percipient.ai, Inc. v. United States

104 F.4th 839

• Court: Court of Appeals for the Federal Circuit
• Decided: June 7, 2024
• Docket: 23-1970
• Status: Published

Opinion

Case: 23-1970 Document: 46 Page: 1 Filed: 06/07/2024

United States Court of Appeals for the Federal Circuit ______________________

PERCIPIENT.AI, INC., Plaintiff-Appellant

v.

UNITED STATES, CACI, INC.-FEDERAL, Defendants-Appellees ______________________

2023-1970 ______________________

Appeal from the United States Court of Federal Claims in No. 1:23-cv-00028-EGB, Senior Judge Eric G. Bruggink. ______________________

Decided: June 7, 2024 ______________________

SAMUEL CHARLES KAPLAN, Boies Schiller Flexner LLP, Washington, DC, argued for plaintiff-appellant. Also rep- resented by HAMISH HUME, ERIC J. MAURER, GINA ALICIA ROSSMAN.

RETA EMMA BEZAK, Commercial Litigation Branch, Civil Division, United States Department of Justice, Wash- ington, DC, argued for defendant-appellee United States. Also represented by BRIAN M. BOYNTON, PATRICIA M. MCCARTHY, CORINNE ANNE NIOSI.

ANNE PERRY, Sheppard Mullin Richter & Hampton LLP, Washington, DC, argued for defendant-appellee Case: 23-1970 Document: 46 Page: 2 Filed: 06/07/2024

CACI, Inc.-Federal. Also represented by JONATHAN SCOTT ARONIE, TOWNSEND BOURNE, LILLIA JO DAMALOUJI, ARIEL ELIZABETH DEBIN. ______________________

Before TARANTO, CLEVENGER, and STOLL, Circuit Judges. Opinion for the court filed by Circuit Judge STOLL. Dissenting opinion filed by Circuit Judge CLEVENGER. STOLL, Circuit Judge. This case principally involves the question of whether a prospective offeror of commercial items to a government contractor may bring an action against the Government for alleged procurement-related statutory violations under the Tucker Act, 28 U.S.C. § 1491(b)(1) (allowing suit by “inter- ested party objecting to . . . any alleged violation of statute or regulation in connection with a procurement or a pro- posed procurement”), where the allegations do not chal- lenge a contract, proposed contract, or solicitation for a contract between the Government and its contractor or the issuance of a task order under such a contract. Percipi- ent.ai, Inc. appeals the decision of the United States Court of Federal Claims granting the Government’s and interve- nor CACI, Inc.-Federal’s (collectively, “Defendants”) mo- tions to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1) of the Rules of the U.S. Court of Federal Claims. The trial court erred in holding that the Federal Acquisition Streamlining Act of 1994 (FASA) task order bar, 10 U.S.C. § 3406(f)(1), applies to Percipient’s protest, thereby removing the case from coverage by the Tucker Act. Separately, we reject Defendants’ alternative argu- ments for affirming the trial court, which are based on the Tucker Act itself, standing, and timeliness. We thus re- verse and remand. Case: 23-1970 Document: 46 Page: 3 Filed: 06/07/2024

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BACKGROUND The National Geospatial-Intelligence Agency (NGA) provides intelligence data to the federal government by an- alyzing images and geospatial information. NGA issued a solicitation, referred to as SAFFIRE, to sustain and im- prove its processes for obtaining and storing visual intelli- gence data, and integrating those capabilities with computer vision (CV), a form of artificial intelligence. 1 Per- cipient’s complaint sets forth the relevant facts. SAFFIRE sought a single award Indefinite Delivery, Indefinite Quantity (IDIQ) contract. This type of contract “allows an agency to issue a broad solicitation for a general procurement goal and then more detailed solicitations for individual task orders as specific needs arise.” See, e.g., 22nd Century Techs., Inc. v. United States, 57 F.4th 993, 996 (Fed. Cir. 2023). The SAFFIRE solicitation required, broadly, (1) “an enterprise repository backbone for storing, managing, and disseminating data,” known as “SOM En- terprise Repository” or “SER”; and (2) a user-facing CV System. J.A. 38–39 ¶ 6. Task Order 1, solicited simulta- neously with the SAFFIRE solicitation, directed the con- tractor to, among other things, develop and deliver the CV suite of systems. The NGA awarded both the SAFFIRE contract and the Task Order 1 to CACI. Percipient offers a commercial CV platform, “Mirage,” that could meet NGA’s CV System requirements. But Per- cipient was unable to meet the SER component of the SAFFIRE solicitation. It also expected NGA and CACI to

1 The facts are largely taken from Percipient’s com- plaint. When a party moves to dismiss for lack of subject matter jurisdiction, the court assumes that the undisputed facts in the complaint are true and draws reasonable infer- ences in the plaintiff’s favor. Acevedo v. United States, 824 F.3d 1365, 1368 (Fed. Cir. 2016). Case: 23-1970 Document: 46 Page: 4 Filed: 06/07/2024

comply with 10 U.S.C. § 3453, which establishes a prefer- ence for commercial services, and consider Mirage for the CV System. With these expectations, Percipient did not bid for the SAFFIRE contract or challenge the SAFFIRE solic- itation or award. Percipient contacted NGA and explained that “in addi- tion to being legally required [to consider commercial prod- ucts under § 3453], using commercial software [like Mirage] would save hundreds of millions of dollars[ and] allow immediate mission impact potentially years ahead of government developed software.” J.A. 71–72 ¶ 91. It also requested a meeting to discuss why NGA “appeared to be pursuing the development of government software without a thorough test and evaluation process of commercially available software.” Id. NGA informed Percipient that if it wanted to take part in SAFFIRE, it could contact CACI. At the resulting meeting, Percipient asked CACI to evalu- ate Mirage for SAFFIRE and CACI responded: “That ship has sailed.” J.A. 72 ¶ 93. Percipient then asked NGA to independently evaluate Mirage as a commercial solution for SAFFIRE’s CV System. NGA confirmed that commer- cial products would be evaluated once CACI finished re- viewing NGA’s legacy system and that the “that ship has sailed” statement was an “unfortunate miscommunica- tion.” J.A. 74 ¶¶ 98–100. About two months later, Percipient demonstrated Mi- rage to CACI, received positive feedback, and was told that CACI should do a more technical “deep dive” into Mirage— an analysis that never occurred. J.A. 76–77 ¶¶ 107–09. In- stead, five months passed, and Percipient learned, at the 2021 GEOINT Symposium, that CACI intended to build its own software to meet SAFFIRE’s requirements. Percipient then approached NGA, sharing its concern about whether CACI could objectively evaluate Mirage’s CV capabilities (given its stated intention to develop soft- ware itself) and requesting the opportunity to demonstrate Case: 23-1970 Document: 46 Page: 5 Filed: 06/07/2024

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Mirage’s capabilities to NGA directly. NGA agreed to set up a demonstration, stated the agency’s intent to evaluate commercial alternatives before building software inhouse, and asked that Percipient “ease up on the legal pressure.” J.A. 79 ¶¶ 117–18. In December 2021, Percipient demonstrated Mirage to NGA representatives, one of whom stated after the demon- stration that Mirage “meets all of NGA’s analytic transfor- mation requirements.” J.A. 79–80 ¶¶ 119–20. Over several months NGA and Percipient worked to reach an agreement for NGA to test Mirage with live data, which Percipient agreed to do for free. After some back-and-forth about whether to use live data at all, NGA relented and finally finished its testing in October 2022. But the testing, according to Percipient’s complaint, was subpar—with NGA running only four searches on Mi- rage over a twelve-week testing period. Percipient offered, free-of-charge, to extend the testing period. But a month later NGA explained that it evaluated Mirage as a “Ma- chine Learning (ML) Platform” rather than an “Analytical tool,” which Percipient took as confirmation that NGA had “deliberately failed to evaluate Mirage’s ability to meet SAFFIRE’s CV System requirements,” and thus failed to evaluate whether Mirage could be an alternative to CACI’s development of SAFFIRE’s CV System inhouse. J.A. 85 ¶ 137. NGA confirmed that there would be no broader eval- uation of Mirage. Percipient then filed an action in the Court of Federal Claims under what is commonly called the “bid protest” provision of the Tucker Act, 28 U.S.C. § 1491(b)(1). In its complaint, Percipient asked the court to enjoin NGA’s alleged violation of its obligations under 10 U.S.C. § 3453, titled “Preference for commercial products and commercial services,” which requires heads of agencies to ensure their contractors conduct market research to deter- mine if commercial or nondevelopmental items are Case: 23-1970 Document: 46 Page: 6 Filed: 06/07/2024

available that can meet the agency’s procurement require- ments. This procurement statute requires, “to the maxi- mum extent practicable,” a preference for commercial or nondevelopmental items or services. See 10 U.S.C. § 3453(a). The Government and CACI filed motions to dismiss Percipient’s complaint, arguing that (1) the Court of Fed- eral Claims lacked subject matter jurisdiction based on the FASA task order bar and, separately, the Tucker Act; (2) Percipient lacked standing; and (3) Percipient’s com- plaint was untimely. The Tucker Act, in pertinent part, provides the Court of Federal Claims with jurisdiction: to render judgment on an action by an interested party objecting to [1] a solicitation by a Federal agency for bids or proposals for a proposed contract or to [2] a proposed award or the award of a con- tract or [3] any alleged violation of statute or regu- lation in connection with a procurement or a proposed procurement. 28 U.S.C. § 1491(b)(1) (emphases added). Percipient as- serted that it was an interested party and that the Court of Federal Claims had jurisdiction under the third prong of the Tucker Act provision. The FASA task order bar provides that: (1) A protest is not authorized in connection with the issuance or proposed issuance of a task or deliv- ery order except for — .... (B) a protest of an order valued in excess of $25,000,000. Case: 23-1970 Document: 46 Page: 7 Filed: 06/07/2024

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(2) . . . [T]he Comptroller General of the United States shall have exclusive jurisdiction of a protest authorized under paragraph (1)(B). 10 U.S.C. § 3406(f) (emphasis added). 2 While the trial court initially denied the motions to dis- miss, Percipient.ai, Inc. v. United States, 165 Fed. Cl. 331, 340 (2023), it later vacated its opinion. 3 After additional briefing, the court held that the FASA task order bar ap- plied and granted the motions to dismiss for lack of subject matter jurisdiction. Percipient.ai, Inc. v. United States, No. 23-28C, 2023 WL 3563093, at *3 (Fed. Cl. May 17, 2023). Percipient appeals. We have jurisdiction under 28 U.S.C. § 1295(a)(3). DISCUSSION “We review a decision by the [Court of Federal Claims] to dismiss a case for lack of subject matter jurisdiction de novo.” Diversified Grp. Inc. v. United States, 841 F.3d 975, 980 (Fed. Cir. 2016). We may affirm the court’s judgment on any ground supported by the record. El-Sheikh v. United States, 177 F.3d 1321, 1326 (Fed. Cir. 1999). And we assume all facts alleged in a complaint as true and draw

2 There is a FASA task order bar that applies to pub- lic contracts generally, 41 U.S.C. § 4106(f)(1), and one that applies to the Department of Defense in particular, 10 U.S.C. § 3406(f)(1). The text of the two provisions is similar, except for the different monetary thresholds over which task order protests may be heard by the Comptroller General. Here, 10 U.S.C. § 3406(f)(1) is applicable because NGA operates under the oversight of the Department of Defense. 3 The trial court’s vacated opinion addressed subject matter jurisdiction, standing, and timeliness. Case: 23-1970 Document: 46 Page: 8 Filed: 06/07/2024

all reasonable inferences in favor of the plaintiff. Henke v. United States, 60 F.3d 795, 797, 799 (Fed. Cir. 1995). Percipient argues that its protest is not “in connection with the issuance or proposed issuance of a task or delivery order” and thus falls outside the FASA task order bar. See Appellant’s Br. 28–48. Defendants disagree, arguing that the trial court correctly determined that the FASA task or- der bar divests the Court of Federal Claims of jurisdiction over Percipient’s protest. See Government’s Br. 13–28; CACI’s Br. 23–38. Defendants also assert alternative grounds for affirmance, including that the trial court lacks subject matter jurisdiction because Percipient’s protest is not “in connection with a procurement or a proposed pro- curement,” a requirement under the third prong of the Tucker Act. See Government’s Br. 30–33; CACI’s Br. 50– 52. The Government also alternatively argues that we should affirm the trial court’s dismissal because Percipient lacks standing and, separately, argues that one of Percipi- ent’s claims challenges terms of the SAFFIRE solicitation and is thus untimely. See Government’s Br. 34–38. We address each issue in turn. I First, we turn to subject matter jurisdiction. For the Court of Federal Claims to have jurisdiction, Percipient’s protest must be outside the FASA task order bar and within the jurisdictional limits of the Tucker Act. For the reasons below, we hold that the Court of Federal Claims has subject matter jurisdiction over Percipient’s protest. A We begin by addressing the FASA task order bar and whether the Court of Federal Claims erred by dismissing Percipient’s complaint for raising claims in connection with the issuance of a task order. FASA provides that a “protest is not authorized in connection with the issuance or pro- posed issuance of a task or delivery order.” 10 U.S.C. Case: 23-1970 Document: 46 Page: 9 Filed: 06/07/2024

