[00:00:06] Speaker 00:
18-21-19 OBX Tech versus United States.

[00:01:05] Speaker 00:
We're ready whenever you are.

[00:01:25] Speaker 04:
Good morning, Your Honor.

[00:01:27] Speaker 04:
Michelle Liddekin for Appellant OB-X Tech.

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May it please the Court?

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This case turns on one question.

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Did GSA engage in discussions when it allowed multiple offerors to revise their individual subcontracting plans?

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We submit the answer is yes, regardless of whether the individual subcontracting plan was characterized as a responsibility factor.

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The individual subcontracting plan was required to be acceptable for an offeror to be eligible for award.

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Here, after receiving proposals and concurrent with the evaluation, before identifying potentially successful offerors, GSA notified multiple offerors that their subcontracting plans contained significant weaknesses and deficiencies.

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Well, this was the step two in the analysis, right?

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The responsibility determinations came after

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They had evaluated and verified the top 65 highest technically rated offers, right?

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And then they took that pool and they applied the responsibility determination.

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Am I wrong about that?

[00:02:32] Speaker 04:
Your honor a small correction there were 71 Offers that were set aside, but it wasn't part of the initial determination it came after they had identified the top 71 or 61 Yes, but they had not yet determined the offers final scores this was a rather unusual procurement instead of submitting a narrative proposal with explanation of how you would perform the contract and

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It was a self-scored proposal with a maximum of 83,100 points.

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The top 71 were set aside based on their self-scored proposal.

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Concurrent with this process of reviewing the subcontracting plans, which were the only substantive proportion of the offeror's proposal, the agency was reviewing the backup documentation provided for the various categories where offerors could claim points, and that's how you get from 71 down to 61, as the points were verified.

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Ms.

[00:03:31] Speaker 02:
Lillian, as I understand it, your contention is,

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Number one, we don't fall with the subcontracting plan being a responsibility determination issue.

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And you would recognize that when you're talking responsibility, there can be some, I'm not going to use the word discussions, there can be some conversations, if you will.

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How do you say the conversations went too far and merged into what you contend were improper discussions?

[00:04:04] Speaker 04:
Yes, Your Honor, that's correct.

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And GSA also does not dispute that it engaged in communications with offerors about exchanges, communications.

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Our position is that there is no exception for communications about responsibility factors in the FAR.

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That has been something that has been created by the Court of Federal Claims, the GAO.

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The rule that this court and the Court of Federal Claims and the J.O.

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have also articulated is that discussions occur when an offeror is given the opportunity to revise his proposal.

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Here, the individual subcontracting plan was not something like a DCMA approved cost accounting system.

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It was a detailed narrative document where an offeror was required to explain and justify and support its approach to how it was going to carry out subcontracting and performance.

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We think the court should avoid the confusion that can occur when you have different rules based on whether something is a responsibility factor or a technical factor or some other factor.

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There is a bright line rule that's very easy to follow.

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If you allow an offer to revise its proposal or element of its proposal as was done here, you're engaging in discussions.

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You're saying, give me an example, if you will, of what a particular allowance that was made here that you say was improper.

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Here, multiple offerors were told that they were parroting the GSA sample plan and they needed to go back and provide their own explanations for why they were choosing different numbers.

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One offeror was accused of simply copying and pasting from a sample plan.

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It's not the kind of clarifications and exchanges were also covered in the FAR, allowing the agency to communicate with offerors about minor clerical errors if a number is missing.

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You're saying this went on beyond what you would say were acceptable clarifications.

[00:06:04] Speaker 02:
Yes, Your Honor.

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And let me ask you, what exactly, what relief are you asking for here?

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I mean, we're always at a little bit of a disadvantage when the cases get to us here at the Federal Circuit from the Court of Federal Claims.

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We don't know precisely where the procurement stands, and maybe the government will tell us about that.

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But what relief do you want, specifically, do you want them to disqualify these people, or do you want to be added on as a

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qualified awardee.

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What are you asking for?

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Ultimately.

[00:06:39] Speaker 04:
Either scenario would be appropriate here, Your Honor, because in discussions, these at least four awardees were given the opportunity to correct their otherwise defective proposals and be selected for award.

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If the agency had not engaged in those unequal discussions, OBX would have been within the top 61 offerors with its existing score, because those four offerors would not be within the top 61.

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Are you saying there should have been discussions with OBX about its problems, which were not under the subcontracting plan?

[00:07:08] Speaker 04:
Yes, Your Honor.

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Once an agency begins discussions with an offeror, it's required to conduct discussions with all offerors.

[00:07:13] Speaker 02:
But what does that want?

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You would say that we should send the case back to the Court of Federal Claims with directions to that court to in turn have the agency conduct clarification communications with your client?

[00:07:29] Speaker 04:
Well, there's two options here, Your Honor.

