In 2024, the U.S. Court of Appeals for the Federal Circuit, the U.S. Court of Federal Claims and the U.S. Government Accountability Office issued five noteworthy bid protest decisions:

• Percipient.ai Inc. v. U.S.[1]
• Oak Grove Techs. LLC v. U.S.[2]
• Kearney & Co. PC v. U.S.[3]
• Marathon Medical Corp.[4]
• DecisionPoint Corp. — f/k/a Emesec Inc.[5]

1. Percipient.ai

The Facts

In January 2021, the National Geospatial-Intelligence Agency, or NGA, awarded CACI Inc. a contract with a task order to integrate a computer vision system to produce, review and classify image intelligence. Percipient, a technology company with a commercial software product called Mirage, asked NGA and CACI to consider using Mirage, but despite successful demonstrations, CACI decided to develop its own system.

In January 2023, Percipient filed a COFC protest alleging that NGA had unlawfully pursued a development solution rather than a commercial solution, unlawfully delegated to CACI inherently governmental policymaking authority, and arbitrarily resisted innovation. Both the government and CACI moved to dismiss the suit for a lack of subject matter jurisdiction.

Initially, the COFC denied the motions but, on reconsideration, granted them on March 15, 2024, holding that CACI's development of its own system instead of using Percipient's commercial product was "in connection with the issuance of a task or delivery order," and was, thus, precluded by the task order jurisdictional bar of the Federal Acquisition Streamlining Act.

Percipient then appealed to the Federal Circuit, which, in June, held that the COFC erred in dismissing the protest because the Federal Acquisition Streamlining Act task order bar did not apply.

The Federal Circuit reasoned that Percipient's protest did not challenge the issuance of a task order but rather challenged the NGA's failure to properly review Percipient's commercial products before developing the computer vision system. Percipient's protest, therefore, was "in connection with a procurement" and fell under the Tucker Act.

In addition, Percipient was an interested party because it offered a commercial product that had a substantial chance of meeting agency needs.

Subsequently, in November, the Federal Circuit granted a government petition for rehearing en banc on the question of who could be considered "an interested party" objecting to an alleged violation of statute or regulation in connection with a procurement or a proposed procurement under the Tucker Act.

The Takeaway

If the en banc review preserves the Federal Circuit's holding, then prospective subcontractors may have expanded COFC protest standing in some limited cases to challenge an agency's contract administration decisions when the prospective subcontractor can show a prejudicial violation of a statute or regulation, a significant change from past practice.

2. Oak Grove Technologies

The Facts

In this long-running case, the U.S. Army originally issued the special operations forces training solicitation in October 2018. Oak Grove, an unsuccessful offeror, filed two GAO protests in 2020.

Then, in January 2021, Oak Grove filed a COFC protest, alleging that the Army had (1) failed to engage in required discussions, (2) wrongly overlooked a material defect in the awardee's proposal, and (3) inadequately investigated an alleged organizational conflict of interest.

COFC sustained the protest and separately imposed sanctions on the government for repeated failures to include documents in the administrative record. The defendants appealed to the Federal Circuit, which, on Sept. 11, 2024, reversed the COFC merits decision but upheld the sanctions order.

Three aspects of the appellate decision are worthy of mention.

First, the Federal Circuit held that the Army did not act unlawfully by including in the solicitation a Federal Acquisition Regulation clause stating that the Army could choose not to conduct discussions while at the same time including Section 215.306(c) of the Defense Federal Acquisition Regulation Supplement, which strongly encouraged discussions. The Federal Circuit held that the solicitation terms were patently ambiguous about discussions, and that Oak Grove had waived its discussions argument under the Blue & Gold doctrine when it did not protest the solicitation terms before proposals were due.

The Federal Circuit further rejected the COFC's determination that the Army had conducted an inadequate organizational conflict of interest investigation, holding that the COFC erred by conducting a de novo review of the agency's investigation rather than treating the agency's decision-making with deference.

Finally, the Federal Circuit held that the COFC did not abuse its discretion in imposing sanctions against the government — a rare occurrence — for failing to compile an adequate administrative record when the government had added relevant documents only after the conclusion of briefing and oral argument, despite previous COFC production orders.

The Takeaway

The Federal Circuit clarified the applicability of Section 215.306 of the Defense Federal Acquisition Regulation Supplement and signaled the continuing vitality of the Blue & Gold waiver doctrine, underlining that potential protesters must be mindful of ambiguous solicitation language.

The organizational conflict of interest review holding emphasized the need for deference to agency investigations.

Lastly, the affirmation of the COFC's sanction award may encourage protesters to pursue sanctions where the government unreasonably withholds material documents.

3. Kearney & Co.

The Facts

In another NGA procurement, Deloitte & Touche LLP originally protested Kearney's contract at the GAO. There, the GAO conducted outcome prediction alternative dispute resolution, which predicted whether the GAO would likely sustain or deny the protest.

During the alternative dispute resolution call, the GAO attorney stated that the GAO would likely sustain Deloitte's protest because the solicitation required an "exact match" between the work sought and the offerors' General Services Administration schedule contract labor categories. Based on the GAO's outcome prediction, the NGA took corrective action.

In response, Kearney protested the NGA's corrective action decision at the COFC. Shortly thereafter, Deloitte filed its own COFC corrective action protest, arguing that the announced corrective action did not go far enough. COFC consolidated the cases.