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§ 3406(f)(1). Consistent with the statutory focus on “issu- ance” and this court’s decision in SRA International, Inc. v. United States, 766 F.3d 1409, 1413 (Fed. Cir. 2014), we interpret this language to mean that a protest is barred if it challenges the issuance of the task order directly or by challenging a government action (e.g., waiver of an organi- zational conflict of interest) whose wrongfulness would cause the task order’s issuance to be improper. To deter- mine whether the Court of Federal Claims erred in dis- missing Percipient’s complaint, we analyze each of the claims in the complaint. In doing so it becomes clear that the FASA task order bar does not preclude the Court of Federal Claims from exercising jurisdiction over Percipi- ent’s protest, which does not assert the wrongfulness of, or seek to set aside, any task order. In Count One, Percipient alleges that NGA violated, and will continue to violate, 10 U.S.C. § 3453 and related regulations by refusing to ensure that its contractor for the ongoing SAFFIRE procurement incorporates commercial or nondevelopmental items “to the maximum extent prac- ticable.” J.A. 94–96. There is no mention of—or challenge to—the issuance of the task order. Rather, drawing all rea- sonable inferences in favor of Percipient, Henke, 60 F.3d at 799, we conclude that the claim is directed to NGA’s vi- olation of § 3453 and related regulations after issuance of the task order. In particular, the claim asserts that “Per- cipient has specifically requested on several occasions that NGA and SAFFIRE’s contractor evaluate Mirage for inte- gration into the SAFFIRE procurement, but both have re- fused to do so in favor of launching a developmental effort . . . . NGA therefore has failed to meet its obliga- tion[s]” under § 3453. J.A. 95 ¶ 165. Continuing, the claim asserts that “[i]f NGA complies with its legal obligations and conducts a full and fair evaluation of Mirage’s capabil- ities, it and its contractor will conclude—or at a minimum are substantially likely to conclude—that Mirage can meet their CV System needs for SAFFIRE and should be Case: 23-1970 Document: 46 Page: 10 Filed: 06/07/2024

incorporated into the SAFFIRE procurement.” J.A. 96 ¶ 167. In Count One, Percipient thus seeks NGA’s compli- ance with § 3453 and related regulations to ensure that NGA’s contractor incorporates commercial or nondevelop- mental items “to the maximum extent practicable,” with- out challenging the issuance of Task Order 1 to CACI. Count Two likewise involves allegations that “NGA is violating 10 U.S.C. § 3453 and related regulations by refus- ing to take steps to require its contractor to engage in mar- ket research and make determinations as to whether its needs could be met by commercial or nondevelopmental items.” J.A. 96–98 (cleaned up). Percipient cites § 3453(c)(1)(C) and (c)(5), which require the agency head to “conduct market research . . . before awarding a task or- der,” and “take appropriate steps to ensure that any prime contractor of a contract (or task order or delivery or- der) . . . engages in such market research as may be neces- sary to carry out the requirements of subsection (b)(2)”— i.e., “to incorporate commercial services . . . or nondevelop- mental items” to the “maximum extent practicable.” 10 U.S.C. § 3453(b)(2). The phrase “task order” is present in Count Two. And the language “conduct market re- search . . . before awarding a task order or delivery order” could in some cases be interpreted as “in connection with the issuance or proposed issuance of a task or delivery or- der.” But that’s not the allegation here. Rather, Percipient’s allegation is that NGA violated 10 U.S.C. § 3453 because of its failure to require CACI, its contractor, to engage in market research. The claim states: “NGA’s contractor failed to conduct the necessary market research before proceeding to launch an effort to develop the CV system . . . .” J.A. 97 ¶ 173. This alleged inaction is not in connection with NGA’s issuance or Case: 23-1970 Document: 46 Page: 11 Filed: 06/07/2024

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proposed issuance of the task order. 4 Rather, the focus is on CACI’s actions after issuance of Task Order 1 and its failure to evaluate Mirage for integration into the SAFFIRE’s CV system. In Count Three, Percipient alleges that “NGA improp- erly delegated inherently governmental authority” by al- lowing its contractor to build software to meet SAFFIRE’s computer vision software requirements before conducting market research. J.A. 98–99 (cleaned up). Specifically, Percipient alleges that NGA improperly allowed CACI to decide agency policy for developing artificial intelligence technology. J.A. 99 ¶¶ 179–80. Again, Percipient does not challenge the Government’s issuance of Task Order 1 to CACI. Task Order 1 is not mentioned; nor does this alle- gation more broadly relate to NGA’s issuance of Task Or- der 1. Lastly, Percipient alleges in Count Four that “NGA en- gaged in arbitrary, capricious, and unlawful conduct by re- sisting innovation, by insisting on the wasteful approach of software development, and by engaging in bad faith con- duct.” J.A. 99–101 (cleaned up). Specifically, Percipient alleges that while NGA knows that Mirage meets the CV System requirements, it “is deliberately failing to conduct whatever additional evaluation it claims to be necessary to confirm Mirage’s ability to meet SAFFIRE’s CV System re- quirements.” J.A. 100 ¶ 185. And Percipient details the related representations and actions by NGA that it alleges are evidence of “malicious, bad faith conduct toward

4 See also Oral Arg. at 2:30–3:16 (Percipient’s attor- ney stating that “[t]here may be an allusion in our com- plaint” to insufficient market research prior to the issuance of the task order, “but our complaint, our claims don’t de- pend on that” insufficient market research), https://oralarguments.cafc.uscourts.gov/default.aspx?fl=2 3-1970_11082023.mp3. Case: 23-1970 Document: 46 Page: 12 Filed: 06/07/2024

Percipient.” J.A. 100–01. None of these allegations relates to the issuance of a task order, or even mention task orders. In sum, none of Percipient’s counts is “in connection with the issuance or proposed issuance of a task or delivery order.” 10 U.S.C. § 3406(f)(1). Percipient does not chal- lenge the issuance of Task Order 1 to CACI. Moreover, no allegation asserts that the language of Task Order 1 was deficient or forced the alleged statutory violations to occur. Only one Count mentions the phrase “task order,” but no allegation deals with how NGA worded, issued, or proposed to issue its task order. See also Oral Arg. at 0:30–0:58 (Per- cipient’s attorney saying, “We do not challenge the task or delivery order. We do not seek to set aside a task or deliv- ery order that’s been issued. We do not challenge an action that directly or immediately led to a task or delivery order. We do not challenge an action on which the validity of a task or delivery order depends . . . .”). The Government disagrees because it interprets the language “in connection with” in § 3406(f) to bar all pro- tests that relate to work performed under a task order. See Government’s Br. 16. It argues that whatever results from, i.e., follows or comes after, a task order falls under the task order bar. Id. To support its interpretation, the Government relies on a sentence in SRA, 766 F.3d at 1413, which described the challenged waiver of an organizational conflict of interest as an action that was “directly and caus- ally connected to issuance of [a task order]” in holding that the challenge to that waiver (which if accepted would have undermined the task order) came within the task order bar and therefore was outside the Court of Federal Claims’ ju- risdiction. See Government’s Br. 14, 21–22. The dissent agrees with the Government, asserting that “in connection with the issuance or proposed issuance of a task or delivery order” means anything that stems from, is tied to, or re- sults from the issuance of a task order, including chal- lenges to work performed under Task Order 1. We are unpersuaded. Case: 23-1970 Document: 46 Page: 13 Filed: 06/07/2024

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We find the Government’s interpretation far too broad. The statutory language refers to protests “in connection with the issuance or proposed issuance” of a task order. As Percipient notes, the Government’s interpretation gives no meaning to the words “issuance or proposed issuance.” Specifically, the Government reads the statute as if it broadly bars all protests made in connection with a task order—including work performed by a proper awardee af- ter issuance of a proper task order—rather than just those protests made “in connection with the issuance or proposed issuance of a task” order. Reply Br. 6 (citing 10 U.S.C. § 3406(f)) (emphasis added). This flouts the well-estab- lished principle that “we should construe the statute, if at all possible, to give effect and meaning to all the terms.” Bausch & Lomb, Inc. v. United States, 148 F.3d 1363, 1367 (Fed. Cir. 1998). In our view, the plain meaning of § 3406(f) precludes the Government’s interpretation, which casts a far larger net than what the statute prescribes. We also find the Government’s interpretation unsup- ported by precedent. The SRA opinion cited by the Govern- ment and the dissent does not support the Government’s broad interpretation. 5 The “directly and causally con- nected to issuance of [a task order]” language in SRA is narrower than the interpretation sought by the Govern- ment and, moreover, must be understood in light of the facts at issue there. See, e.g., Arkansas Game & Fish Comm’n v. United States, 568 U.S. 23, 36 (2012) (“Chief Justice Marshall[] sage[ly] observ[ed] that ‘general

5 The dissent misunderstands our language here. We do not “see[] the ‘directly and causally connected to is- suance’ test as ‘far too broad,’” generally. Dissent Op. at 10. Rather, as is clear from our language, it is our posi- tion that the Government’s and dissent’s interpretation of the “directly and causally connected to issuance” language in SRA is far too broad. Case: 23-1970 Document: 46 Page: 14 Filed: 06/07/2024

expressions, in every opinion, are to be taken in connection with the case in which those expressions are used. If they go beyond the case, they may be respected, but ought not to control the judgment in a subsequent suit when the very point is presented for decision.’” (citation omitted)); R.A.V. v. St. Paul, 505 U.S. 377, 386–87 n.5 (1992) (“It is of course contrary to all traditions of our jurisprudence to consider the law on [a] point conclusively resolved by broad lan- guage in cases where the issue was not presented or even envisioned.”). Read in context, we understand SRA’s refer- ence to “directly and causally connected to issuance of [a task order]” to refer to government action in the direct causal chain sustaining the issuance of a task order, not to all actions taken under or after issuance of a proper task order. SRA filed a bid protest in the Court of Federal Claims alleging that the General Services Administration (GSA) violated various laws when it waived an organizational conflict of interest (OCI) after awarding a task order to Computer Sciences Corporation (CSC). SRA, 766 F.3d at 1410–11. There, unlike here, SRA asked the Court of Federal Claims to set aside the issuance of the task order to CSC because of CSC’s OCI. This is a significant differ- ence. Here, Percipient does not challenge the issuance of Task Order 1 to CACI. Notwithstanding its specific challenge to the issuance of the task order to CSC, SRA asserted that the task order bar did not apply. SRA’s principal argument against the application of the task order bar was a temporal one. SRA acknowledged that had GSA waived the alleged OCI before issuance of the task order, the task order bar would apply. Id. at 1413. But because GSA executed the waiver after issuing the task order, SRA argued that the task order bar did not apply because the alleged violation was “temporally separated” from issuance of the task order. Id. at 1412. Addressing SRA’s argument on appeal, we held that “the OCI waiver was directly and causally connected to issuance Case: 23-1970 Document: 46 Page: 15 Filed: 06/07/2024