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The first would be to say any offeror who was given this unfair opportunity should be excluded, and then OVX Tech is in the top 61.

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Nobody says you can't have discussions.

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The requirement is, is it not, that you have discussions with one, you have to have discussions with others, right?

[00:07:48] Speaker 04:
Right, Your Honor.

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So the other option would be to engage in discussions with all of the offerors, which will be ex-tech, the opportunity to correct the significant weaknesses and deficiencies that were identified in this proposal.

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The discussions here are centered on the subcontracting portion of the proposal, right?

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So would the remedy be that they have to have discussions with all people about the subcontracting proposal?

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Why does discussions on one aspect and then equalizing it and having discussions with everybody else open up the universe?

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Because under the FAR, discussions once they're opened are not limited to a single issue.

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In another procurement, you wouldn't have discussions with an offeror about its staffing plan, but not have to discuss with another offeror if it had a significant weakness.

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weakness with its key personnel.

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The standard is once you open discussions, you need to have communications, discussions with all offerors.

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And what does that mean in this context?

[00:08:46] Speaker 01:
I mean, did you... It means a lot of conversation.

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But did, I mean, is it clear, have you identified what if the government had pointed, government had a specific problem with your proposal and what would have happened if the government had come back and told you about that problem?

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Is that what you're alleging here happened with your client?

[00:09:05] Speaker 04:
Yes, Your Honor.

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OBX Tech lost points in several areas, but the issue here is the product service code and leading-edge technology experience factors.

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OBX Tech lost a combined 1,600 points there.

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The issue was a missing FPDS report and not including a CPAR.

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Those are kinds of issues that could have very easily been corrected.

[00:09:27] Speaker 01:
But that's why issues like that

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which fall within things that are scored for purposes of identifying the top offerors are treated as the kinds of things that are part of the discussion over or communications about the technical evaluation, because that's part of the technical evaluation.

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It goes to the points.

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There's no question it is.

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You want a bright line rule, there is a bright line rule that is consistently applied by the Court of Federal Claims and the Board of Contract Appeals

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And that is in cases like this where it goes only to the responsibility determination and is not part of the scored value.

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Subcontractors did not affect any person's score in this case.

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That's part of the responsibility determination and that is a place where you can

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have follow-up conversation to make sure they're accurate.

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So there is a bright line rule.

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You say you want a bright line rule, you know you want a different bright line rule.

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And your bright line rule would create so much more work if they have to open up the discussion with every individual contractor on every component of their technical evaluation when the issues they have with these other people have nothing to do with their technical evaluation.

[00:10:34] Speaker 01:
So I have a problem with what you're requesting.

[00:10:37] Speaker 01:
It seems like it's created administrative nightmare for commerce.

[00:10:39] Speaker 04:
I understand your concern, Your Honor, but there is existing case law that an agency is only required to discuss significant weaknesses and deficiencies with offerors.

[00:10:49] Speaker 04:
There's dozens of protests where an offeror has argued that it did not get meaningful discussions because it was not alerted to a rather minor weakness in its proposal, and those protests are denied because there is this rule that you are only required to engage in discussions with offerors, but –

[00:11:07] Speaker 00:
the, you know, CFC, GAO, and articulated by Judge Moore, that if it deals with concluding what the best value is in that portion of the analysis and the points, that's separate from a responsibility determination which doesn't go there.

[00:11:25] Speaker 00:
Why isn't that an appropriate rule here?

[00:11:28] Speaker 04:
Because that's not a clear line, best value.

[00:11:31] Speaker 04:
The government is including this subcontracting plan requirement in the proposal.

[00:11:34] Speaker 00:
Well, clear, I mean, we're all striving for as clear lines as are appropriate.

[00:11:38] Speaker 00:
But yeah, I mean, even better yet, you could just say that if government has discussions with one person about one offer, about anything, it has to open up and have discussions with corrections on anything.

[00:11:51] Speaker 04:
So I understand the concern, but we're not asking for this to apply to every single circumstance.

[00:12:07] Speaker 00:
Well, if not, then I'm just going to the point that you said one of your policy reasons for saying we need another line is because the line that others have settled on is not clear.

[00:12:18] Speaker 00:
And I'm just not sure.

[00:12:19] Speaker 00:
Now you're mudding up your line too, right?

[00:12:22] Speaker 04:
Your Honor, it's not clear and it's not supported by the FAR.

[00:12:25] Speaker 04:
The FAR does not provide a clear, a carve-out for communications that deal with responsibility factors.

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If that was the intent of the FAR Council, that would be what was put in there.

[00:12:34] Speaker 04:
Instead, the FAR specifically allows for clarifications to correct minor clerical errors, and it has parts 15.306E and E which do not allow material revisions to be conducted through clarifications.

[00:12:50] Speaker 04:
If possible, I would like to reserve my time.

[00:12:52] Speaker 04:
Thank you, Your Honor.

