[00:00:28] Speaker 03:
Our next case this morning is number 182399, Astriss Health LLC versus United States.

[00:00:54] Speaker 03:
OK, Mr. Volk.

[00:00:56] Speaker 01:
May it please the court.

[00:00:57] Speaker 01:
Congress gave very clear instructions for determining.

[00:01:01] Speaker 03:
What's the status of this contract, which originally had one year with four option years to it?

[00:01:10] Speaker 03:
Where is it?

[00:01:12] Speaker 03:
Has the contract been completed?

[00:01:14] Speaker 03:
Is it still ongoing?

[00:01:16] Speaker 01:
As far as I understand, the contract is ongoing that was awarded to Golden State.

[00:01:22] Speaker 01:
So they're different contracts.

[00:01:25] Speaker 03:
How many option years have been

[00:01:27] Speaker 03:
invoked by the government?

[00:01:31] Speaker 01:
I believe at this point it would be the first option year that they're in now.

[00:01:36] Speaker 03:
Okay, and is there any indication whether the other option years will be picked up by the government?

[00:01:42] Speaker 01:
I don't think there's any indication one way or the other, but it typically is the case that the option years have been exercised by the VA.

[00:01:49] Speaker 01:
Unless there's some reason not to, they've continued.

[00:01:53] Speaker 01:
So there certainly is the expectation that this contract could go on for a while.

[00:01:58] Speaker 04:
The CIT case is still hanging.

[00:02:02] Speaker 01:
At the request of a setterist, the CIT case has currently stayed for a resolution of this case.

[00:02:11] Speaker 03:
So under Kingdom, which also involved a contract with auction years, why is this potentially not capable of repetition yet evading review in terms of whether there's a remaining case or controversy?

[00:02:28] Speaker 01:
The Kingdomware discussion of mootness was certainly a very different situation than what was at issue here before the trial court.

[00:02:35] Speaker 01:
In Kingdomware, the Supreme Court was referring to the years it takes for a case to wind through the appellate process to the Supreme Court.

[00:02:43] Speaker 01:
What the Court of Federal Claims was looking at was a procurement that was going on right then and there.

[00:02:48] Speaker 01:
There was no concern that the Court of Federal Claims wouldn't be able to receive and decide a protest

[00:02:56] Speaker 01:
if Et cetera's had actually been injured or is actually injured in some future procurement.

[00:03:02] Speaker 01:
But the bottom line of this appeal that we don't want to get lost is that Congress gave very clear instructions in the statute as to how to decide what the country of origin is.

[00:03:13] Speaker 01:
They wrote it in.

[00:03:13] Speaker 03:
I don't think they're clear at all.

[00:03:15] Speaker 03:
I mean, I think if they're clear, it's that it's the country of origin, and it has to be

[00:03:21] Speaker 03:
wholly manufactured within the country of origin.

[00:03:25] Speaker 03:
And this pill is not wholly manufactured in India.

[00:03:31] Speaker 01:
Right.

[00:03:31] Speaker 01:
However, what's clear is the statute.

[00:03:35] Speaker 01:
And so the statute says that if it is not wholly manufactured, that the test is substantial transformation.

[00:03:41] Speaker 01:
And that's why this test is just referred to as the substantial transformation test.

[00:03:47] Speaker 01:
Because that's the key part of it.

[00:03:48] Speaker 01:
That's what's getting disputed.

[00:03:49] Speaker 01:
That's what's getting argued.

[00:03:51] Speaker 04:
In fact, no pills are manufactured in India, are they?

[00:03:55] Speaker 04:
It depends what you mean by manufactured, Your Honor.

[00:03:58] Speaker 04:
You don't get a pill from India.

[00:04:00] Speaker 04:
Whatever India sends us, it's not a pill.

[00:04:03] Speaker 01:
As to the facts here, it's absolutely clear that you're right.

[00:04:06] Speaker 01:
The bulk drug substance is what comes from India.

[00:04:09] Speaker 01:
It's not in pill form.

[00:04:10] Speaker 01:
The pill form is made in New Jersey.

[00:04:12] Speaker 04:
And they add other things to it, manufactured here in the United States and elsewhere, perhaps.

[00:04:18] Speaker 01:
As described in the CBP ruling, that's correct.

[00:04:23] Speaker 01:
But what happened here was that the court lost sight of the statute.

[00:04:29] Speaker 01:
And by losing sight of the statute and not giving the statute controlling weight, the statutory rule.

[00:04:33] Speaker 03:
How did it explain that?

[00:04:35] Speaker 03:
Because it seems to me the statute says, holy manufacture.

[00:04:40] Speaker 03:
And you say, no, OK, we've got to go over that.

[00:04:43] Speaker 03:
We're now at substantial transformation.

[00:04:46] Speaker 01:
The court here said that the statutory rule of origin is just one way to qualify under the statute, but that before even looking at the statute,

[00:04:57] Speaker 01:
Under the regulations implementing that same statute, the court said there's an alternative way to qualify.

[00:05:04] Speaker 01:
And that's what's inconsistent with the statutory scheme.

[00:05:07] Speaker 01:
I think some background on what the difference is between the Buy American Act and the Trade Agreements Act and why the trade agreements.

[00:05:14] Speaker 03:
So your position is that this pill is a product of India, right?

[00:05:19] Speaker 01:
That's the ruling of CVP form, yes.

