Raytheon Company v. United States

In the United States Court of Federal Claims

FOR PUBLICATION

No. 24-1824C

(Filed: February 24, 2025)

)

RAYTHEON COMPANY, )

)

Plaintiff, )

)

v. )

)

UNITED STATES, )

)

Defendant, )

)

and )

)

NORTHROP GRUMMAN SYSTEMS CORP., )

)

Defendant – Intervenor. )

Jeffrey M. Lowry, Vedder Price, PC, Washington, DC, for plaintiff. With him on the

briefs were Kevin P. Connelly, Kelly E. Buroker, and Michael P. Ols, Vedder Price,

P.C., Washington, DC.

Reta E. Bezak, Senior Trial Counsel, Commercial Litigation Branch, Civil Division,

U.S. Department of Justice, Washington, DC, for defendant. With her on the

briefs were Brett A. Shumate, Acting Assistant Attorney General, and Patricia M.

McCarthy, Director, and Douglas K. Mickle, Assistant Director, Commercial

Litigation Branch, Civil Division, U.S. Department of Justice, Washington, DC.

Lieutenant Colonel Sean Zehtab, Contract Litigation and Intellectual Property

Division, U.S. Army Legal Services Agency, Fort Belvoir, VA, and Brian J. Chapuran,

Associate General Counsel – Acquisition, Missile Defense Agency, Washington, DC,

Of Counsel.

Jason A. Carey and Kayleigh M. Scalzo, Covington & Burling LLP, Washington, DC,

for defendant-intervenor.



This opinion was originally filed under seal on February 13, 2025. The Court provided the parties

an opportunity to review the decision for any proprietary, confidential, or other protected information

and submit proposed redactions. On February 20, 2025, plaintiff proposed a series of redactions.

Those adopted by the Court are denoted using “{redacted}.”

OPINION AND ORDER

BONILLA, Judge.

Through this action, this Court is again called upon to determine the scope of

its jurisdictional authority to adjudicate bid protests involving “other transactions”

awarded by the U.S. Department of Defense (DOD) under 10 U.S.C. §§ 4021–22. In

an effort to break the Sisyphean cycle, the undersigned examines the history and

purpose of these statutes, their intersect with the Administrative Dispute Resolution

Act (ADRA), Pub. L. No. 104–320, § 12, 110 Stat. 3870, 3874–75 (1996) (codified at

28 U.S.C. § 1491(b)(1)), and the developing caselaw, with an eye toward articulating

a predictive forum selection standard for challenging these ill-defined and

oft-evolving prototype projects. At a minimum, this opinion may streamline the

litigation of these jurisdictional issues in future cases, until such time as Congress or

the United States Court of Appeals for the Federal Circuit is presented with the

appropriate opportunity to resolve the issue or provide critical guidance in navigating

this space. Perhaps this case will serve that purpose.

Until then, consistent with the broad authority statutorily vested in this Court

to entertain challenges to the procurement decisions of federal agencies and

instrumentalities, the undersigned concludes that this Court is the de facto forum for

bid protests involving “other transactions” (OTs) and “other transaction agreements”

(OTAs) awarded under 10 U.S.C. §§ 4021–22. The annual award of billions in

taxpayer dollars cannot evade judicial scrutiny, nor be returned to the whims of

tactical forum shopping. Congress intended neither. While there may well be limited

exceptions to the general rule announced today, the case presented is not one of them.

The military defense project in issue easily falls within the Court’s bid protest

jurisdiction under the Tucker Act, 28 U.S.C. § 1491(b)(1). The government’s standing

challenge and administrative exhaustion argument, in turn, similarly fall short.

Accordingly, defendant’s motion to dismiss must be denied.

BACKGROUND1

Through the Fiscal Year 2017 National Defense Authorization Act (FY 2017

NDAA), Congress tasked the DOD Missile Defense Agency (MDA) with developing

missile defense capabilities, to include weapons capable of detecting and intercepting

1 In resolving defendant’s motion to dismiss, the facts are largely drawn from plaintiff’s complaint and

attached exhibits, corroborating agency proceedings appended to defendant’s dispositive motion

(referenced in plaintiff’s complaint), and undisputed publicly available information. See Bitscopic, Inc.

v. United States, 166 Fed. Cl. 677, 696 (2023) (“The court is not limited to the pleadings to assure itself

of its jurisdiction; it may ‘inquire into jurisdictional facts’ to confirm jurisdiction.”) (quoting Rocovich

v. United States, 933 F.2d 991, 993 (Fed. Cir. 1991)); Dimare Fresh, Inc. v. United States, 808 F.3d

1301, 1306 (Fed. Cir. 2015) (In evaluating a complaint for sufficiency under RCFC 12(b)(6), the court

is “not limited to the four corners of the complaint. [The court] may also look to ‘matters incorporated

by reference or integral to the claim, items subject to judicial notice, [and] matters of public record.’”)

(citations omitted).

2

hypersonic and intercontinental ballistic missiles during their glide phase.2 See

Pub. L. No. 114-328, § 1687, 130 Stat. 2000, 2629–30 (2016). In response to the

congressional mandate, the MDA issued a Special Topic Broad Agency

Announcement (BAA) titled Enhanced Hypersonic Defense on April 12, 2021, seeking

concept white papers on basic and applied research related to the development of a

new Glide Phase Interceptor (GPI). More specifically, the MDA sought “innovative

concepts that provide affordable, reliable, high capacity, robust capability defending

against regional hypersonic threats during the glide phase of flight and other

advanced threats.” ECF 1-2 at 7. Limited to the research and development phase,

the BAA noticed a possible follow-on production contract for successful participants:

For any OT awarded [in accordance with] 10 U.S.C. § [4022], the

Government may award a follow-on production contract or OT for any

OT awarded under this BAA if: (1) that participant in the OT, or a

recognized successor in interest to the OT, successfully completed the

prototype project provided for in the OT, as modified; and (2) the OT

provides for the award of a follow-on production contract or OT to the

participant, or a recognized successor in interest to the OT.

ECF 1-2 at 8.