[00:13:08] Speaker 03:
Someone appeared to left a note for me, Your Honors.

[00:13:14] Speaker 03:
Good morning, Your Honors.

[00:13:15] Speaker 03:
May it please the Court?

[00:13:17] Speaker 03:
Your Honor, OBX Tech's argument over time has become a little more nuanced, a little more focused, especially today here before this Court.

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We do believe that it still suffers from the three problems that we mentioned in our brief.

[00:13:30] Speaker 03:
That's blue and gold waiver, that is inconsistent with the statutes and regulations, and an issue of prejudice.

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But since Your Honors were talking about the bright line, perhaps we could start.

[00:13:39] Speaker 01:
Well, what about her last argument that there just doesn't exist in the far?

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any carve out that allows for commerce to permit material revisions to contracts just because it's within the responsibilities section.

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The small business act.

[00:13:57] Speaker 01:
Is that correct?

[00:13:57] Speaker 01:
Does the FAR allow for such a FAR about?

[00:14:00] Speaker 03:
Yes, because discussions are about, as Your Honor was talking about, the technical aspect of a proposal.

[00:14:06] Speaker 00:
And as we point out... Well, the FAR language.

[00:14:08] Speaker 00:
Can we look at the FAR language?

[00:14:09] Speaker 00:
Oh, yes, of course.

[00:14:09] Speaker 00:
Is that 306 paragraph D?

[00:14:12] Speaker 00:
306D.

[00:14:13] Speaker 00:
Mm-hmm.

[00:14:13] Speaker 00:
Okay.

[00:14:14] Speaker 00:
What prescription did you point to?

[00:14:15] Speaker 00:
15306D.

[00:14:16] Speaker 03:
15306D, Your Honor.

[00:14:19] Speaker 00:
So this is a cropped quote, so tell me if I'm missing anything.

[00:14:23] Speaker 00:
But they define negotiations as exchanges between the government and offerors that are undertaken with the intent of allowing the offeror to revise its proposal.

[00:14:34] Speaker 00:
Now, does that necessarily exclude subcontracting stuff that we're talking about here?

[00:14:40] Speaker 03:
Well, Your Honor, we're looking specifically at D2 of 15306, which says the primary objective of discussions is to maximize the government's ability to obtain best value based on the requirement and evaluations factor set forth in the solicitation.

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When we're talking about best value, Your Honor, and the requirements of a solicitation, we're talking about the meat and potatoes of what's being purchased here.

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Here in this instance, we're talking about leading edge technology and other information technology services.

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So the question becomes,

[00:15:13] Speaker 03:
What is the best value in this procurement?

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What are our discussions going to try to maximize for the government?

[00:15:21] Speaker 03:
The best value?

[00:15:22] Speaker 03:
The best value in this particular procurement is defined by the RFP itself, the solicitation.

[00:15:29] Speaker 00:
But let me ask you, responsibility is defined, and this is out of a case, by an offeror's apparent ability and capacity to perform all contract requirements.

[00:15:41] Speaker 00:
Well, just speaking as a lay person, how does their ability or inability to perform all contracts requirement not sort of breathe into the notion of what is the base value based on the requirement and evaluation factor?

[00:15:59] Speaker 03:
Well, if I could answer generally and then specifically, Your Honor, for this case, generally, other responsibility factors might give some more information on this, like whether or not the company has the financial resources to do a contract.

[00:16:13] Speaker 03:
That is a general...

[00:16:15] Speaker 03:
performance capability question, whether this company is going to survive doing this business.

[00:16:21] Speaker 03:
Not a specific question that whether or not this company has the knowledge or experience to do cloud computing, for instance.

[00:16:31] Speaker 03:
That is a technical question.

[00:16:33] Speaker 01:
Whether they can do the job at all seems to me to go to best value.

[00:16:36] Speaker 01:
I'm not sure how it's not, right?

[00:16:39] Speaker 01:
I mean, it can't be your best value to choose someone who's actually incapable of doing the job.

[00:16:44] Speaker 03:
Well, no, but that's why it's a go or no go question in responsibility.

[00:16:51] Speaker 03:
If you can actually have a conversation with the government to try to explain, let me tell you why my cloud computing will meet your needs, GSA.

[00:16:59] Speaker 03:
That's something that can be negotiated.

[00:17:01] Speaker 03:
That's something that is subject to discussions.

[00:17:03] Speaker 03:
You can sit down and explain with the government's evaluators

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through letters or what have you as to why your particular solution is the best value for the price that you're offering.

[00:17:16] Speaker 03:
Whether or not you have, for instance, financial resources to do a job, or in this case, whether or not you intend to use subcontractors per Congress's policy to use subcontracting, is an overall go or no-go question.

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Whether or not you should be doing any government contract whatsoever.

