Federal Circuit, Sitting En Banc, Reverses Landmark Panel Decision on Bid Protest Standing

Back in June 2024, we wrote about a 3-judge panel’s holding in Percipient.AI, Inc. v. United States, 104 F.4th 839 (Fed. Cir. 2024), that a contractor was permitted to bring a bid protest against the government alleging violations of a procurement statute even though it did 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.” In the subject SAFFIRE procurement, let by the National Geospatial-Intelligence Agency (“NGA”), the plaintiff Percipient was a potential subcontractor to the eventual awardee, CACI. Percipient alleged that the NGA violated 10 U.S.C. § 3453, which sets out a government preference for commercial products and services, by failing to meaningfully consider whether Percipient’s commercial software would satisfy the NGA’s needs, such that CACI did not need to build a software program from scratch as part of its performance of the SAFFIRE contract. The Court of Federal Claims (“COFC”) dismissed the bid protest for lack of standing, and Percipient appealed to the Federal Circuit.

On August 28, 2025, the Federal Circuit, sitting en banc, and in a 7-4 decision, declined to follow its panel’s ruling and affirmed the COFC’s earlier dismissal of Percipient’s bid protest for lack of standing. The Federal Circuit held that, under 28 U.S.C. § 1491(b)(1) (the Tucker Act), the term “interested party” 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.” Since Percipient, a potential subcontractor to the awardee on the SAFFIRE contract, was not an “actual or prospective bidder,” they lacked standing to maintain a bid protest challenging the contract award. This decision effectively affirms the status quo with respect to bid protest standing before the COFC.

The majority’s decision rested on the following reasoning:

• Textual Interpretation: The majority rejected Percipient’s argument that the Tucker Act’s third clause (“any alleged violation of statute or regulation in connection with a procurement”) should expand the definition of “interested party.” Instead, they applied a consistent definition of “interested party” across all three clauses of Section 1491(b)(1) (i.e., an “actual or prospective bidder whose direct economic interest would be affected by” the contract award).
• Statutory and Caselaw History: The majority traced the evolution of bid protest jurisdiction, examining early cases like Heyer Products Co. v. United States, 140 F. Sup. 409 (Ct. Cl. 1956) (the first case to recognize a bid protest cause of action) and Scanwell Laboratories, Inc. v. Shaffer, 424 F.2d 859 (D.C. Cir. 1970) (recognizing a cause of action in the district courts) and concluded that those cases established that actual bidders had standing to challenge procurement irregularities but did not extend standing to third parties and non-bidders. The Court also reflected on the Administrative Dispute Resolution Act (“ADRA”) of 1996, which added Section 1491(b) to the U.S. Code, and emphasized that Congress adopted the definition of “interested party” for ADRA from the Competition in Contracting Act (“CICA”), which explicitly limits standing to actual or prospective bidders.
• Legislative Intent: The majority found no evidence that Congress, in enacting ADRA, intended to alter the landscape of government contracts law by expanding bid protest standing to subcontractors or other vendors who did not bid on a prime contract. In fact, Congress had previously considered and rejected such expansions in both CICA and the Brooks Act.

In sum, because Percipient did not bid on the SAFFIRE contract and had no teaming arrangement with CACI or intent to submit a proposal, it lacked standing. The Federal Circuit therefore affirmed the dismissal of Percipient’s bid protest by the COFC.