Percipient.ai, Inc. v. United States

104 F.4th 839

PERCIPIENT.AI, INC., Plaintiff-Appellant v. UNITED STATES, CACI, INC.-FEDERAL, Defendants-Appellees

2023-1970

United States Court of Appeals, Federal Circuit

Decided: June 7, 2024

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

Samuel Charles Kaplan, Boies Schiller Flexner LLP, Washington, DC, argued for plaintiff-appellant. Also represented by Hamish Hume, Eric J. Maurer, Gina Alicia Rossman.

Reta Emma Bezak, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, 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 CACI, Inc.-Federal.

Also represented by Jonathan Scott Aronie, Townsend Bourne, Lillia Jo Damalouji, Ariel Elizabeth Debin.

Before Taranto, Clevenger, and Stoll, Circuit Judges.

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 "interested party objecting to . . . any alleged violation of statute or regulation in connection with a procurement or a proposed procurement"), where the allegations do not challenge 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. Percipient.ai, Inc. appeals the decision of the United States Court of Federal Claims granting the Government's and intervenor CACI, Inc.-Federal's (collectively, "Defendants") motions 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 arguments for affirming the trial court, which are based on the Tucker Act itself, standing, and timeliness. We thus reverse and remand.

BACKGROUND

The National Geospatial-Intelligence Agency (NGA) provides intelligence data to the federal government by analyzing images and geospatial information. NGA issued a solicitation, referred to as SAFFIRE, to sustain and improve its processes for obtaining and storing visual intelligence data, and integrating those capabilities with computer vision (CV), a form of artificial intelligence.¹ Percipient'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 Enterprise Repository" or "SER"; and (2) a user-facing CV System. J.A. 38-39 ¶ 6. Task Order 1, solicited simultaneously with the SAFFIRE solicitation, directed the contractor 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 Percipient was unable to meet the SER component of the SAFFIRE solicitation. It also expected NGA and CACI to comply with 10 U.S.C. § 3453, which establishes a preference 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 solicitation or award.

Percipient contacted NGA and explained that "in addition to being legally required [to consider commercial products 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 evaluate 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 commercial products would be evaluated once CACI finished reviewing NGA's legacy system and that the "that ship has sailed" statement was an "unfortunate miscommunication." J.A. 74 ¶¶ 98-100.

About two months later, Percipient demonstrated Mirage 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. Instead, 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 software itself) and requesting the opportunity to demonstrate 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 demonstration that Mirage "meets all of NGA's analytic transformation 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 Mirage 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 "Machine 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 evaluation 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 determine if commercial or nondevelopmental items are available that can meet the agency's procurement requirements. This procurement statute requires, "to the maximum 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 Federal 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 complaint 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 contract or [3] any alleged violation of statute or regulation in connection with a procurement or a proposed procurement.

28 U.S.C. § 1491(b)(1) (emphases added). Percipient asserted 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 delivery order except for —

. . . .

(B) a protest of an order valued in excess of $25,000,000.

(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 dismiss, 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 applied 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...