This summary is based on the United States Court of Federal Claims’ published decision in the consolidated case of Blue Water Autonomy, Inc. v. United States, No. 26-936, filed November 3, 2026. The court addressed protests brought by Blue Water Autonomy, Inc. and Saildrone, Inc. against the Navy’s elimination of their proposals from consideration under a prototype “other transaction” (OT) agreement solicitation for Medium Unmanned Surface Vessels (MUSVs).

The Navy issued Solicitation N00024-26-R-6326 in 2026, seeking prototype proposals to accelerate the design, development, and demonstration of MUSVs, funded by a 2025 congressional appropriation. The solicitation called for a two-phase process where Phase 1 proposals would be evaluated against four criteria: business model (informational only), vessel solution design, manufacturing readiness, and a plan for test execution of an on-water MUSV test event. The Navy evaluated proposals under these criteria on an acceptable/unacceptable basis, with any unacceptable rating resulting in elimination from the competition.

Blue Water and Saildrone both received unacceptable ratings that prevented them from advancing to Phase 2. Blue Water was found unacceptable under Criteria 2 (vessel solution design) and 4 (test event plan), specifically due to concerns about the maturity of its vessel design and its test vessel not being representative of the proposed production vessel, given differences in hull form and machinery layout. Saildrone was initially found unacceptable under Criteria 2, 3, and 4 due to an infeasible design that exceeded maximum displacement requirements, although the Government later conceded Saildrone met Criteria 3 and 4.

The court examined multiple motions for judgment on the administrative record filed by the protesters, the Government, and defendant-intervenors. The key legal standard applied was the Administrative Procedure Act’s arbitrary and capricious test, which requires that agency decisions are sustained if rational and reasonable. The court must defer to technical judgments by the Navy unless they lack a rational basis.

In its opinion, the court granted Saildrone’s motion for judgment, denied Blue Water’s motion, granted the Government’s cross-motion against Blue Water but denied it as to Saildrone, denied Defendant-Intervenor Saronic’s motion, and granted Defendant-Intervenor Leidos’s partial motion.

The court addressed Blue Water’s principal contention that the Navy’s unacceptable rating under Criterion 4 was unreasonable and inconsistent with the solicitation criteria. The Navy had found Blue Water’s test vessel unrepresentative of its production vessel due to significant differences in hull form (test vessel was a twin-hulled catamaran; production vessel was an axe-bow monohull) and machinery layout, particularly in the machinery control system which interfaces with the autonomy platform. Blue Water argued these differences should be permissible or that the solicitation was ambiguous, but the court held the solicitation was unambiguous in requiring the test asset to be representative of the production MUSV, including hull type and propulsion architecture reflected in the required solicitation attachments.

The court rejected Blue Water’s argument that the Navy applied unstated criteria or engaged in disparate treatment, finding the Navy’s evaluation was supported by the record and consistent with the solicitation terms. It also held that Blue Water waived any argument based on alleged ambiguity by failing to seek clarification from the Navy before submitting its proposal.

The court further addressed the sufficiency of the record for judicial review. It concluded the Navy provided a reasonably discernable decisional path for its evaluation, including a contemporaneous evaluation workbook and a pre-litigation debriefing that sufficiently explained the basis for the Navy’s ratings without providing impermissible post hoc rationalizations.

In sum, the court found that the Navy reasonably applied the solicitation criteria in evaluating the offerors, and its decisions were not arbitrary or capricious under the governing standards.

“The Court construes the Solicitation itself, and it defers only on how much difference is too much. On that question, the Court will not substitute its judgment for the Navy’s.”

Editorial: Potential Impact

This decision may underscore the importance of carefully construing solicitation language and meeting technical requirements in procurement protests, especially in complex defense acquisitions like prototype other transaction agreements. The ruling highlights the court’s deference to agency technical judgments, particularly about design maturity and test asset representativeness, which could signal to offerors the need for clear compliance with solicitation criteria rather than reliance on ambiguous or interpretive readings.

The court’s reaffirmation that protestors waive challenges to solicitation ambiguities if they fail to seek clarifications before submitting proposals might influence future litigation strategies and encourage closer pre-bid scrutiny of solicitation provisions. For industry participants in autonomous systems and unmanned vessel development, the ruling suggests that technical differences in vessels proposed for testing versus production will be carefully evaluated and could determine qualification for further competition phases.

While the decision applies specifically to the facts of Navy MUSV solicitations and is limited in precedential value, it may serve as a reference point for future protests involving prototype agreements where technical design comparability is at issue. The emphasis on a reasonably discernable agency decision record could also affect how agencies document evaluations to withstand judicial review.

Source: Read the full decision on CourtListener

Court: United States Court of Federal Claims | Docket: 26-936 | Date filed: 2026-11-03

This article was generated automatically from a public court record and is provided for informational purposes only. It is not legal advice. Refer to the linked source document for the authoritative text of the decision.