Based upon the white papers submitted, on November 19, 2021, the MDA

awarded OTAs for Phase I: Materiel Solutions Analysis to three defense contractors,

including Northrop Grumman Systems Corp. (Northrop Grumman) and Raytheon

Co. (Raytheon). The awardees were reduced to two on June 24, 2022, after a third

defense contractor was eliminated. Throughout this phase of the GPI Program,

the MDA requested successive proposals based on awarded and option agreement

line-item numbers (ALINs) as outlined in Article 6 of the OTAs, titled Option Exercise

to Continue Performance. See ECF 31-2 at 76–77. Article 6 noted the MDA’s

“unilateral discretion to continue performance (subsequent option exercises) or

discontinue performance (options not exercised).” Id. at 76. ALIN awards hinged,

in part, on continued compliance with the top-level requirements of design and

projected performance. The MDA initially sanctioned two proposed technological

solutions: aeroshell breakup (a/k/a blast fragmentation) and payload defeat (a/k/a

warhead neutralization or, more colloquially, “hit-to-kill”). According to Raytheon,

its aeroshell breakup approach is relatively easier to achieve, faster to develop, and

2 “Hypersonic weapons fly at speeds of at least Mach 5 and are highly maneuverable and able to change

course during flight. They are different from ballistic missiles, which can also travel at hypersonic

speeds (of at least Mach 5) but have set trajectories and limited maneuverability.” See Jeff Seldin,

What Are Hypersonic Weapons and Who Has Them?, Voice of America News (Mar. 22, 2022, 12:08 PM),

available at https://perma.cc/B9HZ-V2NP (last visited Feb. 12, 2025). During the “glide phase,”

hypersonic missiles separate from their rocket boosters, reenter the atmosphere, and are capable of

evasive maneuvers while traveling at high speed toward their intended targets. See Center for Arms

Control and Non-Proliferation, Fact Sheet: Hypersonic Weapons (Nov. 15, 2023), available at

https://perma.cc/69D8-DVRU (last visited Feb. 12, 2025).

3

cheaper to produce, but is naturally more likely to produce hazardous debris than

payload defeat. In contrast, Northrop Grumman’s payload defeat approach is highly

technical, harder (if not improbable) to achieve, and will require significantly more

time to demonstrate proof of concept. The reason: Raytheon’s approach is to disable

the missile by {redacted}, whereas Northrop Grumman’s approach is to destroy the

missile by essentially hitting a (hypersonic) bullet with another bullet.

In mid-FY 2023, the MDA launched Phase II: Technology Development, slated

to continue into FY 2029, with a cost estimate exceeding $2.5 billion. This phase—

the precursor to Phase III: Product Development—focuses on building and testing the

hardware and software for potential prototypes (i.e., GPI missile and weapon systems

development, systems engineering and integration). As memorialized in the MDA’s

April 3, 2023 Acquisition Plan for the GPI Program:

The missile development during the [Product Development] phase will

be accomplished with only one missile concept. However, if technical

merit and funding permit, competition may continue into the [Product

Development] phase with more than one offeror design. The planned

contract structure to be used during this phase is under review. The

[MDA] will pursue a strategy that will ensure maximum flexibility

coupled with the ability to deliver the capability at optimal cost.

ECF 31-2 at 39. Both Northrop Grumman and Raytheon proceeded to participate in

the Technology Development phase.

Responding to increased interest and supplemental appropriations from

Congress, the MDA issued a Request for Prototype Proposal (RPP) on May 1, 2024,

intended to complete the Phase II deliverables identified as Option Period 2C+

(Technical Maturation). Comprised of six base ALINs addressing GPI technical

development, expected milestones, and hypothetical timing and budgetary

constraints, and a funding limit of nearly $650 million, this period of performance is

projected to be completed by September 30, 2030. See generally ECF 1-2 at 112–19.

Two weeks later, the MDA finalized negotiations and signed a cooperative

development agreement with the Japan Ministry of Defense. Under the bilateral

agreement, Japan took the lead in developing the GPI rocket motors and propulsion

components. Notwithstanding this new partnership, the MDA did not modify the

May 1, 2024 RPP. Relevant here, the Japan Ministry of Defense reportedly expressed

a preference for Northrop Grumman’s payload defeat over Raytheon’s aeroshell

breakup. In response, the MDA asked Raytheon to submit payload defeat capability

data. Although Raytheon’s solution is reportedly capable of payload defeat, as

explained above, the company’s design focuses on disabling rather than destroying

its target. As such, particularly given the short response time, Raytheon represents

that the submitted data—based on simulation modeling and algorithms developed

for a different solution—does not capture the company’s true capabilities.

4

On September 25, 2024, the MDA decided to continue Northrop Grumman’s

technical development work under Option Period 2C+ and discontinue Raytheon’s

participation in the GPI Program altogether. In support, the MDA cited “a lack of

confidence in the ability of [Raytheon’s] design to meet not only US but also Japan

warfighter needs as indicated through the identified concerns, including: . . . The

lethality of [Raytheon’s] design against current and future threats . . . .” Id. at 142–

43. Presumably, this is a reference to the expressed preference for payload defeat

over aeroshell breakup. The MDA’s contemporaneously issued press release further

explained:

The [MDA], in coordination with our international partner the Japan

Ministry of Defense [], will proceed with Northrop Grumman [] to

continue development of the Glide Phase Interceptor (GPI). . . .

Northrop Grumman will continue to perform under its existing

Other Transaction Agreement (OTA). This effort is expected to lead to a

follow-on development and production contract in support of achieving

the Department of Defense priority requirement of developing

integrated layered defeat capabilities to degrade adversaries’

hypersonic weapons.

Id. at 124 (emphasis added). Relating the history of the GPI program, the MDA closed

the press release noting: “MDA has continued the technology maturation of . . . two

GPI concepts up until today’s announcement. This decision allows MDA and Japan

[Military of Defense] to focus on a solution that meets costs, schedule and

performance requirements.” Id.

Notwithstanding the foregoing, during the requested “out brief” conducted on

October 22, 2024, MDA officials reportedly represented to Raytheon: “Payload defeat

is not the only acceptable outcome of an intercept under MDA’s requirements,” and

that aeroshell breakup continued to serve as an “acceptable kill mechanism[].” Id. at

40. The MDA further explained that other concerns—such as the increased risk of

“hazardous debris entry into a defended area”—contributed to the decision to

discontinue Raytheon’s participation in the GPI Program. Id. at 40, 41; accord id. at

42 (“Consideration of the amount of hazardous debris impacting a defended area is

implicit in the intent behind a defensive system.”).

