Whether a protester has standing to challenge a government bid process or award is typically clear for actual bidders, but it can be less clear for lower-tier participants like subcontractors and prospective bidders. The Federal Circuit recently added some clarity.

On August 28, 2025, the U.S. Court of Appeals for the Federal Circuit decided Percipient.ai, Inc. v. United States,[1] under the Tucker Act (28 U.S.C. § 1491(b)). The Federal Circuit dismissed Percipient.ai’s (Percipient) protest because it was only a potential subcontractor who never submitted a bid, rather than an actual or prospective bidder or offeror whose direct economic interest would be affected by the award or failure to award a contract.

Case Background

In 2020, the National Geospatial-Intelligence Agency (NGA) sought bids for a contract known as SAFFIRE, which in part required advanced computer vision (CV) capabilities, a form of artificial intelligence technology used to derive geospatial intelligence from imagery. Percipient did not submit a bid, and NGA awarded the contract to CACI, Inc.-Federal (CACI).

After NGA awarded the contract to CACI, Percipient requested that NGA evaluate its CV product for potential inclusion in the SAFFIRE contract. NGA directed Percipient to contact CACI, who held some discussions with Percipient but ultimately did not pursue Percipient’s product. Percipient then filed a bid protest alleging that NGA violated its obligations to “acquire commercial services, commercial products, or nondevelopmental items other than commercial products to meet the needs of the agency” “to the maximum extent practicable.”[2]

Holding and Legal Analysis

The Federal Circuit held that an “interested party” under the Tucker Act is limited to actual or prospective bidders or offerors whose direct economic interest is affected by the award or failure to award a contract.

Percipient asserted it had standing to bring the bid protest, relying on the Administrative Procedures Act (APA), which allows any party directly harmed by an agency’s legal violation to challenge it. Percipient argued, among other things, that the Tucker Act’s definition of “interested party” should be flexible, adapting to the specific circumstances of a bid protest. Specifically, Percipient argued that the government breached the laws or regulations related to the procurement process by not considering Percipient’s CV product to the “maximum extent practicable.”

The court disagreed and held that Percipient was not an “interested party,” but instead a potential subcontractor because it only attempted to provide its CV platform to CACI, the winning bidder.

In making its decision, the court relied on historical context, statutes, and case law interpreting the meaning of “interested party.” Specifically, the court looked to the Tucker Act, legislative intent behind the Administrative Dispute Resolution Act (ADRA), and judicial precedent interpreting “interested party.” The court reasoned:

  1. CICA: The Competition in Contracting Act of 1984 (CICA), which the Tucker Act closely aligns with, defines “interested party” as an actual or prospective bidder or offeror whose economic interest is impacted by the award or non-award of a contract.
  2. ADRA: The ADRA established a clear legal framework for reviewing federal procurement actions. The legislative history shows that Congress considered and rejected expanding standing to subcontractors or other parties indirectly affected. The court also cited past precedent, including Fed’n. of Gov’t. Emps., AFL-CIO v. United States, 258 F.3d 1294, 1297–98 (Fed. Cir. 2001) (AFGE), which reasoned that, in enacting the ADRA, Congress intended only to extend the jurisdiction of the Court of Federal Claims to cases brought under the APA by disappointed bidders.”

Key Considerations for Prospective Offerors and Subcontractors

While the Federal Circuit’s decision offers a cautionary tale for mere prospective bidders, it did reiterate that subcontractors may have standing to bring a bid protest under certain situations:

  1. The contractor acted as a purchasing agent of the government;
  2. The government caused or controlled the rejection or selection of a potential subcontractor;
  3. Agency bad faith or fraud in the approval of a subcontractor is demonstrated;
  4. A contract was made “for” the government (i.e., the prime contract involves direct government observations like managing a government facility, so that the subcontractor’s work is essentially directly for the government);
  5. The agency is entitled to an advance decision (i.e., the government agency has the authority to make preemptive decisions regarding subcontract awards, indicating a level of direct involvement or control over the subcontracting process). See Percipient.ai, Inc. v. United States (citing Amdahl Corp. v. Baldrige, 617 F. Supp. 501, 505 (D.D.C. 1985)).

Troutman Pepper Locke attorneys are well-positioned to advise clients regarding their pre-award government contracting work and, should the need arise, to guide you through the bid protest process.

[1] Percipient.ai v. United States, No. 2023-1970, 2025 WL 2472671 (Fed. Cir. Aug. 28, 2025).

[2] 10 U.S.C. § 3453.