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of [the task order], despite being executed after issuance” because “GSA issued the waiver in order to go forward with CSC on [the task order].” Id. at 1413. We explained that “although a temporal disconnect may, in some circum- stances, help to support the non-application of the FASA bar, it does not help SRA here.” Id. We further explained that GSA’s delay in executing the waiver was “inconse- quential” since (1) the delay occurred because GSA was un- aware of the organizational conflict earlier; (2) GSA “could have executed a waiver prior to awarding [the task order]”; and (3) “SRA acknowledges that, had GSA waived the al- leged OCI prior to issuance, FASA would have barred its protest.” Id. Read in context, the court’s statement that the OCI waiver was “directly and causally connected to is- suance” does not broadly refer to work performed under, or events caused by the task order as asserted by the Govern- ment here. Indeed, if the Government’s view of the SRA language were right, the court would have found the be- fore-after distinction not even worth the trouble of explain- ing away as it did. Instead, the language refers to an actual challenge to the issuance of the task order regardless of whether the alleged violation occurred after issuance of the task order. 6 Here, Percipient does not challenge the issuance or pro- posed issuance of a task order. Percipient’s requested relief would not alter NGA’s issuance of Task Order 1 to CACI. Rather, Percipient largely challenges the failure of NGA

6 Our decision in 22nd Century Technologies, Inc. v. United States, 57 F.4th 993 (Fed. Cir. 2003), is con- sistent. There, we affirmed the Court of Federal Claim’s holding that the task order bar applied “because 22nd Cen- tury’s challenge is to the alleged failure of the task order to require bidders to recertify as small businesses.” 22nd Century, 57 F.4th at 999–1000. The challenge was to the language of the task order itself. Case: 23-1970 Document: 46 Page: 16 Filed: 06/07/2024

and its contractor to properly review its Mirage product and thereby conduct the necessary research required by statute before developing the CV system. We thus reverse the trial court’s decision that the FASA task order bar ap- plies. B Next, we turn to whether the statutory and regulatory violations alleged by Percipient fall within the Court of Federal Claims’ jurisdiction under the Tucker Act. Percip- ient asserted jurisdiction under the third prong of the Tucker Act: “any alleged violation of statute or regulation in connection with a procurement or a proposed procure- ment.” 28 U.S.C. § 1491(b)(1). We hold that Percipient’s protest—alleging a violation of 10 U.S.C. § 3453 and re- lated regulations, which establish a preference for commer- cial services—is in connection with the SAFFIRE procurement, and thus falls within the Court of Federal Claims’ jurisdiction. Defendants argue that Percipient’s protest falls outside the third prong because it is not “in connection with a pro- curement or a proposed procurement.” Government’s Br. 30–33; CACI’s Br. 50–52. To this end, they character- ize Percipient’s protest as challenging contract perfor- mance and administrative activities. Specifically, the Government argues that the only “procurement” actions af- ter the issuance of an IDIQ contract are “the issuance of a task order and the acquisition-related decisions that are connected to the issuance of that task order.” Govern- ment’s Br. 33. Everything else is contract administration or performance. Id. And because the IDIQ contract incor- porates Federal Acquisition Regulation (FAR) 52.244-6, J.A. 857, which mirrors 10 U.S.C. § 3453, Defendants also argue that Percipient’s complaint is about CACI’s adher- ence to the contract terms, i.e., its performance. See Gov- ernment’s Br. 33; CACI’s Br. 52. We are not persuaded. Case: 23-1970 Document: 46 Page: 17 Filed: 06/07/2024

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We have held that “in connection with a procurement or proposed procurement” involves “a connection with any stage of the federal contracting acquisition process, includ- ing ‘the process for determining a need for property or ser- vices.’” Distributed Sols., Inc. v. United States, 539 F.3d 1340, 1346 (Fed. Cir. 2008). As we have previously ex- plained, “in connection with” is “very sweeping in scope.” RAMCOR Servs. Grp., Inc. v. United States, 185 F.3d 1286, 1289 (Fed. Cir. 1999). And “procurement” encompasses “all stages of the process of acquiring property or services, beginning with the process for determining a need for prop- erty or services and ending with contract completion and closeout.” Distributed Sols., 539 F.3d at 1345–46 (quoting 41 U.S.C. § 403(2)) 7. Naturally, the definition includes stages between issuance of a contract award and contract completion, i.e., actions after issuance of a contract award. Accordingly, “in connection with a procurement or pro- posed procurement” encompasses more than “the issuance of a task order and the acquisition-related decisions that are connected to the issuance of that task order,” the nar- rowed subset Defendants would like us to adopt. This is important in the context of § 3453, whose requirements to maximize acquisition of commercial items suitable to meet the agency’s needs continue and can be violated well after the contract’s award. Defendants’ argument would allow agencies to ignore § 3453 by deferring decisions about com- mercial products until after the contract award. We also reject Defendants’ argument that because the SAFFIRE contract incorporates FAR 52.244-6, which mir- rors § 3453, Percipient’s protest is tethered to contract per- formance and excludes Tucker Act jurisdiction. The Tucker Act allows for “any alleged violation of statute or regulation in connection with a procurement or a proposed

7 In 2011, 41 U.S.C. § 403(2) was recodified at 41 U.S.C. § 111. Case: 23-1970 Document: 46 Page: 18 Filed: 06/07/2024

procurement.” 28 U.S.C. § 1491(b)(1) (emphasis added). Percipient alleges a violation of 10 U.S.C. § 3453, a statute, in connection with the SAFFIRE procurement. This di- rectly conforms with the stated requirements of the third prong of the Tucker Act. We decline Defendants’ invitation to carve limitations untethered to the statute’s plain text into 28 U.S.C. § 1491(b)(1). In sum, Percipient’s protest is “in connection with a procurement” because Percipient alleges NGA violated 10 U.S.C. § 3453 and related regulations, which establish a preference for commercial services, in connection with the SAFFIRE procurement’s CV System. We thus hold that Percipient’s protest falls within the jurisdiction of the Court of Federal Claims under the Tucker Act. II We now turn to standing under 28 U.S.C. § 1491(b)(1). To have standing under the statute, a plaintiff must be an “interested party.” 8 As discussed above, an “interested party” can challenge: (1) a solicitation by a federal agency; (2) a proposed award or the award of a contract; or (3) any alleged violation of statute or regulation in connection with a procurement or proposed procurement. See 28 U.S.C. § 1491(b)(1). Our court has defined “interested party” when the alleged harm-causing government action is a so- licitation, an award, or a proposed award—i.e., when the challenge is to a solicitation or award under prongs one and/or two (with or without an additional prong three chal- lenge to the solicitation or award). See, e.g., Weeks Marine, Inc. v. United States, 575 F.3d 1352, 1356, 1359–60 (Fed. Cir. 2009) (challenged harm-causing action was the solicitation); Am. Fed’n of Gov’t Emps., AFL–CIO v. United

8 This requirement is a matter of statutory standing, and thus not jurisdictional. See CACI, Inc.-Fed. v. United States, 67 F.4th 1145, 1151 (Fed. Cir. 2023). Case: 23-1970 Document: 46 Page: 19 Filed: 06/07/2024

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States (AFGE), 258 F.3d 1294, 1302 (Fed. Cir. 2001) (chal- lenged harm-causing action was a contract award). This case presents the different question of who quali- fies as an “interested party” only under prong three, where the challenged harm-causing action is not the solicitation, the award, or the proposed award of a contract. More spe- cifically, this case addresses whether a prospective offeror of commercial items may assert procurement-related ille- galities where the assertions do not challenge a contract or proposed contract between the Government and its con- tractor or a solicitation for such a contract. We hold that, in the context of this case involving alleged violations of 10 U.S.C. § 3453, an interested party includes an offeror of commercial or nondevelopmental items whose direct eco- nomic interest would be affected by the alleged violation of the statute. Specifically, we hold that where a plaintiff, in- voking only prong three of the jurisdiction under 28 U.S.C. § 1491(b)(1), asserts a violation of 10 U.S.C. § 3453 without directly or indirectly challenging a solicitation for or actual or proposed award of a government contract, 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. A brief history of the statue is instructive. Sec- tion 1491(b) was enacted as part of the Administrative Dis- putes Resolution Act of 1996 (ADRA). P.L. No. 104–320, § 12, 110 Stat. 3870, 3874–75 (1996). Before ADRA, the Court of Federal Claims had jurisdiction over pre-award protests and federal district courts had jurisdiction over post-award protests. See AFGE, 258 F.3d at 1300. The dis- trict courts’ review, as explained in Scanwell Laboratories, Inc. v. Shaffer, was conducted under the Administrative Procedure Act (APA). See Scanwell, 424 F.2d 859, 865–66 (D.C. Cir. 1970). In § 1491(b), ADRA sought to invest the Court of Federal Claims with the exclusive jurisdiction to review government contract protest actions, allowing for Case: 23-1970 Document: 46 Page: 20 Filed: 06/07/2024

concurrent jurisdiction with federal district courts to hear “the full range of bid protest cases previously subject to re- view in either system,” before a sunset provision ended the federal district court’s jurisdiction. See Emery Worldwide Airlines, Inc. v. United States, 264 F.3d 1071, 1081 (Fed. Cir. 2001) (quoting 142 Cong. Rec. S11849 (daily ed. Sept. 30, 1996) (statement of Sen. Levin)); see also Res. Conservation Grp., LLC v. United States, 597 F.3d 1238, 1243 (Fed. Cir. 2010). ADRA also expressly made the APA standard of review applicable for all actions under § 1491(b). See 28 U.S.C. § 1491(b)(4). It did not similarly define the standard for standing. This court first construed “interested party,” and thus delineated a standard for standing, in AFGE. There, fed- eral employees brought a protest challenging the award of the contract under both prongs two and three of § 1491(b). Specifically, appellants there filed suit to challenge the de- cision to award a contract to EG&G Logistics, Inc., a pri- vate company, instead of using government facilities and personnel. AFGE, 258 F.3d at 1297. In determining whether the federal employees had standing, we held that “interested party” should be construed according to the def- inition of that same term in a related statute, the Compe- tition in Contracting Act (CICA). Id. at 1299. CICA defines an “interested party” as “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.” 31 U.S.C. § 3551(2)(A). Notably, CICA’s scope of protests does not include the third prong of § 1491(b)(1) (“alleged violation of statute or regulation in connection with a procurement or proposed procurement”). Rather, CICA limits protests to written objection to: (A) A solicitation or other request by a Federal agency for offers for a contract for the procurement of property or services. Case: 23-1970 Document: 46 Page: 21 Filed: 06/07/2024

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(B) The cancellation of such a solicitation or other request. (C) An award or proposed award of such a contract. (D) A termination or cancellation of an award of such a contract, if the written objection contains an allegation that the termination or cancellation is based in whole or in part on improprieties concern- ing the award of the contract. (E) Conversion of a function that is being per- formed by Federal employees to private sector per- formance. 31 U.S.C. § 3551(1) (emphases added). In so construing “interested party” in 28 U.S.C. § 1491(b)(1), we recognized that the issue was difficult. The statue’s plain language did not resolve the issue. AFGE, 258 F.3d at 1299–1300. Indeed, unlike in CICA, Congress did not define the term “interested party” in ADRA. And the legislative history does not reveal whether Congress sought to limit ADRA’s claims to those “brought by disappointed bidders”—most cases brought in district courts pursuant to Scanwell—or any contract claim that could be brought in district court under the APA. AFGE, 258 F.3d at 1300–02. The latter, given the APA’s broad language, would allow parties other than actual or prospec- tive bidders to bring suit. Id. at 1301. Our court identified three reasons for adopting the def- inition in CICA and thereby limiting the term “interested party” to disappointed bidders and offerors in AFGE. First, we observed the principle that “statutes which waive im- munity of the United States from suit are to be construed strictly in favor of the sovereign.” See id. at 1301 (quoting McMahon v. United States, 342 U.S. 25, 27 (1951)). Sec- ond, legislative history described Scanwell as allowing a “contractor” to challenge a contract award. Id. at 1301–02 (quoting 142 Cong. Rec. S11848 (statement of Sen. Case: 23-1970 Document: 46 Page: 22 Filed: 06/07/2024