Raytheon filed this bid protest on November 6, 2024, seeking to challenge the

MDA’s decision to move forward with Northrop Grumman in Option Period 2C+ and

discontinue Raytheon’s participation in the GPI Program. Raytheon claims the MDA

improperly evaluated both companies’ proposals using unstated selection criteria

(i.e., preferred payload defeat solution, hazardous debris minimization), decremented

Raytheon’s proposal based on perceived cost risk without subjecting Northrop

Grumman’s proposal to similar scrutiny, and ignored Congress’ directive that the

agency “achieve . . . initial operation capability for the Glide Phase Interceptor . . .

not later than December 31, 2029.” See FY 2024 NDAA, Pub. L. No. 118-31, § 1666,

5

137 Stat. 606 (2023). Raytheon alternatively asserts that MDA officials breach an

implied-in-fact contract to fairly consider the defense contractor’s proposal.3

DISCUSSION

I. Standard of Review

This Court’s statutorily prescribed jurisdiction to adjudicate claims and grant

relief requires an affirmative waiver of sovereign immunity. United States v. Testan,

424 U.S. 392, 399 (1976). When the Court’s authority to entertain a cause of action

is challenged or otherwise called into question under RCFC 12(b)(1), the onus is on

plaintiff to present preponderant evidence that jurisdiction is proper. Reynolds v.

Army & Air Force Exch. Serv., 846 F.2d 746, 748 (Fed. Cir. 1988). In evaluating the

jurisdictional propriety of a claim, the Court is “obligated to assume all factual

allegations to be true and to draw all reasonable inferences in plaintiff’s favor.”

Henke v. United States, 60 F.3d 795, 797 (Fed. Cir. 1995) (citing Scheuer v. Rhodes,

416 U.S. 232, 236 (1974); Catawba Indian Tribe v. United States, 982 F.2d 1564,

1568–69 (Fed. Cir. 1993)).

In turn, when considering a motion to dismiss for failure to state a claim under

RCFC 12(b)(6), courts “must accept as true all the factual allegations in the complaint

and . . . indulge all reasonable inferences in favor of the non-movant.” Sommers Oil

Co. v. United States, 241 F.3d 1375, 1378 (Fed. Cir. 2001) (citations omitted). “A trial

court should not dismiss a complaint for failure to state a claim unless it is beyond

doubt that the plaintiff can prove no set of facts which would entitle him to relief.”

Id. (quotation marks omitted) (quoting Hamlet v. United States, 873 F.2d 1414, 1416

(Fed. Cir. 1989)). Assertions of legal conclusions are not credited during this

assessment, and the complaint must include nonconclusory factual allegations

setting forth a plausible–as opposed to merely a conceivable–claim for relief. Ashcroft

v. Iqbal, 556 U.S. 662, 680 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544

(2007)).

II. Tucker Act

The Administrative Dispute Resolution Act of 1996 (ADRA), Pub. L. 104–320,

§ 12(a)–(b), 110 Stat. 3870, 3874 (1996), amended the Tucker Act, 28 U.S.C. § 1491,

to vest this Court with concurrent subject matter jurisdiction to adjudicate pre- and

post-award bid protests:

Both the Unite[d] States Court of Federal Claims and the district courts

of the United States shall have jurisdiction to render judgment on an

action by an interested party objecting to a solicitation by a Federal

agency for bids or proposals for a proposed contract or to a proposed

award or the award of a contract or any alleged violation of statute or

regulation in connection with a procurement or a proposed

3 In light of today’s decision, the Court does not address Raytheon’s alternative claim for relief.

6

procurement. Both the United States Court of Federal Claims and the

district courts of the United States shall have jurisdiction to entertain

such an action without regard to whether suit is instituted before or

after the contract is awarded.

28 U.S.C. § 1491(b)(1).4 By operation of the five-year sunset provision included in the

ADRA, Congress terminated the jurisdiction of federal district courts over bid protest

actions effective January 1, 2001. Pub. L. No. 104–320, § 12(d), 110 Stat. at 3875. In

conferring exclusive jurisdiction over these cases in this Court, Congress sought

“to develop a uniform national law on bid protest issues and end the wasteful practice

of shopping for the most hospitable forum.” See 142 CONG. REC. S6155-01, S6156,

1996 WL 315422 (daily ed. June 12, 1996) (statement of Sen. William Cohen); accord

H.R. Conf. Rep. No. 104–841, at 10 (1996) (“It is the intention [of Congress] to give

the Court of Federal Claims exclusive jurisdiction over the full range of procurement

protest cases previously subject to review in the federal district courts and the Court

of Federal Claims.”), quoted in AFGE, 258 F.3d at 1300; see Emery Worldwide

Airlines, Inc. v. United States, 264 F.3d 1071, 1079 (Fed. Cir. 2001) (“[T]o prevent

forum shopping and to promote uniformity in government procurement award law,

Congress sought to channel the entirety of judicial government contract procurement

protest jurisdiction to the Court of Federal Claims.”).

The Tucker Act sets forth three avenues for a qualified “interested party” to

invoke this Court’s bid protest jurisdiction: “objecting to [1] a solicitation by a Federal

agency for bids or proposals for a proposed contract or to [2] a proposed award or the

award of a contract or [3] any alleged violation of statute or regulation in connection

with a procurement or a proposed procurement.” Percipient.ai, Inc. v. United States,

104 F.4th 839, 846 (Fed. Cir.) (quoting 28 U.S.C. § 1491(b)(1)) (emphasis omitted),

vacated and reh’g en banc granted, 121 F.4th 1311 (Fed. Cir. 2024). The concluding

phrase “in connection with a procurement or proposed procurement” applies to each

jurisdictional prong, giving this Court “broad” authority “over objections to a

solicitation, objections to a proposed award, objections to an award, and objections

related to a statutory or regulatory violation so long as these objections are in

connection with a procurement or proposed procurement.” See Sys. Application &

Techs., Inc. v. United States, 691 F.3d 1374, 1380–81 (Fed. Cir. 2012) (citation

omitted).

“The Tucker Act does not define the terms ‘procurement’ or ‘proposed

procurement.’” Distributed Sols., Inc. v. United States, 539 F.3d 1340, 1345 (Fed. Cir.

