US Court of Federal Claims finds the Navy's exclusion of Saildrone from the MUSV competition 'arbitrary and capricious', freezing about $600 million of the $2.1 billion programme

How a finding of non-compliance on all three criteria fell apart

The Navy issued the MUSV solicitation on 26 March 2026 under Other Transaction prototype authority, funded from the July 2025 reconciliation bill. It called for a production-ready boat carrying two 40-foot containers and a 25-tonne payload for 2,500 nautical miles at 25 knots in sea state 4. Seven bidders were chosen for at-sea testing in May; Saildrone and Blue Water Autonomy were left out. The Navy had rated Saildrone non-compliant on all three evaluation criteria, dropped two findings after the company protested, and on the third the court found that the Navy had applied a standard to Saildrone that it applied to no other bidder.

Blue Water Autonomy's protest, heard in the consolidated case, was denied as the court found its elimination reasonable. The court had rejected the government's jurisdictional motion on 29 October and ruled against it again on the merits. The heart of the decision concerns procedural fairness, whether the same criteria were applied equally to every bidder, rather than the technical merits of the boats.

Three production awards and $600 million on hold

On 29 September the Navy had awarded production agreements for ten MUSVs each, at roughly $40 million a boat, to Galliano Marine Services, HII and Saronic Technologies, and $15 million each to Leidos, PacMar Technologies and Sea Machines, which passed testing; Birdon did not pass. Under the ruling the Navy may spend no more than $1.5 billion on MUSV construction, leaving about $600 million frozen. Saildrone gets another chance at an at-sea demonstration, with no deadline set for the reevaluation. Both excluded firms remain eligible for the second MUSV solicitation published on 23 September.

Founder and CEO Richard Jenkins said that 'the future of naval warfare will be fought on the water, not in a courtroom,' calling the ruling 'a win for fair competition, for taxpayers, and for national security.' A Navy spokeswoman did not immediately respond to the New York Times, and the service had declined to discuss the litigation in October.

A judicial check on fast procurement under OT authority

MUSV is a flagship of the Navy's push to mass-produce uncrewed vessels, and OT authority is used to bring in commercial newcomers while skipping Federal Acquisition Regulation procedures. The ruling shows that equal treatment of bidders remains open to judicial review even under OT agreements, imposing a procedural constraint on reforms that prize speed. Construction by the three awardees continues within the $1.5 billion ceiling, so the delay to the programme as a whole is expected to be limited, but the outcome of the reevaluation could reshape the second solicitation.