DOD Can't Escape Claims It Overlooked AI
Firm In $376M Deal
By Katie Buehler · Listen to article
Law360 (March 10, 2023, 6:45 PM EST) -- The Court of Federal Claims has ruled a U.S. Department of Defense agency can't duck an artificial intelligence developer's lawsuit accusing it of shirking its obligation to use commercially developed products for a $376 million project, rejecting the agency's argument that its alleged inaction can't be challenged once a contract is awarded.
Senior Judge Eric G. Bruggink issued a short order on March 9 repudiating the DOD's National Geospatial Intelligence Agency's claim that the court lacked jurisdiction to hear Silicon Valley-based Percipient.ai Inc.'s challenge to the agency's and its contractor CACI International Inc.'s alleged decision to waste time and money developing a new product instead of using an already existing commercially developed one.
The NGA had argued in a January motion to dismiss that the Court of Federal Claims can only decide disputes that arise during an agency's procurement process before a contract is awarded. Percipient.ai's lawsuit deals with decisions made after CACI was awarded a contract and touches on the agency's contract administration — a subject the NGA claims courts have no jurisdiction over.
But Judge Bruggink wrote the Federal Circuit has determined the claims court's jurisdiction, established by the Tucker Act, extends to nonfrivolous allegations "in connection with a procurement or a proposed procurement," and that a procurement consists of all stages of the contract process from bid solicitation to completion.
"While the parties may dispute the merits of Percipient's claim, no one has argued its allegations are frivolous as Percipient has alleged specific facts that, if true, may violate [U.S. Code] Section 3453," the judge wrote.
Percipient.ai sued the NGA in early January, claiming the agency was violating rarely enforced 10 U.S.C. Section 3453, which establishes a preference for already developed commercial products and services and requires government agencies and their contractors to conduct market research and acquire those products and services "to the maximum extent practicable."
The lawsuit claims the NGA has failed to abide by Section 3453 with its Structure Observation Management, Automation, Augmentation and Artificial Intelligence Framework for Integrated Reporting and Exploitation project, which aims to develop an artificial intelligence system for analyzing, storing and organizing geospatial-intelligence data the agency collects from satellites and other sources. The NGA awarded CACI a $376.45 million grant in January 2021 to pursue the project.
Percipient.ai claims its Mirage program meets all the requirements for the SAFFIRE project and that it told this to CACI and NGA in a March 2021 letter, but says its efforts to demonstrate the program to CACI have been largely dismissed.
The agency responded to Percipient.ai's letter, ensuring CACI would begin market research for viable products once the contractor had settled into its new role. But Percipient.ai is now concerned CACI is developing its own program to satisfy the SAFFIRE project's requirements.
The company has asked the Court of Federal Claims to find that NGA violated Section 3453 and order the agency to conduct a thorough evaluation of its Mirage program to determine its applicability for the SAFFIRE project.