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In Percipient.ai, Inc. v. United States, the Federal Circuit considered Percipient.ai Inc.’s (Percipient) protest arising out of the National Geospatial-Intelligence Agency’s (NGA) SAFFIRE procurement, for the improvement of the agency’s production, storage, and integration of geospatial intelligence data.  Percipient’s protest was unusual—filed in 2023, it related to a task order NGA awarded to CACI, Inc. (CACI) two years earlier, for which Percipient did not (and could not) bid.  But Percipient’s protest did not challenge the award to CACI.  Instead, Percipient challenged NGA’s (and CACI’s) alleged failure, during task order performance, to conduct sufficient market research as to the commercial availability of AI software—for which Percipient already had a commercial offering that purportedly met NGA’s needs—before CACI began developing its own software at significantly higher cost.  Percipient alleged this failure violated 10 U.S.C. § 3453, which establishes a preference for commercial items/services and instructs agencies to procure them “to the maximum extent practicable.”

After originally rejecting a government dismissal request based upon alleged lack of standing (a decision we covered here), the CFC ultimately ruled it lacked jurisdiction over Percipient’s protest due to the FASA task order bar.  That bar generally precludes the CFC from exercising jurisdiction over protests “in connection with the issuance or proposed issuance of a task or delivery order.”  10 U.S.C. § 3406(f). 

A divided Federal Circuit reversed with a dissent.  The Court rejected the government’s argument that the FASA bar applies to “all protests that relate to work performed under a task order.”  The Court held the government’s interpretation of the statutory language was “far too broad” and gave “no meaning to the words ‘issuance or proposed issuance [of a task order delivery order]’” at Section 3406(f), thereby “flouting” well-established canons of statutory interpretation.  The Court concluded that FASA’s “focus on ‘issuance’” means “a protest is barred if it challenges the issuance of the task order directly or . . . a government action . . . whose wrongfulness would cause the task order’s issuance to be improper.”

Having established the scope of the FASA bar, the Court walked through each allegation in Percipient’s complaint and explained why Percipient’s protest was not such a challenge.  The Court noted Percipient’s protest was “directed to NGA’s violation of § 3453 and related regulations after issuance of the task order,” culminating in “requested relief [that] would not alter NGA’s issuance of Task Order 1 to CACI.”  As a result, the Court held the FASA bar did not preclude the CFC’s exercise of jurisdiction over Percipient’s protest.

After ruling the FASA bar did not apply, the Court summarily rejected the government’s argument that Percipient’s claim should be dismissed because it was a matter of post-award contract administration and therefore not “in connection with a procurement or a proposed procurement”—a separate prerequisite for exercise of the CFC’s Tucker Act jurisdiction under 28 U.S.C. § 1491(b)(1).  The Court explained the phrase “in connection with” is “sweeping in scope,” thereby capturing Percipient’s protest allegations, and that a contrary ruling in favor of the government “would allow agencies to ignore § 3453 by deferring decisions about commercial products until after the contract award.”

Finally, the Court concluded that Percipient had “interested party” standing to bring its protest despite the fact that it was not an actual bidder and was challenging neither the terms of a solicitation nor the proposed award of a contract, the circumstances by which a protester typically establishes interested party status under the Tucker Act.  The Court held that Percipient established standing under the Tucker Act’s third prong—“any alleged violation of statute or regulation in connection with a procurement or proposed procurement.”  Under that prong, the Court explained, “the plaintiff is an interested party if it is an offeror of a commercial product or commercial service that had a substantial chance of being acquired to meet the needs of the agency had the violation not occurred,” irrespective of the protester’s status as an “actual or prospective bidder”—a conclusion about which the dissent expresses great concern.  Finally, the Court noted a policy consideration animating its decision, explaining that, were the Court to rule that Percipient lacked standing to protest, “the statutory guarantees under Section 3453 could become illusory.”

