The Court of Appeals for the Federal Circuit last month granted the Government’s petition for rehearing en banc of the precedent-setting decision in Percipient.ai, Inc. v. United States. A divided panel of the Federal Circuit held in June that a prospective subcontractor had standing to challenge the Government’s alleged failure to adhere to the statutory preference for commercial items.
The decision thus expanded the definition of “interested party” under the Tucker Act much more broadly than previous decisions of the Federal Circuit have held, opening the door to a possible flood of bid protests by disappointed subcontractors that never competed for (and may not have been eligible to compete for) the underlying government contracts that are the subject of their complaints.
With the granting of the Government’s petition for rehearing en banc, however, all active judges of the Federal Circuit (and any senior judges on the panel that elect to participate) will now consider whether the panel majority got it right when it ruled Percipient had standing to bring its protest.
The order granting the petition limited the en banc review to the question of standing under prong three of the Tucker Act governing challenges to alleged violations of procurement law, meaning the panel majority’s holdings on the statutory task order protest bar and timeliness will not be reconsidered. The order also invites amicus briefs, giving members of the government contracts bar an opportunity to provide their two cents on how the Tucker Act’s “interested party” requirement should be interpreted.
As discussed in this space and in a follow-up commentary for the American Bar Association’s Procurement Lawyer, the majority decision in Percipient.ai left several looming questions unanswered about what it means to be an “interested party” for purposes of bringing a bid protest action before the Court of Federal Claims. With the grant of en banc reconsideration, the Federal Circuit now has an opportunity to resolve those questions and provide greater certainty and predictability in this complicated area of the law. A hearing date has not yet been scheduled.
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