[00:00:00] Speaker 01:
6-2, Eskridge versus the United States.

[00:00:34] Speaker 03:
May I please the court?

[00:00:38] Speaker 05:
You make a lot of arguments about the 2016 solicitation.

[00:00:42] Speaker 05:
Correct.

[00:00:43] Speaker 05:
Is it in any way incorporated into the 2018 solicitation?

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I believe what we are incorporating, to any degree, is what we or what Eskridge was told in the debriefing.

[00:01:00] Speaker 03:
And in the debriefing, they were told that... Is there anything in the record that shows?

[00:01:05] Speaker 05:
If you say yes, I want a record site.

[00:01:08] Speaker 03:
The record site is to the debriefing.

[00:01:39] Speaker 05:
I always used to find tabs held.

[00:01:42] Speaker 03:
Yes, I know.

[00:01:45] Speaker 03:
The debriefing may actually not be in the record.

[00:01:51] Speaker 05:
Oh, there you go.

[00:01:53] Speaker 04:
The debriefing.

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This was the.

[00:01:57] Speaker 04:
Well, give us a site, please.

[00:02:01] Speaker 04:
The debriefing.

[00:02:02] Speaker 04:
Appendix page.

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It's 830.

[00:02:04] Speaker 04:
Appendix 830.

[00:02:06] Speaker 04:
OK.

[00:02:08] Speaker 03:
This is a debriefing, but this is not the specific debriefing that the contracting officer specifically told the- Well, well, well, well.

[00:02:26] Speaker 05:
If it's not in the record, it's not in the record.

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Unless you have another one in there.

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Not in the appendix, no.

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So it is not in the record.

[00:02:40] Speaker 02:
Mr. Turner, let me ask you, what is the present status of the contract that arose from the 2018 solicitation?

[00:02:50] Speaker 03:
It is my understanding that it is being formed at least in a possibly bridge contract form by the awardee.

[00:03:02] Speaker 02:
So the contract is being performed?

[00:03:05] Speaker 02:
Correct.

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Now what would you have us do, leaving aside whether the case supports a ruling in your favor?

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What are you looking for here at the end of the day?

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You want the Army to be required to terminate that contract and do what?

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Unfortunately, the time is extending into the contract period, which I believe goes until 2023.

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But it is my understanding that Eskridge would like to have that contract.

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But that would mean the Army would have to terminate the contract.

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Is it Ansible?

[00:03:51] Speaker 02:
Am I pronouncing it correctly?

[00:03:52] Speaker 02:
Ansible.

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Ansible.

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I believe.

[00:03:53] Speaker 02:
We have to terminate that contract, right?

[00:03:55] Speaker 03:
Correct.

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If it's on a blanket contract, which I'm not sure that it is, that process is a bit easier than if it is actually in an option year.

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Because when protests occur, they will award

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the prospective awardee or the incumbent.

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If an incumbent is performing, they will award a blanket, which is temporary, and they will stretch it out for certain periods of time.

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And waiting for the protest to conclude, I do not know if that is the case with Ansible.

[00:04:34] Speaker 02:
We can find out from the government.

[00:04:35] Speaker 02:
Well, let me ask you one other thing.

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I gather your main contention here, as I sense it is, that the four

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people who were in front of your client in the final cut, you're saying that their dollar figures didn't meet the requirements because they didn't take adequate, they didn't take into account price escalation that was required in the option years.

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Is that correct?

[00:05:05] Speaker 03:
Well, their wage rates, correct.

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Price escalation that was within

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line with the independent government cost estimate.

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Now, where is the requirement, in your view, that there had to be this price escalation to take into account option years in terms of the contract or any of the provisions of the FAR that were incorporated by reference into the contract?

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To what do you point and say, ah, there's the thing that says they had to take into account escalation in the option years?

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And let me throw in to that question.

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Doesn't this 2018 solicitation specify the minimum wage rate?

[00:05:54] Speaker 03:
There are two questions there.

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First, the 52222246.

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FAR 52222246, informed the contractors that a compensation realism would be done on their professional wage rates.

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And in that, it tells them that their rates need to be adequate for retention and recruitment.

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And then if you turn to appendix 172,

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and you look at volume number four price

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The government, while not explicitly stating that there would be a price escalation, it is telling the contractor in section D, given that 52.