Cohen)). Relatedly, the court noted that courts have “nar- row[ly]” read standing under Scanwell. Id. at 1302. And third, that the language used by Congress (“interested party”) does not mirror the broad APA language, but rather a term that is used in another government contract dis- putes statute, CICA. Id. at 1302. The Government relies on AFGE’s interpretation of “in- terested party” to argue in this case that Percipient lacks standing. Government’s Br. 34–37 (citing, e.g., CACI, Inc.- Federal, 67 F.4th at 1151). Percipient admits that it did not, nor could it, submit a bid on the SAFFIRE contract. Appellant’s Br. 10. And this, the Government argues, is fatal because it means that Percipient is not an “actual or prospective bidder or offeror” as required under AFGE’s “interested party” standard. Government’s Br. 35–36. Percipient responds that it is an interested party with a direct economic interest that is affected by the Govern- ment’s failure to comply with 10 U.S.C. § 3453 because Percipient is a prospective offeror of a commercial product that satisfies SAFFIRE’s CV System requirements and, had the Government complied with the statute, Percipient would have been a subcontractor. As support, Percipient cites the reasoning in the Court of Federal Claims’ now- vacated decision holding that Percipient has standing. There, the trial court held that offerors of commercial prod- ucts need not bid on the prime contract to have § 3453 standing. Percipient also identifies various cases that it describes as recognizing that “parties need not have sub- mitted a bid in all circumstances to qualify as an actual or prospective offeror,” including SEKRI v. United States, 34 F.4th 1063, 1071–73 (Fed. Cir. 2022), and Distributed Solutions, 539 F.3d at 1343–44. Appellant’s Reply Br. 29. AFGE is controlling law for what it covers, but this case presents a different scenario than AFGE. Specifically, un- like the plaintiffs in AFGE, Percipient does not challenge a solicitation for or an award or proposed award of a govern- ment contract, so its claim could not come within the first Case: 23-1970 Document: 46 Page: 23 Filed: 06/07/2024

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two prongs of § 1491(b)(1). 9 We have not previously ad- dressed the meaning of “interested party” in such circum- stances, when the protest actually presented is, and must be, based solely on the third prong—“any alleged violation of statute or regulation in connection with a procurement or a proposed procurement.” In other words, we have not previously considered whether a prospective offeror of com- mercial items may file an action raising procurement-re- lated illegalities under § 3453 where the asserted illegalities do not challenge the contract between the Gov- ernment and its contractor (either the award or proposed award of or a solicitation for such a contract). In AFGE, the challenge made under the third prong of § 1491(b)(1) did challenge the contract award, and the third prong could not properly be applied to evade the constraint on standing under the first two prongs. The present case involves no such overlap or potential evasion, and AFGE does not ad- dress this situation. This is a crucial distinction in identi- fying why AFGE does not control here, and one that answers the contention of the dissent that AFGE controls this case. We hold that, under the facts here, AFGE’s standing requirements do not control. Said otherwise, on these facts, “an interested party” is not limited to “an actual or prospective bidder or offeror whose direct economic interest

9 For similar reasons, this case is distinguishable from other cases cited by the Government, including Weeks Marine and SEKRI. In both cases, the challenged mecha- nism of harm was the solicitation. Weeks Marine, 575 F.3d at 1354, 1356 (challenging that a solicitation violated 10 U.S.C. § 2304(a)(2)); SEKRI, 34 F.4th at 1069, 1071 (challenging an agency’s procurement of ATAP through a competitive solicitation rather than through SEKRI, a qualified, mandatory source of ATAP). Case: 23-1970 Document: 46 Page: 24 Filed: 06/07/2024

would be affected by the award of the contract or by failure to award the contract.” Rather, for this case involving only the third prong of § 1491(b)(1) and allegations of violations of 10 U.S.C. § 3453 that do not challenge the solicitation or contract, we hold that Percipient is an interested party be- cause it offered a commercial product that had a substan- tial chance of being acquired to meet the needs of the agency had the violations not occurred. We hold so for at least four reasons, and we find persuasive Judge Moss’s analysis of 28 U.S.C. § 1491(b)(1) in Validata Chemical Services v. United States Department of Energy, 169 F. Supp. 3d 69, 82 (D.D.C. 2016). First, the third prong of § 1491(b)(1) goes beyond the situations considered in CICA. As noted above, CICA lim- its protests by an interested party to written objections to solicitations, awards or proposed awards of a contract, can- cellation of a solicitation, termination, or cancelation of an award, and “[c]onversion of a function that is being per- formed by Federal employees to private sector perfor- mance.” The third prong of § 1491(b)(1), covering a challenge to “any alleged violation of statute or regulation in connection with a procurement or a proposed procure- ment,” in no way resembles CICA; it is not defined with reference to the foregoing specific types of government ac- tion, but instead is defined by the legal source of wrongful- ness (statutory or regulatory violation) across the full range of actions connected with an actual or proposed pro- curement. Compare 31 U.S.C. § 3551(1), with 28 U.S.C. § 1491(b)(1). See RAMCOR, 185 F.3d at 1289. This lack of correspondence demonstrates that the definition of “inter- ested party” in CICA is not fairly borrowed to apply to eve- rything that comes under the third prong—and specifically not for conduct challengeable only under the third prong. Second, the statutory language in prong three defines an “interested party” as more than actual or prospective bidders. The term “interested party” must be understood in context of the language of the third prong of 28 U.S.C. Case: 23-1970 Document: 46 Page: 25 Filed: 06/07/2024

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§ 1491(b)(1), which imposes a broader scope for standing. The third prong gives the Court of Federal Claims jurisdic- tion in cases filed “by an interested party objecting to . . . any alleged violation of statute or regulation in connection with a procurement or a proposed procurement.” See 28 U.S.C. § 1491(b)(1) (emphases added). On its face, this statutory language provides for an independent cause of action; that is, a plaintiff need not challenge either a solic- itation for or the award or proposed award of a government contract. A procurement, as already explained, is a broad term and includes “all stages of the process of acquiring property or services, beginning with the process for deter- mining a need for property or services and ending with con- tract completion and closeout.” 41 U.S.C. § 111. As such, the third prong covers actions that are necessarily broader than the solicitation or the award of a contract stage, the first two Tucker Act prongs. It is also broader than any of CICA’s five categories. We are obliged to interpret the term “interested party” in the context of this broader third prong to give it independent import. See, e.g., Bausch, 138 F.3d at 1367 (explaining that we must construe a statute, if pos- sible, to give meaning and effect to all its terms). Stated differently, the phrase “interested party”—which appears in other federal statutes and regulations without a stand- ard meaning—ought to be interpreted based on the rele- vant statutory context of prong three. See Validata, 169 F. Supp. 3d at 82 (citing various statutes, rules, and regulations, with the phrase “interested party”). Third, our analysis must be tailored to the specific facts here: an alleged violation of 10 U.S.C. § 3453 and related regulations, which establish the preference for commercial products and commercial services for agency procure- ments. In the Article III context, the Supreme Court has explained that “a plaintiff must demonstrate standing for each claim he seeks to press.” Daimler Chrysler Corp. v. Cuno, 547 U.S. 332, 352 (2006). The same should be true for statutory standing. And here the statutory guarantees Case: 23-1970 Document: 46 Page: 26 Filed: 06/07/2024

under § 3453 could become illusory were parties like Per- cipient, under these facts, unable to protest. As the Court of Federal Claims recognized in its now-vacated decision, “the interested party requirements have . . . been relaxed when their rigid application would make statutory guaran- tees illusory.” Percipient, 165 Fed. Cl. at 337–38 (discuss- ing cases like SEKRI, where we declined to treat mandatory sources of commodities the same as other po- tential interested parties based on, in part, Congress’s in- tent behind a statute, see SEKRI, 34 F.4th at 1072–73). Here, § 3453 provides, in part, that the “head of an agency shall ensure” that “offerors of commercial services, commercial products, and nondevelopmental items other than commercial products are provided an opportunity to compete in any procurement to fill such requirements” of the agency with respect to procurement of supplies or ser- vices “to the maximum extent practicable.” 10 U.S.C. § 3453(a)(1), (3). The statutory text does not limit this re- quirement to the award of the entire contract, but rather the statute’s obligations apply even to “components of items supplied to the agency.” Id. § 3453(b)(2). Section 3453(b)(2) provides that agencies must “require prime con- tractors and subcontractors . . . to incorporate commercial services [and] commercial products . . . as components of items supplied to the agency.” Id. By its express terms, the statute is meant to ensure that, “to the maximum ex- tent practicable,” agencies provide offerors of commercial services an opportunity to compete in procurements, and to give a preference for commercial products and commercial services. Id. § 3453(a). If parties like Percipient, who offer significant commercial and nondevelopmental items likely to meet contract requirements but who cannot bid on the entire contract or a task order, are unable to challenge stat- utory violations in connection with procurements, the stat- ute would have minimal bite—it would rely on an agency to self-regulate and on contractors like CACI to act against their own interest. Case: 23-1970 Document: 46 Page: 27 Filed: 06/07/2024

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Lastly, the relative timing of the passage of FASA, cod- ified in part in 10 U.S.C. § 3453, and ADRA, codified in part in 28 U.S.C. § 1491, supports our view. FASA was passed in 1994 and required each executive agency head to procure commercial items to meet agency needs. See P.L. No. 103–355, §§ 8001, 8104, 8203, 108 Stat. 1587, 3390–91, 3394–96 (1994) (defining “commercial item” broadly and adding “[p]reference for acquisition of commercial items”). This prominent legislation had significant impact on gov- ernment procurement, imposing duties on “contractors and subcontractors at all levels under the agency contracts” to incorporate commercial items to meet the needs of the agency even after award of a contract. 10 See, e.g., 10 U.S.C. § 3453(b)(2). Just two years later, Congress passed ADRA—seeking to consolidate bid protest jurisdiction in the Court of Federal Claims. See P.L. No. 104–320, 110 Stat. 3870 (1996). We find it difficult to conclude that the very next Congress following passage of FASA would promulgate ADRA with the intention of eliminating any meaningful enforcement of the post-award preferences for commercial items in § 3453. In addition, we note that this is not the first time this court has modified the general standing test adopted in AFGE to address factual circumstances not present there. In Weeks Marine, we modified the general standing test to address standing in solicitation protests (i.e., under prong one). Relying on the specific language in prong one, we held that the appropriate standing test in pre-award solic- itation protests is “whether [a plaintiff] has demonstrated

10 See 140 Cong. Rec. 24864, 24865 (1994) (“This leg- islation makes sweeping reforms to the Federal Procure- ment System.”); id. at 24869 (“Purchasing commercial products should abolish the current practice of buying ex- pensive, specially designed products, when off-the-shell, less expensive commercial products would suffice.”). Case: 23-1970 Document: 46 Page: 28 Filed: 06/07/2024

a ‘non-trivial competitive injury which can be addressed by judicial relief” and that “in some cases the injury stemming from a facially illegal solicitation may in and of itself be enough to establish standing.” Weeks Marine, 575 F.3d at 1362. Thus, contrary to the dissent’s suggestion, our precedent supports interpreting “interested party” in light of the different prongs in 28 U.S.C. § 1491(b)(1). The dissent’s reliance on the legislative history of other statutes does not persuade us otherwise. The dissent does not cite legislative history for the statute at issue, 28 U.S.C. § 1491(b)(1). And the dissent’s reliance on the legislative history of CICA—including that Congress ini- tially sought to include subcontractors as interested par- ties in CICA—is not helpful. First, as noted above, any parallel between CICA and ADRA breaks down where a plaintiff’s protest falls under prong three of ADRA without objecting to a solicitation or award, and thus any rationale for adopting CICA’s definition of “interested party”—or re- lying on the legislative history of CICA—does not apply to prong three. CICA is a different statute governing the bid- protest jurisdiction of the U.S. Government Accountability Office and does not include prong three. Furthermore, the legislative history of the now-re- pealed Brooks Act cited by the dissent indicates that Con- gress was concerned that establishing a subcontractor’s right to protest in the now-repealed Brooks Act would “es- tablish precedent that privity of contract exists between the government and subcontractors.” To Revise and Streamline the Acquisition Laws of the Federal Govern- ment, and for Other Purposes: Hearing on S. 1587 Before the S. Comm. On Governmental Affs. & the S. Comm. On Armed Servs., 103rd Cong. 293 (1994). This legislative his- tory confirms the connection between privity and the gen- eral unavailability of standing for would-be subcontractors when the subject of a challenge is a contract (or proposed contract or solicitation for a contract) between the Govern- ment and a prime contractor. Here, there is no challenge Case: 23-1970 Document: 46 Page: 29 Filed: 06/07/2024