[00:05:22] Speaker 03:
That's your position here today, right?

[00:05:24] Speaker 01:
Yes.

[00:05:25] Speaker 03:
Why is this a pill that's a product of India?

[00:05:29] Speaker 03:
I don't understand that in light of the statutory definition or in the language of the FAR.

[00:05:36] Speaker 01:
So this determination, which is one that CVP made and is for the Court of International Trade to decide, was decided in that

[00:05:45] Speaker 01:
Because the pill is made from the active pharmaceutical ingredient is what determines the country of origin.

[00:05:54] Speaker 03:
That's apparently what they said in the CPB, but that's not binding on us, and it doesn't seem to be consistent with the statute.

[00:06:05] Speaker 03:
Why is the active ingredient the test as opposed to the pill?

[00:06:10] Speaker 01:
That's for the Court of International Trade to decide.

[00:06:12] Speaker 01:
I want to be clear.

[00:06:13] Speaker 03:
That's not for this- No, it's for us to decide whether that's right or not.

[00:06:16] Speaker 03:
You don't agree that we can decide it?

[00:06:18] Speaker 01:
Respectfully, Your Honor, I think you would wait for the Court of International Trade to rule on that and then potentially- Isn't that case stayed?

[00:06:26] Speaker 01:
That case is stayed.

[00:06:27] Speaker 01:
But it's not appealed right now.

[00:06:29] Speaker 01:
This appeal is not from the CIT.

[00:06:31] Speaker 01:
This appeal is from the Court of Federal Claims.

[00:06:32] Speaker 01:
And that's an important distinction.

[00:06:34] Speaker 03:
Let's assume we reject the argument you're just making about having to wait for the Court of International Trade.

[00:06:41] Speaker 03:
Why is the CPB interpretation of this statute correct?

[00:06:46] Speaker 03:
Because it seems to be in conflict with the language of the statute.

[00:06:51] Speaker 01:
Well, you're right.

[00:06:51] Speaker 01:
I don't think it's in conflict at all.

[00:06:53] Speaker 01:
And so here's why it's correct.

[00:06:55] Speaker 01:
The relevant part is substantial transformation.

[00:06:59] Speaker 01:
It's not wholly in either place.

[00:07:00] Speaker 01:
Substantial transformation is your standard.

[00:07:02] Speaker 01:
When you look at substantial transformation, the cases have analyzed whether there's a change in the character, use,

[00:07:10] Speaker 01:
the essential nature of the chemical.

[00:07:13] Speaker 01:
And so CBP, Customs has for many years... How is it substantially transformed in India?

[00:07:18] Speaker 03:
The pill doesn't even exist in India.

[00:07:21] Speaker 01:
Because it's not about the pill, it's about the bulk drug substance.

[00:07:24] Speaker 01:
It's about the integrity.

[00:07:25] Speaker 01:
Why?

[00:07:26] Speaker 01:
Why?

[00:07:27] Speaker 04:
Because when you buy... So suppose you buy a generic... Isn't the end product that we're concerned about the pill?

[00:07:33] Speaker 04:
We're not concerned about what India does.

[00:07:36] Speaker 04:
We're concerned about what they're selling, which is a pill.

[00:07:41] Speaker 01:
Isn't that right?

[00:07:42] Speaker 01:
Exactly.

[00:07:42] Speaker 01:
But if you buy any number of the different pills, what you're really after is that active ingredient.

[00:07:47] Speaker 01:
That's what makes it the pill that you're buying.

[00:07:50] Speaker 01:
That's the essential nature, the character, or use of the ingredient.

[00:07:55] Speaker 01:
If you buy store brand Tylenol versus name brand Tylenol, what you're buying is the active ingredient.

[00:08:00] Speaker 04:
So you're saying if you import something, it can never be substantially transformed?

[00:08:07] Speaker 01:
No, you're not.

[00:08:08] Speaker 01:
I'm not saying that.

[00:08:09] Speaker 01:
Certainly, that's what I'm hearing.

[00:08:11] Speaker 01:
I'm sorry to have not been clear on that.

[00:08:14] Speaker 01:
Certainly, you can import components of something, and then the question becomes, is it or isn't it substantially transformed in this country, or was it substantially transformed in the prior country?

[00:08:25] Speaker 01:
So this is the statute, so you look for the active ingredient of a pharmaceutical?

[00:08:31] Speaker 01:
It's not in the statute.

[00:08:32] Speaker 01:
The statute doesn't just apply to pharmaceuticals.

[00:08:35] Speaker 01:
It's in the customs ruling, which were exclusively reviewable and aren't.

[00:08:38] Speaker 01:
Or maybe that's wrong.

[00:08:40] Speaker 03:
I mean, what's the basis for the customs ruling saying that it's the active ingredient?

[00:08:44] Speaker 01:
Your Honor, I don't want to suggest at all that that can't be fully reviewed in the Court of International Trade.

[00:08:50] Speaker 03:
No, no.

[00:08:50] Speaker 03:
We're proceeding on the assumption that we're rejecting that argument and that it's up to us here and now to make a determination of the construction of the statute.

[00:09:00] Speaker 03:
Okay?

[00:09:01] Speaker 03:
Please tell me

[00:09:03] Speaker 03:
why the statute is concerned with the active ingredient instead of the final product.

[00:09:11] Speaker 04:
In other words, we don't care what the CVP said for the purposes of this case.