[00:17:34] Speaker 00:
And so how does that differentiation that you're positing for us

[00:17:40] Speaker 00:
justify why there would be the discussion requirement in the first basket, but not in the second basket.

[00:17:46] Speaker 00:
Sure.

[00:17:46] Speaker 03:
Well, I mean, putting the Small Business Act aside, because most of our argument revolves around the fact that this is something that Congress said must be done, these negotiations.

[00:17:55] Speaker 00:
What this contract specifically said- You're talking now about the subcontractors.

[00:17:59] Speaker 03:
Correct.

[00:18:01] Speaker ?:
Right.

[00:18:01] Speaker 03:
What this contract specifically said for best value purposes, who will be the offerors who receive contracts here?

[00:18:09] Speaker 03:
It says on page 1594 of the appendix, your honors.

[00:18:17] Speaker 03:
And about midway down that page, there is M2, basis for awards.

[00:18:24] Speaker 03:
Says, at the last sentence of the first paragraph underneath M2, for the master contract, the highest technically rated offers with a fair and reasonable price will be determined the best value basis for master contract.

[00:18:39] Speaker 02:
This is on 1594?

[00:18:41] Speaker 03:
Correct, Your Honor.

[00:18:42] Speaker 03:
If I can point you in the right direction again, do you see the M2 basis for award?

[00:18:46] Speaker 03:
Right.

[00:18:47] Speaker 03:
It is the last sentence in that first paragraph underneath there, part of it's underlined.

[00:18:52] Speaker 03:
So what that is saying is that the best value in this procurement, who is going to get awards, are the companies with the highest technically rated offers and a fair price.

[00:19:03] Speaker 02:
Would this come into the heading of a negotiated procurement?

[00:19:07] Speaker 03:
I guess, Your Honor.

[00:19:08] Speaker 00:
Yes.

[00:19:09] Speaker 00:
OK, so?

[00:19:11] Speaker 03:
And to go off that, Your Honors,

[00:19:15] Speaker 03:
The best value here was to be determined by the ranking scores.

[00:19:19] Speaker 03:
If we talked about earlier with my colleague, the ratings were based entirely upon the technical aspects of this proposal.

[00:19:28] Speaker 03:
OBX text concedes that the small business subcontracting plans was not rated, not given a score.

[00:19:36] Speaker 03:
It does not fall within the rubric of what a best value is for this procurement.

[00:19:40] Speaker 03:
So certainly, definitely not for this procurement is the small business subcontracting plans part of the best value.

[00:19:47] Speaker 03:
They are not subject to discussions.

[00:19:50] Speaker 00:
Well, tell me what the rationale would be between differentiating that and the stuff that's against it.

[00:19:55] Speaker 03:
So big picture, Your Honor, right?

[00:19:56] Speaker 03:
Right.

[00:19:57] Speaker 03:
Big picture.

[00:19:58] Speaker 03:
Congress has decided in the Small Business Act that it is the policy of the United States to have subcontractors and small business acting as, let me restart that.

[00:20:09] Speaker 03:
Congress has decided that small businesses and the different variations of them should be subcontractors in procurements.

[00:20:17] Speaker 03:
It's developed a policy that that is the policy of the United States.

[00:20:20] Speaker 03:
The intent of the Small Business Act is to get these small business subcontractors involved in large procurements such as Alliant 2.

[00:20:30] Speaker 03:
The Small Business Act instructs that for negotiated procurements and other non-negotiated procurements, so procurements that are not even a subject to the concept of discussions whatsoever.

[00:20:41] Speaker 03:
that small business subnautical plans should be involved, and there should be heavy negotiation between the agency and the contractor to make sure that these plans are maximizing the potential for these small business subcontractors to be involved in government procurements.

[00:21:02] Speaker 03:
What OBX Tech is asking for is to throw this out the window and have subcontracting plans become part of every single evaluation criteria that is ranked and compared against one another by sort of maximizing.

[00:21:17] Speaker 00:
I understand what you're saying.

[00:21:21] Speaker 00:
I'm hearing you, but you're not really responding to my question, so let me restate it, which is fine.

[00:21:27] Speaker 00:
We put this under the bucket of certain things, but why the notion that

[00:21:34] Speaker 00:
prompts far to say if you have discussions with one, you have discussions with all.

[00:21:38] Speaker 00:
I guess it's a fundamental fairness thing why the subcontracting thing would be exempt from that or something different from that.

[00:21:47] Speaker 00:
The fact that Congress is trying to get more small subcontractors doesn't really

[00:21:53] Speaker 00:
Answer it for me.

[00:21:54] Speaker 03:
Because it's a collateral requirement, Your Honor.

[00:21:57] Speaker 03:
It's not about the actual services or technology or services or products that the agency is purchasing.

[00:22:04] Speaker 00:
And is that true of all responsibility determinations?

