On June 7, 2024, the Federal Circuit issued a major decision addressing bid protest jurisdiction and standing at the Court of Federal Claims (“COFC”).  In Percipient.ai, Inc. v. United States, the court found that COFC has jurisdiction to hear a protest challenging a matter of contract administration — even where the matter arose in connection with a task order — and articulated a new test for standing applicable to the facts presented in that case. 

Background

The National Geospatial-Intelligence Agency (“NGA”) held a competition for (1) a single-award Indefinite Delivery, Indefinite Quantity (“IDIQ”) contract, called SAFFIRE, for a range of services related to visual intelligence data; and (2) the first task order under the IDIQ contract, which sought, in part, an artificial intelligence computer vision (“CV”) system.  The agency awarded the IDIQ contract and task order to CACI. 

The protester, Percipient, could not satisfy all of the requirements of the IDIQ contract, and it therefore did not submit a proposal.  According to Percipient, however, it possessed a commercial platform that could meet the first task order’s requirement for a CV system.

Percipient reached out to both the agency and CACI seeking to provide its CV platform.  But the agency and CACI decided to not pursue Percipient’s CV platform, and CACI announced that it instead would develop a new CV platform.  Percipient protested, alleging that the agency’s actions violated 10 U.S.C. § 3453, which establishes a preference for commercial products and services.  

In response to Percipient’s protest, the Government and CACI contended, among other things, that (1) the Federal Acquisition Streamlining Act of 1994 (“FASA”) bar against task order protests deprives COFC of jurisdiction; (2) the Tucker Act does not confer jurisdiction over matters of contract administration in any event; and (3) Percipient lacked standing because it was not an actual or prospective offeror for the IDIQ contract. 

COFC agreed that the FASA task order bar applied to Percipient’s protest and dismissed the protest for lack of subject matter jurisdiction.  Percipient appealed to the Federal Circuit.

The Federal Circuit’s Decision

On appeal, the Federal Circuit reversed, finding that COFC had jurisdiction and that Percipient had standing.

First, the Federal Circuit held that the FASA did not bar Percipient’s claims.  The FASA task order bar provides that “[a] protest is not authorized in connection with the issuance or proposed issuance of a task or delivery order.”  10 U.S.C. § 3406(f)(1) (emphasis added).  Although Percipient’s claims were in connection with a task order, they were not in connection with “the issuance” or “proposed issuance” of a task order.  Accordingly, the FASA task order bar did not apply.

Second, the Federal Circuit held that the Tucker Act conferred jurisdiction.  The third prong of the Tucker Act establishes jurisdiction over protests challenging “any alleged violation of statute or regulation in connection with a procurement or a proposed procurement.”  28 U.S.C. § 1491(b)(1).  The phrase “in connection with” is “very sweeping in scope[,]” RAMCOR Servs. Grp., Inc. v. United States, 185 F.3d 1286, 1289 (Fed. Cir. 1999), and the term “procurement,” specifically, has been interpreted as including “all stages of the process of acquiring property or services, beginning with the process for determining a need for property or services and ending with contract completion and closeout,” Distributed Sols., Inc. v. United States, 539 F.3d 1340, 1345-46 (Fed. Cir. 2008) (quoting 41 U.S.C. § 403(2)) (emphasis omitted).  Because that “definition includes stages between issuance of a contract award and contract completion, i.e., actions after issuance of a contract award,” Percipient’s protest — “alleg[ing] NGA violated 10 U.S.C. § 3453 and related regulations . . . in connection with the SAFFIRE procurement’s CV System” — fit within it.

Third, the Federal Circuit held that Percipient had “interested party” standing to bring its bid protest, even though it did not and could not bid on the SAFFIRE solicitation.[1]  In a typical bid protest, COFC determines standing based on a test that considers whether the protester is an actual or prospective bidder for the award of a contract, but the court found that that standard did not apply where “the challenged harm-causing action is not the solicitation, the award, or the proposed award of a contract.”  

Instead, the court formulated a different test applicable to the facts before it:  “[I]n the context of this case involving alleged violations of 10 U.S.C. § 3453 without challenging the contract, an interested party includes an offeror of commercial or nondevelopmental services or items whose direct economic interest would be affected by the alleged violation of the statute.”  This different test applies only when a protest is “based solely on the third prong” of the Tucker Act.  If, by contrast, protest claims implicate the first two prongs of the Tucker Act — meaning that they concern a solicitation, award, or proposed award — then COFC’s typical standing test will likely apply. 

