Percipient.Ai, Inc. v. United States
Authored by: Jeremy J. Gustrowsky
In a major decision for government contractors and tech companies, the Federal Circuit recently clarified who has the right to challenge federal procurement decisions in Percipient.Ai, Inc. v. United States (153 F.4th 1226, decided August 28, 2025). The case revolved around whether a company that did not submit a bid for a government contract—but believed its product should have been considered—could sue the government for allegedly failing to follow procurement laws that favor commercial products.
Percipient.Ai, a provider of computer vision technology, argued that the National Geospatial-Intelligence Agency (NGA) violated federal law by not properly considering its commercial product for a major intelligence contract. However, Percipient.Ai never actually submitted a bid or teamed up with another company to do so. After being passed over as a subcontractor, the company filed a protest, claiming NGA failed to comply with laws requiring agencies to use commercial products when possible.
The Federal Circuit, sitting en banc, ruled against Percipient.Ai, holding that only actual or prospective bidders—companies that submitted a bid or were preparing to do so—can be considered “interested parties” eligible to bring a bid protest under 28 U.S.C. § 1491(b)(1). The court emphasized that this definition applies no matter what type of legal violation is alleged. The court also noted that Congress had previously considered and rejected proposals to allow subcontractors or other disappointed vendors to bring such challenges, choosing instead to limit standing to those directly involved in the bidding process.
This decision is significant for companies hoping to challenge federal procurement decisions without having participated in the bidding process. The ruling makes clear that, to have standing in the Court of Federal Claims, a company must be an actual or prospective bidder with a direct economic interest in the contract award. Companies on the sidelines, even if they believe their products were unfairly overlooked, generally cannot sue unless they took concrete steps to participate in the procurement.