Commercial-Item Contractors Take Note: Federal Circuit to Rehear Percipient.ai En-Banc

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.