] Id. at 112.

[14] 145 Fed. Cl. 84 (2019).

[15] See id. at 87–88.

[16] See id.

[17] See Compl. at 4–5, Harmonia Holdings Grp., LLC v. United States, 145 Fed. Cl. 84 (2019) (No. 19-1147).

[18] 145 Fed. Cl. at 90.

[19] See Def.'s Motion to Stay Proceedings and Def.'s Motion for Voluntary Remand at 1, 145 Fed. Cl. 84 (2019) (No. 19-674). See generally Docket, 145 Fed. Cl. 84 (2019) (No. 19-674).

[20] 145 Fed. Cl. at 90.

[21] Id. at 91 (citing, e.g., FAR 1.102-2, FAR 8.405-6(a)(1)–(2)).

[22] Id. at 91–92 (quoting Administrative Record at 35).

[23] The import of this decision is more far reaching than the three stated points; however, such analysis extends beyond the scope of this article.

[24] See id. at 90.

[25] See HVF West, LLC v. United States, 146 Fed. Cl. 314, 321, 328 (2019).

[26] Id. at 341.

[27] 2020 U.S. Claims LEXIS 1769, at *4–5.

[28] Id.

[29] See id. at *24–25, 115–16.

[30] See id. at *144–51.

[31] Bridge Contracts, Def. Acquisition Univ.

[32] Id.