The protester filed a bid protest claiming the agency used unstated selection criteria when it decided to discontinue an other transaction agreement (OTA). The government sought to dismiss the protest, arguing OTAs were not solicitations for bids or proposals for a proposed contract. COFC found that other transaction (OT) cases remain under the court's jurisdiction.
Raytheon Company v. United States, et al., COFC No. 24-1824C
- Background - Congress tasked DOD Missile Defense Agency (MDA) with developing missile defense capabilities that could detect and intercept ballistic missiles during their glide phase. After some time, MDA awarded other transaction agreements (OTAs) to two defense contractors -- one of which was the plaintiff, Raytheon. The two defense contractors proposed different methods to intercept the ballistic missiles.
- Protest: MDA eventually moved forward with the other contractor and discontinued Raytheon's participation in the program. Raytheon then filed the instant bid protest challenging the decision, claiming MDA used unstated selection criteria when it preferred the other contractor's method to intercept missiles over its own.
- Decision - The government moved to dismiss, arguing other transaction (OT) awards do qualify as "a solicitation...for bids or proposals for a proposed contract." After covering the history of the court's jurisdiction over bid protests, COFC rejected this argument. Even though MDA had not yet formally committed to purchasing an end product, its actions and communications demonstrated intent to award a follow-on production contract to the other contractor if its proposed method was proven. Hence, COFC denied the government's motion to dismiss.
- Procurement: The program was intended to provide the government with a direct benefit in the form of products or services. Therefore, the solicitation was "in connection with a procurement or a proposed procurement," making it fall under the Tucker Act. This was particularly true since the products or services were unique to the government and ill-suited for use by the general public.
- Standing: The government claimed Raytheon lacked standing. Raytheon had been performing under the OTA for nearly three years. It alleged that the agency's discontinuation of it with Raytheon and not the other contractor effectively eliminated its ability to compete for the anticipated follow-on production contract worth billions of dollars. COFC found this was a valid claim of economic harm concerning an allegedly flawed OT award decision.
- Exhaustion Requirement: The government claimed Raytheon failed to comply with the dispute resolution procedures in the negotiated OTA, which required exhaustion of administrative remedies before filing suit. Because the Court concluded Raytheon properly pled and filed this matter as a bid protest, the Court rejected the government's argument. Exhaustion of administrative remedies cannot serve as a condition precedent to filing a bid protest.
Raytheon was represented by Jeffrey M. Lowry, Kevin P. Connelly, Kelly E. Buroker, and Michael P. Ols of Vedder Price. The government was represented by Reta E. Bezak, Brett A. Shumate, Patricia M. McCarthy, and Douglas K. Mickle of DOJ; and Sean Zehtab and Brian J. Chapuran of Missile Defense Agency. The defendant-intervenor was represented by Jason A. Carey and Kayleigh M. Scalzo of Covington & Burling LLP.
-- Case summary by Joshua Lim, Assistant Editor