[00:06:51] Speaker 01:
I'm sorry.

[00:06:51] Speaker 01:
Let me find.

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Are you at appendix 172?

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OK.

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D?

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And section D, FAR 52 to 187, basically, is that the government reserves the right to exercise option years.

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So it is telling the contractor that

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they will be evaluating the optioneers of the contract.

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When you're doing a compensation realism requirement, that is telling the contractor, at least in Eskridge's thinking, and based on the fact that they were told previously that their wage rates were too low in the optioneers, that they needed to escalate their rates.

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So you're basically saying a natural reading here, a reading of this provision would

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lead anyone to infer from the terms of this provision, and I guess 52-222-46, that there had to be some kind of escalation in the option years.

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And that's basically what you're saying.

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Escort's correct.

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We would agree with that.

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Now, one other question that I had, and this came up, I think Judge Wallach asked you at the start of your argument, there's been discussion in the briefing

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and in the Leto opinion about the 2016 solicitation.

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And we all know the history of that.

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What use are you saying we should make of the 2016 solicitation in our determination of this case?

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In other words, what role do you say the 2016 solicitation and everything that happened there

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plays or should play in connection with our determination of this case?

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Government contracting for small businesses is especially set-asides where you're, this is an SDVOSB set-aside, is a, it's a pretty fierce competition and Eskridge was specifically told

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that their wage rates for the option years were not in line with the IGE.

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In the 2016.

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In the 2016.

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We never saw.

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But you can't point to that.

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It's unfortunately correct.

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It is not in the.

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I understand in the appendix.

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Is it in the record?

[00:09:24] Speaker 03:
It is in the record in the briefing.

[00:09:28] Speaker 03:
I mean, it's in the briefing, but it's not in the record.

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It is in the AR, which is at Coffse.

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And it did not make it into the appendix.

[00:09:38] Speaker 01:
So it is in the record.

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It's in the administrative record at Coffse.

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It's not in the appendix before this court.

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And I'm entirely not sure why it is not in here.

[00:09:52] Speaker 01:
Well, why don't we hear from the government?

[00:09:54] Speaker 01:
I'm sorry.

[00:10:00] Speaker 01:
No, you've got time if you want to use it.

[00:10:02] Speaker 03:
Well, I just wanted to explain the wage rate disparity that you mentioned.

[00:10:09] Speaker 03:
I mean, this is purely theoretical on our part, but all service contracts with the government require a wage rate, specifically from the Department of Labor, or in this case, from the Department of Defense.

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And they release that.

[00:10:28] Speaker 03:
This is the 122 figure here, right?

[00:10:30] Speaker 03:
Yes, correct.

[00:10:31] Speaker 03:
It was 113, and then they bumped it up to

[00:10:36] Speaker 02:
Let me ask you though, getting back to this point you raise about the 2016 solicitation and your follow-up discussion with Judge Wallach.

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Assuming what you say is correct, you're basically saying this was a provision in the contract.

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The 2016 solicitation transaction, so to speak, framed this contract.

[00:11:02] Speaker 02:
Yet, you have to have provisions in the contract.

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And there's nothing in the contract that sort of gives you what you want, I think.

[00:11:11] Speaker 02:
You're talking about the background of the 2016 solicitation.

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And everything you say may be true.

[00:11:17] Speaker 02:
But I don't think it helps you, because what you're asking for doesn't seem to be in the contract.

[00:11:24] Speaker 03:
What we're asking for and what we expect.

[00:11:27] Speaker 02:
Well, escalation clause and the

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what you were just talking about.

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But then that also goes to the relationship between the contractors and contracting officers and being

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confident to rely on what you're told in a debriefing or... So you're saying you were told things in the 2016 solicitation debriefing, and it's your understanding that those things, and I'm not using that pejoratively, but those things would form a part of the 2018 solicitation.

[00:12:10] Speaker 02:
Is that what you're saying?

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Well, they wouldn't necessarily form a part of the solicitation per se.

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But it would form a part of how the contractor understands how the source selection authority was going to evaluate the contract or evaluate the solicitation.

[00:12:28] Speaker 01:
Maybe I misunderstood.

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I'm not here to help you out or make your case for you.

[00:12:32] Speaker 01:
But I thought in addition to just relying on what happened in 2016, you were also relying on this FAR provision that I think you cited this morning.