2008). To fill in this statutory gap, the Federal Circuit turned to the definition

currently found in 41 U.S.C. § 111: “all stages of the process of acquiring property or

services, beginning with the process for determining a need for property or services

and ending with contract completion and closeout.” See 539 F.3d at 1345–46

4 Prior to the ADRA’s enactment, this Court’s jurisdiction extended only to pre-award bid protest,

whereas jurisdiction over post-award bid protests was vested in federal district courts. See Am. Fed’n

of Gov’t Emps., AFL-CIO v. United States (AFGE), 258 F.3d 1294, 1297–98, 1300 (Fed. Cir. 2001)

(citing Scanwell Labs., Inc. v. Shaffer, 424 F.2d 859 (D.C. Cir. 1970)).

7

(“We conclude that it is appropriate to adopt this [statutory] definition to determine

whether a ‘procurement’ [(actual or proposed)] has occurred pursuant to § 1491(b).”)

(citing 41 U.S.C. § 403(2) (currently codified at 41 U.S.C. § 111)). Circling back to the

intended scope of these provisions, the Federal Circuit has further explained that

“[t]he operative phrase ‘in connection with’ is very sweeping in scope,” and “covers a

broad range of potential disputes arising during the course of the procurement

process.” RAMCOR Servs. Grp., Inc. v. United States, 185 F.3d 1286, 1289 (Fed. Cir.

1999); Sys. Application & Techs., 691 F.3d at 1380–81. In Distributed Solutions, for

example, the appellate court concluded that an agency’s pre-procurement market

research—“used . . . to determine the scope of services required by the government”

and then added to an existing contract rather than purchase from a new vendor—fell

with the jurisdictional definition of “proposed procurement.” 539 F.3d at 1346.

Defining the contours of this Court’s bid protest jurisdiction under the Tucker

Act also requires consideration of procurement-related definitions codified in the

Federal Grant and Cooperative Agreement Act (FGCAA), Pub. L. No. 95-224, 92 Stat.

3 (1978) (codified at 31 U.S.C. §§ 6301 et seq.). See Hymas v. United States, 810 F.3d

1312, 1326–27 (Fed. Cir. 2016). The FGCAA instructs on the appropriate uses of

procurement contracts, grant agreements, and cooperative agreements, reflective of

the specific relationship between the federal government and the recipient entity. Id.

at 1327. Relevant here, a “procurement contract” is meant for situations where “the

principal purpose of the instrument is to acquire . . . property or services for the direct

benefit or use of the United States Government . . . .” 31 U.S.C. § 6303(1) (emphasis

added). In contrast, a “grant agreement” is designed for the transfer of property in

exchange for performing a public service at the behest of the federal government and

in its stead. Id. § 6304; e.g., Purpose Built Fams. Found. v. United States, 167 Fed. Cl.

714, 718 (2023) (“[T]he [Supportive Services for Veterans Families (SSVF)]

agreements were not for the direct benefit of the United States government. The

applicable statutory and regulatory provisions provide that the purpose of the

agreements is to facilitate supportive services to low-income veteran families.”)

(citing 38 U.S.C. § 2044(a)). Finally, a “cooperative agreement” similarly involves the

transfer of property, but to perform a public service in cooperation with a federal

agency. 31 U.S.C. at § 6305; e.g., Hymas, 810 F.3d at 1327–28 (cooperative farming

agreements executed pursuant to 16 U.S.C. §§ 661 et seq. designed to manage public

lands and conserve wildlife in the National Wildlife Refuge System).5 Additional

limits can be found in the context of federal leases, which involve the letting of

government-owned land rather than a federal agency’s acquisition of goods and

services. See Res. Conservation Grp., LLC v. United States, 597 F.3d 1238, 1245

(Fed. Cir. 2010).

5 As discussed infra, the OTA statutes define “other transactions” in the negative: “transactions []other

than contracts, cooperative agreements, and grants.” 10 U.S.C. § 4021(a) (emphasis added). Context

strongly suggests that the use of “contracts” within the OTA statutes is a reference to “procurement

contracts” as that term is used in the FGCAA given the overlapping trilogical characterizations.

8

III. Other Transactions

A. History

Congress first sanctioned the use of amorphous “other transactions” in 1958,

to assist the United States and National Aeronautics and Space Administration

(NASA) in winning the Space Race during the Cold War. Through the National

Aeronautics and Space Act of 1958, Congress authorized NASA

to enter into and perform such contracts, leases, cooperative

agreements, or other transactions as may be necessary in the conduct of

its work and on such terms as it may deem appropriate, with any agency

or instrumentality of the United States, or with any State, Territory, or

possession, or with any political subdivision thereof, or with any person,

firm, association, corporation, or educational institution.

Pub. L. 85-568, § 203(b)(5), 72 Stat. 426, 430 (1958) (emphasis added). Three decades

later, Congress extended the authorized use of “other transactions” to DOD: first,

in 1989, for research projects and then, in 1994, for the development of prototypes.

See 10 U.S.C. § 2371 (research projects) (current version at 10 U.S.C. § 4021);

10 U.S.C. § 2371b (prototype projects) (current version at 10 U.S.C. § 4022).

According to the Government Accountability Office (GAO), as of January 2016, nearly

a dozen federal agencies (and certain components and programs) enjoy the

administrative flexibility associated with executing OTAs in lieu of traditional

contracts, cooperative agreements, and grants “to help meet project requirements and

mission needs.”6

DOD’s other transaction authority is codified at 10 U.S.C. §§ 4021 and 4022.

Section 4021 provides: “The Secretary of Defense and the Secretary of each military

department may enter into transactions (other than contracts, cooperative

agreements, and grants) under the authority of this subsection in carrying out basic,

applied, and advanced research projects.” 10 U.S.C. § 4021(a). This provision notes

that this authority is in addition to DOD’s authority to use traditional contracts,

cooperative agreements, and grants to accomplish this work under § 4001. See id.