[00:22:08] Speaker 03:
Well, we have that outlier case that both parties discussed in the briefing, the Computer Science Corporation case at GAO, where the agency determined that it would consider small business subcontracting as an evaluation criteria

[00:22:21] Speaker 03:
assigned scores to the plans, and then compared them against one another of the different offers.

[00:22:27] Speaker 03:
At that point, that agency made a determination that its best value included how much small business subcontracting an offer needed.

[00:22:35] Speaker 00:
So the government agrees that in those circumstances, that would be subject to the FAR requirement.

[00:22:39] Speaker 03:
Yes.

[00:22:40] Speaker 03:
The Computer Science Corporation case that we both discussed in our briefs, Your Honor, we think is consistent with our position.

[00:22:45] Speaker 03:
Yes, absolutely.

[00:22:46] Speaker 03:
At that point, the agency determined that its best value included small business subcontracting plans.

[00:22:54] Speaker 02:
Is it your position, Mr. Garaldi, that there could be any and all discussions about the subcontracting issue here, big, small, in between?

[00:23:05] Speaker 03:
Yes, yes your honor.

[00:23:06] Speaker 03:
I mean that's what the Small Business Act instructs.

[00:23:10] Speaker 03:
What the Small Business Act is looking for is

[00:23:15] Speaker 03:
maximizing the potential for these small businesses to be involved.

[00:23:20] Speaker 02:
Now, please.

[00:23:21] Speaker 03:
Yeah, I was going to use the example that we just discussed earlier, Your Honor, if you wouldn't mind, that there was a parroting back of a plan, a base plan for some of these offers.

[00:23:32] Speaker 03:
Well, there was an example small business plan included in the solicitation.

[00:23:37] Speaker 03:
And sure enough, some offers didn't provide enough information.

[00:23:40] Speaker 02:
That's what Ms.

[00:23:41] Speaker 03:
Lillian was talking about.

[00:23:42] Speaker 03:
Correct.

[00:23:43] Speaker 03:
Correct.

[00:23:44] Speaker 03:
The FAR and the SBA envision negotiation with the offerors to make sure that these plans are maximizing the potential, make sure that the numbers within them are attainable and they're not based on nothing.

[00:24:02] Speaker 03:
I think this sort of dovetails directly into what we were talking about in our blue and gold argument, Your Honor, that the solicitation here specifically noted that the small business subcontracting plans would be part of this responsible determination, and that the plans would be reviewed to determine if they have concrete numbers in them.

[00:24:22] Speaker 02:
This envisioning... I had a couple more questions.

[00:24:24] Speaker 02:
I think Judge Moore had a question.

[00:24:26] Speaker 01:
Oh, yeah, please.

[00:24:28] Speaker 01:
I hope you agree that the FAR says really the only difference between what it calls negotiations and discussions is that negotiations are negotiations if they take place before the establishment of the competitive range and they're called discussions if they take place after, correct?

[00:24:43] Speaker 03:
Correct, Your Honor, yes.

[00:24:44] Speaker 01:
So otherwise negotiations and discussions are really the same communications.

[00:24:48] Speaker 01:
There isn't, it's just timing.

[00:24:50] Speaker 01:
It's the difference.

[00:24:50] Speaker 03:
Part of it is timing.

[00:24:52] Speaker 03:
Discussions do have that specific definition that we're talking about.

[00:24:55] Speaker 03:
What's the purpose of discussions as well?

[00:24:58] Speaker 01:
Not purpose, because it says primary objective in the FAR.

[00:25:02] Speaker 01:
So it doesn't say what the purpose is.

[00:25:03] Speaker 01:
It says primary objective.

[00:25:05] Speaker 01:
Can there be secondary objectives?

[00:25:06] Speaker 01:
Can there be alternative objectives?

[00:25:10] Speaker 03:
Well, that certainly implies that there is alternative objectives for discussions.

[00:25:13] Speaker 01:
Sure does, doesn't it?

[00:25:13] Speaker 01:
So then the other problem I have with the FAR, I mean, I'm just trying to wrap my head around whether or not you have the ability

[00:25:20] Speaker 01:
I don't mean you personally, I mean the government, the ability to carve out these responsibility determinations.

[00:25:28] Speaker 01:
And so the other thing that's bothering me about the same section, which is the one that delineates that the only difference between negotiations and discussions are the timing, but it defines negotiations.

[00:25:39] Speaker 01:
Negotiations are exchanges in either a competitive or a sole source environment between the government and offerors

[00:25:46] Speaker 01:
that are undertaken with the intent of allowing the offeror to revise its proposal.

[00:25:51] Speaker 01:
That is exactly what we have here.

[00:25:53] Speaker 01:
Exactly.

[00:25:54] Speaker 01:
I don't see how it falls outside of that definition.

[00:25:58] Speaker 03:
Your Honor, I think the problem that I have with this argument is that we're not carving anything out.

[00:26:03] Speaker 03:
The Small Business Act trumps the FAR.

