OPINION
In this post-award protest, Keeton Corrections, Inc. (“Keeton”) challenges the decision by the Federal Bureau of Prisons (“BOP”) to override the automatic stay which occurred when Keeton challenged the award of a community correction center contract in Memphis, Tennessee. The court has denied plaintiffs motions for a temporary restraining order (“TRO”) and preliminary injunction premised largely on plaintiffs lack of any right to a contract to perform the service required during the protest period. In the February 13, 2004 Order denying injunctive relief, the court also held that in order to determine the validity of the override action taken by the BOP, the “record must be supplemented to include the basis and factual predicate for the apparent decision that purchase orders could not be utilized to provide the service urgently required during the protest period.” Keeton Corrections, Inc. v. United States, No. 04-132C, Slip. Op. at 6 (Feb. 13, 2004). Subsequently, at the court’s request, the BOP submitted additional documentation addressing the agency’s decision that it could not continue with purchase orders. The validity of the BOP’s override decision is now before the court under the arbitrary and capricious standard of review. See 28 U.S.C. § 1491(b)(4). For the reasons stated below, the BOP’s override of the automatic stay is declared invalid and the stay remains in effect.
FACTS
The background facts of this case were fully explained in the court’s February 13, 2004 Order denying plaintiffs requests for a TRO and preliminary injunction. Briefly, the undisputed facts relevant to the resolution of this case are as follows. On March 14, 2002, the BOP issued Request for Proposals No. 200-0730-MA (“RFP”) for a new contract to provide community correction center services for male and female offenders in the Memphis, Tennessee area. The BOP received offers from both Keeton and Dismas Charities, Inc. (“Dismas”). At the time, Kee-ton was the incumbent contractor to operate a halfway house. It was originally awarded a two-year contract with three one-year option periods. Administrative Record (“AR”) 1. Keeton’s contract expired <?n February 15, 2003 after the BOP invoked all three option periods. Under authority provided for in Federal Acquisition Regulation (“FAR”) 52.217-8, the BOP extended Keeton’s contract for six months until August 15, 2003.
*755 (I) performance of the contract is in the best interests of the United States; or
(II) urgent and compelling circumstances that significantly affect interests of the United States will not permit waiting for the decision of the Comptroller General concerning the protest;
31 U.S.C. § 3553(d)(3)(C).
From August 16, 2003 through January 31, 2004, Keeton continued to provide its services to the BOP by entering into a series of sole source monthly purchase orders. AR 31-38. The purchase orders provided that Keeton would provide community correction center services under the terms provided for in the expired contract and extended services clause. On January 21, 2004, Harley G. Lap-pin, Director of the BOP, authorized performance by Dismas, notwithstanding Kee-ton’s second protest pending before the GAO based on asserted urgent and compelling circumstances. AR 41-43. The merits of Kee-ton’s bid protest remain with the GAO. A decision by the GAO is expected by April 9, 2004. On February 1, 2004, the inmates were transferred from Keeton’s facility to Dismas. On February 13, 2004, plaintiffs motions for a TRO and preliminary injunction were denied.
DISCUSSION
I. Jurisdiction and Standard of Review
The Court of Federal Claims has jurisdiction to review an agency’s decision to override a CICA automatic stay pursuant to 28 U.S.C. § 1491(b)(1). See RAMCOR Servs. Group, Inc. v. United States,
An agency’s decision can be found to be arbitrary and capricious if the agency “entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.” Motor Vehicle Mfrs. Ass’n of the United States v. State Farm Mut. Auto. Ins. Co.,
II. Analysis
In issuing his determination and findings, the BOP director held that:
Urgent and compelling circumstances exist that significantly affect the interests of the United States and will not permit waiting for the GAO’s decision. Specifically, these include: substantial costs to relocate inmates currently residing in Keeton’s Memphis facility to alternate locations that are under contract while awaiting GAO decision; potential return of inmates to institutions from which they were released; possible delayed release of presently incarcerated inmates into appropriate community placements; and, substantial disruption to inmates’ ability to transition back into the Memphis community.
AR 42.
According to the director’s findings, the urgent and compelling circumstances were based on the fact that Keeton’s contract had expired on August 15, 2003, and therefore
At oral argument and in its initial briefing, the government asserted that the BOP must have believed that FAR § 13.003, which allows for simplified acquisition procedures such as purchase orders, does not apply if an agency can meet its requirements using “existing indefinite delivery/indefinite quantity contracts; or [ ] other established contracts.” 48 C.F.R. § 13.003(a). However, there was nothing in the original administrative record that would have supported the court’s reliance on this explanation. Indeed, “argument by counsel, unsupported by affidavits, is unavailing.” J & H Reinforcing & Structural Erectors, Inc. v. United States,
In its supplementation of the record, the BOP’s principal assertion is that it considered the continued use of purchase orders as a violation of the simplified acquisition procedures contained in the FAR. Specifically, the agency argues that purchase orders during the protest period would be considered illegal fragmenting of its requirements in order to stay within the required monetary limits. The BOP also contends that purchase orders were no longer acceptable once Dismas was able to begin performance because it would violate the requirements of full and open competition. It submits that the availability of an established contract with Dismas prevented it from entering into continued purchase orders with Keeton. Finally, the contracting officer relied upon cost savings resulting from performance under the new contract. The BOP decided that it was preferable to commence performance on an awarded, but protested, contract rather than continue with sole source purchase orders with Keeton. According to the draft determination and findings, the BOP contracting officer noted that “[s]ervices are currently being performed by Keeton on a month to month Purchase Order under a
The monthly purchase orders were each under the simplified acquisition threshold (SAT) per FAR 13.003, however the cumulative value exceeded the SAT. We realized we should not be using simplified acquisitions in this case because the service required was not limited to one month periods-it was more than that. FAR 13.003(c)(2) prohibits breaking down requirements aggregating more than the SAT into several purchases that are less than the applicable threshold merely to use the procedures.