Section 4022, in turn, extends DOD’s other transaction authority to “carry out

prototype projects that are directly relevant to enhancing the mission effectiveness of

personnel of [DOD] or improving platforms, systems, components, or materials

6 See GAO No. 16-209, Federal Acquisitions: Use of “Other Transaction” Agreements Limited and

Mostly for Research and Development Activities (Jan. 7, 2016), available at https://perma.cc/MY8P-

TV7E (last visited Feb. 12, 2025). In addition to NASA and DOD, the list of authorized federal agencies

and their respective components and programs include: the Department of Energy and its Advanced

Research Projects Agency; the Department of Health and Human Services and certain programs

within the National Institutes of Health; the Department of Homeland Security and its Transportation

Security Administration and Domestic Nuclear Detention Office; and the Department of

Transportation and its Federal Aviation Administration. See id. (full report).

9

proposed to be acquired or developed by [DOD], or to improvement of platforms,

systems, components, or materials in use by the armed forces.” Id. § 4022(a).

As succinctly explained by this Court:

Congress granted the military OT authority under 10 U.S.C. §§ 4021–

4022 to provide a more flexible method to facilitate research,

development, and prototyping than via traditional procurement

contracts. See S. Rep. No. 106-292, § 807, at 324, 114 Stat. 1030 (2000)

(“[I]t is imperative that [DOD] continue to have the flexibility to use

innovative contractual instruments that provide access to [commercial]

technology.”). The flexibility of OT agreements derives from them not

being subject to the federal statutes and regulations applicable to other

types of agreements, including the Federal Acquisition Regulation

(FAR). See 32 C.F.R. § 3.2.[7] This flexibility potentially allows for a

faster acquisition process, thereby attracting companies to do business

with [DOD] when they otherwise might forego opportunities due to

bureaucratic obstacles. Heidi M. Peters, Cong. Rsch. Serv., DOD Use of

Other Transaction Authority: Background, Analysis, and Issues for

Congress (Feb. 22, 2019). Indeed, Congress viewed OT authority as

providing “an important acquisition tool” for the military to help

“facilitate the incorporation of commercial technology” into its programs.

S. Rep. No. 106-292, at 324; see also Peters, Cong. Rsch. Serv. 32

(Congress believed that “OTs could support DOD’s effort to access new

sources of technological innovation . . . .”).

Indep. Rough Terrain Ctr., LLC v. United States (IRTC), 172 Fed. Cl. 250, 257 (2024)

(cleaned-up). As illustrated in the table below, in recent years, DOD’s exercise of its

OT authority has increased nearly ten-fold in use and five-fold in value.

Fiscal Year Other Transactions Total Value

(in billions)

2017 496 $2.20

2018 808 $3.98

2019 1,702 $7.38

2020 3,234 $16.02*

2021 4,086 $14.29

2022 4,391 $10.70

*FY 2020 included a significant spike in spending due to COVID-19.

7 Title 32, Code of Federal Regulations, Section 3.2 provides:

“Other transactions” is the term commonly used to refer to the 10 U.S.C. [§] 2371

authority to enter into transactions other than contracts, grants or cooperative

agreements. “Other transactions” are generally not subject to the Federal laws and

regulations limited in applicability to contracts, grants or cooperative agreements.

As such, they are not required to comply with the [FAR] and its supplements [under

Title 48].

32 C.F.R. § 3.2.

10

In FY 2022, moreover, nearly two-thirds of DOD’s OTA awards involved or otherwise

provided for the option of a follow-on production contract.8

B. Judicial Review

“There is a strong but rebuttable presumption of judicial review of agency

action. The presumption is overcome ‘when a statute’s language or structure

demonstrates that Congress wanted an agency to police its own conduct.’” IRTC,

172 Fed. Cl. at 257 (quoting Mach Mining, LLC v. E.E.O.C., 575 U.S. 480, 486 (2015)

(citing Bowen v. Mich. Acad. of Fam. Physicians, 476 U.S. 667, 670 (1986)). Federal

agencies bear a “heavy burden” in successfully rebutting this presumption. Mach

Mining, 575 U.S. at 486 (citation omitted). To this point, it is axiomatic that Congress

knows how to exempt government actions from judicial review. See, e.g., 5 U.S.C.

§ 704 (Administrative Procedures Act (APA) provision exempting non-final agency

actions from judicial review); Commandos Compensation Act, Pub. L. No. 104–201

§ 657(j), 110 Stat. 2422, 2584 (1996) (“NO RIGHT TO JUDICIAL REVIEW.—All

determinations by the Secretary of Defense pursuant to this section are final and

conclusive, notwithstanding any other provision of law. Claimants under this section

have no right to judicial review, and such review is specifically precluded.”), quoted

in Mattes v. Chairman, Vietnamese Commandos Comp. Comm’n, 173 F.3d 817

(11th Cir. 1999) (per curiam). This principle extends to the bid protest context.

See, e.g., 10 U.S.C. § 3406(f)(1) (limiting scope of judicial review of military task and

delivery orders); 41 U.S.C. § 4106(f)(1) (same for general executive agency task and

delivery orders).

Nothing in the statutory scheme or legislative history behind the grant of OT

authority suggests that Congress intended to exempt awards under these contracting

vehicles from judicial scrutiny. The government does not contend otherwise. Rather,

the government generally seeks to present OTA awardees (and prospective awardees)

with a binary choice: seek injunctive relief through an APA challenge to the agency

action in federal district court or file a breach of contract claim in this Court under

the Contract Disputes Act, 41 U.S.C. §§ 7101–09, where relief is largely limited to

monetary damages.9 In support of exempting this class of contracting vehicles from

this Court’s bid protest jurisdiction under the Tucker Act, defendant argues that OT

awards do not qualify as “a solicitation . . . for bids or proposals for a proposed

8 Office of the Under Secretary of Defense for Acquisition and Sustainment, Report to Congress on the

Use of Other Transaction Authority for Prototype Projects In FY 2022, at 3, 8 (Apr. 2023).

9 One caveat to the government’s position involves a bid protest challenge to the agency’s decision to

employ the OT vehicle, which defendant concedes may be filed before the GAO or this Court. See In

re MD Helicopters, Inc., No. B-417379, 2019 WL 1505296, *2 (Comp. Gen. Apr. 4, 2019) (“Absent any

allegation . . . that the Army is improperly using its statutory OTA authority to acquire goods or

services that should be acquired via a procurement contract, we have no jurisdiction over [the]

protest.”); but see In re ARiA, No. B-422365, 2024 WL 2746965, at *2, 3–4 (Comp. Gen. May 28, 2024)

(GAO exercised jurisdiction over bid protest to Phase I of Army technology solution competition where

the announcement cited 10 U.S.C. § 4022 as one of three authorities for the procurement; critical to

the GAO’s jurisdictional assessment was the likely award of a follow-on contract to the Phase III

winner); Tr. at 7–9 (Jan. 14, 2025) (discussion of caveat) (ECF 55).