[00:26:05] Speaker 03:
It's bigger.

[00:26:05] Speaker 03:
It's a statute.

[00:26:06] Speaker 03:
It applies not only to negotiated procurements.

[00:26:09] Speaker 03:
Remember, part 15 of the FAR here only applies to negotiated procurements.

[00:26:13] Speaker 03:
The SBA, the Small Business Act, applies to all procurements.

[00:26:17] Speaker 03:
It is a collateral requirement imposed by Congress on agencies to get small businesses involved in contracting.

[00:26:27] Speaker 01:
This right here, this entire section... Wait, the Small Business Act just says that you should communicate with them over ourselves.

[00:26:34] Speaker 01:
How does that impact whether that means you have to communicate with everybody over everything?

[00:26:40] Speaker 01:
The FAR doesn't preclude you from talking or from doing what the Small Business Act says you ought to do.

[00:26:46] Speaker 01:
The FAR doesn't conflict with that.

[00:26:48] Speaker 01:
The FAR just could be read as saying, but if you do that, you are now in the land of discussions.

[00:26:55] Speaker 03:
Okay, so for your honor, what about the examples of sealed bids then?

[00:26:58] Speaker 03:
And sealed bids, there are no discussions because 15 doesn't apply to them, correct, your honor?

[00:27:03] Speaker 03:
Okay, so sealed bid, basically this scenario, your honor, you receive all the bids, you open them, whoever is technically acceptable and the lowest price gets the offer.

[00:27:15] Speaker 03:
That's it.

[00:27:15] Speaker 03:
There's no negotiations.

[00:27:17] Speaker 03:
If a small business subcontracting plan is considered to be part of whether or not an offer is actually responsive to the solicitation, which is what OBX text is asking this court to do, then those offers that don't have a perfect small business subcontracting plans would have to be rejected because there's no way to communicate with them and seal bids.

[00:27:39] Speaker 03:
That's why we know that the Small Business Act is bigger.

[00:27:42] Speaker 03:
It applies all throughout procurement.

[00:27:44] Speaker 01:
I don't understand why a discussion would be needed.

[00:27:46] Speaker 01:
In that scenario, you just go with the best offeror that also meets the subcontracting plan.

[00:27:51] Speaker 03:
But why does the Small Business Act then require negotiation of plans?

[00:27:55] Speaker 03:
It doesn't meet that, Your Honor.

[00:27:57] Speaker 03:
The FAR part 19, which applies to both sealed bids and negotiated permits, requires negotiation of these plans, Your Honor.

[00:28:07] Speaker 00:
This whole discussion this morning, it strikes me that the government's position then is not that all responsibility determinations are exempt from this FAR discussion requirement, but you're only justifying taking out this one bucket of subcontracting as being justified to exclude from the discussion requirement.

[00:28:27] Speaker 03:
Well, no, we haven't gone into the, Your Honor, there's been no research or any looking into the other responsibility factors and what is considered where they fall and what they do.

[00:28:40] Speaker 03:
What we're talking about here, where I draw the line with the bucket I'm talking about, is the Computer Science Corporation case.

[00:28:47] Speaker 03:
If you take it that far, if you take a small business subcontracting plan and you grade it and you compare it and you say offer A is my awardee over offer B because offer A has a better subcontracting plan.

[00:28:59] Speaker 00:
So all this discussion about the subcontracting stuff has been only in that unique circumstance where subcontractors included as part of the initial best value evaluation?

[00:29:10] Speaker 03:
I'm not sure I understand your question.

[00:29:13] Speaker 00:
I thought we were talking in general, not just about that one unique circumstance where subcontracting is part of the best value of initial determination, but we're talking about responsibility determinations versus the other stuff that comes before.

[00:29:28] Speaker 00:
Correct.

[00:29:28] Speaker 00:
And there are other things besides subcontracting

[00:29:32] Speaker 00:
that come within this responsibility determination.

[00:29:35] Speaker 00:
So you put so much weight on the fact that the SBA stuff is unique and different, which kind of makes it fall apart.

[00:29:43] Speaker 00:
What I thought the government's position was is differentiating this value from responsibility.

[00:29:48] Speaker 03:
Absolutely, Your Honor, yes.

[00:29:49] Speaker 03:
There is the more general concept that a responsibility issue is looking at whether or not that the particular offer itself could perform a contract.

[00:29:59] Speaker 03:
It's a go-no-go look.

[00:30:00] Speaker 00:
So all the stuff you said about the SBA is actually really not appropriate in terms of what you're asking us to decide, which is responsibility as determinations are out.

[00:30:13] Speaker 03:
well your honor it the sb a small business act shows why small business subcontract plants are a matter of responsibility.

[00:30:20] Speaker 00:
So the question what we do with this case is whether we can easily decide it in the government's favor without making any pronouncements about responsibility determinations versus best value and just have an opinion that talks about what you've talked about.