Key Takeaways:

  • The Court’s untethering of the Tucker Act’s “interested party” test from a solicitation or actual or potential award appears to be a substantial—and, for putative protesters, welcome—expansion of protester standing, at least where a protester has a clear allegation of statutory violation upon which to rely.
  • The Court’s ruling places a well-founded and necessary constraint on the FASA bar, which the government typically attempts to deploy in favor of dismissal of any protest even tangentially related to a task order. Here, where NGA nested a subsequent acquisition implicating commercial items within an already-awarded task order, if Percipient was unable to challenge a failure to apply 10 U.S.C. § 3453 after task-order award, the government potentially would have a means to make the statute unenforceable.   
  • Though the dissent expresses concern that as a result of the Court’s ruling, “potential subcontractors will soon flood the Claims Court with § 1491(b)(1) protests,” whether and how that happens is unclear. The Court’s ruling certainly opens the door to protests by potential subcontractors (which is how Percipient described itself), but Percipient only learned of CACI’s intent to develop its software at a post-award symposium and was able to plead specific facts of an agency statutory violation.  Whether a “flood” of putative subcontractors will have visibility into ongoing contracting activity and potential statutory violations arising therein remains to be seen.    
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Photo of Anuj Vohra Anuj Vohra

Anuj Vohra litigates high-stakes disputes on behalf of government contractors in federal and state court, and maintains an active bid protest practice before the U.S. Government Accountability Office and the U.S. Court of Federal Claims. He also assists clients with an array of…

Anuj Vohra litigates high-stakes disputes on behalf of government contractors in federal and state court, and maintains an active bid protest practice before the U.S. Government Accountability Office and the U.S. Court of Federal Claims. He also assists clients with an array of issues related to contract formation (including subcontracts and teaming agreements), regulatory compliance, internal and government-facing investigations, suspension and debarment, organizational conflicts of interest (“OCIs”), intellectual property and data rights, and the Freedom of Information Act (“FOIA”).

Prior to entering private practice, Anuj spent six years as a Trial Attorney in the U.S. Department of Justice’s Commercial Litigation Branch. At DOJ, he was a member of the Bid Protest Team—which handles the department’s largest and most complex protests—and served as lead counsel in dozens of matters representing the United States in commercial disputes before the U.S. Court of Appeals for the Federal Circuit, the Court of Federal Claims, and the U.S. Court of International Trade.

Photo of Rob Sneckenberg Rob Sneckenberg

Rob Sneckenberg is a government contracts litigator in Crowell & Moring’s Washington, D.C. office. He routinely first chairs bid protests before the U.S. Government Accountability Office (GAO) and U.S. Court of Federal Claims (COFC), and has successfully argued multiple appeals before the U.S.

Rob Sneckenberg is a government contracts litigator in Crowell & Moring’s Washington, D.C. office. He routinely first chairs bid protests before the U.S. Government Accountability Office (GAO) and U.S. Court of Federal Claims (COFC), and has successfully argued multiple appeals before the U.S. Court of Appeals for the Federal Circuit. He also represents contractors in contract claim and cost accounting disputes before the Armed Services Board of Contract Appeals (ASBCA), and counsels clients on a wide array of government contracts investigations. Rob is very active in Crowell & Moring’s pro bono program, where he focuses on civil and criminal appeals.

Photo of Issac Schabes Issac Schabes

Issac D. Schabes is an associate in the firm’s Washington, D.C. office, where he is a member of the Government Contracts Group.

Prior to joining the firm, Issac clerked for the Honorable Matthew H. Solomson on the U.S. Court of Federal Claims and…

Issac D. Schabes is an associate in the firm’s Washington, D.C. office, where he is a member of the Government Contracts Group.

Prior to joining the firm, Issac clerked for the Honorable Matthew H. Solomson on the U.S. Court of Federal Claims and the Honorable Robert N. McDonald on the Maryland Court of Appeals. Issac received his J.D., magna cum laude, from the University of Maryland Carey School of Law, where he graduated Order of the Coif and served as an executive editor for the Maryland Law Review. He received numerous awards, including the Judge Simon E. Sobeloff Prize for Excellence in Constitutional Law. During law school, Issac was a member of a low-income taxpayer clinic team that successfully appealed an IRS assessment resulting in a substantial tax liability reduction, and also interned for the Honorable Beryl A. Howell, Chief Judge, on the U.S. District Court for the District of Columbia and the Honorable Marvin J. Garbis on the U.S. District Court for the District of Maryland.