Continental Service Group, Inc. v. United States, 17-449

Background

In December 2015 the Department of Education (ED) issued Solicitation No. ED‑FSA‑16‑R‑0009 for collection/administrative resolution of defaulted student debt; awards were IDIQs with 5‑year base + 5‑year option periods.
Multiple disappointed offerors (including ConServe) protested at GAO; GAO sustained many challenges in a March 27, 2017 protected decision, producing a need for corrective action by ED.
ConServe withdrew its GAO protest and filed in the Court of Federal Claims on March 28, 2017; the court issued a TRO and, on May 2, 2017, a preliminary injunction barring ED from authorizing awardees to perform or transferring work to other contracting vehicles.
The Government moved (May 19, 2017) under RCFC 60(b) to vacate the preliminary injunction and later sought stays pending appeal; intervenors and other affected contractors also moved for stays or to enforce/modify the injunction; ED announced corrective action and limited recalls for disaster relief needs.
The court held that the Government did not present the "extraordinary circumstances" required under RCFC 60(b)(6) and denied the Government’s motion to vacate the injunction and denied Alltran’s motions to stay the injunction pending appeal, while directing the Government to inform the CAFC whether ED’s corrective action may moot the appeals.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the court should vacate the May 2, 2017 preliminary injunction under RCFC 60(b)(6)	Injunction should remain to protect bid protestants from irreparable harm and preserve competitive process	ED argued circumstances justified vacatur because it planned corrective action and had represented awards/terminations would be issued (thus obviating injunction)	Denied — Government failed to show "extraordinary circumstances" under RCFC 60(b)(6)
Whether to stay the injunction pending appeal	Move to stay would harm plaintiffs by allowing ED to transfer work and dilute relief; injunction preserves status quo	Alltran and Government argued stay necessary to avoid disruption, allow bridge/short‑term performance, and protect borrower interests	Denied — stay not warranted; movants did not make strong showing of likely success and equities favored maintaining injunction pending corrective action
Whether emergency modification (limited recall for disaster relief) violated the injunction	Plaintiffs argued recalls/assignments would violate injunction and threaten rights	Government argued limited recall was necessary for urgent hurricane relief and could be characterized as a modification under RCFC 62(c)	Court treated notice as motion to modify and approved limited recall on public‑interest grounds (hurricane relief) — not a violation
Whether preliminary injunction was appropriate to maintain status quo while ED completes corrective action	Plaintiffs: status quo (as of GAO stay/filing date) must be preserved to protect procurement integrity and remedies	Government: could mitigate harms via bridge/ATE contracts or prompt corrective action; asked court to lift injunction	Held that injunction served to preserve competitive process and prevent dilution of remedies; factors (irreparable harm, public interest, balance of hardships) favored injunction

Key Cases Cited

U.S. Ass'n of Importers of Textiles & Apparel v. United States, 413 F.3d 1344 (Fed. Cir. 2005) (four‑factor test for preliminary injunction)
FMC Corp. v. United States, 3 F.3d 424 (Fed. Cir. 1993) (weakness in one injunctive factor may be overborne by strength of others)
Florida Power & Light Co. v. Lorion, 470 U.S. 729 (U.S. 1985) (APA review is based on the agency record)
Liljeberg v. Health Servs. Acquisition Corp., 486 U.S. 847 (U.S. 1988) (Rule 60(b)(6) applies only in extraordinary circumstances)
Ackermann v. United States, 340 U.S. 193 (U.S. 1950) (Rule 60(b) principles)
Nken v. Holder, 556 U.S. 418 (U.S. 2009) (standards for stays pending appeal)
Hilton v. Braunskill, 481 U.S. 770 (U.S. 1987) (stay factors for injunctions pending appeal)
Standard Havens Prods., Inc. v. Gencor Indus., Inc., 897 F.2d 511 (Fed. Cir. 1990) (stay pending appeal factors and flexible approach)
Abbott Labs. v. TorPharm, Inc., 503 F.3d 1372 (Fed. Cir. 2007) (courts have authority to enforce their injunctions)
Litton Systems, Inc. v. Sundstrand Corp., 750 F.2d 952 (Fed. Cir. 1984) (preliminary injunctions maintain status quo to preserve relief)
Fiskars, Inc. v. Hunt Mfg. Co., 279 F.3d 1378 (Fed. Cir. 2002) (Rule 60(b)(6) available only in extraordinary circumstances)