[00:30:35] Speaker 00:
Oh you absolutely could.

[00:30:37] Speaker 02:
Well it seems to me that the key point for you here is you would say we would have a different case

[00:30:43] Speaker 02:
if the small business subcontracting issue was a scored matter.

[00:30:49] Speaker 02:
Correct, Your Honor, yes.

[00:30:50] Speaker 02:
And that would result in a favorable decision perhaps for Ms.

[00:30:55] Speaker 02:
Liddigan.

[00:30:56] Speaker 02:
You're saying that's the key point here.

[00:30:58] Speaker 02:
This was not something that was being scored.

[00:31:00] Speaker 03:
And I won't get into our blue and gold argument, but that's why we raised it, Your Honor, because the solicitation was very clear that this case fell into the standard bucket of we're looking at small business subcontracting plans as a matter of responsibility.

[00:31:12] Speaker 03:
Because it's a scoring issue.

[00:31:13] Speaker 03:
Because it's not scored.

[00:31:14] Speaker 03:
If the solicitation had said, hey, score this, and we didn't do it, we would have a problem, Your Honor.

[00:31:19] Speaker 01:
The problem I have with that idea, and I'm not sure where I am on it, but the problem that jumps out at me is this was a pass fail criteria.

[00:31:27] Speaker 01:
You know, when my son takes a class pass fail, even though he's not getting a score, I still would like to see him pass.

[00:31:33] Speaker 01:
So it is still one of the criteria you're using to come up with your best 50 or 61 or whatever, because if you fail on that front, you're not included in the 60.

[00:31:44] Speaker 03:
Well, that's not how the solicitation defines what best value is.

[00:31:47] Speaker 03:
The definition of best value, again, Your Honors, says that it's the highest technically rated offers with a fair and reasonable price.

[00:31:55] Speaker 03:
The responsibility question comes separate from that.

[00:31:59] Speaker 03:
Okay, you have your best value, you've selected them.

[00:32:01] Speaker 03:
Can we even give these guys a contract for another example?

[00:32:05] Speaker 03:
Are they suspended or debarred from doing government contracts?

[00:32:08] Speaker 03:
That's a go-no-go question.

[00:32:10] Speaker 03:
Of course you want the answer to be yes, Your Honor, but there are other reasons why you need to look at something like that, like whether or not you're suspended.

[00:32:21] Speaker 02:
Are you finished?

[00:32:24] Speaker 02:
Two questions.

[00:32:24] Speaker 02:
One, sort of housekeeping.

[00:32:27] Speaker 02:
What's the deal now with this procurement?

[00:32:29] Speaker 02:
Is it ongoing?

[00:32:30] Speaker 02:
Yes.

[00:32:31] Speaker 02:
These people being awarded contracts?

[00:32:33] Speaker 03:
Since July 1st, 2018.

[00:32:35] Speaker 03:
We're approaching a billion dollars task orders have been awarded, Your Honor, so we're very far into it.

[00:32:40] Speaker 02:
So the contracts underway.

[00:32:42] Speaker 02:
The second point question I had is, assuming for the moment the court were to disagree with you, what would be the relief

[00:32:50] Speaker 02:
to which the protester would be entitled, in your view.

[00:32:55] Speaker 02:
I suggested that the most one could do would be to send it back to the Court of Federal Claims to go back to the agency and have a, quote, discussion, close quote, with the protester about the two problems in its submittal.

[00:33:14] Speaker 02:
Is that correct?

[00:33:15] Speaker 03:
maybe even more narrow than that, Your Honor.

[00:33:18] Speaker 03:
Putting aside that we think we're correct on the merits, Your Honor.

[00:33:23] Speaker 03:
No, Your Honor, first off, OBX Tech's small business subcontracting plan might suffer from the same problems as some of these other offers.

[00:33:32] Speaker 03:
It wasn't checked.

[00:33:32] Speaker 02:
No, I'm not talking about that.

[00:33:33] Speaker 02:
I'm talking about the problems that she's just saying, Ms.

[00:33:35] Speaker 02:
Littigan is just saying, we want to have discussions about the two things that led to us

[00:33:42] Speaker 02:
Losing points right from our site.

[00:33:45] Speaker 03:
Mm-hmm.

[00:33:45] Speaker 03:
Well as we pointed out in our brief We do not believe that those two items themselves are significant weaknesses or discussions or deficiencies so therefore the agency would not even need to engage in discussions on those particular two items which would leave obx tech below the numbers and

[00:34:03] Speaker 02:
You're saying even if there are discussions on those points, they'd still be outlawed.

[00:34:06] Speaker 03:
And that's what we detail in our prejudice argument in our brief.

[00:34:09] Speaker 03:
So even if we send this back, it's all going to be a Pyrrhic victory, frankly, Your Honor.