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to a contract (or proposed contract or solicitation for a con- tract) between the Government and a prime contractor. The subject of the challenge is an alleged violation of stat- ute in connection with a procurement. The concern with to respect privity does not apply to cases like this one because Plaintiff’s allegation of procurement related illegalities, i.e., a prong three case, does not suggest that privity of con- tract exists between the Government and subcontractors. By contrast, prong one and prong two cases challenge a contract (or proposed contract or solicitation for a contract) between the Government and a prime contractor, so grant- ing standing to a subcontractor might be viewed to suggest that subcontractors would have privity with the Govern- ment. For all these reasons, we hold that, in the context of this case involving alleged violations of 10 U.S.C. § 3453 without challenging the contract, an interested party in- cludes an offeror of commercial or nondevelopmental ser- vices or items whose direct economic interest would be affected by the alleged violation of the statute. Here, De- fendants do not dispute Percipient’s direct economic inter- est. Percipient offers a commercial product that is plausibly alleged to satisfy the agency’s needs, has plausi- bly alleged inter alia that the agency violated the require- ments of § 3453 by not evaluating its product for integration into the SAFFIRE procurement, has plausibly alleged that but for this violation of the statute its Mirage product would be incorporated into the SAFFIRE procure- ment, and has offered NGA and CACI its product. Under these facts, we hold that Percipient has standing to chal- lenge the agency’s alleged violation of § 3453. III Lastly, we address timeliness of Percipient’s claim that NGA unlawfully delegated government authority to its contractor, Count Three in Percipient’s complaint. We have held that “a party who has the opportunity to object Case: 23-1970 Document: 46 Page: 30 Filed: 06/07/2024

to the terms of a government solicitation containing a pa- tent error and fails to do so prior to the close of the bidding process waives its ability to raise the same objection subse- quently.” Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308, 1313 (Fed. Cir. 2007). The Government ar- gues that, to the extent Percipient alleges NGA “permitted CACI to determine whether to utilize commercial or devel- opmental products to create the SAFFIRE solution, and, in doing so, unlawfully delegated inherently governmental functions,” such a claim is untimely under Blue & Gold. Government’s Br. 37 (citing J.A. 98–99). But the plaintiff in Blue & Gold was challenging the terms of the solicita- tion. Percipient is not. Percipient’s complaint focuses on post-award delega- tions, not defects in the solicitation. See J.A. 98–99; Reply Br. 30. Compare J.A. 99 ¶ 179 (alleging that NGA dele- gated inherently government authority by “allow[ing] its contractor to develop computer vision software . . . without requiring adherence to 10 U.S.C. § 3453”), with Govern- ment’s Br. 38 (the SAFFIRE solicitation, requiring offerors to submit as part of their proposal “a process to identify, evaluate and implement opportunities from the Govern- ment and commercial industry as part of each planning in- crement to satisfy requirements faster, reduce or avoid cost and increase system performance” (quoting J.A. 844)). Said otherwise, the solicitation allows for NGA to adhere to the statutory obligations in § 3453 and thus there is no “patent error” in the solicitation. Accordingly, Percipient did not have to protest before the close of the bidding pro- cess and did not waive its ability to protest. CONCLUSION We have considered Defendants’ remaining arguments and find them unpersuasive. For the reasons above, we reverse the trial court’s dismissal and hold that it has sub- ject matter jurisdiction over Percipient’s protest. We also hold that Percipient has standing, and its claims are Case: 23-1970 Document: 46 Page: 31 Filed: 06/07/2024

PERCIPIENT.AI, INC. v. US 31

timely. We thus reverse and remand for further proceed- ings consistent with this opinion. REVERSED AND REMANDED COSTS No costs. Case: 23-1970 Document: 46 Page: 32 Filed: 06/07/2024

United States Court of Appeals for the Federal Circuit ______________________

UNITED STATES, CACI, INC.-FEDERAL, Defendants-Appellees ______________________

Appeal from the United States Court of Federal Claims in No. 1:23-cv-00028-EGB, Senior Judge Eric G. Bruggink. ______________________

CLEVENGER, Circuit Judge, dissenting. This is a very important government contract case. In conflict with binding authority, 1 and even absent that au- thority, the majority errs in significantly narrowing the ex- isting scope of the task order bar in 10 U.S.C. § 3406(f)(1), by reinterpreting the statute to bar only protests focused on a task order, not protests more broadly made in connec- tion with the issuance of a task order. It also likewise errs

1 “In this Circuit, a later panel is bound by the deter- minations of a prior panel, unless relieved of that obliga- tion by an en banc order of the court or a decision of the Supreme Court.” Deckers Corp. v. United States, 752 F.3d 949, 959 (Fed. Cir. 2014). Case: 23-1970 Document: 46 Page: 33 Filed: 06/07/2024

in significantly broadening the existing scope of “interested party” statutory standing in 28 U.S.C. § 1491(b)(1) by per- mitting potential subcontractors for the first time to bring suit under § 1491(b)(1). For the reasons set forth below, I respectfully dissent. The SAFFIRE contract has two interrelated parts, one of which is a CV System. Percipient alleges that its Mirage product satisfies the requirements for the CV System but admits that it cannot supply the other component. Conse- quently, Percipient is not qualified to bid on the SAFFIRE contract. At most, Percipient is a wishful potential subcon- tractor hoping that CACI, on its own or by direction of NGA, will subcontract with it to purchase its Mirage prod- uct. The government must comply with 10 U.S.C. § 3453, 2 which requires government contracting agencies “to the maximum extent practicable” to ensure that government contracts use existing products, rather than products to be developed under a contract, and to that end, requires the government and actual contractors to conduct market re- search to determine if commercial products are available. NGA solicited the base SAFFIRE contract and Task Order 1 together and awarded both to CACI at the same time in January 2021. Task Order 1 authorized CACI to begin performance on the CV System portion of the con- tract. For two years after the issuance of Task Order 1, both CACI and NGA, fully aware of and exercising their various § 3453 responsibilities, conducted extensive tests of Percipient’s Mirage product, and ultimately concluded that Mirage was not suitable. Dissatisfied with NGA’s as- sessment of Mirage, Percipient on January 9, 2023, filed suit in the United States Court of Federal Claims (“Claims

2 This statute covers military procurements. Its counterpart for public contracts is 41 U.S.C. § 3307. Case: 23-1970 Document: 46 Page: 34 Filed: 06/07/2024

Court”) under 28 U.S.C. § 1491(b)(1), alleging violation of § 3453 by NGA for failing to police § 3453 properly after issuance of Task Order 1. The Task Order Bar The relevant statute, 10 U.S.C. § 3406(f)(1), provides that a “protest is not authorized in connection with the is- suance or proposed issuance of a task or delivery order,” thus depriving the Claims Court of jurisdiction over an oth- erwise proper 28 U.S.C. § 1491(b)(1) complaint. 3 The stat- ute is commonly called the “task order bar.” In this case, the Claims Court dismissed Percipient’s complaint under the task order bar. In doing so, the Claims Court applied what it understood to be the interpretation of the task order bar set forth in our previous decision in SRA International, Inc. v. United States, 766 F.3d 1409, 1413–14 (Fed. Cir. 2014): the task order bar is satisfied when the alleged violation is “directly and causally con- nected to issuance” of a task order. The Claims Court found as a matter of fact that Percipient’s alleged violation of 10 U.S.C. § 3453 is “directly and causally related to the agency’s issuance of Task Order 1” because the alleged vi- olation occurred after issuance of “Task Order 1, which di- rected CACI to develop and deliver a [CV] system” and “without the task order, the work that Percipient is chal- lenging would not be taking place and Percipient could not allege this § 3453 violation.” Percipient.ai, Inc. v. United States, No. 23-28C, 2023 WL 3563093, at *3 (Fed. Cl. May

3 As the majority notes, see Majority Op. at 7 n.2, the task order bar of 41 U.S.C. § 4106(f)(1) for public contracts is essentially the same, for statutory interpretation pur- poses, as 10 U.S.C. § 3406(f)(1) for Department of Defense contracts. The majority’s interpretation of § 3406(f)(1) no doubt will apply to 41 U.S.C. § 4106(f)(1) cases. Case: 23-1970 Document: 46 Page: 35 Filed: 06/07/2024

17, 2023). Because the alleged violation of § 3453 is di- rectly and causally related to the issuance of Task Order 1, the Claims Court opined that were Percipient to prevail on the merits, the court would be required to partially sus- pend or discontinue performance under the task order even though Percipient did not ask to have Task Order 1 with- drawn. Id. The majority holds that the interpretation of the task order bar applied by the Claims Court is incorrect, and that the correct interpretation is that the bar is only invoked if a protest “challenges the issuance of the task order directly or by challenging a government action (e.g., waiver of an organizational conflict of interest) whose wrongfulness would cause the task order’s issuance to be improper.” Ma- jority Op. at 9. The majority applies its interpretation of the task order bar by examination of the contents of Per- cipient’s complaint. The question is whether the majority fails to apply SRA correctly, and in any event whether the majority’s interpretation of the statute is correct. The ma- jority errs in both regards. 4 SRA involved a contract, like the one in this case, to be performed through issuance of task orders. The govern- ment issued the ISC–3 task order procurement to a com- petitor of SRA, and SRA protested on the ground that its competitor should have been disqualified due to an organi- zational conflict of interest. The government resolved the matter by issuing a waiver of the organizational conflict of interest, thus permitting the competitor to proceed with performance of the contract. SRA filed a protest in the Claims Court, arguing that the grant of the waiver violated various laws. The Claims Court rejected the government’s

4 If the Claims Court read the decision in SRA cor- rectly, the majority does not disagree with the Claims Court’s findings of fact that Percipient’s complaint is task order barred. Case: 23-1970 Document: 46 Page: 36 Filed: 06/07/2024

invocation of the task order bar for two reasons: first, be- cause the waiver was granted after the issuance of the task order, thus creating a “temporal disconnect” between the issuance of the task order and the alleged violation; and second, because the grant of the waiver was a discretionary act by the agency. The Claims Court thus held that there was no “direct, causal relationship” of the allegedly illegal grant of the conflict of interest waiver to the issuance of the task order. SRA Int’l, Inc. v. United States, 114 Fed. Cl. 247, 256 (2014) (quoting MORI Assocs., Inc. v. United States, 113 Fed. Cl. 33, 38 (2013)). On appeal to this court, SRA and the government disa- greed on the correct interpretation of the task order bar. Like Percipient in this case, and the majority, SRA inter- preted the statute to bar only protests that challenge the task order itself, arguing that: [A]ll of the alleged violations of statute and regula- tion were in connection with the ISC-3 procure- ment, but none were in connection with the issuance (or proposed issuance) of the ISC-3 task order. Thus, the [Claims Court] had jurisdiction over all of SRA’s Complaint. . . . None [of SRA’s five counts] concern the already-concluded issuance of the ISC-3 task order and therefore none are ex- cluded by FASA. Brief for Plaintiff-Appellant at 28–29, SRA Int’l, Inc. v. United States, 766 F.3d 1409 (Fed. Cir. 2014) (No. 14-5050), 2014 WL 1319680, at *28–29. The government strongly disagreed with SRA’s inter- pretation of the task order bar, instead invoking the inter- pretation set forth by the Claims Court in DataMill, Inc. v. United States, 91 Fed. Cl. 740, 756 (2010), that the statute bars protests that have a direct and causal relationship to the issuance or proposed issuance of a task order. Brief for Defendant-Appellee United States at 16, SRA Int’l, Inc. v. United States, 766 F.3d 1409 (Fed. Cir. 2014) (No. 14-5050), Case: 23-1970 Document: 46 Page: 37 Filed: 06/07/2024

2014 WL 1882366, at *16. The analysis and interpretation from DataMill proposed to the SRA court by the govern- ment specifies: Turning to the phrase “in connection with,” the court notes that “in” means “[w]ith the aim or pur- pose of.” American Heritage Dictionary 698 (4th ed.2004). A “connection” is defined as “[t]he condi- tion of being related to something else by a bond of interdependence, causality, logical sequence, co- herence, or the like; relation between things one of which is bound up with, or involved in, another.” Oxford English Dictionary 747 (2d ed.1989); see also American Heritage Dictionary, supra, at 303 (defining “connection” as “[a]n association or rela- tionship”). The word “with” means “[i]n relation- ship to.” American Heritage Dictionary, supra, at 1574. Taken together, the phrase “in connection with” references something designed to possess a logical or sequential relationship to or be bound up with or directly involved in something else. In other words, the phrase “in connection with” means that there is a direct and causal relationship be- tween two things that are mutually dependent. It is therefore apparent that the phrase “in connec- tion with” encompasses those occurrences that have a direct and causal relationship to the “issu- ance” or “proposed issuance” of a delivery order. DataMill, 91 Fed. Cl. at 756. In response, SRA disagreed with the government’s broader interpretation of the statute, asserting again that “[o]n the question of jurisdiction, Defendants’ position fails because SRA does not challenge the ‘issuance or proposed issuance’ of a task order but the separate and distinct Gov- ernment actions that violate statutes and regulations.” Re- ply Brief for Plaintiff-Appellant at 3–4, SRA Int’l, Inc. v. Case: 23-1970 Document: 46 Page: 38 Filed: 06/07/2024

