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The protester believed its commercial software could fulfill the agency’s needs. But the protester didn’t bid on the contract. Instead, the protester wanted to provide its software as a subcontractor. The awardee, however, declined to team up with the protester, and the agency didn’t think the protester’s software was all that. So the protester filed suit, alleging the agency violated its statutory duty to seek commercially available solutions. The government argued the protester lacked standing — the protester was just a disappointed subcontractor, not an actual offer. But the COFC sided with the protester. The statute that requires the government to seek commercial solutions imparts rights on offerors of commercial items who are not actual bidders. The protester had standing to vindicate those rights.

Percipient AI, Inc. v. United States, COFC No. 23-28C

Background

The National Geospatial-Intelligence Agency (NGA) issued solicitation for a computer vision system called SAFFIRE. Percipient AI had a commercial program called Mirage that met some, but not all, of NGA’s requirements. Consequently, Percipient decided not to submit a proposal in response to NGA’s solicitation. Percipient figured NGA would incorporate its software into the SAFFIRE as part of the agency’s obligation to use commercial products.

NGA awarded the SAFFIRE contract to CACI, Inc. Percipient asked CACI if it was interested in the Mirage software. CACI was a just a tease. Nothing came of Percipient’s overtures. CACI decided to develop its own software.

Percipient asked NGA if it was interested. Percipient even demonstrated Mirage’s capabilities for NGA. But NGA demurred.

Percipient filed a protest with the Court of Federal Claims. Percipient reasponed 10 U.S.C. § 3453 requires defense agencies to use commercial items. the maximum extent possible. Percipient contended NGA ignored this obligation’ the agency went with CACI’s developed solution when it could’ve incorporated Percipient’s commercial solution. The government moved to dismiss.

Analysis

Subject Matter Jurisdiction

Under the Tucker Act, the court only has jurisdiction over an alleged statutory violation in connection with a procurement. The government argued Percipient’s protest broached a matter of contract administration and was not connected a procurement.

The court rejected the government’s argument. A protest does not become a matter of contract administration simply because the statutory violation occurred after award. The Tucker Act does not require an objection to the actual procurement, only an objection to a statutory violation connected to a procurement.

Standing

The government also argued Percipient lacked standing. The government reasoned Percipient was not an actual bidder on the SAFFIRE contract. At best, Percipient was a disappointed subcontractor. Percipient might be disappointed it was spurned by CACI, but that didn’t give it standing to protest.

The court, however, opined the actual bidder requirement for standing is not absolute. Several cases have found standing where the protester was not a bidder but had some personal stake in the outcome of the protest.

In this case, Percipient alleged a violation of 10 U.S.C. § 3453. This statute gives rights to “offerors of commercial products.” Indeed, the statute even distinguishes between offerors of commercial products and bidders. This indicates a party need not be an actual bidder to assert a claim under § 3453.

Additionally, §3453 imposes an obligation on agencies to incorporate commercial products beyond the contract award. For instance, the statute requires agencies to perform market research before issuing task or delivery orders. This further indicated a non-bidder has rights under the statute.

The government reasoned Percipient’s inability to perform the entire SAFFIRE contract meant it lacked standing. Again, however, the court found this argument was belied by statutory text. The statute allows agencies to incorporate “components” of commercial items. The use of the word “component” shows the statute contemplate the agency using contractors who may not be able to meet all the agency’s requirements.

In short, even though it was not an actual offeror, Percipient had standing under § 3453.

Percipient is represented by Samuel C. Kaplan, Hamish P.M. Hume, Eric J. Maurer, and Gina A. Rossman. The intervenor, CACI, is represented by Anne B. Perry, Jonathan S. Aronie, and Ariel E. Debin. The government is represented by Reta E. Bezak, Brian M. Boynton, Patricia M. McCarthy, and Corinne A. Nisoi of the Department of Justice as well as Graham Day of the National Geospatial-Intelligence Agency.

–Case summary by Craig LaChance, Senior Editor