[00:34:14] Speaker 03:
Also, there is the concept of limited discussions.

[00:34:19] Speaker 03:
The agency would have to make a decision as to where we would want to do discussions.

[00:34:22] Speaker 03:
Just because the agency does discussions in one area of the proposal does not necessarily mean it needs to do it in another.

[00:34:29] Speaker 03:
So it could limit it to solely the subjecting plan, as Your Honor previously noted.

[00:34:33] Speaker 03:
Thank you for your time, Your Honors.

[00:34:42] Speaker 04:
I would like to begin with the issue that took up a lot of my opposing counsel's time, namely the Small Business Act.

[00:34:49] Speaker 04:
OBX Tech is a former small business.

[00:34:51] Speaker 04:
We fully support contracting to small businesses.

[00:34:54] Speaker 04:
And the Small Business Act and the corresponding FAR 19.7

[00:34:58] Speaker 04:
contemplate these negotiations about subcontracting plans occurring after the identification of the apparent successful offerors.

[00:35:05] Speaker 04:
They can even occur after someone is already selected for award.

[00:35:09] Speaker 04:
So the idea that requiring discussions on all issues if an agency needs to discuss the individual subcontracting plan would

[00:35:19] Speaker 04:
It doesn't pass muster.

[00:35:20] Speaker 04:
It would not create this parade of horribles because the law currently allows agencies to negotiate those plans.

[00:35:27] Speaker 04:
The problem is here the timing.

[00:35:29] Speaker 04:
GSA could have waited until it had its 61 or 60 apparent successful offers and then allowed them all to correct their unacceptable, their failure subcontracting plans.

[00:35:40] Speaker 04:
Instead, GSA did that concurrent with its evaluation, and that's what created the main problem for GSA here.

[00:35:47] Speaker 02:
Mr. Grimoli, I think this is what he said.

[00:35:50] Speaker 02:
He said, look, the key here is that we don't have to go global on this.

[00:35:55] Speaker 02:
We can just look at this particular situation.

[00:35:58] Speaker 02:
And he's saying the key point here is that the subcontracting plan was not one of the scored issues.

[00:36:05] Speaker 02:
And he said, I think, quite frankly, that you would win if it had been.

[00:36:11] Speaker 02:
because you would have been entitled to the discussions.

[00:36:14] Speaker 02:
But here, it was not.

[00:36:17] Speaker 02:
What is your answer to that?

[00:36:18] Speaker 02:
This was not one of the scored issues.

[00:36:21] Speaker 02:
It was something separate and apart from that.

[00:36:24] Speaker 04:
Yes, Your Honor, that takes us back to the main argument we make here is that this distinction between scored and not scored responsibility and technical is a distinction without a difference.

[00:36:34] Speaker 04:
The issue is whether an agency allows an offeror to revise its proposal and gain eligibility for award, and that's what the agency did here.

[00:36:42] Speaker 04:
The ability to just characterize something as a responsibility factor in one procurement and not in another creates these arbitrary and inconsistent outcomes.

[00:36:51] Speaker 04:
These – these offers were ineligible for award.

[00:36:54] Speaker 04:
They submitted failure homework assignments.

[00:36:56] Speaker 04:
They were not acceptable.

[00:36:58] Speaker 04:
And GSA gave them the opportunity to correct those problems.

[00:37:02] Speaker 04:
And on the issue of prejudice, the Court of Federal Claims in Square One Armoring has held that you look at the cumulative impact of significant weaknesses and deficiencies.

[00:37:13] Speaker 02:
And it's very – what's this case?

[00:37:14] Speaker 02:
What's the site?

[00:37:15] Speaker 04:
Square One Armoring, 123, Fed Claim 309 from 2015.

[00:37:21] Speaker 04:
And here it was the combination of the deductions of the PSC and the product service code and the leading edge technology experience that kicked OBX Tech out of the top 61.

[00:37:32] Speaker 04:
It had an acceptable subcontracting plan.

[00:37:34] Speaker 04:
So we submit.

[00:37:35] Speaker 04:
that those deductions constitute significant weaknesses and deficiencies, and GSA would be required to engage in discussions.

[00:37:43] Speaker 04:
And finally, on this issue of the go, no-go meat and potatoes, this was not a check the box.

[00:37:49] Speaker 04:
Did you submit a subcontracting plan or didn't you?

[00:37:51] Speaker 04:
It was a detailed review looking at whether things were explained and justified and substantiated.

[00:37:57] Speaker 04:
And that's why we think it's – it goes to the best value if you're going to even rely on that distinction to begin with.

[00:38:03] Speaker 04:
And finally, I have 13 seconds so I can say we don't believe that blue and gold applies because there was no way for offerors to know the agency was going to engage in communications and allow offerors to revise their subcontracting plans to regain eligibility award.

[00:38:17] Speaker 00:
Thank you.