Background
The Navy solicited prototype proposals under its other-transaction authority for Medium Unmanned Surface Vessels (MUSVs). The solicitation described the effort as a competitive down-select intended to lead to production or service work, with successful prototype participants potentially eligible for follow-on production.
Blue Water Autonomy and Saildrone submitted Phase 1 proposals but were not among the seven of 25 offerors advanced to Phase 2. They protested their exclusions. The government moved to dismiss, arguing that the Court of Federal Claims lacks bid-protest jurisdiction over actions taken under the Defense Department’s other-transaction authority.
The Court’s Holding
Judge Hadji denied the government’s motion to dismiss. The court held that 28 U.S.C. § 1491(b)(1) encompasses this protest because the Navy’s prototype other-transaction competition was conducted in connection with the procurement, or proposed procurement, of MUSVs.
The court emphasized that procurement jurisdiction extends broadly to all stages of acquiring property or services, including determining an agency’s need. Here, the Navy had identified a funded need for MUSVs, planned to build a fleet, structured the solicitation as a direct down-select toward production, and limited the path to follow-on production to successful prototype participants. Using an other transaction did not itself place the competition beyond the court’s jurisdiction.
Key Takeaways
- An other transaction can be subject to Court of Federal Claims protest jurisdiction when it is connected to an agency’s acquisition of property or services.
- The relevant inquiry is the transaction’s purpose and connection to procurement, not merely its label as an other transaction.
- A prototype competition that serves as a direct path to production may be challenged before the prototype phase ends.
Why It Matters
The decision rejects the government’s proposed categorical rule that other transactions are outside Tucker Act bid-protest jurisdiction. It also declines to adopt a “jurisdictional blackout” during an OT prototype phase where the agency has not yet formally made a production award.
For contractors, the ruling supports prompt judicial review of exclusion decisions in prototype competitions that are designed to select firms for eventual government production work.