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contract,” “a proposed award or the award of a contract,” or otherwise “in connection

with a procurement or a proposed procurement,” as required under 28 U.S.C.

§ 1491(b). The Court rejects defendant’s narrow and oversimplistic view of

OT awards for the sake of judicial expediency in drawing jurisdictional boundaries.

Five years ago, this Court decided Space Exploration Technologies Corp. v.

United States (“SpaceX”), involving a post-award bid protest of OTAs awarded by the

Air Force to facilitate commercial development of space launch systems. 144 Fed. Cl.

433, 434–37 (2019). Specifically, SpaceX sought to challenge its non-selection for the

prototype development phase of a DOD project, wherein the Air Force was offering

seed money for the development of space launch vehicles that, if proven, could serve

both the private and public sectors. Id. Reminiscent of the Cold War, the government

sought to create a domestic market to end the United States’ reliance upon Roscosmos

spacecraft.10 If successful, the Air Force planned to procure off-the-shelf space launch

services from the newly created market of domestic suppliers. 144 Fed. Cl. at 437–

38.

Acknowledging the broad jurisdictional authority intentionally vested in this

Court to hear bid protest challenges to the wide array of procurement decisions made

by federal agencies and instrumentalities, the SpaceX decision stands for the notion

that the Tucker Act is not without limits. To reach this conclusion, the court first

determined that the OTAs in issue were not procurement contracts and that the

Air Force solicitation was not a procurement. Id. at 442. In support, the SpaceX

court likened the prototype development agreements to cooperative farming

agreements, which fall outside our bid protest jurisdiction. Id. at 441, 442 (citing

Hymas, 810 F.3d at 1320, 1329–30). The court then focused on whether the

Air Force’s evaluation of prototype proposals and award of prototype development

agreements were “‘in connection with a procurement or proposed procurement,’

as contemplated by the Tucker Act.” Id. at 442 (citations omitted). Answering this

question in the negative, the SpaceX court distinguished between agency decisions

made “in connection with” a procurement and those more broadly “related to” a

procurement, highlighting three factors: (1) the “separate and distinct” nature of the

solicitations seeking prototype development versus the possible procurement from

the market created; (2) the different acquisition strategies to be employed (i.e., OTA

versus FAR-based contract); and (3) the prototype development agreements awarded

“did not involve the procurement of any goods or services by the Air Force.” Id. at

442–44. The court further noted that although SpaceX might be at a disadvantage

for not having participated in the launch vehicle prototype development phase of the

commercial market generating exercise, the anticipated space launch services would

be procured through full and open competition. Id. at 444–45. Pointedly limiting its

jurisdictional conclusion to the unique facts presented, see id. at 442 n.4, the SpaceX

10 See Konstantin Sergeyev, The End of an Era: US Prepares to Sever Space Ties with Russia

Threatening Roscosmos’s Future, The Insider (July 2, 2024), available at https://perma.cc/6RK6-FJPL

(last visited Feb. 12, 2025).

12

court transferred the case to the United States District Court for the Central District

of California under 28 U.S.C. § 1631.11 Id. at 445–46.

Since then, courts have been presented with several opportunities to revisit

the jurisdictional issues addressed in SpaceX. Each time, the court has either

distinguished the OTAs in issue or declined to extend the conclusion reached beyond

the seemingly unique factual scenario addressed. In the aftermath of this Court’s

decision in SpaceX, for example, the United States District Court for the District of

Arizona was presented with the opposite scenario: a plaintiff brought an ostensible

bid protest in federal district court under the APA, challenging the Army’s award of

OTAs for the design and development of next-gen military helicopters. See

MD Helicopters Inc. v. United States, 435 F. Supp. 3d 1003, 1006–07 (D. Ariz. 2020).

Distinguishing the challenged agency action from the scenario presented in SpaceX,

outlined supra, the district court focused on the direct link between the down-select

process adopted by the Army, wherein the anticipated follow-on procurement contract

to be awarded would be limited to the pool of successful prototype program

participants. Id. at 1012–13. Upon these grounds, the district court concluded that

the case fell within the exclusive jurisdictional province of this Court in accordance

with the ADRA.12 Id.

In Kinemetrics, Inc. v. United States, the court summarily rejected the

application of SpaceX to a post-award bid protest challenging the Air Force’s award

of an OTA to acquire seismic equipment to monitor nuclear proliferation treaty

compliance. 155 Fed. Cl. 777, 780–81 (2021). Examining the substance over form of

the procurement vehicle employed, the court highlighted that the solicitation “invited

‘[i]nterested parties [to] submit a complete technical and cost proposal[,]’” rather than

simply announce “‘a call for white papers[.]’” Id. at 782. The court was further struck

by the language used in rejecting plaintiff’s proposal: reportedly deeming it

“technically acceptable” but not worthy of “a contract award.” Id. at 783, 785. Noting

the direct connection between the contested solicitation and the contract award, the

Kinemetrics court held that the challenged agency action “was ‘in connection with’

a procurement,” thus falling squarely within this Court’s bid protest jurisdiction.

Id. at 785.

A year later, this Court was again called upon to assess the jurisdictional

boundaries of the Tucker Act in relation to OT bid protests. In Hydraulics Int’l, Inc.

v. United States, a disappointed bidder filed a post-award bid protest challenging the

Army’s award of OTAs for the prototype development of military helicopter aviation

ground power units (AGPUs). 161 Fed. Cl. 167, 171 (2022), appeal dismissed, No. 22-

2287, 2023 WL 2729433 (Fed. Cir. Mar. 31, 2023). Iterating at the outset that Ots in

11Following transfer, the district court examined the certified administrative record and denied

SpaceX’s claims for relief under the APA standard of review. SpaceX v. United States, No. 19-7927,

2020 WL 7344615 (C.D. Cal. Sept. 24, 2020). The matter was subsequently dismissed.

12 Prior to filing suit in district court, plaintiff filed a bid protest before the GAO, which dismissed the

action on jurisdictional grounds. See MD Helicopters, 435 F. Supp. 3d at 1006–07. The district court

did not transfer the case, nor was the matter refiled in this Court.