[00:09:17] Speaker 04:
So answer the judge's question.

[00:09:20] Speaker 01:
It's because the determination of what is substantial transformation.

[00:09:27] Speaker 01:
You look in the cases at what substantial transformation means.

[00:09:31] Speaker 03:
What case?

[00:09:32] Speaker 01:
So for example, a recent case from the CIT is Energizer Battery.

[00:09:37] Speaker 01:
They looked at is post-importation manufacturing or assembly, is that adequate to make for substantial transformation?

[00:09:46] Speaker 03:
There's no case from our core that says you look at the active ingredient, right?

[00:09:51] Speaker 03:
That's correct, Your Honor.

[00:09:52] Speaker 03:
OK.

[00:09:53] Speaker 03:
So put aside these non-binding cases.

[00:09:56] Speaker 03:
What is it in the statute that tells us to look to the active ingredient?

[00:10:01] Speaker 01:
I don't have something.

[00:10:02] Speaker 01:
There's nothing in the statute that gets that specific as to particular categories of product.

[00:10:06] Speaker 01:
But what general language even are you relying on?

[00:10:10] Speaker 01:
So if you go to the statute 25184B, the country of origin under the Trade Agreements Act, you're looking at the question of substantial transformation.

[00:10:23] Speaker 01:
And so you're asking,

[00:10:33] Speaker 01:
if it has been substantially transformed into a new and different article of commerce with a name, character, or use distinct from that of the article or articles from which it was so transformed.

[00:10:48] Speaker 01:
So if you want to go through that list, the name, Intekavir, that's the same.

[00:10:53] Speaker 01:
The bulk drug substance is called Intekavir.

[00:10:55] Speaker 01:
The pill is called Intekavir.

[00:10:57] Speaker 01:
The character,

[00:10:58] Speaker 01:
So that's where you get into this technical analysis that CBP did.

[00:11:02] Speaker 01:
The Court of Federal Claims wouldn't do in this big protest.

[00:11:05] Speaker 01:
The character of it is not changing.

[00:11:07] Speaker 01:
The essential chemical makeup of this bulk drug substance is not changing when it gets put into pill form.

[00:11:13] Speaker 01:
And then the use.

[00:11:14] Speaker 01:
The use is not changing.

[00:11:16] Speaker 01:
The use is the same from when it's the bulk drug substance in India to when it's put into the pill for human consumption.

[00:11:22] Speaker 01:
Really?

[00:11:23] Speaker 04:
You could take the bulk stuff and get the same result?

[00:11:27] Speaker 01:
You can't swallow the bulk stuff.

[00:11:29] Speaker 01:
But that doesn't mean the use is different.

[00:11:30] Speaker 01:
There wouldn't be any other use for the bulk stuff.

[00:11:33] Speaker 04:
That's how you use it.

[00:11:36] Speaker 04:
You use it.

[00:11:36] Speaker 04:
What does it mean to use the bulk stuff?

[00:11:39] Speaker 04:
You use it to make a pill.

[00:11:41] Speaker 01:
The use is for treating hepatitis B. And so that use doesn't change.

[00:11:46] Speaker 03:
Suppose we reject this.

[00:11:48] Speaker 03:
We say, OK, you're wrong.

[00:11:51] Speaker 03:
the active ingredient, it's the pill that's the product.

[00:11:55] Speaker 03:
The pill is not a product of India under that assumption, correct?

[00:12:00] Speaker 01:
The pill is a product of India.

[00:12:04] Speaker 01:
No.

[00:12:05] Speaker 03:
Under that assumption, it's a product of India?

[00:12:07] Speaker 03:
Why?

[00:12:08] Speaker 04:
I can't buy that pill in India, can I?

[00:12:10] Speaker 04:
If it's imported back to India.

[00:12:12] Speaker 04:
Yeah, unless it's imported back, but that's not the question.

[00:12:16] Speaker 04:
Absent the importing back of the very pill that these people are trying to sell to the government, I can't buy that pill.

[00:12:23] Speaker 01:
Under the statute, it's a product of wherever the last substantial transformation was.

[00:12:27] Speaker 01:
If that was India, no matter where else it goes in the world.

[00:12:30] Speaker 03:
But we're rejecting, on my hypothetical, we're rejecting your argument that the issue is what the active ingredient was, that the pill is the product.

[00:12:40] Speaker 03:
The pill, under that assumption, is not the product of India, correct?

[00:12:46] Speaker 01:
I think, Your Honor, you assume the ultimate issue.

[00:12:48] Speaker 01:
In that case, I couldn't disagree with you.

[00:12:50] Speaker 01:
If you're assuming that the pill is the... Pill.

[00:12:54] Speaker 03:
If I assume the pill is the pill, you lose, right?

[00:12:58] Speaker 01:
But, Your Honor, I really would encourage you to carefully consider whether the court should be deciding this now.

[00:13:04] Speaker 01:
And I haven't not listened to the comments you made, but I don't even think a setter is claiming that this decision is for the court right now.

[00:13:11] Speaker 01:
They focus on the procuring agency.

[00:13:13] Speaker 01:
And that's really the issue here is whether there was a separate error by the procuring agency.