United States, 766 F.3d 1409 (Fed. Cir. 2014) (No. 14-5050), 2014 WL 2175563, at *3–4. Our decision in SRA held that “neither the discretion- ary nature of the OCI waiver nor the temporal disconnect between it and the issuance of ISC� 3 removes it from FASA’s purview,” 766 F.3d at 1413, and held that SRA’s protest fell within the task order bar because it was “di- rectly and causally connected to issuance of ISC� 3 . . . .” Id. In SRA, as in this case, the protest had nothing to do with any alleged flaws in the task order, and the only con- nection between issuance of the task order and the alleged violation was that the task order permitted SRA’s compet- itor to continue performance of the contract notwithstand- ing the agency’s alleged violation of law. SRA’s protest was that its competitor was allowed to enjoy performance of a government contract in the face of an alleged violation of law that should have prevented the competitor from per- forming the contract. This case is as close to SRA as the law school “on all fours case” can get. In both cases, no challenge is made to any aspect of the task order in any count of the complaint, or otherwise; the relationship between the issuance of the task order and the alleged violation of law is that perfor- mance of the task order is allowed to proceed notwithstand- ing violations of law by the agency following issuance of the task order; and the task order would be upset if the plain- tiff prevailed on the merits. The same interpretation of the task order bar that the majority here adopts was presented to and not adopted by the SRA court. Indeed, if the major- ity’s interpretation of the task order bar is correct, SRA was wrongly decided, and is overruled, and a legion of cases has been wrongly decided by the Claims Court—cases like this one and SRA, in which the protest raised no allegation of error with regard to the task order and only challenged Case: 23-1970 Document: 46 Page: 39 Filed: 06/07/2024

subsequent agency action resulting from the issuance of the task order. 5 Given this court’s rule that a later panel is bound by preceding precedent, it is fair to ask how the majority can sidestep away from SRA to create and apply a significantly different interpretation of the task order bar in this case. As justification, the majority asserts that: Read in context, the court’s statement that the OCI waiver was “directly and causally connected to is- suance” does not broadly refer to work performed under, or events caused by the task order as as- serted by the Government here. Indeed, if the Gov- ernment’s view of the SRA language were right, the court would have found the before-after distinction not even worth the trouble of explaining away as it

5 See, e.g., Unison Software, Inc. v. United States, 168 Fed. Cl. 160 (2023); MORI Assocs., Inc. v. United States, 113 Fed. Cl. 33 (2013); DataMill, Inc. v. United States, 91 Fed. Cl. 740 (2010); A & D Fire Prot., Inc. v. United States, 72 Fed. Cl. 126 (2006). Since this court’s 2014 decision in SRA, the Claims Court has consistently read SRA as the binding precedent on the interpretation of § 3406(f)(1) and § 4106(f)(1)—that the task order bar ap- plies if a protest is directly and causally connected to the issuance or proposed issuance of a task order—including most recently in FYI - For Your Info., Inc. v. United States, 170 Fed. Cl. 601, 614 (2024) (noting, in response to plain- tiff’s attempt to avoid SRA’s “directly and causally con- nected to issuance” task order bar test, that any change to the SRA test would have to come from an en banc decision by this court). The majority’s holding that the task order bar is limited to challenges focused on a task order will come as a surprise to the Claims Court and the government contract bar. Case: 23-1970 Document: 46 Page: 40 Filed: 06/07/2024

did. Instead, the language refers to an actual chal- lenge to the issuance of the task order regardless of whether the alleged violation occurred after issu- ance of the task order. Majority Op. at 15. This justification for the majority’s sidestep away from SRA lacks merit. The “directly and causally connected to issuance” words in SRA do not refer to any “actual chal- lenge to the issuance of the task order,” because there was no challenge to the issuance of the task order in SRA, and the events caused by the task order, i.e., work performed under the task order despite alleged violations of law after issuance of the task order, is the basis for the connection between the protest and the issuance of the ISC–3 task or- der. In sum, the majority’s claim that the “‘directly and causally connected to issuance of [a task order]’ language in SRA is narrower than the interpretation sought by the Government and, moreover, must be understood in light of the facts at issue there,” Majority Op. at 13, is undone by the facts in SRA, as I have demonstrated. As a matter of statutory construction (assuming the majority is free to reinterpret the task order bar), the ma- jority argues that the government’s interpretation gives no meaning to the words “issuance or proposed issuance,” be- cause the government’s view bars protests concerning “work performed by a proper awardee after issuance of a proper task order—rather than just those protests made ‘in connection with the issuance or proposed issuance of a task’ order.” Majority Op. at 13. But the majority overlooks that allegedly illegal conduct under the “directly and causally connected to” test can stem from, be tied to, and result from the issuance (or proposed issuance) of a task order. “Di- rectly and causally connected to” does not read “issuance or proposed issuance” out of § 3406(f)(1). By reading the stat- ute to bar only protests focused on a task order itself, the Case: 23-1970 Document: 46 Page: 41 Filed: 06/07/2024

majority effectively reads the full meaning of “in connection with” out of the statute. If Congress intended the reach of § 3406(f)(1) to be lim- ited to protests involving deficiencies in a task order, as proposed or issued, it would not have included the lan- guage “in connection with,” and instead would have barred only protests challenging the task order. 6 Instead, Con- gress clearly meant the task order bar to reach beyond pro- tests focused on the task order. The majority sees the “directly and causally connected to issuance” test as “far too broad.” Majority Op. at 13. The majority overlooks that SRA expressly confronted and re- solved the policy implications of its broad interpretation of the statute: Even if the protestor points to an alleged violation of statute or regulation, as SRA does here, the court still has no jurisdiction to hear the case if the pro- test is in connection with the issuance of a task or- der. We acknowledge that this statute is somewhat unusual in that it effectively eliminates all judicial review for protests made in connection with a pro- curement designated as a task order—perhaps even in the event of an agency’s egregious, or even criminal, conduct. Yet Congress’s intent to ban protests on the issuance of task orders is clear from FASA’s unambiguous language. SRA, 766 F.3d at 1413.

6 See DataMill, 91 Fed. Cl. at 756 (“If Congress in- tended to bar protests involving the actual ‘issuance’ or ‘proposed issuance’ of a delivery order, then it could have drafted the FASA accordingly. It did not.”). DataMill in- volved a delivery order. Case: 23-1970 Document: 46 Page: 42 Filed: 06/07/2024

In footnote 5, the majority suggests two versions of the “directly and causally connected to issuance” test. First, the “far too broad” one that the government and the dissent refer to, and a second and narrower version: “We do not see[] the ‘directly and causally connected to issuance’ test as ‘far too broad,’ generally.” Majority Op. at 13 n.5 (cleaned up). The “directly and causally connected to issu- ance” test which the majority finds “far too broad” was pre- sented to the court by the government in SRA as an alternative to the test proposed by SRA, which would have limited the scope of the task order bar to protests focused on the task order itself, i.e., the test the majority now in- terprets as defining the entire scope of the task order bar. Nothing in the words of the SRA decision support the view that the court applied a less broad version of the test than actually proposed by the government, and the court’s ex- planation of the consequences of the breadth of its decision, quoted above, belies any thought that the court actually applied a less broad version of the test. Since SRA, this court has repeated that “FASA’s un- ambiguous language categorically bars jurisdiction over bid protests . . . made in connection with a procurement designated as a task order—perhaps even in the event of an agency’s egregious, or even criminal, conduct.” 22nd Century Techs., Inc. v. United States, 57 F.4th 993, 999 (Fed. Cir. 2023) (internal quotes omitted and citation omit- ted). In sum, this court in binding precedent has already held that the unambiguous language of § 3406(f)(1) bars a protest that is directly and causally connected to the issu- ance of a task order. The majority’s contention that the plain meaning of the statute only bars protests focused on a task order is incorrect, both as a matter of failure to fol- low binding precedent and as a matter of initial statutory interpretation. Case: 23-1970 Document: 46 Page: 43 Filed: 06/07/2024

The judgment of the Claims Court dismissing Percipi- ent’s complaint as barred by § 3406(f)(1) should be af- firmed. 28 U.S.C. § 1491(b)(1) As the majority states, 28 U.S.C. § 1491(b)(1) provides the Claims Court with jurisdiction to render judgment on an action by an interested party objecting (1) to a solicita- tion by a Federal agency for bids or proposals for a proposed contract, (2) to a proposed award or the award of a contract, or (3) to any alleged violation of statute or regulation in connection with a procurement or a proposed procure- ment. 7 We have interpreted “interested party” to “limit stand- ing under § 1491(b)(1)” to “actual or prospective bidders or offerors whose direct economic interest would be affected by the award of the contract or by failure to award the con- tract.” Am. Fed’n of Gov’t Emps., AFL-CIO v. United States, 258 F.3d 1294, 1302 (Fed. Cir. 2001) (“AFGE”). The majority appreciates that as a potential subcon- tractor Percipient cannot meet the AFGE standing test, and it understands that it is bound by AFGE. But the ma- jority says that AFGE does not apply because this case “presents a different scenario than AFGE.” Majority Op. at 22. The difference, according to the majority, is that un- like the scenario in AFGE, where the plaintiffs raised prong two and prong three protests, Percipient raises only a prong three protest. Considering itself free to disregard AFGE entirely, and in the interest of promoting compliance with § 3453, the majority creates a standing test

7 The majority and I refer to the statute as having three prongs, each relating to defined stages of the procure- ment process. Case: 23-1970 Document: 46 Page: 44 Filed: 06/07/2024

exclusively for potential subcontractor § 1491(b)(1) prong three protests alleging a violation of § 3453: Specifically, we hold that where a plaintiff, invok- ing only prong three of the jurisdiction under 28 U.S.C. § 1491(b)(1), asserts a violation of 10 U.S.C. § 3453 without directly or indirectly challenging a solicitation for or actual or proposed award of a government contract, the plaintiff is an interested party if it is an offeror of a commercial product or commercial service that had a substan- tial chance of being acquired to meet the needs of the agency had the violation not occurred. Majority Op. at 19. As I explain below, the majority’s sidestep away from AFGE is as incorrect as its sidestep away from SRA on ap- plication of the task order bar to this case. It may be true that this court has not faced a § 1491(b)(1) case presenting only a prong three protest, but we have ruled on a § 1491(b)(1) case presenting a prong three protest along with a prong two protest. And in that case, we necessarily dismissed both protests on the ground that the plaintiffs failed to meet the “actual or prospective bidder” standing test, producing a binding precedent that the “actual or pro- spective bidder” standing test applies to prong three pro- tests. That case is AFGE. There is no clear daylight between this case and AFGE, as the majority contends, and thus no room for the majority to cast AFGE aside and fashion a new, relaxed standing test that allows potential subcontractors, for the first time, to challenge government contracts under § 1491(b)(1). But if this panel were free to adopt a special standing test for prong three protests, for the reasons set forth below I would not interpret “interested party” to include potential sub- contractors. Case: 23-1970 Document: 46 Page: 45 Filed: 06/07/2024

