Interview transcript:
Terry Gerton There’s always a lot we can learn when we look at protest decisions, bid protest decisions, and you’ve got an interesting case for us this morning. Percipient — tell us what was going on here.
Dan Ramish So, Terry, this is a really big case and one that was closely watched. The Federal Circuit issued a rare en banc decision heard by the full court, holding that to qualify as an interested party eligible to bring a protest at the Court of Federal Claims, a company must be an actual or prospective bidder or offeror, regardless of the type of challenge they’re bringing. And this was important to Percipient because they were a subcontractor, and so subcontactors, because they’re not actual or prospective bidders, can’t bring a protest. So this may seem like an obvious result, but four out of the 11 judges that ruled on this came out the other way. So an interesting case.
Terry Gerton But Percipient actually wasn’t a subcontractor, right? They wanted to be, but weren’t selected.
Dan Ramish That’s right, they were a prospective subcontractor.
Terry Gerton What was their protest all about?
Dan Ramish So to kind of recap the background here, the National Geospatial-Intelligence Agency had a requirement under the SAFFIRE [(Structured Observation Management Analytic Automation Architecture Framework For Integrated Reporting and Exploitation)] solicitation that had two parts. One of them was a repository to store, disseminate and regulate access to data. And the other part was a computer vision AI part. And Percipient wanted to provide the computer vision piece. They admitted they couldn’t provide the repository piece. And they offered commercial computer vision software. So there is a statutory preference for commercial software. And they raised their interest to both the agency and the awardee on the SAFFIRE procurement after award. The awardee was CACI. And the argument from Percipient was, they didn’t get a fair shake in having their commercial software considered to meet the computer vision part of the larger requirement.
Terry Gerton The interesting thing here is that the court ultimately was considering Percipient’s standing, right, to even bring the protest in the first place.
Dan Ramish Yes, that’s exactly right. And the reason this issue came up was that the Tucker Act, which defines the bid protest jurisdiction of the Court of Federal Claims, uses the term “interested party” to define who has standing. But it doesn’t define the term. Now, the Competition in Contracting Act, which covers the GAO’s bid protest jurisdiction, does define the terms. And part of that definition, the critical part, is that the interested party must be an actual or prospective bidder.
Terry Gerton So how did the court consider Percipient’s standing, then? What made the ruling significant?
Dan Ramish So this went through an initial protest at the Court of Federal Claims. There was a panel decision that created a special standing interested party rule for this type of protest brought by Percipient. And specifically, that meant challenges based on the preference for commercial products and services that were brought under a specific part of the jurisdictional grant in the Tucker Act. And that part relates to violations of statute or regulation in connection with the procurement. And Percipient said, as long as a protest uses that prong and doesn’t challenge the solicitation or award or proposed award of a contract, there should be a special test. Because that goes beyond the jurisdiction that GAO has under CICA. And so it doesn’t make sense to apply the same test.
Terry Gerton Why were folks really paying attention to this? What would have happened if the court had decided in Percipient’s favor?
Dan Ramish Well, all along this has been viewed as very high stakes because of the potential practical implications. The concern was that there could be many more protests brought by commercial products and services vendors that didn’t have the ability to bid on a particular requirement, but could easily demonstrate that they could be prospective subcontractors on the job. So the potential to open the floodgates was really the underlying concern, I think, by those in the government contracts community.
Terry Gerton I’m speaking with Dan Ramish. He’s a partner at Haynes Boone. So Dan, what does this mean in the near term and the longer term for other vendors like Percipient? What options do they have to make sure that they’re considered, especially in a case where, similar to the Trump administration, there’s a high focus on procuring commercial products?
Dan Ramish Sure. So there were a couple of options that were laid out by the majority, in their opinion. And this was part of the consideration. They said there are other ways to enforce the commercial item preference. If a commercial products or services company wants to ensure they have a fair shake, one of the ways is they can team with an existing prime to offer their product. And then the prime could protest that commercial products and services preference wasn’t being appropriately implemented in the award. Or the court said they could also team with another traditional subcontractor and decide between them who would be the prime and who would the sub. And they’d be in a similar scenario. Whoever was the prime could bring the challenge that commercial products and services weren’t being used.
Terry Gerton If you’re a contractor and you’re thinking about a protest and you have to decide between whether you’re going to protest with GAO or the Court of Federal Claims, does this inform how you’d make that decision?
Dan Ramish This doesn’t really shake that up substantially, I would say. I would mention there was one other option that came up in oral argument, which was CACI’s counsel said that Percipient could have challenged the way the requirement was originally structured in a pre-award protest to say that it frustrated the ability to access the commercial software. So that’s another wrinkle. The piece, actually, that maybe more broadly has implications here, is in the original panel decision, there was a decision on the FASA [(Federal Acquisition Streamlining Act)] task order protest bar. And so one of the original issues in the case was whether Percipient’s protest could be brought because the SAFFIRE solicitation related to a task or delivery order. And the original final decision would have established a new special, actually narrower test for bringing task order protests at the Court of Federal Claims. And so because the full court, sitting en banc, ruled against Percipient on the jurisdictional standing question related to interested party, that cut off the potential that the panel decision could come back and reestablish this narrower test for task order protests.
Terry Gerton You mentioned there was a minority opinion here, four out of the 11 disagreed. Are there any significant features in the minority opinion that might play out over time?
Dan Ramish Well, the argument of the minority was largely based around the language of the statute. They said where the majority said that the Congress used the “interested party” term, recognizing in the broader procurement context that this was a term of art that had a settled definition, that Congress didn’t define the term, and that it should be assumed that they did that intentionally. And they pointed out, kind of consistent with Percipient’s argument, that the protest jurisdiction at GAO is narrower and doesn’t cover all of the types of protests that can be brought under that third prong. So I think it will be interesting to see whether this affects other protests that challenge violations of statute or regulation in connection with a procurement without any relation to a solicitation or award or proposed award. That could be an area that’s affected.
Terry Gerton But for now, the law is settled, right?
Dan Ramish For now, the law is settled. We’re back to the status quo. And I think some agencies may breathe a sigh of relief that they won’t have to deal with an influx of many new subcontractor protests.
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