Ultimately, the COFC concluded on April 30, 2024, that the NGA's proposed corrective action lacked a rational basis — as did the resulting NGA decision — and directed the reinstatement of the award to Kearney. Rather than a requirement for an exact match between the work sought and the GSA contract labor categories, the COFC determined that offerors could map the work to the labor categories.

Thus, the GAO's outcome prediction was irrational, as there was no ambiguity in the solicitation, and, assuming the exact match requirement was correct, there was no prejudice since Deloitte's proposal suffered from the same flaw.

The Takeaway

This decision emphasizes that an agency's decision to take corrective action is not absolute but must have a rational basis, underlining the option of protesting corrective action at the COFC after a GAO protest resulting in such corrective action.

4. Marathon Medical Corp.

The Facts

In Marathon Medical Corp., a GAO protest that followed an agency-level protest, the GAO dismissed the protester's argument that the solicitation defectively applied the nonmanufacturer rule because the protest was filed more than 10 days after the "initial adverse agency action," which was the unchanged closing date for the receipt of quotations.

The U.S. Department of Veterans Affairs had issued a request for quotations for the establishment of multiple blanket purchase agreements under the VA's medical surgical prime vendor program. The request for quotations was a simplified acquisition of commercial items that was totally set aside for service-disabled veteran-owned small businesses. It also incorporated the nonmanufacturer rule clause at FAR 52.219-33, requiring either the business to have a nonmanufacturer rule class waiver or meet the nonmanufacturer rule qualifications.

On Nov. 14, 2023, well before quotes were due on Dec. 1, Marathon submitted its quotation. Then, on Nov. 29, Marathon filed an agency-level protest, arguing that the application of the nonmanufacturer rule to the service-disabled veteran-owned small business tier was improper and would effectively eliminate small businesses from the competition.

The VA took no action in response to the agency-level protest before the Dec. 1 quote submission deadline, which remained unchanged. On Jan. 17, 2024, the VA denied the agency-level protest. Marathon then protested at the GAO.

To appeal a denied agency-level protest to the GAO, that protest must be filed within 10 days of when the protester knew or should have known of the initial adverse agency action. The GAO protest was untimely because Marathon first became aware of the initial adverse agency action at the closing date for the submission of quotations when the VA did nothing in response to the agency-level protest before the quote deadline, not when the VA denied the agency-level protest in January 2024.

Thus, Marathon was on notice that the contracting activity had not taken the corrective action necessary to address the challenged terms at the quote closing date, meaning that it had 10 days from that day to file a protest with the GAO to be timely. Since it failed to do so, the GAO dismissed the protest as untimely on Feb. 14.

The Takeaway

This protest emphasizes the need to be alert to GAO deadlines, which are unforgiving. The GAO's clarification of the definition of "initial adverse agency action" provides helpful clarification to protesters considering a protest strategy involving an agency-level protest and a subsequent protest at the GAO.

5. DecisionPoint Corp.

The Facts

The U.S. Air Force required offerors to submit proof of a Level III Capability Maturity Model Integration certification for the prime contractor providing cyber protection team support services. EmeSec submitted a proposal identifying itself as the prime contractor, but provided DecisionPoint's Level III CMMI certification because EmeSec was then a wholly owned subsidiary of DecisionPoint.

Prior to proposal submission, EmeSec had merged into DecisionPoint, and later, a novation agreement, effective in January 2023, was executed, formally recognizing DecisionPoint as the successor to EmeSec.

The Air Force rejected DecisionPoint's proposal after taking corrective action in response to an earlier protest, arguing that EmeSec — the original named prime contractor — did not hold a Level III CMMI certification at the time of proposal submission.

DecisionPoint then filed a GAO protest, arguing that (1) the solicitation did not require the certification at the time of proposal submission, and (2) the merger and novation agreement made DecisionPoint the proper prime contractor holding the required certification.

On Nov. 13, the GAO rejected DecisionPoint's argument that the certification was not required at the time of proposal submission because the solicitation clearly required the submission of certification proof at that time. However, the GAO sustained the protest because the Air Force failed to properly consider the merger and novation agreement, which effectively made DecisionPoint the prime contractor. Because DecisionPoint held the required CMMI certification, its proposal met the solicitation requirements.

The Takeaway

The DecisionPoint decision serves as an important reminder that corporate transactions can, and often do, directly affect pending government contract proposals.

With consolidation in the government contract space increasing, issues like those in DecisionPoint will inevitably become more common. As such, it is important for government contractors involved in corporate transactions to be mindful of the potential unanticipated effects of those transactions on their government contract proposals.

Conclusion

In our view, the five decisions discussed here will likely have a continuing impact on bid protest questions involving the standing of interested parties in commercial procurements, the Blue & Gold waiver doctrine, challenges to corrective action decisions based on GAO decisions, the timeliness of GAO protests after agency-level protests, and the management of proposal preparation by contractors involved in corporate transactions.

Republished with permission. The original article "The 5 Most Important Bid Protest Decisions Of 2024" was published by Law360 on January 29, 2025.

Notes: 

[1] Percipient.ai Inc. v. U.S., 121 F.4th 1311 (Fed. Cir. 2024).

[2] Oak Grove Techs. LLC v. U.S., 116 F.4th 1364 (Fed. Cir. 2024).

[3] Kearney & Company, P.C. v. U.S., No. 24-162 (April 30, 2024).

[4] Marathon Medical Corp., B-422168.2 (Comp. Gen. Feb. 14, 2024).

[5] DecisionPoint Corp. — f/k/a Emesec Inc., B-422245.5, 2024 CPD ¶269 (Comp. Gen. Nov. 13, 2024).