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which would govern this contract as well that deals with considering the impact on recruitment and retention.

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But as Judge Sall specifically said, it doesn't specifically say that there is an escalation clause in there.

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What we're saying is that clause

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is meant to tell the contractor that they need to take care of the back end of their contract when they're pricing it.

[00:13:16] Speaker 03:
OK.

[00:13:17] Speaker 03:
Well, I don't hear from the government.

[00:13:18] Speaker 03:
Thank you.

[00:13:30] Speaker 00:
Thank you.

[00:13:31] Speaker 00:
Good morning, Your Honors, and may it please the court.

[00:13:33] Speaker 00:
Just to start off with a point of clarification, Eskridge's previous debriefing is in the joint appendix at page 445.

[00:13:41] Speaker 01:
And you agree with your friend's characterization of that?

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Well, Your Honor, the debriefing from 2017 in response to the 2016 solicitation is simply wholly irrelevant to this case.

[00:14:03] Speaker 00:
In response to a protest filed by Eskridge at the GAO, the Army canceled the solicitation and changed several substantive provisions before it issued the 2018 solicitation, including changing the number of FTEs required by the contract, changing the procurement type from best value to lowest price technically acceptable.

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It removed the price realism requirement and instead added a minimum wage rate.

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And as the trial court found at appendix page 4, the minimum wage rate was added as intended to be a price realism regulator.

[00:14:40] Speaker 00:
So the current 2008.

[00:14:42] Speaker 01:
But that doesn't deal with the out years, right?

[00:14:44] Speaker 01:
I mean, weren't we talking about what increased in subsequent years, not just the starting rate?

[00:14:50] Speaker 00:
Well, that is correct, Your Honor.

[00:14:52] Speaker 00:
The price realism would have evaluated whether the prices were too low, which is what Eskridge was found.

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Their prices were found to be too low in the 2016 solicitation.

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So the Army, in response to the protests, removed the price realism requirement and instead added the minimum wage rate.

[00:15:11] Speaker 01:
But the minimum wage rate doesn't go to anything beyond the starting salary.

[00:15:17] Speaker 00:
That is correct, Your Honor.

[00:15:17] Speaker 00:
The minimum wage rate does not specifically address the option years.

[00:15:22] Speaker 01:
I just have some preliminary questions.

[00:15:25] Speaker 01:
I haven't been on that many of these contract cases.

[00:15:28] Speaker 01:
And so it's just my own edification.

[00:15:32] Speaker 01:
only about standing.

[00:15:33] Speaker 01:
It's jurisdictional, it's only about standing, right?

[00:15:36] Speaker 00:
That's correct, Your Honor.

[00:15:37] Speaker 01:
I'm a little confused between what we look for then with what is necessary to establish standing.

[00:15:46] Speaker 01:
The Court of Federal Claims, I think, correctly says, according to the government,

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Because four other technically acceptable proposals were lower than that of Estridge, and Estridge's allegations would not undermine those lower bids, the army presumably would award the contract to someone else.

[00:16:06] Speaker 01:
We're not looking at the merits of his allegations in the standing phase, right?

[00:16:11] Speaker 01:
I mean, my classic standing case is some guy who's had two employees who's never done any contracting work challenges a contract.

[00:16:21] Speaker 01:
And it's true that the government may have done some stuff wrong with the contract, but there's no chance of him ever having gotten the contract anyway.

[00:16:29] Speaker 01:
That's the standing inquiry, that it doesn't go to the merits of his allegations.

[00:16:34] Speaker 01:
It really goes.

[00:16:35] Speaker 01:
And so let me just make my argument to you, and then you can respond.

[00:16:39] Speaker 01:
So it seems to me, is there not an argument here?

[00:16:41] Speaker 01:
You can lump all those four other contractors that did the bids that are above him and say, yeah, they didn't in the out years increase the salaries.

[00:16:52] Speaker 01:
He may be absolutely wrong on the merits of his allegations that that was necessary under FAR.

[00:16:58] Speaker 01:
But why is that not a merits determination?

[00:17:01] Speaker 01:
Why does that go to standing?

[00:17:03] Speaker 00:
Well, Your Honor, I would like to address the merits point, but just to address the standing point first.

[00:17:10] Speaker 00:
Under this court's case law, in the bid-protect context, in order to have standing, offers need to show that they have a direct economic interest.

