In a matter of first impression, the United States Court of Appeals, Federal Circuit, has held an interested party with standing to bring a bid protest under the Tucker Act is an “actual or prospective bidder or offeror whose direct economic interest would be affected by contract award or failure to award contract, regardless of the type of challenge brought.” The Federal Circuit has specifically clarified that a subcontractor is not an interested party and does not have standing. Percipient AI, Inc. v. United States, 153 F.4th 1226 (2025).
The United States government is generally immune from lawsuits; however, the Tucker Act grants the United States Court of Federal Claims jurisdiction to hear certain claims against the government. 28 U.S.C. § 1346(a) and 1491. Among the claims that can be brought under the Tucker Act, “an interested party [may object] to a solicitation by a Federal agency for bids or proposals for a proposed contract or to a proposed award or the award of a contract or any alleged violation of statute or regulation in connection with a procurement or a proposed procurement.” 28 U.S.C. § 1491(b)(2). Notably, only an “interested party” may file a bid protest against the government.
In 2020, the National Geospatial-Intelligence Agency (“NGA”) issued a solicitation seeking bids to build and operate a Structured Observation Management Enterprise Repository (“SER”) to store, disseminate, and regulate access to data. NGA also sought “Computer Vision” (“CV”) capabilities. In January, 2021, NGA awarded the contract to CACI, Inc. (“CACI”) in the form of a single-award, indefinite delivery/indefinite quantity contract.
Percipient, AI, (“Percipient”) offers a commercial CV platform it contends could have met NGA’s CV requirements; however, it did not have capabilities to meet the SER component of the solicitation. Percipient did not attempt to submit a bid for the contract, but after the contract was awarded to CACI, contacted NGA for an evaluation of its product for the contract. NGA directed Percipient to CACI, for whom Percipient demonstrated its product’s capabilities. NGA ultimately entered into a bailment agreement with Percipient to evaluate the product, but neither CACI nor NGA selected Percipient’s product to be used for the project or requested follow up demonstrations.
In January, 2023, Percipient filed a bid protest in the Court of Federal Claims, contending NGA had violated its obligations and “deliberately failed” to evaluate Percipient’s product. Percipient argued it had standing as an “interested party” under the Tucker Act because an “interested party” differs depending on how a claimant chooses to style or bring its claim. Percipient argued § 1491(b)(1) should be read to contain three “prongs,” each of which provide an independent basis for objection: (1) a solicitation by a federal agency for bid or proposals for a proposed contract; (2) a proposed award or award of a contract; and (3) any alleged violation of statute or regulation in connection with a procurement or a proposed procurement. Percipient’s purported interpretation largely tracks the broader Administrative Procedure Act (“APA”), which provides an “interested party” is any directly injured party who could have offered its product or service to meet the needs of the agency but for that agency’s alleged legal violation.
The Court rejected Percipient’s argument, concluding there is only one definition of an “interested party” under the Tucker Act: “[A]n ‘interested party’ who has standing to bring a bid protest under § 1491(b) is 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, regardless of the type of challenge brought.” 153 F. 4th 1226, at 1243. The Court reasoned that the statutory schemes and legislative history of the Tucker Act make it obvious Congress intended to limit the definition of “interested party” to those directly affected by contract awards – contractors and bidders – not prospective subcontractors.
The holding ultimately means that subcontractors, and prospective subcontractors, do not having standing to bring a bid objection claim in Federal Claims court. While the Court did not fully evaluate the issue, the Court posits that subcontractors may have claims pursuant to the APA to enforce 10 U.S.C. § 3453, Preference for Commercial Products and Commercial Services.