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general “are not procurements,” the Hydraulics court assessed whether the particular

OTA in issue met the “connectivity to ‘a procurement or a proposed procurement’”

jurisdictional requirement of the Tucker Act. 161 Fed. Cl. at 176. Resolving this

issue in the affirmative, the court explained that a guaranteed follow-on procurement

contract is not a prerequisite to invoking this Court’s bid protest jurisdiction. Id. at

176–77. Instead, the Hydraulics court focused on the critical fact that “every aspect

of the [OT project] in this case is specifically tailored towards ‘determining’ the

Army’s ‘need for property—upgraded AGPUs.’” Id. at 177–78. Distinguishing the

case from SpaceX, the court concluded that the challenged agency action “fits

squarely within the first ‘stage of the federal contracting acquisition process[,]’”

qualifying as “in connection with a procurement or a proposed procurement.” Id.

(citing Distributed Sols., 539 F.3d at 1346).

The Court’s most recent entrée into this jurisdictional quagmire came in IRTC,

when the Court was called upon to adjudicate a pre-award bid protest challenging a

follow-on production contract for next-gen military vehicles issued by the Army under

its OT authority. 172 Fed. Cl. at 253. Breaking from the Court’s previous decisions,

outlined supra, the IRTC court suggested that pre-production OTAs may qualify as

“procurements” as opposed to being limited to considered as “in connection with a

procurement or a proposed procurement.” Id. at 258. The court explained that the

relevant jurisdictional inquiry requires looking beyond the label of the contracting

vehicle to determine whether the government was seeking to acquire actual property

or services. Id. In IRTC, the conclusion was clear: through the solicited follow-on

production contract, the Army was seeking property in the form of next-gen military

vehicles as well as services in the nature of specified warranty services. See id. at

253, 259–60.

Synthesizing these decisions in an effort to develop an appropriate and more

predictable jurisdictional framework does not require re-examining whether SpaceX

was properly decided or should be expanded. Instead, the Court places the SpaceX

decision at one end of the spectrum and IRTC at the other. To properly assess the

jurisdictional divide simply requires an evaluation of the federal agency’s immediate

endgame. SpaceX involved an unorthodox arrangement where the government

planned to seed the development of technology to be made generally available to the

public and private sectors alike, creating a commercial market from which the

government may later procure off-the-shelf services. In contrast, in MD Helicopters,

Kinemetrics, Hydraulics Int’l, and IRTC, the government charted a more direct and

interlinked path from research, to development, to production, to government

purchase.

Against this backdrop, the undersigned proffers the following working

definition of OTs and OTAs falling within this Court’s exclusive bid protest

jurisdiction under the Tucker Act: an acquisition instrument other than a traditional

procurement vehicle intended to provide the government with a direct benefit in the

form of products or services. This definition satisfies the jurisdictional hook of

“procurement solicitations and contracts” required under the Tucker Act. See Res.

Conservation, 597 F.3d at 1245 (“[I]t is clear . . . [§] 1491(b)(1) in its entirety is

14

exclusively concerned with procurement solicitations and contracts.”). It further

accounts for the critical divide between the government facilitating the creation or

expansion of a commercial market for the general public from which a federal agency

or instrumentality might someday purchase as in SpaceX, and the government

seeking to acquire a specific product or service and directing or otherwise facilitating

its generation and production as in MD Helicopters, Kinemetrics, Hydraulics Int’l,

and IRTC. Cf. Hymas, 810 F.3d at 1328 (“The cooperative farming agreements

(CFAs) cannot be construed as procurement contracts because the agency did not

intend to acquire farming ‘services’ for the ‘direct benefit or use of the United States

Government.’” (quoting 31 U.S.C. § 6305(1)). The undersigned now endeavors to take

this new jurisdictional model—assembled using parts manufactured from cases

involving space and military prototype vehicles and technologies—out for its

inaugural test drive.

IV. Raytheon’s Bid Protest

A. Jurisdiction

The OT authority exercised by the MDA in this case, and the OTAs awarded

and then extended for Northrop Grumman but simultaneously discontinued for

Raytheon, fall squarely within the working jurisdictional framework adopted today.

The invitation to participate in the GPI Program and continue working through the

research and development phase toward the production and delivery phase was

carried out through an acquisition instrument other than a traditional procurement

vehicle (i.e., procurement contract, cooperative agreement, or grant) intended to

provide the government with a direct benefit in the form of products or services. As

persuasively argued by Raytheon, the Option Period 2C+ award to Northrop

Grumman (and non-award to Raytheon) thus meets the jurisdictional underpinnings

of the Tucker Act. At a minimum, the MDA solicited proposals from the defense

contractors “in connection with a procurement or a proposed procurement”—i.e., the

development, production, and acquisition of a hypersonic missile defense system.

That the MDA had not yet formally committed to purchasing an end product

from Northrop Grumman or any other successful prototype developer is not

dispositive. See Hydraulics Int’l, 161 Fed. Cl. at 176–77 (guaranteed follow-on

procurement contract to challenged OTA is not a prerequisite to Tucker Act bid

protest jurisdiction). Rather, the invocation of this Court’s jurisdictional authority to

review a contested procurement is predicated on the agency’s demonstrated intent,

actions to date, and intentions moving forward. This is particularly true where, as

here, the products or services to be developed and acquired are unique to the federal

government and otherwise ill-suited for acquisition and use by the general public

(i.e., hypersonic missile defense capabilities). Compare SpaceX, 144 Fed. Cl. at 435–

37 (space launch vehicles capable of commercial and national security use), with

MD Helicopters, 435 F. Supp. 3d at 1006–07 (military helicopters), and Kinemetrics,

155 Fed. Cl. at 780–81 (nuclear proliferation treaty compliance monitoring

equipment), and Hydraulics Int’l, 161 Fed. Cl. at 171 (APGUs), and IRTC,

15

172 Fed. Cl. at 253 (military vehicles). Further, as the MDA’s actions and internal

and external communications make clear, the government has every intention of

awarding a follow-on production contract to Northop Grumman in the event the

defense contractor’s proposed solution is proven.