[00:13:18] Speaker 01:
The Court of Federal Claims decided in a procurement where there was absolutely no relief to be granted in that procurement, the Court of Federal Claims nonetheless decided that in all future procurements by the VA, whether it's pharmaceuticals, whether it involves these parties or not, that the government was misinterpreting

[00:13:38] Speaker 01:
the regulations.

[00:13:40] Speaker 01:
But it was the court's own interpretation of those regulations as not consistent with the statute.

[00:13:45] Speaker 01:
By saying that the substantial transformation test in the statute is just one possible way to comply with that very same statute, the court is interfering with the statutory scheme.

[00:13:56] Speaker 01:
The court didn't recognize that the TAA is comprehensive.

[00:14:01] Speaker 01:
Rather than preferences under the Buy American Act, the TAA has an in or out scheme.

[00:14:07] Speaker 01:
There's so much focus on the waiver of the TAA, of the Buy American Act preferences, but it's not the waiver that says the product of India is excluded.

[00:14:15] Speaker 01:
It's the prohibition that's also in the statute.

[00:14:18] Speaker 04:
Well, you certainly start out in your brief saying that this is an opinion the Court of Federal Claims never should have issued.

[00:14:27] Speaker 04:
It upset the law, contradicting the plain language of the TAA and issuing a broad injunction requiring the department to conduct analyses under an inapplicable legal

[00:14:37] Speaker 04:
the sky really is falling on the Justice Department.

[00:14:41] Speaker 04:
I understand that.

[00:14:43] Speaker 04:
Let me shift just for a moment, if I may.

[00:14:47] Speaker 04:
Why is the VA

[00:14:51] Speaker 04:
delegating to the CBP, or CPB, whichever that is, the decision on what the statute requires?

[00:15:01] Speaker 04:
Why aren't they doing it themselves?

[00:15:03] Speaker 04:
Is there some authority that allows them or orders them to delegate it to the CPB?

[00:15:09] Speaker 01:
There's not a requirement that CBP must do it, but it's not irrational for the procuring agency to say,

[00:15:17] Speaker 01:
What you're saying doesn't make sense to me.

[00:15:19] Speaker 01:
I want a decision from customs.

[00:15:21] Speaker 04:
There's nothing irrational about it.

[00:15:22] Speaker 04:
Whether it's irrational or not, it's always rational for somebody to pass a tough decision off to somebody else if they can get away with it.

[00:15:31] Speaker 04:
The question is, can they get away with it?

[00:15:34] Speaker 04:
Why shouldn't the VA make this decision?

[00:15:37] Speaker 04:
It's their problem.

[00:15:38] Speaker 04:
It's their contract.

[00:15:41] Speaker 01:
There's no question that the VA did make the decision.

[00:15:44] Speaker 01:
But they adopted CBP's ruling.

[00:15:46] Speaker 01:
But that's no different than supposed CBP's ruling.

[00:15:48] Speaker 01:
Oh, wait.

[00:15:48] Speaker 04:
Wait, wait, wait.

[00:15:49] Speaker 04:
Come on now.

[00:15:49] Speaker 04:
Let's not play verbal games.

[00:15:51] Speaker 04:
They delegated it to the CPB to make the decision.

[00:15:55] Speaker 04:
And they said, OK, you make the decision.

[00:15:57] Speaker 04:
We're bound by it.

[00:15:59] Speaker 04:
Why are they bound by it?

[00:16:00] Speaker 01:
It's the same way that if the decision had been affirmed by the Court of International Trade or this court or the Supreme Court.

[00:16:08] Speaker 01:
The procuring agency could certainly rely on it then.

[00:16:11] Speaker 01:
Why can't they rely on it just because it's at the administrative stage?

[00:16:14] Speaker 01:
They can.

[00:16:15] Speaker 01:
It's the law.

[00:16:16] Speaker 03:
They can rely on it, but that doesn't mean that we have to wait for the CPB decision before deciding whether they were right.

[00:16:24] Speaker 01:
I think as a technical matter, it's 28 USC 1581E.

[00:16:30] Speaker 01:
That is why the court should wait.

[00:16:33] Speaker 01:
And so that provision says...

[00:16:35] Speaker 01:
That provision says that exclusive jurisdiction to review the CBP decision is in the Court of International Trade And so that's why it should be that the court would wait this court would wait for that court to decide the review of that determination But if we have jurisdiction in this case and the court below had jurisdiction the case was properly brought and one of the issues is

[00:17:00] Speaker 00:
this issue that was already decided in another proceeding, we still get to decide it, right?

[00:17:05] Speaker 00:
There's no reason why we have to give the agency's determination deference or refer to it at all.

[00:17:12] Speaker 01:
And Your Honor, your question identified the critical issue, which is whether the court below in this appeal had jurisdiction at all, and it didn't.

[00:17:19] Speaker 01:
That was a major issue that was addressed below and is addressed here.

[00:17:23] Speaker 00:
Well, when Judge Lake asked you about it, you moved on to the merits very quickly.

[00:17:26] Speaker 01:
I'm sorry, Your Honor.

[00:17:27] Speaker 01:
I certainly don't want to minimize the jurisdictional questions that need to be decided.

[00:17:30] Speaker 00:
The Court of Federal Claims never had... But assuming we have jurisdiction, do you still have an argument that we shouldn't be considering this issue?

[00:17:37] Speaker 01:
Yes, because the jurisdiction would only be with respect to the VA's procurement decision.

