## Facts

- CMS implemented competitively awarded Medicare administrative contracts required by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003.
- CMS solicited bids for Durable Medical Equipment Medicare Administrative Contractor (DME-MAC) contracts, divided into four geographic jurisdictions (A–D), using a “best value” evaluation with emphasis on offerors’ understanding of requirements.
- Cigna, the longstanding incumbent performing similar services in Jurisdiction D, submitted proposals for Jurisdictions C and D.
- CMS awarded Jurisdiction C to Noridian Administrative Services, LLC and Jurisdiction D to Palmetto GBA, LLC; Cigna was not selected.
- Cigna filed a timely post-award GAO protest, triggering an automatic stay of contract performance under CICA.
- CMS issued a written determination overriding the CICA stay, citing schedule constraints tied to implementation planning and asserted risks of disruption from delay.
- Cigna sued in the Court of Federal Claims challenging only the legality of the override decision and seeking declaratory relief and restoration of the stay during GAO’s review.

## Issues

1. Whether CMS’s written override determination satisfied CICA’s statutory standards for overriding an automatic stay (best interests of the United States or urgent and compelling circumstances).
2. Whether the override decision was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law under bid-protest review standards.

## Decision

- The court granted declaratory relief for Cigna and held CMS’s CICA stay override invalid.
- The court concluded the override was not reasonably justified on the administrative record and was arbitrary and capricious.
- The practical effect was restoration of the statutory stay while GAO considered the protest.

## Legal Principles

- A timely GAO protest triggers a CICA automatic stay of performance; an agency may override only with a written finding that performance is in the best interests of the United States or that urgent and compelling circumstances significantly affecting U.S. interests will not permit waiting for GAO’s decision.
- Judicial review of a stay override examines whether the determination is rational, adequately explained, and grounded in the statutory criteria, and sets aside decisions that are arbitrary, capricious, or contrary to law.
- Generalized assertions of schedule pressure or programmatic goals, without specific factual support showing concrete harm during the protest period, are insufficient to justify an override.
- The written determination must supply record-based reasoning explaining why identified harms are likely during the GAO period and why they cannot be mitigated without proceeding with performance.

## Conclusion

The court held that CMS failed to support its CICA stay override with specific, record-based findings showing urgent and compelling circumstances or a valid best-interests rationale, rendering the override arbitrary and capricious and leaving the statutory stay in place during GAO’s protest review.


Cigna Gov’t Servs., LLC v. United States, 70 Fed. Cl. 100 (2006)