The Federal Circuit ruled that an "interested party" under 28 U.S.C. § 1491(b)(1) only includes actual or prospective bidders. It reasoned that this interpretation kept the statute's definition of "interested party" internally consistent. The Court was further convinced by statutory history showing that Congress intentionally narrowed its definition in similar statutes that existed during the drafting of 28 U.S.C. § 1491(b)(1).
Percipient.ai v. United States, Fed. Cir., No. 2023-1970
- Background - The National Geospatial-Intelligence Agency (NGA) issued a solicitation to improve its collection, interpretation, and storage of visual intelligence data. It also sought "Computer Vision" (CV) capabilities, which is a type of artificial intelligence technology that trains and uses computers to derive geospatial intelligence data from imagery. NGA awarded this SAFFIRE contract to CACI, Inc.-Federal (CACI).
- Percipient.ai: Percipient.ai (Percipient) offered a commercial CV platform that it claimed could have met NGA's CV requirements. Because it could not meet a separate component of the solicitation, it did not bid on the contract. This meant it was not a bidder or a prospective bidder.
- Protest - However, Percipient filed a bid protest with COFC contending that NGA did not comply with its obligations under 10 U.S.C. § 3453(b)(1). This requires agency heads to "acquire...commercial products...to the maximum extent practicable." Percipient alleged it could bring this protest under 28 U.S.C. § 1491(b)(1). COFC dismissed the protest finding that the Federal Acquisition Streamlining Act (FASA) task order bar applied. A panel from the Federal Circuit Court reversed and remanded with a dissent. The government petitioned for a rehearing en banc to define an "interested party" in 28 U.S.C. § 1491(b)(1).
- 28 U.S.C. § 1491(b)(1) - This statute grants jurisdiction to both COFC and district courts to render judgment on an action by "an interested party objecting to a solicitation by a Federal agency for bids or proposals for a proposed contract or to a proposed award or the award of a contract or any alleged violation of statute or regulation in connection with a procurement or a proposed procurement."
- Percipient's Interpretation: Percipient claimed this statute had three prongs that each provided an independent basis for objection: (1) a solicitation for a proposed contract, (2) a proposed award or the award of a contract, and (3) any alleged violation of statute or regulation in connection with a procurement or a proposed procurement.
- Main Issue - This en banc proceeding sought to answer who can be "an interested party" objecting to an alleged violation of statute or regulation in connection with a procurement or a proposed procurement under 28 U.S.C. § 1491(b)(1).
- Decision - The majority ultimately concluded that an "interested party" must be an actual or prospective bidder or offeror whose direct economic interest would be affected by the award or failure to award the contract.
- Statutory Interpretation: The court rejected Percipient's interpretation because it would interpret "interested party" to have a different definition multiple times in the same sentence. Additionally, there was no indication that the statute was to be divided into three prongs since the statute used one sentence.
- Statutory History: The court supported its conclusion with statutory history and the similarities between the language of § 1491(b)(1), the Brooks Act, and the Competition in Contracting Act (CICA). The Brooks Act was in effect while § 1491(b)(1) was being drafted, and it defined "interested party" as "an actual or prospective bidder." CICA used the same definition. The statutory history for these showed that Congress specifically decided against broader language that would permit standing to subcontractors. This convinced the court that the term "interested party" had a settled meaning of "an actual or prospective bidder" when § 1491(b)(1) was enacted.
- Dissent
- Statutory Interpretation: The dissent pointed out that the government's interpretation also has multiple definitions of interested party in the same sentence. For the first prong, it would include a party with interest in a solicitation. Under the second prong, it would include a party with interest in a proposed or actual award. Already, a party may be an interested party under one prong but not the other.
- Statutory History: The dissent found it improper to adopt CICA's definition for "interested party." CICA does not even include the subject matter of interest at issue. The § 1491(b)(1) language, "any alleged violation of statute or regulation in connection with a proposed award or award of a contract," is intentionally broad. The court should ask whether a party has a direct economic interest in the agency's violation of a statute that's connected with a procurement, not if the party has direct economic interest in a solicitation, proposed award, or award.
The plaintiff was represented by Hamish Hume, Samuel Charles Kaplan, Eric J. Maurer, and Gina Alicia Rossman of Boies Schiller Flexner LLP. The government was represented by Gallina I. Fomenkova, Reta Emma Bezak, Emma E. Bond, Patricia M. McCarthy, Corinne Anne Niosi, and Yaakov Roth of DOJ. The defendant-appellee was represented by Anne Perry, Jonathan Scott Aronie, Townsend Bourne, Ariel Debin Collinsworth, and Lillia Jo Damalouji.
-- Case summary by Joshua Lim, Assistant Editor.