Affidavit of Rebecca Canfield, Contracting Officer, BOP, Feb. 23, 2004, 116, Def.’s Supplement at 2.
However, neither the draft determination and findings nor the affidavit provide any support for the conclusion that performance of the required services by Keeton via purchase orders resulted in increasing costs. Instead, the purchase orders indicated that Keeton agreed to continue performance under the terms of its original contract. See AR 31-38. Thus, the cost to the government under the purchase orders was the same as the amount specified for each option period under the original contract. See AR 2. Unlike Sierra Military Health Servs. v. United States,
The BOP’s assertion that sole source purchase orders during the automatic stay period pending a GAO protest decision do not comply with the competition provision of CICA is unsupported by law. The agency must balance the needs for full and open competition with the purpose of the automatic stay to preserve the status quo. Id. at 657-58. Thus, agencies may not resort to small, recurring purchase orders merely as a loophole to evade Congress’ intent to further competition. On the other hand, Congress also provided that simplified procedures should be available in certain situations. The District Court for the District of Columbia found that “good faith efforts to comply with CICA’s mandate for competitive procurement will protect a procurement officer’s decision-making from a potential legal challenge of fragmenting.” Petchem, Inc. v. United States,
In this case, the BOP did not resort to purchase orders merely to avoid awarding a community correction center contract pursuant to full and open competition. Instead, it relied on purchase orders precisely because it wanted to reevaluate the bids and award the contract to the offeror presenting the best value. After Keeton’s contract expired, there was no other facility in the Memphis area that could fulfill the BOP’s need for these services. Therefore, it was proper to rely upon sole source purchase orders because they preserved competition until the GAO could decide the merits of Keeton’s protest. The BOP is not in a situation where it will continue to use short-term orders indefinitely to avoid awarding the contract pursuant to an open solicitation. In fact, the GAO’s pending decision will ensure that the contract is performed after a competitive solicitation. Without the exact knowledge of how long it would need interim services until the contract could be competitively awarded pursuant to a GAO decision, the BOP could not have a clear intent to evade CICA.
An additional reason cited by the BOP for overriding the stay is that it could no longer rely upon purchase orders once there was an established contract in place.
Furthermore, the GAO has held that an agency’s use of sole source purchase orders during the pendency of a stay period is proper under CICA.
In Unified Indus., bids were solicited for a follow-on contract for data processing services to commence on October 1, 1989. The original contract with RGI was due to expire on September 30, 1989. The GAO sustained Unified’s first bid protest and recommended solicitation of best and final offers. Unified subsequently filed a second protest which
Absent a valid override decision the stay mandated by 31 U.S.C. § 3553(d) remains in effect. However, the fact that the stay has remained in effect does not, itself, create an urgent and compelling circumstance which would now support an immediate, fresh override decision by the BOP. As purchase orders can be used to meet the continuing BOP needs, an award of such an order to Dismas or Keeton to meet BOP needs during the protest period could be used even if its performance of the contract under protest remained stayed. Keeton has no existing contractual right to perform the service and is not entitled to an automatic extension of purchase orders. If purchase orders are continued to be used during the stay period once a second facility in Memphis was available, the BOP would be under an obligation to seek competition for each purchase order. See 13 C.F.R. § 13.104. The BOP may also limit the number of sources from which it solicits bids if the agency’s need for these services has an unusual and compelling urgency. See 13 C.F.R. § 6.302-2. However, the agency is not limited to entering into purchase orders only with Keeton during the stay period. See Bannum v. United States,
While performance under the contract awarded to Dismas cannot occur because it is stayed, the service presently being performed by Dismas could be compensated if it is considered to be occurring pursuant to an implied-in-fact purchase order. New York Mail & Newspaper Transp. Co. v. United States,
CONCLUSION
Accordingly, as the January 21, 2004 override decision lacks a rational basis it is ORDERED that Final Judgment shall be entered DECLARING the override to be invalid and to be of no effect, with the result that the stay mandated by 31 U.S.C. § 3553(d)(3) remains extant.
Notes
. 48 C.F.R. § 52.217-8 "Option to Extend Services" provides: "The Government may require continued performance of any services within the limits and at the rates specified in the contract.... The option provision may be exercised more titan once, but the total extension of performance hereunder shall not exceed 6 months.”
. 48 C.F.R. § 13.003(c)(2) provides: Do not break down requirements aggregating more than the simplified acquisition threshold ... or the micro-purchase threshold into several purchases that are less than the applicable threshold merely to — (i) Permit use of simplified acquisition procedures; or (ii) Avoid any requirement that applies to purchases exceeding the micro-purchase threshold.
. 31 U.S.C. § 3554(a)(1) (2004) provides: “Except as provided for under paragraph (2) of this subsection, the Comptroller General shall issue a final decision concerning a protest within 100 days after the date the protest is submitted to the Comptroller General."
. The Dismas contract is a Firm-Fixed Unit Price, Requirements type contract and does not qualify as an existing indefinite deliveiy/indefi-nite quantity contract under FAR § 13.003(a)(2). See PL’s Supplemental Br., Attach. B.
. While GAO decisions in procurement cases are not binding on the court, the court may accord deference in recognition of their special expertise. Bean Dredging Corp. v. United States,