B. Standing

In invoking the Court’s bid protest jurisdiction under the Tucker Act, the

plaintiff bears the additional burden of demonstrating that they are an interested

party. Weeks Marine, Inc. v. United States, 575 F.3d 1352, 1359 (Fed. Cir. 2009). To

qualify, a party must be “‘an actual or prospective bidder or offeror whose direct

economic interest would be affected by the award of the contract or by failure to award

the contract.’” AFGE, 258 F.3d at 1302 (quoting 31 U.S.C. § 3551(2)), quoted in

Rex Serv. Corp. v. United States, 448 F.3d 1305, 1307 (Fed. Cir. 2006). In post-award

bid protests, the requisite direct economic interest is shown through credible

allegations that the protestor had a “substantial chance” of award but for the claimed

error. See id. (citations omitted); see also Bannum, Inc. v. United States, 404 F.3d

1346, 1358 (Fed. Cir. 2005) (“substantial chance” test to establish standing “is more

lenient than [proving] actual causation” on the merits). Raytheon satisfies this

standard.

Prior to receiving notice that the MDA was discontinuing the company’s

participation in the GPI Program, Raytheon had been performing under the OTA at

the center of this bid protest for nearly three years. The crux of Raytheon’s claims

focuses on the federal agency’s alleged improper independent and comparative

evaluations of Raytheon’s and Northrop Grumman’s proposals, resulting in cascading

award decisions that are arbitrary, capricious, an abuse of discretion, and contrary to

law. These decisions include the more immediate determinations to proceed with

Northrop Grumman through the Option Period 2C+ phase of product development

while simultaneously discontinuing Raytheon’s participation in the GPI Program

altogether. According to Raytheon, these contemporaneous decisions effectively

eliminate the company’s ability to compete for the anticipated follow-on production

contract reportedly worth billions of dollars. Thus, at every turn, Raytheon makes

non-frivolous claims of economic harm directly attributed to the allegedly flawed OT

award decisions made by the MDA and follow-on consequences.13

13 With respect to Raytheon’s reliance upon the FY 2024 NDAA, the Court notes the following.

Defendant’s argument that Raytheon lacks standing to enforce a congressional deadline on the MDA’s

development of a hypersonic missile defense system is well-taken. See Cleveland Assets, LLC v.

United States, 883 F.3d 1378, 1382 (Fed. Cir. 2018) (appropriations bills and riders are typically not

interpreted as procurement statutes for purposes of adjudicating bid protests under the Tucker Act).

Nevertheless, as explained during oral argument, the Court can (and should) consider Congress’

directive in assessing whether the MDA took the deadline into account in evaluating whether to

proceed with Northrop Grumman and/or Raytheon. See Tr. at 106–10 (Jan. 14, 2025) (ECF 55).

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C. Exhaustion Requirement

Finally, defendant submits that Raytheon failed to adhere to the dispute

resolution procedures included in the negotiated OTA, requiring exhaustion of

administrative remedies prior to filing suit or seeking other legal redress.

Specifically, Article 17 provides: “Any dispute between the Government and

Performer concerning questions of fact or law arising from or in connection with this

Agreement, and, whether or not involving an alleged breach of this Agreement, may

only be raised under this Article.” ECF 50-1 at 6–7. This provision then provides for

a series of mandatory notices and documentation submissions, intermittent meet and

confer requirements, and an escalating agency appeal process which, by this Court’s

calculation, would take six months or more to complete. See id. at 7. Defendant

asserts that Raytheon’s failure to satisfy the administrative precondition precludes

the pursuit of this (or any other) legal action.14

In light of the Court’s conclusion that Raytheon properly pled and filed this

matter as a bid protest, defendant’s reliance upon the mandatory dispute resolution

procedures included in the OTA is misplaced. As Raytheon aptly notes, this Court

has long held that exhaustion of administrative remedies, although a staple of CDA

claims, cannot serve as a condition precedent to filing a bid protest. Coastal Env’t

Grp., Inc. v. United States, 114 Fed. Cl. 124, 132 (2013) (“There are no waiting periods

or administrative exhaustion requirements for bid protests.”) (citing 28 U.S.C.

§ 1491(b)); Hawpe Constr., Inc. v. United States, 46 Fed. Cl. 571, 576–77 (2000)

(“Plaintiff’s cause of action arises under the contracts and bid protest jurisdiction of

the Tucker Act, 28 U.S.C. § 1491(b)(1)[], which does not require exhaustion of

administrative remedies for post-award bid protests.”); see, e.g., K-Lak Corp. v. United

States, 93 Fed. Cl. 749, 753–55 (2010) (rejecting government’s administrative

exhaustion requirement argument in case alleging viable bid protest); cf. Darby v.

Cisneros, 509 U.S. 137, 154 (1993) (administrative exhaustion requirement

inapplicable to APA cases). To hold otherwise would improperly subjugate this

Court’s Tucker Act jurisdiction to the will and whim of creative contract drafting. See

VanDesande v. United States, 673 F.3d 1342, 1350 (Fed. Cir. 2012) (noting “the well-

established rule that neither a court nor the parties has the power to alter a federal

court’s statutory grant of subject matter jurisdiction”) (citing cases); Sperient Corp. v.

United States, 113 Fed. Cl. 1, 6 (2013) (“[P]arties cannot affect a federal court’s

jurisdiction by contract”) (citing cases).

14 Under the terms of Article 17, Raytheon reportedly has up to 180 calendar days to administratively

notify the MDA of any dispute under the other transaction agreement. See ECF 50-1 at 7. Adherence

to this provision would afford Raytheon until March 24, 2025, to dispute the agency’s September 25,

2024 decision to discontinue the company’s participation in the GPI Program. According to the above-

referenced timeline, exhaustion of the dispute resolution procedures could last through the fall of 2025.

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CONCLUSION

For the foregoing reasons, defendant’s motion to dismiss (ECF 31) is DENIED.

The parties shall FILE a joint status report on or before February 24, 2025, proposing

a schedule of continued proceedings in this case, including the prompt filing of the

administrative record and an expedited briefing schedule to resolve this matter on

cross-motions for judgment on the administrative record.

It is so ORDERED.

___________________

Armando O. Bonilla

Judge

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