The Bid Protest Debrief
In GovCIO, LLC v. United States, U.S. Court of Federal Claims, Nos. 25-809 & 25-913 (August 18, 2025), in one of the first cases to test the impact of a Trump administration executive order (EO) on federal procurement, GovCIO and 22nd Century Technologies challenged the IRS’s sole-source bridge contract to Iron Mountain for scanning and digitizing incoming tax filings. The agency had bypassed competition, invoking an “urgent and compelling need” based on EO 14,247, which mandated digital payments and a shift away from paper-based systems by late 2025.
The plaintiffs argued that the agency’s justification was flawed, lacked support in the administrative record, and used the executive order to sidestep full and open competition in violation of procurement law. The Court agreed in part, holding that the Limited Sources Justification (LSJ) failed to adequately explain the link between the executive order and the agency’s urgency claim which is a key legal requirement under FAR 8.405-6.
The Decision
The COFC sustained the protest, ruling that:
- Standing Upheld for Both Protesters: The government and intervenor argued that GovCIO and 22nd Century lacked standing because they had not submitted proposals or demonstrated immediate harm. The Court rejected those arguments, holding that both firms showed they could have competed and were prejudiced by the lack of competition. The Court held that this satisfied both Article III and statutory standing requirements.
- Executive Order Did Not Justify the Urgency: While the IRS claimed that the executive order necessitated fast-track digitization, the Court found the LSJ did not actually explain how the mandate for digital payments created an urgent and compelling need for a noncompetitive bridge contract to scan incoming tax documents. The agency’s counsel attempted to explain the connection during litigation, but the Court refused to accept post hoc rationales, citing the well-established rule that agency decisions must be justified in the record, not in briefing.
- Digitization Mandate Was Already Underway: The Court noted that the IRS had been pursuing digitization for years through pilot programs and prior initiatives well before the executive order. Therefore, the government could not credibly claim that the executive order suddenly created urgency that would justify a sole-source award.
- Remand Without Injunction: Although the Court found the LSJ legally deficient, it declined to enjoin the award. Instead, it remanded the procurement to the IRS for 30 days to either supplement the justification or issue a new decision. The Court noted that halting work on the digitization project would be disruptive and expensive, and a brief remand provided a less drastic, more appropriate remedy.
Key Takeaways for Contractors
- Executive Orders Don’t Override Competition Requirements: Even a presidential mandate must be clearly linked to a specific procurement decision if the agency intends to invoke an urgent and compelling need to skip competition. That reasoning must appear in the contemporaneous record.
- Post Hoc Justifications Don’t Count: Arguments from agency counsel, no matter how compelling, cannot substitute for what’s missing in the administrative record. Agencies must connect the dots at the time of award.
- Standing Is Broader Than You Think: Even if you didn’t submit a proposal, you can have standing if you show that you were prepared to compete but were denied the opportunity due to a flawed procurement strategy.
- Remand Without Vacatur Can Be a Win: The Court’s refusal to vacate the award doesn’t diminish the protest’s impact. By identifying legal deficiencies and ordering a remand, the Court forced the agency to revisit its justification and provide transparency.
- Bridge Contracts Still Require Justification: Agencies often use bridge contracts to maintain continuity, but they still must comply with FAR rules. Convenience alone is not a legal basis for avoiding competition.