What You Need to Know
- Key takeaway #1In granting rehearing en banc, the Federal Circuit appears to be reconsidering the standing it recognized in its earlier ai decision. A reversal of that June decision could significantly impair commercial item contractors’ ability to challenge make/buy decisions that are nested within task order procurements, making it all but impossible to enforce the commercial-item mandate.
- Key takeaway #2Given the importance of the Court’s holding to the underlying question regarding FASA’s commercial-preference mandate, commercial-item contractors may consider accepting the Circuit’s invitation to submit amicus briefing.
On November 22, 2024, the Federal Circuit granted the United States’ petition for panel rehearing en banc of its June 2024 decision in Percipient.ai, Inc. v. United States (litigation we have extensively discussed here, here, and here). In its June decision, the Circuit held Percipient had standing to challenge a National Geospatial-Intelligence Agency (NGA) procurement action—whether NGA had complied with the Federal Acquisition Streamlining Act’s (FASA) commercial-item mandate at 10 U.S.C. § 3453—nested within the performance of a previously awarded NGA task order upon which Percipient had not bid.
In granting the government’s petition, the Circuit indicated its intent to revisit the question of Percipient’s standing, instructing the parties to brief a single issue: “Who can be ‘an interested party objecting to . . . any alleged violation or regulation in connection with a procurement or a proposed procurement’ under [the Court of Federal Claims’ Tucker Act bid protest jurisdiction]?”
The Circuit has invited the views of amicus curiae. Percipient.ai represents a decision in which those views may be important. As the Circuit explained in its June decision, a holding that Percipient lacked standing to challenge NGA’s make-or-buy decision under the unique circumstances of that case would “allow agencies to ignore [the commercial item preference] by deferring decisions about commercial products until after the contract award.” Under those circumstances, absent the standing the Circuit recognized in its June decision, it would be all but impossible to enforce FASA’s commercial-item mandate.
We would like to thank Cherie J. Owen, Consultant, for her contribution to this alert.
For further information, please contact:
Daniel W. Wolff, Partner, Crowell & Moring
dwolff@crowell.com
