# Raytheon Company v. United States

> United States Court of Federal Claims · February 24, 2025

URL: https://www.frixlaw.com/law-library/cases/10804732

## Case

- **Court:** United States Court of Federal Claims
- **Decided:** February 24, 2025
- **Precedential status:** Published
- **Opinion:** Opinion
- **Judges:** A. Bonilla
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

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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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10804732. Public record. Not legal advice.