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Government Contracts: Court of Federal Claims Finds No Jurisdiction Over SpaceX's OTA Protest

The Court of Federal Claims dismissed SpaceX's OTA bid protest finding that the court lacks subject matter jurisdiction over this OTA protest.

In a recently released decision, the Court of Federal Claims held that the court did not have Tucker Act jurisdiction to resolve a bid protest challenging the award of Other Transaction Agreements ("OTAs"). In this case of first impression, SpaceX challenged the Air Force's award of three OTAs for launch services. SpaceX acknowledged that the Air Force's prototype OTAs were not "procurement contracts" under the Tucker Act. However, SpaceX noted that, following the government's investment in the development of launch system prototypes under the OTA, the Air Force plans to procure launch services via a competitive procurement during Phase two of the program. As a result, SpaceX argued that the OTA was awarded "in connection with" the Phase two procurement, and therefore subject to Tucker Act jurisdiction.

The court rejected this argument, finding that the OTA award was not "in connection with a procurement or proposed procurement," as contemplated by the Tucker Act. The court noted that the OTA and procurement competitions involved separate and distinct solicitations with different acquisition strategies, different start dates, and different goals. The court also noted that the Phase two Procurement will not be limited to the companies awarded the prototype OTAs.

The court dismissed SpaceX's protest for lack of subject matter jurisdiction, but transferred venue to the United States District Court for the Central District of California to permit SpaceX to continue to pursue its claims.

Key Takeaway: Protesters seeking to challenge the award of an OTA have limited options. The court's decision here indicates that the Court of Federal Claims may find a lack of jurisdiction over such protests. But footnote 4 in the decision leaves open the possibility that there may be instances where jurisdiction exists. The U.S. Government Accountability Office ("GAO") also lacks jurisdiction over OTA protests because GAO’s jurisdiction is based in the Competition in Contracting Act, which does not apply to OTAs. However, GAO will consider a protest that alleges that the agency is improperly using an OTA when it should actually be using a procurement contract. As a result, in most cases, challenges to OTA awards may be limited.

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