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In a spate of recent decisions, the Federal Circuit has been clarifying and expanding the Court of Federal Claims’ jurisdiction over government contracts cases. This new decision, which limits the FASA bar and expands the definition of an interested party in bid protests, may be the most momentous.
Percipient.AI, Inc. v. United States, CACI, Inc.-Federal, Fed. Cir. 2023-1970
- Task Order – The National Geospatial-Intelligence Agency awarded a task order to CACI for obtaining and storing intelligence data. The protester, Percipient. AI, did not bid on the task order. The task order had two major requirements; Percipient could only provide one of them. Nevertheless, Percipient expected it would take part in the contract. Title 10 section 3453 establishes a preference for commercial services. Percipient provided its capability as a commercial service. So Percipient thought that in accordance with this preference, it would participate in the task order.
- Protest – But neither the agency nor CACI invited Percipient to participate in the task. Percipient filed a protest with the COFC, alleging the agency had violated its obligations under 10 U.S.C. 3453 to consider commercial services. The COFC dismissed the protest for lack of jurisdiction. The COFC reasoned the protest was connected to a task order and thus precluded by the FASA task order bar. Percipient appealed to the Federal Circuit.
- FASA Bar – The Federal Circuit held the COFC misapplied the FASA task order bar. The FASA bar precludes protests made in connection with the issuance of a task order. The Federal Circuit held that the bar only applies when a protester asserts the wrongfulness or seeks to set aside a task order. Here, however, Percipient was not challenging the validity of the task order or any action that led to issuance of the order. Rather, Percipient alleged a violation of 10 U.S.C. 3453. And, it was arguing, that but for that violation, it would have been allowed to participate in the task order. The FASA bar, the Federal Circuit opined, does not apply to actions taken under or after issuance of the task order.
- Tucker Act – The Tucker Act grants the COFC jurisdiction over protests (1) challenging an award, (2) challenging a solicitation, or (3) alleging a violation of a statute or regulation in connection with a procurement. Percipient claimed the COFC had jurisdiction under the third prong. The government disputed this, arguing that Percipient was not challenging a procurement but objecting to performance of a task order. But the Federal Circuit sided with Percipient. A procurement encompasses all stages of the process of acquiring services up until contract completion. Thus, Percipient’s challenge was in connection with procurement
- Interested Party – The Federal Circuit has defined an interested party as an actual or prospective bidder whose direct economic interests would be impacted by the award of the contract. Here, Percipient was not an actual or prospective bidder. But the court held Percipient was still an interested party. The court reasoned the interested party definition only applies to protests brought under the first two prongs of the Tucker Act—i.e., protests challenging an0 award or a solicitation. But Percipient brought its protest under the third prong, alleging a violation of statute. The court held that even if a protester is not an offeror or a prospective offeror, it can be an interested party when it alleges violation of a procurement-related statute, and that the alleged violation impacts its economic interests. Percipient had satisfied that threshold.
- Dissent – A judge of the Federal Circuit panel. The judge opined the majority had narrowed the FASA bar and expanded interested party status in contravention of the Federal Circuit’s precedents
Percipient is represented by Smauel Charles Kaplan, Hamish Hume, Eric J. Maurer, and Gina Alicia Rossman of Bois Schiller Flexner LLP. CACI is represented by Anne Perry, Jonanthan Scott Aronie, Townsend Bourne, Lillia Jo Damalouli, and Ariel Elizabeth Debin of Sheppard Mullin. The government is represented by Reta Emma Bezak, Brian M. Boynton, Patricia M. McCarthy, and Corinne Anne Niosi of the Department of Justice.
–Case summary by Craig LaChance, Editor in Chief
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