[00:17:42] Speaker 01:
And so here, the VA was not, and the Court of Federal Claims was not reviewing a VA decision that was what CBP decided.

[00:17:50] Speaker 03:
But they didn't have to defer.

[00:17:51] Speaker 03:
You agreed in the answer to Judge Plaker's questions that the VA could have made its own decision.

[00:17:57] Speaker 03:
It just made a discretionary decision to defer to CBP.

[00:18:02] Speaker 01:
I don't see any reason why it couldn't.

[00:18:03] Speaker 01:
It would be judged under the same standard as all these big protests, which is, was it rational?

[00:18:07] Speaker 01:
So if it was rational for CBP to make some different decision, that would be fine.

[00:18:13] Speaker 01:
But here, it's clear that CBP wanted to rely on that.

[00:18:16] Speaker 01:
I'm sorry, the VA wanted to rely on that decision.

[00:18:18] Speaker 01:
And that wasn't irrational.

[00:18:19] Speaker 01:
That's the standard.

[00:18:20] Speaker 03:
OK, let me just move.

[00:18:22] Speaker 03:
We're out of time.

[00:18:23] Speaker 03:
But I wanted to ask you one other question.

[00:18:26] Speaker 03:
We have these five questions and answers that arose in connection with this solicitation.

[00:18:32] Speaker 03:
Yeah.

[00:18:32] Speaker 03:
Is there any reason to believe that the VA would take a different position

[00:18:36] Speaker 03:
about the country of origin here in any future contract?

[00:18:45] Speaker 01:
Assuming the Court of Federal Claims injunction was not in place, would the VA take a different position?

[00:18:51] Speaker 01:
Not as long as that CVP decision was in place.

[00:18:54] Speaker 01:
There's no reason to assume that.

[00:18:55] Speaker 01:
But those future procurements weren't before the court.

[00:18:58] Speaker 01:
OK.

[00:18:58] Speaker 04:
I read those five questions and answers, and I think those answers were the most

[00:19:03] Speaker 04:
non-responsive answers I've ever seen the government do.

[00:19:06] Speaker 04:
They were very brilliant.

[00:19:09] Speaker 01:
Just to respond briefly, Your Honor, Accentris was arguing its case in those questions, and the VH said, we're going to follow the law.

[00:19:16] Speaker 04:
That's what they said.

[00:19:18] Speaker 04:
That was their answer.

[00:19:19] Speaker 03:
All right, Mr. Well, we'll give you two minutes for a bottle.

[00:19:26] Speaker 03:
OK, Mr. Ruskis?

[00:19:29] Speaker 02:
Good morning.

[00:19:30] Speaker 02:
May I please support Stephen Ruskis for?

[00:19:32] Speaker 02:
Et cetera.

[00:19:34] Speaker 02:
To address your question about country of origin, the citation read by Mr. Volk, 2518, it does, in fact, say that the question is, is the product that the government's purchasing exhibit new name, character, and use from the raw ingredient?

[00:19:54] Speaker 02:
And we argued at the Court of International Trade that clearly it did.

[00:20:00] Speaker 02:
Because as Judge Plager has pointed out, the characteristics of a prescription drug product approved as safe and efficacious for administration to a patient are very different from the characteristics of a raw chemical that's only one component of the finished product.

[00:20:17] Speaker 03:
But what about jurisdiction?

[00:20:20] Speaker 03:
What about the question of movements?

[00:20:22] Speaker 03:
I mean, you don't have any chance of getting this particular contract, right?

[00:20:27] Speaker 03:
Because your bid was not below bid.

[00:20:32] Speaker 02:
Our view is twofold on that.

[00:20:35] Speaker 02:
When we made that bid, we were bidding under a contract that was going to exclude us.

[00:20:41] Speaker 02:
We don't know what the bid would have been.

[00:20:43] Speaker 03:
Why would you make a different bid?

[00:20:45] Speaker 02:
Because if none of the compliant companies submit offers, there's an exception where we would have been the only bidder.

[00:20:53] Speaker 04:
You had another problem with your bid, though.

[00:20:56] Speaker 04:
You didn't respond to their timing.

[00:20:59] Speaker 04:
the way they wanted it, and they said you were disqualified on that ground.

[00:21:04] Speaker 02:
Yes.

[00:21:04] Speaker 02:
As the lower court properly found, that was an incorrect statement in the contracting officers recitation of the issue because there was no initial quantity.

[00:21:15] Speaker 02:
There was no requirement that the time that the contract was let, that 100% of the entire supply that would be ordered over a five-year period had to be available at that time.

[00:21:24] Speaker 04:
So we'd have to agree with that in order to keep you qualified.

[00:21:28] Speaker 02:
That's true.

[00:21:29] Speaker 03:
Our principal... Could you go back to the other questions?

[00:21:34] Speaker 03:
I'm not understanding your answer.

[00:21:36] Speaker 03:
Our principal jurisdictional question... Why is it that there would be a different bid if the solicitation had been different and you qualified for it?

[00:21:48] Speaker 02:
If we were going to be competing against the so-called compliant products, we would have to price compete in a different way.

[00:21:55] Speaker 02:
than if we weren't being allowed to compete in that pool.

[00:21:58] Speaker 02:
It's somewhat like a bid under a small business set aside and a bid under an unrestricted bid.

[00:22:03] Speaker 02:
We were going to be in a pool that didn't have anybody in it that had a compliant product.

