The Future Of Protest Jurisdiction Involving Other Transaction Agreements: Does The Hydraulics Int'l Decision Represent A Sea Change At The US COFC?

• Published date: 01 September 2022
• Subject Matter: Government, Public Sector, Government Contracts, Procurement & PPP
• Law Firm: Mayer Brown
• Author: Ms Marcia Madsen and Evan C. Williams

In a recent decision, Hydraulics Int'l, Inc. v. United States, the Court of Federal Claims ("COFC" or "Court") exercised jurisdiction over a bid protest challenging the award of an Other Transaction Agreement (OTA).¹

Background

At issue in Hydraulics Int'l was the Department of the Army's upgrade to military helicopter Aviation Ground Power Units (APGUs), used for servicing Army helicopters when not in flight. To achieve this upgrade, the Army selected an OTA as the purchasing vehicle. In terms of process, the Army first awarded an OTA to a consortium that engages industry and academia in OTA prototype projects. In turn, the consortium issued a Request for Enhanced Whitepapers (RWP) to members of its consortium, with the goal of ultimately entering into separate OTAs with the contractors selected by the Army. Of particular importance to the jurisdiction issue, the RWP provided, pursuant to the Army's OTA authority under section 2371b(f) (now ' 4022(f)), "Upon a determination that this competitively awarded prototype project has been successfully completed, this project may result in the award of a follow-on production contract for over 150 AGPUs without the use of competitive procedures"²(emphasis added).

Five contractors, including Hydraulics Int'l, submitted responses to the RWP. After the Army evaluated the whitepaper submissions, it selected two other contractors for award of OTAs. The protester then filed a post-award protest at the COFC, contesting its non-selection. In particular, the protester's complaint alleged that the Army misevaluated its whitepaper submission and improperly waived or relaxed key solicitation requirements when selecting the two contractors for award.

The government moved to dismiss the protester's complaint for lack of subject matter jurisdiction, arguing that the protest is not "in connection with a procurement or a proposed procurement," as required under the Tucker Act, 28 U.S.C. ' 1491(b)(1). In response, while agreeing that the OTAs themselves were not procurement contracts, the protester maintained the Court had jurisdiction to hear the protest under the Tucker Act. The protester argued that because the RWP established the possibility of a follow-on production contract for 150 AGPUs without competition, the OTAs were therefore "in connection with a procurement."³

Analysis

Ultimately, the Court concluded that it possessed Tucker Act jurisdiction to hear the protest. First, the Court noted that the Tucker Act grants the...