Under AFGE, Percipient should be denied standing un- der § 1491(b)(1), assuming it could escape from the task or- der bar of § 3406(f)(1). AFGE The plaintiffs in AFGE were government agency em- ployees (and their union representatives) who alleged vio- lation of laws by their employer agency in connection with the agency’s procurement of services from a private entity. The statute and regulations at issue in AFGE were the Federal Activities Inventory Reform Act of 1998 (“FAIR”) and OMB Circular No. A–76. The statute required agen- cies to identify activities that are not inherently govern- mental services. When an agency considered contracting with a private sector source for performance of an identi- fied activity, FAIR required the agency to select a source using a competitive process that includes a realistic and fair cost comparison to identify the government and private sector costs to perform the activity. OMB Circular A–76 provided the relevant cost comparison process. The majority recognizes that AFGE involved chal- lenges to the procurement under prongs two and three, but it fails to appreciate that the primary thrust of the case was the prong three allegation of error by misapplication of the OMB Circular A–76 cost evaluation standards. Plaintiffs’ complaint and briefs in the case focused almost entirely on the alleged regulatory violations, asserting only in passing as an adjunct that the award of the contract was illegal be- cause of the regulatory violations. In particular, the plain- tiffs’ briefs to this court argued that the “violation of statute or regulation” jurisdiction prong of § 1491(b)(1) is “wholly separate and independent from the contract award prong,” Brief for Plaintiffs-Appellants at 20–21, Am. Fed’n of Gov’t Emps., AFL-CIO v. United States, 258 F.3d 1294 (Fed. Cir. 2001) (No. 00-5090), 2000 WL 34401893, at *20– 21, and emphasized multiple times that the plaintiffs “were clearly ‘interested parties’ objecting to an ‘alleged violation Case: 23-1970 Document: 46 Page: 46 Filed: 06/07/2024

of statute or regulation in connection with a procurement.’” Id. at 12–23 (citing the language of prong three). While the plaintiffs did object to the award of the contract, their prong three allegation of regulatory violations dominated their case. 8 Our decision in AFGE explained that the purpose of the Administrative Disputes Resolution Act of 1996 (“ADRA”) was to vest the Claims Court with exclusive jurisdiction over the full range of procurement protest cases, and ADRA did so though § 1491(b)(1). Before ADRA, the Claims Court had jurisdiction over pre-award protest cases, and the United States District Courts had jurisdiction over post- award cases, the latter described as a group as “Scanwell” cases. As the AFGE decision explains, the vast majority of pre-ADRA Scanwell cases were brought by disappointed bidders, and the Court of Appeals for the District of Colum- bia Circuit had understood standing in Scanwell cases to be limited to disappointed bidders. But, as the AFGE deci- sion further explained, because the Scanwell cases were based on the Administrative Procedure Act (“APA”), Con- gress in writing § 1491(b)(1) “could have intended to give the Court of Federal Claims jurisdiction over any contract dispute that could be brought under the APA.” AFGE, 258 F.3d at 1301. And because the standing test in the APA9 is quite broad, the AFGE decision surmised that “parties

8 The opening brief in AFGE, including the com- plaint, is publicly available for any reader needing assur- ance that AFGE presents an independent prong three protest. See 2000 WL 34401893. For the government’s brief, see 2000 WL 34401354; for the plaintiffs’ reply brief, see 2000 WL 34401355. 9 “A person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute” has APA stand- ing. 5 U.S.C. § 702. Case: 23-1970 Document: 46 Page: 47 Filed: 06/07/2024

other than actual or prospective bidders” might be able to bring suit as interested parties under § 1491(b)(1). Id. In AFGE, the government argued for the disappointed bidder test for “interested party,” offering a specifically worded test taken from a related statute, the Competition in Contracting Act, 31 U.S.C. §§ 3551–56 (“CICA”): “inter- ested party . . . means an actual or prospective bidder or of- feror whose direct economic interest would be affected by the award of the contract or by failure to award the con- tract.” The issue before the AFGE court was the choice be- tween the CICA test and the broader APA standing test, and AFGE clearly chose the narrower standard of actual or prospective bidders. Id. at 1302. Congress had the APA on its mind when it promul- gated § 1491(b), because it borrowed the APA standard of review for § 1491(b)(1) cases, see 28 U.S.C. § 1491(b)(1)(4), but it did not adopt the APA standing test for such cases. Congress instead adopted the “interested party” term from CICA, which restricted government contract challenges to actual or prospective bidders. These facts of legislative his- tory are overlooked by the majority, but these facts con- vinced the court in AFGE that the “interested party” in § 1491(b)(1) is the same “interested party” as in CICA. AFGE, 258 F.3d at 1302. The majority understands that it is bound by AFGE but argues that the standing test of AFGE is inapplicable here because “this case presents a different scenario than AFGE.” Majority Op. at 22. The only material difference between this case and AFGE is that AFGE included a prong two protest as an adjunct to its primary prong three protest and this case presents only a prong three protest. But in order to dismiss the complaint in AFGE, the court had to find that plaintiffs lacked standing for their inde- pendent prong three protest, as well as their prong two pro- test. The AFGE decision clearly applies the CICA standing Case: 23-1970 Document: 46 Page: 48 Filed: 06/07/2024

test to both protests raised by the plaintiffs. The majority does not challenge that the decision in AFGE dismissed the prong three protest as well as the adjunct prong two protest under the CICA standing test. As for the “crucial distinc- tion in identifying why AFGE does not control here, and one that answers the contention of the dissent that AFGE controls” here, the majority states: In AFGE, the challenge made under the third prong of § 1491(b)(1) did challenge the contract award, and the third prong could not properly be applied to evade the constraint on standing under the first two prongs. Majority Op. at 23. This attempt to justify the majority’s refusal to follow AFGE lacks merit. First, the majority errs in assuming the plaintiffs mixed the prong two and prong three challenges, rather than asserting the challenges independently—as the plaintiffs clearly did. There was no question before the AFGE court of the plaintiffs’ use of prong three “to evade the constraint on standing under the first two prongs.” Be- fore the decision in AFGE, there was no constraint on standing under the first two prongs to evade. What the majority seems to be saying is that in another future case a potential subcontractor might protest a procurement un- der all three prongs, and in that case, the potential subcon- tractor should not be able to evade the constraint of AFGE on the prong one and two issues by gaining standing under prong three. Such a situation did not exist in AFGE or in this case. The majority’s “crucial distinction” reason for thinking “AFGE does not control here” is unsuccessful. Id. Thus, we have already held that a prong three protest is governed by the “actual or prospective bidder” interpreta- tion of “interested party.” There is more in our case law to the same effect. The now repealed Brooks Act (40 U.S.C. § 759 (repealed 1996)) previously allowed bid protests related to Automated Data Case: 23-1970 Document: 46 Page: 49 Filed: 06/07/2024

Processing Equipment (ADP) procurements by “an inter- ested party.” The Brooks Act included the same statutory definition for an “interested party” as in CICA. In 1989, this court held that this “interested party” definition ex- cludes subcontractors in the Brooks Act context. See MCI Telecomms. Corp. v. United States, 878 F.2d 362, 365 (Fed. Cir. 1989). Subsequently in Rex, this court held that “in light of the interrelatedness between . . . CICA and section 1491(b)(1) of the Tucker Act, as established by AFGE, and MCI and its progeny, the definition of ‘interested party’ in the Brooks Act applies to the Tucker Act with equal force.” Rex Serv. Corp. v. United States, 448 F.3d 1305, 1307 (Fed. Cir. 2006). To be clear: subcontractors were denied “inter- ested party” standing under the Brooks Act, and this court held that the Brooks Act definition of “interested party” ap- plies with equal force to § 1491(b)(1). This court’s observa- tion that “mere ‘disappointed subcontractors’” are not “interested parties” for § 1491(b)(1) surely is correct. Dis- tributed Sols., Inc. v. United States, 539 F.3d 1340, 1344 (Fed. Cir. 2008). The majority’s attempt to distinguish AFGE lacks merit, and Percipient has no standing under AFGE. 10

10 The majority errs in thinking that our decision in Weeks Marine, Inc. v. United States, 575 F.3d 1352 (Fed. Cir. 2009) supports its unwillingness to apply the AFGE standing test to Percipient’s prong three protest. Weeks Marine involved a pre-award challenge to a contract, brought by a prospective bidder who could not show a like- lihood of winning the contract at the solicitation stage, and hence could not meet the “direct economic interest” compo- nent of the AFGE standing test. Weeks Marine held that in that instance “direct economic interest” can be shown by a “non-trivial competitive injury which can be redressed by Case: 23-1970 Document: 46 Page: 50 Filed: 06/07/2024

THE MAJORITY’S RATIONALES The majority cannot point to any statute or regulation, or case law authority, that compels or supports creation of an additional standing test within § 1491(b)(1) for a limited subcontractor class of § 1491(b)(1) protest cases. Instead, it offers four insufficient reasons to justify granting statu- tory standing to potential subcontractors alleging a viola- tion of § 3453 under prong three of § 1491(b)(1). The majority’s first reason is that prong three adds ju- risdiction for protests that would not lie under CICA, i.e., allegations of law violations occurring during the life of a government contract after the solicitation and award stages. But any challenge to a solicitation or award is based on some alleged error in law or regulation: a “legal source of wrongfulness,” Majority Op. at 24, underlies any CICA protest and any protest under prongs one and two of § 1491(b)(1), and the various protests overlap and corre- spond because each depends on some allegation of legal er- ror. The various protests differ materially only in that they attack various stages of a government contract and from case to case will raise different sources of wrongfulness. That a protest will focus on a different stage of a contract is hardly a reason to have differing standing tests for dif- fering stages of a contract. The majority’s second reason is a restatement of its first reason: prong three “covers actions that are neces- sarily broader than the solicitation or the award of a con- tract stage, the first two Tucker act prongs.” Majority Op.

judicial relief.” Id. at 1362. Weeks Marine only modified the “direct economic interest” component. It did not alter the requirement that standing requires a bidder or pro- spective bidder. Weeks Marine is not support for rejecting the bidder or prospective bidder standing test and replac- ing it with a potential subcontractor standing test. Case: 23-1970 Document: 46 Page: 51 Filed: 06/07/2024

at 25. What makes a prong three challenge “broader” than a prong one or two challenge? A prong three challenge need not raise substantially broader issues than would be raised under prongs one and two. A prong three protest is only broader in that it will reach beyond the early stages of a contract. The majority’s first two reasons are facially unpersua- sive. The majority can point to no genuine difference in substance between prong one/two and prong three protests. Surely protests to solicitations are invaluable for the gov- ernment contract process because it is during the solicita- tion stage that the specifics of a contract are tested and improved. This observation has been acknowledged by this court. See Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308, 1314 (Fed. Cir. 2007). If there are errors in a solicitation, having them called out before performance be- gins benefits all concerned, and the same is true with pro- tests of proposed or actual contract awards. Equally surely, calling out errors in the later stages of contract per- formance is important for all concerned, although it could be argued that calling out error at the earlier stages is pref- erable, as remedy for error later on in a contract’s life may be more costly than remedy for error earlier caught, and will significantly delay receipt by the government of the product or services for which it contracted. The majority’s attempt to use statutory construction in its first two reasons is unconvincing. Unlike our decision in AFGE, which used conventional statutory interpretation tools to find that Congress limited “interested party” in § 1491(b)(1) to bidders or prospective bidders, the majority has no such interpretative analysis to support its belief that Congress in ADRA carved out a special standing test solely for protests brought by potential subcontractors spe- cifically alleging § 3453 violations under the third prong of the statute. Furthermore, the majority is mistaken when it asserts that the phrase “interested party” appears in other federal statutes without a standard meaning, Case: 23-1970 Document: 46 Page: 52 Filed: 06/07/2024