[00:22:08] Speaker 02:
And in the company's experience, typically no one bids unless they have a compliant product.

[00:22:14] Speaker 02:
I'm sorry.

[00:22:15] Speaker 03:
I'm still not understanding what you're saying.

[00:22:17] Speaker 03:
And I think this is important.

[00:22:20] Speaker 03:
I don't get it.

[00:22:22] Speaker 03:
Why is the bid different depending on

[00:22:24] Speaker 03:
whether you're qualified or not qualified, or your product is qualified or not qualified?

[00:22:30] Speaker 02:
The expected bidders in this procurement were all going to be compliant products.

[00:22:36] Speaker 02:
That means products deemed by the VA were compliant.

[00:22:39] Speaker 02:
Our bid was never going to be compared against those.

[00:22:42] Speaker 02:
Under the VA's view.

[00:22:43] Speaker 03:
But you couldn't have gotten the contract.

[00:22:46] Speaker 02:
Yes.

[00:22:46] Speaker 02:
Under the VA's view of the procurement and under this statute and regulations as written, if there are no bidders of that type,

[00:22:54] Speaker 02:
then the last man standing is an offer of a non-compliant product.

[00:23:02] Speaker 03:
bidding on supposedly compliant products would still be in the mix.

[00:23:06] Speaker 03:
They wouldn't be taken out of it.

[00:23:07] Speaker 02:
Right.

[00:23:08] Speaker 02:
We only have a bid at all under the VA's view if none of those people bid, which happens in a large number of government proceedings.

[00:23:15] Speaker 02:
But they did bid.

[00:23:16] Speaker 02:
Right.

[00:23:16] Speaker 02:
And therefore, we had to.

[00:23:16] Speaker 00:
I don't understand how this hypothetical discussion helps to show jurisdiction in the case isn't moved.

[00:23:22] Speaker 02:
Well, our jurisdiction depends on something entirely different.

[00:23:25] Speaker 02:
And you're correct about that.

[00:23:27] Speaker 02:
We have the same jurisdiction as any other pre-award protester who's protesting an invalid term of the solicitation.

[00:23:34] Speaker 03:
At the time that we... Well, sure you did initially, but it's clear that you have to have standing throughout the case.

[00:23:40] Speaker 03:
There's not... I mean, the court of law claims simply wrong in suggesting that everything's hunky-dory as long as you had standing in the beginning.

[00:23:49] Speaker 02:
As to that, our view is that it's a threshold gating issue and that there are considerations that arise after

[00:23:56] Speaker 02:
The case is continuing, but that doesn't involve a revisitation of standing.

[00:24:03] Speaker 02:
Our view is that you may have to prove the facts that you allege with respect to standing.

[00:24:09] Speaker 02:
that were merely allegations.

[00:24:10] Speaker 03:
And in this case, we were- Well, let's assume we reject that position.

[00:24:13] Speaker 03:
And we say you had to have standing throughout.

[00:24:15] Speaker 03:
And if you've lost standing, there's no longer a case of controversy.

[00:24:19] Speaker 03:
Why, under that standard, is there still a case of controversy here?

[00:24:24] Speaker 02:
Because we raise other significant claims that, in similar situations, have been held to have standing.

[00:24:30] Speaker 02:
We raise the second claim, not just the solicitation, which we think puts us in the same position as any other pre-award protestor

[00:24:37] Speaker 02:
We also pointed to the five questions and answers which the lower court properly determined were final agency action that specifically with respect to our product was a product characterization, not a procurement characterization, but a product characterization in connection with the procurement.

[00:24:55] Speaker 02:
That means court jurisdiction because it was in connection with the procurement.

[00:24:58] Speaker 02:
But as the lower court properly recognized, they told us that they would never consider a Cetris's product to be compliant.

[00:25:06] Speaker 02:
because, as Mr. Volk said, there was a CBP decision out there which held that it was the product of India.

[00:25:16] Speaker 02:
And so just as in weeks where the effect of the government's conduct was to make him bid for future procurements that he potentially wouldn't win, and just as in veteran contracting where

[00:25:32] Speaker 02:
The fact that the government, the VA in fact, had placed the contractor in a database that not only affected a current procurement that had passed, but also would prohibit him from being a veteran on small business for future procurements.

[00:25:44] Speaker 02:
We have a situation where in connection with the procurement, we have a lasting harm, a decision that was going to impact us.

[00:25:51] Speaker 02:
in all subsequent procurements for that product.

[00:25:54] Speaker 02:
And that remained and gave us standing throughout the case.

[00:25:59] Speaker 03:
Well, do we have any case that suggests that a ruling like that is reviewable by us?

[00:26:07] Speaker 02:
Yes.

[00:26:09] Speaker 02:
In the claims court case, veteran contracting,

[00:26:16] Speaker 02:
which was not appealed to the Federal Circuit, at least in any way that changed the decision.

[00:26:21] Speaker 02:
The issue was... I thought that case was appealed to the Federal Circuit.

[00:26:25] Speaker 02:
I thought we rendered a decision about it.

[00:26:28] Speaker 02:
My recollection of the case is that the fundamental holding that there needed to be injunctive relief provided as to the existence of the company's name in the database was

[00:26:42] Speaker 02:
necessary to address the harms faced by the company, because in addition to the procurement about which it originally filed the protest, the fact that its name was not on the list was also going to affect all subsequent procurements.

