Silicon Valley firm sues spy agency over software contract

Percipient.AI alleges NGA and prime contractor CACI are ignoring a law requiring agencies to buy commercially available products.

Nearly seven years after Palantir forced the Army to consider buying its software instead of developing a bespoke system, a Silicon Valley firm is again taking the Defense Department to court over allegedly ignoring commercial products.

Santa Clara, California-based Percipient.AI filed suit in the Court of Federal Claims on Monday, claiming the National Geospatial-Intelligence Agency is violating a law requiring agencies to buy commercially available products when possible.

The suit centers on the $377 million “SAFFIRE” contract NGA awarded to CACI, Inc., in January 2021. The contract provides for “development, integration, deployment and sustainment of enhanced [Structured Observation Management] and computer vision capabilities,” NGA said at the time.

Percipient alleges NGA is allowing CACI to build its own computer vision system for SAFFIRE, rather than considering commercially available products, including one developed by Percipient called “Mirage.” In court filings, the company says Mirage is already licensed by other intelligence agencies and is “more than capable of meeting the needs” of NGA’s computer vision needs under SAFFIRE.

The lawsuit invokes the court’s decision in the 2016 Palantir case forcing the Army to follow the Federal Acquisition Streamlining Act (FASA) of 1994 and its preference for commercial items. The Army ultimately revised its approach to the Distributed Common Ground System (DCGS-A) and awarded Palantir a contract to build a portion of the intelligence analysis system in 2019.

“This case demonstrates that at least some government agencies are still failing to comply with the statute,” Percipient’s lawsuit against NGA states.

Percipient is represented by Boies Schiller Flexner LLP, the same law firm that served as counsel for Palantir in its case against the Army.

In a statement, Samuel C. Kaplan, partner at Boies Schiller Flexner, said NGA is allowing CACI to “launch a wasteful and highly uncertain project.”

“Government agencies must take seriously the legal requirement that they evaluate fully developed software products created by the private sector and procure those products to the maximum extent practicable in lieu of expensive and lengthy development efforts,” Kaplan said.

Percipient’s complaint aims to find NGA in violation of FASA and have the agency conduct “an appropriate evaluation of the practicability of incorporating Mirage” under the SAFFIRE contract.

NGA declined to comment, citing “ongoing litigation.” Government lawyers have until Jan. 20 to file a motion to dismiss the case.

On Thursday, CACI filed an unopposed motion to intervene as a defendant in the case. The company did not immediately respond to a request for comment.

NGA has cast computer vision software as crucial to its future, as an increasing deluge of overhead imagery could overwhelm human analysts. Instead, agency officials say software could detect and classify objects, and even provide more detailed analysis. The agency is also set to take over the Pentagon’s marquee artificial intelligence program, Project Maven, and its associated computer vision capabilities this year.

In its 70-page complaint, Percipient details the development of the Mirage system and how it lines up with NGA’s plans for using computer vision. The company “has gone to great lengths,” the complaint states, to get NGA and CACI to evaluate Mirage and offer it as a commercial product to meet SAFFIRE’s computer vision requirements.

“However, instead of incorporating Mirage — or conducting any additional evaluation it claims to be necessary to confirm Mirage’s ability to meet SAFFIRE’s CV System requirements — NGA is allowing its contractor (CACI) to embark on a years-long process of trying to develop and build what already exists,” the complaint states. “In this way, NGA is allowing its contractor’s economic incentives, rather than the practicability of deploying commercial items in lieu of developing new software, to guide the course of a procurement that is critical to national security.”

The complaint cites recent job postings from CACI for positions “to build the very same tools that currently exist in Percipient’s Mirage geospatial module.” It also cites a Jan. 3 letter from NGA that “confirmed that it had no intention of requiring CACI to license Mirage or other commercial or nondevelopmental items, or to conduct any evaluation necessary to determine the ability of such items to meet SAFFIRE’s CV System requirements.”

Percipient’s complaint also cites the Palantir case as a precedent for ensuring agencies follow FASA’s preference for commercially available items. But while Palantir sued the Army prior to it making a contract award, Percipient’s lawsuit comes up against NGA and a prime contractor in CACI executing an award made two years ago.

Still, Percipient argues the commercial item preference applies to both prime and subcontractors. And in addition to arguing NGA is violating provisions of FASA, the lawsuit also includes a count alleging the agency “improperly delegated inherently governmental authority” to CACI by allowing the firm to develop SAFFIRE’s computer vision system.


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