Next month only one case scheduled for oral argument attracted an amicus brief. That case is a government contract case, Percipient.AI, Inc. v. United States. The Federal Circuit granted en banc rehearing in this case to reconsider the issue of standing to allege a violation of a statute or regulation in connection with the procurement of a government contract. This is our argument preview.
In its petition for rehearing, the United States asked the Federal Circuit to consider the following questions:
- “Does a protester need to be an actual or prospective bidder on the procurement at issue to be an interested party with standing to allege a violation of a statute or regulation in connection with a procurement or proposed procurement under 28 U.S.C. § 1491(b)(1)?”
- “Does the jurisdiction of the Court of Federal Claims to consider a protest alleging a violation of statute or regulation in connection with a procurement or proposed procurement allow review of an agency’s administration of the performance of a procurement contract?”
- “Does the Federal Acquisition Streamlining Act (FASA), 10 U.S.C. § 3406(f), which prohibits the protest of the issuance or proposed issuance of a task or delivery order, bar a protester’s challenge to the performance of a task order, [w]hich necessarily is directly and causally related to the issuance or proposed issuance of that task order?”
In its order granting the petition, however, the Federal Circuit essentially indicated it would address only the first question presented. It requested the parties “file new briefs, which shall be limited to standing under 28 U.S.C. § 1491(b)(1) and address the following question: Who can be ‘an interested party objecting to . . . any alleged violation of statute or regulation in connection with a procurement or a proposed procurement’ under 28 U.S.C. § 1491(b)(1)?” In the same order, the court noted it “will not revisit and does not require additional briefing on the issues of task bar under the Federal Acquisition Streamlining Act of 1994 (FASA), 10 U.S.C. § 3406(f); subject matter jurisdiction under 28 U.S.C. § 1491(b)(1); and timeliness of claims under Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308 (Fed. Cir. 2007).”
In Percipient’s opening en banc brief, Percipient argued “[a] plaintiff is an ‘interested party’ that can bring a claim under the third prong of § 1491(b)(1) if the Government’s alleged legal violation injured that plaintiff by directly preventing it from offering its goods or services to meet the needs of a Government agency.” According to the Percipient, “[t]hat person has a direct competitive interest in challenging the alleged legal violation.” Percipient maintains “[i]t would violate the plain text of § 1491(b)(1) to require a person bringing a claim solely under the third prong of § 1491(b)(1) to show that they were an actual or potential bidder on a solicitation or for a contract.” Alternatively, Percipient also argued, “any party who could demonstrate standing under the [Administrative Procedure Act] qualifies as an interested party who can bring a claim under § 1491(b)(1)’s third prong.”
In its response brief, the United States argues that, “[f]or decades,” the Federal Circuit “has construed the term ‘interested party’ in § 1491(b)(1) in accordance with the Competition in Contracting Act’s definition of the same term in the same context to mean ‘an actual or prospective bidder or offeror whose direct economic interest would be affected by the award of the contract or by failure to award the contract.’” The government contends “[t]he text, structure, and history of § 1491(b)(1) confirm that the Court’s longstanding interpretation.” It maintains “Congress did not . . . fundamentally alter the nature of what a bid protest is; and it did not give private businesses a cause of action to monitor legal compliance in contracts to which they are not parties.” According to the government, “a bid protest—assuming it succeeds on the merits—has to materially advance the possibility that the protester will come to be in privity with the Government in the procurement being challenged.” It suggest this “is not this case” here “because Percipient did not participate in, and by its own admission never had any intention of competing for, the [relevant] procurement.”
In its reply brief, Percipient points out how “[t]he third prong of 28 U.S.C. § 1491(b)(1) gives the [Court of Federal Claims] jurisdiction over claims that challenge a legal violation that is ‘in connection with a procurement,’ including a violation that is not itself a solicitation or contract award.” According to Percipient, “[i]t follows that an ‘interested party’ with standing to bring a challenge solely under that third prong cannot be determined by asking whether the person was an actual or prospective bidder for a solicitation or contract.” It maintains “a person is an ‘interested party’ to bring a third-prong-only claim if it can show that ‘but for’ the legal violation it challenges, it would be able to offer its goods or services to meet the Government’s procurement needs.”
Two amicus briefs were filed in support of Percipient.
Palantir Technologies filed an amicus brief arguing that standing exists “for parties that are not ‘actual or prospective offerors.’” It argues “claims described in Section 1491(b)(1)’s third prong are qualitatively different from and broader than the claims described in the first two prongs, which are expressly limited to objections to solicitations/requests for offers and proposed or actual contract awards, respectively.” Palantir suggests the “third prong is not so confined, reaching wrongful procurement-related Government conduct that goes beyond problematic solicitations or award selection decisions.”
National Industries for the Blind also filed an amicus brief. It urges the Federal Circuit “to affirm the decision below that a party other than the direct offeror on a federal contract may be an ‘interested party’ with standing to challenge an agency’s violation of statute or regulation in connection with a procurement or proposed procurement under the Tucker Act.” NIB contends nonprofit agencies serving the blind “have a direct interest in challenging unlawful procurements that fail to comply with the requirements” of the Javits-Wagner-O’Day Act. Thus, NIB argues, these nonprofit agencies “are . . . interested parties under the third prong of the Tucker Act’s jurisdictional provision.” NIB suggests any decision by the Federal Circuit “should preserve” these agencies’ “ability to challenge procurement actions that violate the JWOD Act, regardless of whether the Court affirms the panel’s holding with respect to commercial sources, like Percipient.ai.”
Oral argument is scheduled to be heard on Monday, June 9 at 10:00 am in Courtroom 201. We will keep track of this case and report on any developments.