Saildrone MUSV Protest Win Caps Navy Spending

A US federal judge has ordered the Navy to take a second look at Saildrone’s bid for its Medium Unmanned Surface Vessel (MUSV) programme, and until it does, the Navy cannot commit more than $1.5bn of the programme’s $2.1bn to production. That is Saildrone’s account of a ruling by Judge Philip S. Hadji at the US Court of Federal Claims, which the California company announced on 2 November.

The Saildrone MUSV case is a fight about how the Pentagon buys new technology quickly, not about what the boats would do at sea. The Navy ran the competition as a fast prototype deal outside the usual contract rules, and the court has now said that this speed does not put the Navy’s choices beyond review.

In brief

Saildrone says the court found it was unlawfully excluded from the Navy’s MUSV prototype competition and ordered a prompt re-evaluation of its proposal.
The Navy may commit no more than $1.5bn of the $2.1bn programme until that re-evaluation is done, which limits how far it can go with other bidders in the meantime.
Unknown: the outcome of the re-evaluation, whether the Navy will appeal, and the full reasoning, as the merits opinion has not been widely published.

The Court of Federal Claims said the Navy applied different rules

Saildrone says its proposal “met or exceeded every requirement” in the solicitation, yet the Navy ruled it non-compliant on all three evaluation criteria. When Saildrone challenged that, the company says, the Navy dropped two of the three findings. The court then rejected the third, finding that the Navy had applied “arbitrary and capricious” criteria to Saildrone that it did not apply to other competitors.

The judge ordered the Navy to re-evaluate Saildrone’s proposal “using the same criteria it applied to other competitors”, according to the company. Bloomberg Law reported that the opinion was made public on 3 November, that the Navy must re-evaluate the proposal in a manner consistent with the solicitation, and that it must reinstate Saildrone to the competition if it finds the proposal acceptable.

Richard Jenkins, Saildrone’s founder and chief executive, said in the release: “The future of naval warfare will be fought on the water, not in a courtroom. We are eager to move beyond this litigation.” He called the ruling “a win for fair competition, for taxpayers, and for national security.”

An earlier ruling opened the door to the bid protest

The merits decision followed a separate opinion on 29 October in which the same judge rejected the government’s attempt to have the case thrown out. In that jurisdiction opinion, in a consolidated case brought by Blue Water Autonomy and Saildrone, the government argued that the court could not hear protests about an “other transaction” (OT) agreement, a flexible kind of deal the Pentagon uses for prototypes.

Judge Hadji disagreed. He held that the court’s “broad procurement protest statute” covers the dispute because the OT competition “is in connection with the Navy’s procurement of MUSVs”. The opinion sets out the background: Congress has allocated $2.1bn for MUSV acquisition, and the Navy’s shipbuilding plan contemplates a fleet of 39 MUSVs by fiscal year 2027. The Navy issued the request for prototype proposals on 26 March 2026, seeking vessels with “autonomous carrying capacity of containerized payloads”.

The Navy has been moving quickly on uncrewed ships. TSN has reported on a carrier strike group deploying with an unmanned surface vessel, on Applied Intuition’s $25m Navy award for AI perception and on the Navy and GSA raising Gecko Robotics’ contract ceiling.

Why the Saildrone MUSV ruling matters beyond one company

The most important part of this dispute may be the jurisdiction ruling rather than the win itself. Other transaction agreements are popular because they let defence agencies skip much of the paperwork of a normal procurement and work with newer firms. That flexibility has a cost: if losing bidders cannot challenge the decision, they have few protections against a careless or uneven evaluation. Judge Hadji’s view that an OT competition can be reviewed where it is linked to a later production buy gives start-ups some protection, and gives agencies a reason to document their evaluations as carefully as they would under the normal rules.

The spending cap is the practical lever. By keeping $600m of the $2.1bn out of reach until Saildrone is re-assessed, the court has made the remedy meaningful without halting the programme. The Navy can keep working with the bidders it selected, but it cannot quietly spend the whole budget before Saildrone gets a fair look.

The ruling does not say that Saildrone’s vessel is better, or that it must win. It says the Navy has to judge every bidder by the same standard. For a procurement process meant to bring commercial autonomy into the fleet faster, that is a basic test of fairness, and one the Navy failed on this occasion, according to the court as Saildrone describes it.

What happens next for the MUSV competition

The Navy must now carry out its re-evaluation “promptly”, in Saildrone’s words, though no deadline has been published. The open questions are whether the Navy finds the proposal acceptable, whether Saildrone is then reinstated to the competition, and whether the government appeals to the Federal Circuit. Until one of those happens, the $1.5bn ceiling stands.