Takeaways

The Federal Circuit’s decision in Percipient.ai lays the foundation for companies with commercial solutions to file COFC protests alleging that the Government has failed to comply with 10 U.S.C. § 3453 during the performance of a prime contract.  The court’s conclusion that COFC’s jurisdiction covers violations of 10 U.S.C. § 3453 during performance of a contract further suggests that COFC’s jurisdiction may extend to other violations that are generally understood to be matters of contract administration — and that may be true even where such violations occur in connection with a task order. 

10 U.S.C. § 3453 is an unusual statutory provision, however, and the standing test articulated in Percipient.ai is specific to a violation of that provision.  It is not yet clear how far the court’s holding will extend, and what standard might apply to protests challenging other matters of contract administration.  At a minimum, companies seeking to protest a matter of contract administration at COFC are still likely to encounter other related hurdles, including questions of standing, prejudice, and available relief.  This is an area worth watching as it develops. 


[1]           As previously discussed on this blog, the Federal Circuit recently decided that interested party standing is a statutory question, not a jurisdictional one.

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Photo of Jay Carey Jay Carey

A Chambers-rated government contracts practitioner, Jay Carey focuses his practice on bid protests, and regularly represents government contractors before the U.S. Government Accountability Office and the Court of Federal Claims. He has prosecuted and defended more than 80 protests, including some of…

A Chambers-rated government contracts practitioner, Jay Carey focuses his practice on bid protests, and regularly represents government contractors before the U.S. Government Accountability Office and the Court of Federal Claims. He has prosecuted and defended more than 80 protests, including some of the most high-profile protests in recent years, for clients in the aerospace and defense, biotechnology, healthcare, information technology, and telecommunications sectors. Mr. Carey also counsels clients on compliance matters and all aspects of federal, state, and local government procurement and grant law. He counsels clients extensively on organizational conflicts of interest (OCIs) and on strategies for protecting and preserving intellectual property rights (in patents, data, and software).

Photo of Kayleigh Scalzo Kayleigh Scalzo

Kayleigh Scalzo represents government contractors in high-stakes litigation matters with the government and other private parties. She has litigated bid protests in a wide variety of forums, including the Government Accountability Office, U.S. Court of Federal Claims, U.S. Court of Appeals for the…

Kayleigh Scalzo represents government contractors in high-stakes litigation matters with the government and other private parties. She has litigated bid protests in a wide variety of forums, including the Government Accountability Office, U.S. Court of Federal Claims, U.S. Court of Appeals for the Federal Circuit, FAA Office of Dispute Resolution for Acquisition, Port Authority of New York and New Jersey, federal and state agencies, and state courts. She is also a co-head of the firm’s Claims, Disputes, and Other Litigation Affinity Group within the Government Contracts practice.

Kayleigh has particular experience navigating state and local procurement matters at both ends of the contract lifecycle, including bid protests and termination matters. In recent years, she has advised and represented clients in connection with procurements in Alaska, Arizona, California, the District of Columbia, Illinois, Indiana, Kansas, New Jersey, New York, Pennsylvania, Tennessee, Texas, and Virginia.

Kayleigh is a frequent speaker on bid protest issues, including the unique challenges of protests in state and local jurisdictions.

Photo of Hunter Bennett Hunter Bennett

Hunter Bennett focuses his practice on contract formation and disputes issues, with a particular emphasis on bid protests.   Mr. Bennett worked with the U.S. Department of Justice (DOJ), Civil Division, Commercial Litigation Branch, National Courts Section.  During his time with the DOJ, Mr.

Hunter Bennett focuses his practice on contract formation and disputes issues, with a particular emphasis on bid protests.   Mr. Bennett worked with the U.S. Department of Justice (DOJ), Civil Division, Commercial Litigation Branch, National Courts Section.  During his time with the DOJ, Mr. Bennett primarily focused on defending the United States against bid protests filed in the U.S. Court of Federal Claims.  In addition, he successfully briefed and argued multiple cases in the United States Court of Appeals for the Federal Circuit.

Photo of Andrew Guy Andrew Guy

Andrew Guy is an associate in the firm’s Washington, DC office. He is a member of the Government Contracts practice group.