Highlights
- Judge Armando Bonilla on Feb. 24, 2025, held that the U.S Court of Federal Claims (COFC or Court) has jurisdiction over a protest challenging an other transaction agreement (OTA) award in Raytheon Co. v. United States.
- Judge Bonilla's ruling further solidifies the COFC's jurisdiction over OTA protests.
- In Raytheon, the Court offered a "working definition" of OTAs that defines them as a "acquisition instrument."
In a decision published on Feb. 24, 2025, Judge Armando Bonilla of the U.S. Court of Federal Claims (COFC or Court) weighed in on the ongoing debate about jurisdiction over protests of other transaction agreements (OTAs). The Raytheon decision is intended to "streamline the litigation of these jurisdictional issues in future cases."1
Judge Bonilla's opinion is not binding on other judges. However, the decision clarifies the Court's jurisdiction over OTAs and represents progress in addressing the previously uncertain landscape of OTA jurisdiction. This decision, coupled with a March 6, 2025, U.S. Department of Defense (DOD) memorandum titled "Directing Modern Software Acquisition to Maximize Lethality"2 (SecDef Memo) from Defense Secretary Pete Hegseth, has significant implications for contractors engaging in OTAs with DOD. In light of OTA funding increases in recent years, contractors should understand their ability to protest OTA awards.
The Facts of Raytheon
The case before the COFC concerned a DOD Missile Defense Agency's OTA for the development of missile defense capabilities.3 In 2021, the agency awarded OTAs for Phase I of the program to three defense contractors, then reduced the awardees to two in 2022 (Northrup Grumman and Raytheon).4 In 2023, the agency began Phase II; on Sept. 25, 2024, following a prototype test, the agency chose to move forward with only Northrup Grumman and discontinue Raytheon's participation in the program.5 Raytheon brought a bid protest to the Court on Nov. 6, 2024, challenging the agency's decision to eliminate Raytheon from the competition.6 The government moved to dismiss, arguing that OTAs are not "in connection with a procurement or a proposed procurement," as required under the Tucker Act, and do not qualify as a solicitation for a proposed contract.
The Court Examines Key Precedent
The Court began its analysis by considering other decisions related to OTA jurisdiction. The Court examined the Space Exploration Technologies Corp. v. United States (SpaceX) decision, where a post-award bid protest of OTAs was ultimately transferred from the COFC to the appropriate U.S. district court.7 In SpaceX, the COFC limited its conclusions to the facts of the case. It attempted to distinguish between the agency's decisions that were "in connection with a procurement," therefore under the jurisdiction of the Tucker Act,8 and agency decisions that merely "related to" a procurement.9 The SpaceX court ultimately concluded the agency's decision regarding this protype development agreement "did not involve the procurement of goods or services" and that the Tucker Act did not grant jurisdiction over this protest.10
In subsequent cases in 2021 and 2022, the Court found jurisdiction over post-award bid protests of OTAs and declined to transfer the cases to a district court. In Kinemetrics, Inc. v. United States, the Court "rejected the application of SpaceX" to the facts of that case and found the instant solicitation that requested a technical and cost proposal was directly connected with a contract award; the Court found jurisdiction over this protest because it was "in connection with a procurement."11 In Hydraulics International, Inc. v. United States, the Court found a post-award bid protest of an OTA award was "in connection with a procurement or proposed procurement" because, unlike SpaceX, the protype being developed was "specifically tailored" to the U.S. Army's needs. 12
Most recently, in 2024, the Court again considered its jurisdiction in Independent Rough Terrain Ctr., LLC v. United States (IRTC).13 The IRTC Court considered that OTAs may themselves be procurements, not just decisions "in connection with a procurement" because the government was seeking goods or services.14
Raytheon builds off these key decisions, affirming the Court's jurisdiction over OTAs.
OTA Treatment in the Last Decade
The government's use of OTAs has undisputedly increased over time. The DOD has noted this trend by documenting "the number of actions increasing from 496 in FY 2017 to 4,391 in FY 2022 and total dollars obligated increasing from $2.2 billion in FY 2017 to a peak of $16.02 billion in FY 2020" (crediting the COVID-19 pandemic with high-dollar other transactions (OTs) in 2020).15
As the use of OTAs has evolved over the last decade, so, too, has the treatment of protests of OTA awards. Indeed, the DOD's Guide to OTs in November 2018 states "bid protests are rare for [other transactions (OTs)]" with regard to the U.S. Government Accountability Office (GAO) because 1) "GAO has limited jurisdiction to review OT decisions and protests to GAO regarding OT awards are rare" and 2) "[p]rotests to the U.S. Court of Federal Claims are also possible but are a rare occurrence."16 The recent Raytheon decision will alter this 2018 assessment.
Perhaps the best case study for the treatment of OTAs by the GAO and federal district courts is the MD Helicopters Inc. v. United States of America cases. The GAO reiterated its rejection of jurisdiction over OTAs in its 2019 decision in MD Helicopters, which states "agreements issued by the agency under its 'other transaction'...