[00:26:56] Speaker 02:
That's what happened in this case with respect to the agency action taken by the contracting officer.

[00:27:03] Speaker 02:
Our product was typed in connection with the procurement, but it was typed in a way that would have affected the company and all of its subsequent procurements.

[00:27:13] Speaker 04:
I think you have a section 1500 problem as well.

[00:27:17] Speaker 02:
Do you want to talk about that?

[00:27:19] Speaker 02:
Yes.

[00:27:19] Speaker 02:
As to section 1500, as Mr. Volk actually argued on our behalf, the case that we filed is not about what was happening at CBP.

[00:27:29] Speaker 02:
It was about what the contracting officer did after, in fact, we filed the case at CBP.

[00:27:35] Speaker 02:
Our central contention in the bid protest is that the contracting officer has to do something other

[00:27:41] Speaker 02:
than simply assess the country of origin under the TAA.

[00:27:45] Speaker 02:
The FAR part 25 instructs him to treat our product equal to a designated country end product or treat a designated country end product equal to a domestic product.

[00:27:57] Speaker 02:
And therefore, you can't simply exclude a product that's a domestic product.

[00:28:02] Speaker 02:
And our case is about the fact that the contracting officer said, I don't need to consider

[00:28:06] Speaker 02:
whether your product is a domestic product, because when the TAA applies, no aspect of the BAA applies.

[00:28:15] Speaker 02:
So that was clearly not before CIT.

[00:28:18] Speaker 02:
And the facts necessary to prove that are, in fact, did the contracting officer consider or not consider whether the product was a domestic product?

[00:28:31] Speaker 02:
The law to be applied to that was, is it correct not to consider whether the product is qualified as an investment product?

[00:28:37] Speaker 04:
The law is irrelevant to deciding whether there is an overlap between the CIT case and the Court of Federal Claims case.

[00:28:49] Speaker 04:
the operative facts.

[00:28:50] Speaker 04:
Law is not a fact.

[00:28:52] Speaker 04:
Precisely.

[00:28:53] Speaker 04:
We need to look at the operative facts.

[00:28:55] Speaker 04:
And so the operative facts, what are the operative facts in the CIT case?

[00:29:00] Speaker 02:
The operative fact in the CIT case is where was the source of each of the raw materials?

[00:29:09] Speaker 02:
And where was the processing that occurred to make a prescription drug?

[00:29:14] Speaker 02:
And what was the scientific, essentially, impact

[00:29:18] Speaker 02:
of the processing on the finished products.

[00:29:21] Speaker 02:
OK.

[00:29:21] Speaker 04:
What were the operative facts in the Court of Federal Claims?

[00:29:26] Speaker 02:
Did the contracting officer decide whether the product was a domestic product or not?

[00:29:33] Speaker 04:
That's a question of law.

[00:29:34] Speaker 04:
What are the facts?

[00:29:35] Speaker 02:
No, no.

[00:29:36] Speaker 02:
Pardon me, Your Honor.

[00:29:36] Speaker 02:
As a matter of fact, does the record reflect a consideration by the contracting officer of whether the company's product was a domestic product?

[00:29:46] Speaker 02:
And as a matter of fact, the

[00:29:48] Speaker 02:
The claims court found that the record contained no suggestion that the contracting officer considered whether there was a contract effect.

[00:29:58] Speaker 02:
Not only is there no record of that in the record, but the five questions and answers which you characterize, if I may paraphrase as cryptic, said we don't consider that when the TAA covers the agreement.

[00:30:12] Speaker 02:
Because when the TAA applies, the BAA does not.

[00:30:16] Speaker 02:
And that was incorrect in our view.

[00:30:18] Speaker 02:
And as a factual matter, the lower court properly agreed with us that the contracting officer made no such determination.

[00:30:25] Speaker 02:
The second fact was, since we were arguing with respect to invalid solicitation terms, as a matter of fact, what did the solicitation say?

[00:30:33] Speaker 02:
And of course, the legal question, which is not relevant to 1500, is, was what the solicitation said improper or not?

[00:30:42] Speaker 02:
And we allege that, as a matter of fact, the language

[00:30:45] Speaker 02:
of the solicitation, as a matter of fact, was improper, existed.

[00:30:50] Speaker 02:
And the lower court properly found, having read that language, that it was exactly where we said it was.

[00:30:55] Speaker 02:
It was not in some draft RFP or it wasn't in some request for information it was in.

[00:31:00] Speaker 02:
It was contained in the RFP that we were subject to.

[00:31:04] Speaker 02:
And then she made a legal ruling that it shouldn't have been because it was inconsistent with the FAR provisions requiring how the contract should be treated.

[00:31:13] Speaker 02:
So our view with respect to the merits of the case is, and we've noted this throughout the proceedings, both below and here, is that the government keeps referring to a single statute that governs.

[00:31:27] Speaker 02:
It says the judge's decision in the lower court was inconsistent with the statute.

[00:31:33] Speaker 02:
But there's not just one statute at issue, and there's not just one section of one statute at issue.

[00:31:40] Speaker 02:
In the sense that TAA was passed and the regulations were implemented, there's over a 30-year history, both within the federal agencies and within any cases that consider the issue specifically, which say that the Buy America Act and the Trade Agreements Act overlay and overlap, not that one repeals the other.