Majority Op. at 25, thus giving it license to fashion differ- ent meanings for “interested party” within § 1491(b)(1). The Brooks Act and CICA, the two most relevant statutes, use “interested party” as the standing test, and under both statutes “interested party” excludes subcontractors. The majority’s third reason for its failure to follow AFGE is its real reason, and likely the reason that under- pins its unwillingness to follow SRA and enforce the task order bar against Percipient. The real reason is § 3453, which importantly establishes and seeks to enforce the preference for commercial products and services in agency procurements across the entire landscape of government contracts. Unless potential subcontractors are allowed to bring § 3453 protests under prong three, the majority pre- dicts that the goals of § 3453 will be “illusory,” Majority Op. at 26, and the statute will have “minimal bite” because con- tractors (like CACI) will not “act against their own inter- est,” and the government cannot be trusted to enforce the law. Majority Op. at 26. Prospective and disappointed actual bidders clearly have a significant interest to police possible violations of § 3453 by the party which won a contract, as they might succeed in achieving cancelation and resolicitation of the contract on the ground that full compliance by the contract winner and agency is lacking. Our precedent already con- firms that prospective bidders are capable of enforcing compliance with § 3453. See CGI Federal, Inc. v. United States, 779 F.3d 1346, 1349, 1354 (Fed. Cir. 2015) (prospec- tive bidder’s protest under § 1491(b)(1) successfully chal- lenges compliance with § 3453’s sister statute, 41 U.S.C. § 3307). The majority has no factual support for its dispos- itive worry that § 3453’s goals are illusory, and that the statute cannot be properly enforced unless potential sub- contractors are granted standing to bring § 3453 prong three protests. It points to no evidence, anecdotal or em- pirical, that the statute is widely disregarded by agencies or contractors, and Percipient makes no such charge. The Case: 23-1970 Document: 46 Page: 53 Filed: 06/07/2024

majority cannot deny that prospective and disappointed bidders have real motives to bring § 3453 protests, as in- deed has happened. I, like Congress, am not so doubting in the interest of private parties and of agencies to enforce compliance with §§ 3453 and 3307 that I would open the protest door to potential subcontractors. As the relevant statutory history of CICA and the Brooks Act described below shows, Congress twice has measured the pros (more would-be law enforcers) and cons (disruption of the procurement process) of giving standing to potential subcontractors to protest procurements, and has even given explicit consideration to granting such standing, only to deny protest standing to subcontractors. The majority’s fourth reason invokes legislative his- tory, arguing that having enacted § 3453 as part of FASA with its “significant impact on government procurement,” it is “difficult to conclude” that Congress, two years later, would have promulgated ADRA “with the intention of elim- inating any meaningful enforcement” of § 3453 by exclud- ing potential subcontractors from the definition of “interested party” in § 1491(b)(1). Majority Op. at 27. The majority overlooks that in promulgating CICA, and in promulgating FASA, Congress actually looked at the ques- tion of providing subcontractors with standing to protest procurements and decided to deny them such standing. Nothing in ADRA’s legislative history suggests that Con- gress was concerned with inadequate enforcement of § 3453 and a need for potential subcontractor standing to enforce § 3453. A comprehensive view of the relevant stat- utory history undermines the majority’s fourth rationale, and argues forcefully against potential subcontractor standing under all three prongs of § 1491(b)(1). First, Congress initially sought to include subcontrac- tors as interested parties in CICA. See H.R. 5184, 98th Cong. § 204(g)(2) (1984) (“the term ‘interested party’ means a person whose direct economic interest would be affected Case: 23-1970 Document: 46 Page: 54 Filed: 06/07/2024

as contractor or subcontractor by the award or nonaward of the contract.” (emphasis added)). In the end, Congress ex- cluded subcontractors as interested parties. See US W. Commc’ns Servs., Inc. v. United States, 940 F.2d 622, 628 (Fed. Cir. 1991) (“the CICA, as enacted, provided for pro- test ‘to a solicitation by a Federal agency’ and all references that would have permitted subcontractors to protest were deleted.”). Next, in 1991 proposed amendments to the Brooks Act, which included the same “actual or prospective bidder” CICA definition of “interested party,” Congress expressly considered and rejected the proposition of giving subcon- tractors standing to challenge ADP procurements. Specif- ically, the House of Representatives proposed amending the definition of “interested party” in the Brooks Act to per- mit “[p]rotests by subcontractors” because of concerns that “restrictive specifications may sometimes go unchal- lenged . . . when prospective prime contractors have no in- centive to protest. . . . A potential subcontractor . . . would be harmed by the restrictive specification, but, under cur- rent law, would not have standing to protest.” H.R. Rep. No. 102-364, at 32 (1991). However, the report also recog- nized that “[b]y increasing the number of possible protes- tors, [the bill] would further complicate ADP procurements, and in all likelihood, increase the oppor- tunity for delay.” H.R. Rep. No. 102-364, at 80. The report further explained that “the proposed definition of ‘inter- ested party’ would allow potential subcontractors . . . to challenge an agency’s procurement decisions[, and w]e be- lieve that the grant of such a right is wholly unnecessary, given that current law authorizes the filing of a protest by ‘an actual or prospective bidder or offeror.’” H.R. Rep. No. 102-364, at 80–81. Congress’s consideration of possible Brooks Act amend- ments occurred at the same time Congress considered draft statutes for a “Preference for Acquisition of Commercial Items” and associated “Market Research” which were later Case: 23-1970 Document: 46 Page: 55 Filed: 06/07/2024

incorporated in FASA, resulting in § 3453. H.R. Rep. No. 102-364, at 6. Certain Brooks Act possible amendments that would have opened the door to Brooks Act protests by subcontractors were rejected, and the reasons for excluding subcontractor standing were recognized in hearings on S. 1587, the final version of FASA, including § 3453. For example, these hearings noted that “[e]stablishing a sub- contractor’s right to protest would greatly expand the num- ber of protests and, consequently the delays in the procurement process[, and i]t would also establish prece- dent that privity of contract exists between the government and subcontractors, thereby opening the possibility for di- rect subcontractor claims under the Contract Disputes Act.” To Revise and Streamline the Acquisition Laws of the Federal Government, and for Other Purposes: Hearing on S. 1587 Before the S. Comm. on Governmental Affs. and the S. Comm. on Armed Servs., 103rd Cong. 293 (1994). Regarding the legislative history of ADRA, this court in AFGE extensively relied on the statute’s legislative his- tory to support adoption of CICA’s standing test for § 1491(b)(1). See AFGE, 258 F.3d at 1299–1302. Rather than quote four pages of the AFGE opinion, it is enough here to note that the legislative history confirmed that con- tractors (not potential subcontractors) should have § 1491(b)(1) standing and that to construe the statute more broadly would violate the sovereign immunity canon. ADRA consolidated pre-award and post-award contract lit- igation in the Claims Court and created a contractor stand- ing test for the new statute. Congress did its ADRA work fully aware of its experience in enacting CICA and the Brooks Act, in which it created a contractor standing test that expressly excluded potential subcontractors from standing. To use the majority’s test, isn’t it difficult to con- clude that Congress in ADRA meant to open the door to protests by potential subcontractors in § 1491(b)(1) when it knowingly closed that door in CICA and the Brooks Act, especially when there’s no evidence that Congress was Case: 23-1970 Document: 46 Page: 56 Filed: 06/07/2024

concerned with lax enforcement of § 3453 when enacting ADRA? The majority’s reference to the legislative history of the now repealed Brooks Act deserves comment. The majority references the part of the legislative history that I have highlighted, in which Congress pointed out that granting standing to subcontractors under the Brooks Act might be viewed to suggest that subcontractors would have privity with the government for direct subcontractor claims under the Contract Disputes Act—despite the general view that such privity is required to sue the government under the Tucker Act. See Merritt v. United States, 267 U.S. 338, 340–41 (1925). Privity is a matter of fact, and under our precedent ac- tual subcontractors are absolutely denied standing to sue the government under the Contract Disputes Act. See Win- ter v. Floorpro, Inc., 570 F.3d 1367 (Fed. Cir. 2009). Actual subcontractors are also denied standing under 28 U.S.C. § 1491(a) unless the subcontractor can establish that it is a third-party beneficiary to the underlying prime contract with the government. See G4S Tech. LLC v. United States, 779 F.3d 1337 (Fed. Cir. 2015). Thus, it is not surprising that Congress was concerned that granting standing to subcontractors to protest under the Brooks Act would allow a nonparty to a contract to sue the government and thus create a false privity of contract where none exists. Interestingly, the majority sees this leg- islative history as supporting denial of standing to poten- tial subcontractors for protests under prongs one and two of § 1491(b)(1), while at the same time having no effect on standing for potential subcontractor protests under prong three of the statute. Majority Op. at 28–29. The majority reasons that because prong one and two protests by poten- tial subcontractors challenge a contract, proposed contract or solicitation, it makes sense to insist on privity and thus deny potential subcontractor standing under prongs one Case: 23-1970 Document: 46 Page: 57 Filed: 06/07/2024

and two. But because prong three protests do not directly challenge terms of a contract, proposed contract or solicita- tion, and instead challenge unlawful conduct arising in performance of a contract, the majority argues that privity concerns evaporate. This does not make sense. The re- quirement of privity does not care about the nature of the challenge a nonparty wishes to bring against the govern- ment on one of its contracts. Privity in government con- tract law exists to prevent nonparties from challenging the government regarding the contracts it forms with parties. A challenge to performance of a contract is no less a chal- lenge to a contract than a specific challenge to a particular line item in a solicitation. Suits brought under the CDA and § 1491(a) challenge performance under a contract, and privity of contract bars actual subcontractor standing to sue under those provisions. The majority’s attempt to ar- gue that privity concerns are neutral for potential subcon- tractor standing under prong three while prohibiting standing under prongs one and two is unconvincing. It is clear that Percipient, as a potential subcontractor, is not in privity of contract with the government. The par- ties have not argued that we need to consider privity of con- tract to decide Percipient’s standing under § 1491(b)(1), but to the extent that privity concerns lurk in the background, those concerns clearly suggest that Percipient should be de- nied standing under all three prongs of the statute. In sum, Congress considered the legislation resulting in § 1491(b)(1) in the light of its previous experience in en- acting CICA, the Brooks Act, and FASA. Congress under- stood the benefits and detriments of subcontractor standing and considered subcontractor standing “wholly unnecessary, given that current law authorizes the filing of a protest by ‘an actual or prospective bidder or offeror.’” H.R. Rep. No. 102-364, at 80–81. Congress enacted ADRA’s “interested party” standing test knowing it had al- ready used the same “interested party” standing test in CICA and the Brooks Act, in each instance with the Case: 23-1970 Document: 46 Page: 58 Filed: 06/07/2024

intention of barring subcontractor standing. The majority points to no evidence that Congress, in enacting ADRA, meant to allow standing for potential subcontractors spe- cifically to bring § 3453 prong three protests, while barring standing for other potential subcontractor protests under prongs one and two. Other than its unfounded prediction that the goals of § 3453 are illusory and that the statute will be unenforced unless potential subcontractors are granted standing to bring prong three protests, the majority has no reason to sidestep away from AFGE and create potential subcontrac- tor standing for prong three § 3453 protests. Were Percip- ient to survive the task order bar, the court should apply the AFGE standing test to this case and deny Percipient statutory standing for its complaint. CONCLUSION The decision in this case will have an enormous impact on government procurements. For government contracts implemented through issu- ance of task or delivery orders, the decision significantly narrows the existing reach of the task order bar, which de- feats Tucker Act jurisdiction for otherwise permissible § 1491(b)(1) protests. The majority interprets the task or- der bar to be limited to protests that allege legal flaws in the task order, but does so by discarding the binding deci- sion in SRA, which interpreted the task order bar to reach broader alleged violations of law arising in connection with the issuance of a task order. Whether the SRA interpreta- tion of the scope of the task order bar is “far too broad” as a policy matter, as the majority asserts, can be addressed by the court sitting en banc, but this panel is bound by SRA, and under its test, Percipient’s protest is task order barred. For protests under § 1491(b)(1), the majority grants po- tential subcontractors standing to protest for the first time Case: 23-1970 Document: 46 Page: 59 Filed: 06/07/2024

in Tucker Act history. That the majority limits potential subcontractor standing to prong three protests involving alleged violations of § 3453 may suggest to some that the decision is not a big deal. But § 3453 and its sister statute 41 U.S.C. § 3307 apply to all government contracts for products and services, so it is fair to expect that potential subcontractors will soon flood the Claims Court with § 1491(b)(1) protests. Think of all the products and ser- vices that go into government contracts for a battleship, or airplane, or new headquarters for an agency, and the vast number of potential subcontractors who can so easily allege possession of a suitable off-the-shelf product or service and inadequate agency attention to § 3453’s requirements. And further, the majority’s driving rationale, i.e., that some laws are so important (here, § 3453) that they require relaxed standing tests to promote compliance, will in time likely apply to alleged violations of other important laws, requiring specially tailored standing requirements. The majority accomplishes its goal of enhancing vigilance for § 3453 by discarding the AFGE precedent as irrelevant to this case. As I have demonstrated above, AFGE binds this panel, and Percipient lacks standing under § 1491(b)(1). And as a matter of independent consideration, there is no support for the majority’s new prong three standing test, and there is ample statutory history evidence that Con- gress would object to granting potential subcontractors § 1491(b)(1) standing of any kind. As with the task order bar issue in this case, the court sitting en banc might con- sider additional standing tests for § 1491(b)(1) beyond AFGE’s, but this panel cannot. For the many reasons set forth above, I respectfully dis- sent.