Federal Circuit Narrows FASA Task Order Bar, Expands "Interested Party" Standing

Crowell & Moring LLP


Our founders aspired to create a different kind of law firm when they launched Crowell & Moring in 1979. From those bold beginnings, our mission has been to provide our clients with the best services of any law firm in the world through a spirit of trust, respect, cooperation, collaboration, and a commitment to giving back to the communities around us.
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 ...
United States Government, Public Sector
To print this article, all you need is to be registered or login on Mondaq.com.

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.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

See More Popular Content From

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.

Learn More