[00:32:00] Speaker 02:
And that's something that simply has been ignored or

[00:32:04] Speaker 02:
or talked around by the government.

[00:32:06] Speaker 02:
As we know, in procurements, central to the Trade Agreements Act, Section 2511, is the statement that we take the products that are currently preferred, that in the context of the Trade Agreements Act, those are the Buy America Act products.

[00:32:23] Speaker 02:
That was the predominant preference in place of the time the Trade Agreement Act was written.

[00:32:28] Speaker 02:
So we take products that are preferred, which are domestic items under the Buy America Act.

[00:32:33] Speaker 02:
But we decide what to do with the products of countries that have signed trade agreements and haven't signed trade agreements.

[00:32:39] Speaker 02:
So Section 2511 says, if it's a designated country and product from a trade-friendly country, we treat it equally.

[00:32:48] Speaker 02:
The preferences are waived.

[00:32:49] Speaker 02:
And the preferences are price adjustments.

[00:32:52] Speaker 02:
So if you're an offer of a non-domestic product, your price gets moved up.

[00:32:55] Speaker 02:
So it's competitively disadvantaged.

[00:32:57] Speaker 02:
But those preferences are waived with respect to designated country products.

[00:33:03] Speaker 02:
But under 2511, anybody else's products are still subject to the preference.

[00:33:08] Speaker 02:
So an offer of a product of Russia or something will still receive a price decrement or preference.

[00:33:15] Speaker 02:
disadvantage with respect to the domestic product.

[00:33:18] Speaker 02:
When you move to 2512, which includes a prohibition, you don't throw out 2511, and you don't throw out the Bia-America Act.

[00:33:26] Speaker 02:
You get a different set of questions.

[00:33:28] Speaker 02:
So under 2512, you start with the domestic product, which is preferred.

[00:33:33] Speaker 02:
You treat the designated country products equally.

[00:33:37] Speaker 02:
You prohibit anything that's not domestic that's the product of a foreign country under the Trade Agreements Act.

[00:33:45] Speaker 02:
And then it turns out, under the IBM case, there's a fourth category of product.

[00:33:50] Speaker 02:
You also have to deal with products that aren't domestic but aren't foreign either because they're substantially transformed in the United States.

[00:33:58] Speaker 02:
And as to that, the board in IBM said the following.

[00:34:04] Speaker 02:
So we know that you have to.

[00:34:06] Speaker 02:
take a domestic product and treat designated country products equal, and that you have to exclude any other product that's foreign.

[00:34:12] Speaker 02:
But what do you do with a US product that's not domestic?

[00:34:16] Speaker 02:
And it said you can't exclude it under the prohibition.

[00:34:19] Speaker 02:
because it only includes foreign products.

[00:34:21] Speaker 02:
But it's left to the agencies as to whether they're still covered by the Buy America preference.

[00:34:27] Speaker 02:
Point being that at all times, the boards and the courts have understood that the preferences from the BAA do apply, although in much more limited situations, both when Section 2511 of the TAA applies and also when 2512 of the TAA applies.

[00:34:45] Speaker 03:
OK.

[00:34:45] Speaker 03:
I think we're out of time.

[00:34:46] Speaker 03:
Thank you.

[00:34:50] Speaker 03:
Mr. Volk, you have two minutes.

[00:34:55] Speaker 01:
If I could convince the court of one thing, it would be that there is no overlap between the TAA and the BAA.

[00:35:03] Speaker 01:
That's just wrong.

[00:35:04] Speaker 01:
A product of India under the TAA cannot be a product of some other country under some other test.

[00:35:11] Speaker 01:
The reason why the court, I think, went astray on this

[00:35:15] Speaker 01:
is that the court didn't see that the TAA on its own is comprehensive.

[00:35:20] Speaker 01:
Rather than giving a boost or having a preference for a domestic product under the BAA, the TAA has an in or out system.

[00:35:27] Speaker 01:
Some have referred to it as a walled garden.

[00:35:29] Speaker 01:
You're either inside with the United States or you're outside.

[00:35:33] Speaker 01:
it specifies the entire universe of possibilities.

[00:35:36] Speaker 01:
So if under the statutory test it's a product of India, it cannot be a product of the United States under some alternative test that interferes with the statute.

[00:35:47] Speaker 01:
If the court were to look at the ultimate question that's subject to discovery in the CIT rather than the APA style procurement review here, the court were to look at that, it would be a problem under section 1500.

[00:36:01] Speaker 01:
because there was never jurisdiction in the Court of Federal Claims to review that case that was already at the CIT, even putting aside the CIT's exclusive jurisdiction.

[00:36:10] Speaker 01:
The only remaining issue then is whether the court was right to think that the VA was supposed to be looking at some other question.

[00:36:20] Speaker 01:
And there just was no other question.

[00:36:22] Speaker 01:
The only question, and when the TAA applies,

[00:36:26] Speaker 01:
in determining country of origin has to be decided under the test that Congress gave in the statute.

[00:36:34] Speaker 01:
As Cedras's counsel mentioned, the veterans contracting case, the most fundamental difference between that case was that veterans contracting involved a SBA decision that the Court of Federal Claims was empowered to review, unlike the CBP decision, which can only be reviewed in the Court of International Trade.

[00:36:53] Speaker 01:
It's the statutory point that's key.

[00:36:55] Speaker 01:
If it's a product of India under the statute, that's the end of the story.