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And that direct economic interest has been defined in Infotech and other cases as having a substantial chance to win the award.

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And because in a lowest price, technically acceptable procurement,

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Price is the determinative factor among all of the technically acceptable offerors.

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An offeror must, in a technically acceptable procurement at least, must need to show that there would have been next in line in the procurement.

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Because if the lowest price offeror is challenged, it's assumed that the award would go to the next price.

[00:17:50] Speaker 01:
Well, let's assume my challenge is that you had to have the ability through a license in the state of Mississippi.

[00:17:57] Speaker 01:
And that was a requirement.

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So there could have been 10 people who had a cheaper bid than me.

[00:18:03] Speaker 01:
But if none of them had licenses, and I have a challenge that argues that they shouldn't have gotten, why does it matter whether they're four with lower prices or whatever, if his challenge, if he were successful on the merits of his allegations, that would knock out one, it would knock out four, it would knock out 40, right?

[00:18:23] Speaker 00:
Well, Your Honor, the escridge as the fifth in line

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needs to show that all four of the lower price offers.

[00:18:31] Speaker 01:
Well, can he make the same?

[00:18:32] Speaker 01:
I mean, his allegations, if they were correct, and I don't have any view of that, would apply to all four equally.

[00:18:39] Speaker 01:
He's the only one that in subsequent years was offering an increase in the wages, and none of them did that.

[00:18:46] Speaker 01:
So why can't they be put in a bucket?

[00:18:48] Speaker 01:
And if he were to win, which he likely will not, but if he were to win, all of those guys would come out.

[00:18:54] Speaker 00:
Well, actually, Your Honor, that's just factually not accurate that the other offerors didn't, in fact, increase in the option years.

[00:19:03] Speaker 00:
And in fact, the agency not only noted that the offers increased, but evaluated the compensation realism to include whether the offerors escalated in the option years.

[00:19:14] Speaker 00:
And I can give you some examples from the record.

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Two offerors, Offeror 2 and Offeror 5, were found to be technically unacceptable.

[00:19:23] Speaker 05:
Where are you in the records?

[00:19:26] Speaker 00:
Appendix page 783.

[00:19:27] Speaker 00:
783?

[00:19:28] Speaker 00:
Yes.

[00:19:28] Speaker 00:
And appendix page 793 is a similar statement, where two offerors were found to be technically unacceptable for failing to meet the minimum wage rate.

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And then quoting from the source selection decision at appendix page

[00:19:53] Speaker 00:
847.

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An additional offeror, offeror 15, was found technically unacceptable even though it met the minimum wage rate for failing to escalate through the option years.

[00:20:10] Speaker 02:
So you're saying this suggests that these other people, the four who were above,

[00:20:18] Speaker 02:
Eskridge at the final cut that there this Supports the proposition that there was an analysis with respect to option years for them.

[00:20:27] Speaker 00:
Yes, your honor the agency did in fact Well your honor in in a page 847 In the technical evaluation of offer 15 the agency found the offer to be unacceptable I understand

[00:20:45] Speaker 05:
Understand that where did they say about the four that were acceptable?

[00:20:50] Speaker 00:
Appendix page for 849 This is the technical evaluation of the awardee and

[00:21:03] Speaker 00:
in sub-factor four compensation plan, the agency notes that the awardee included a 2% escalation.

[00:21:11] Speaker 00:
And at page 850, another technically acceptable offeror was found to have a 2.4 escalation rate throughout the option years.

[00:21:20] Speaker 00:
So the agency did in fact evaluate the option years of the contract as well as the base year.

[00:21:32] Speaker 02:
Sort of the housekeeping question I asked is, what is the present status of this contract?

[00:21:37] Speaker 02:
It's in full performance mode by Ansible?

[00:21:40] Speaker 00:
Yes, Your Honor.

[00:21:41] Speaker 00:
The awardee, Ansible, is currently performing and is actually into one of the option years of the contract, the base year term.

[00:21:48] Speaker 02:
So we're not in a bridge contract situation.

[00:21:51] Speaker 00:
No.

[00:21:51] Speaker 02:
It was the original six-month term?

[00:21:54] Speaker 00:
I believe the original base year was a one-year term.

[00:21:56] Speaker 02:
Oh, so there was the original one-year term, and now they're into the option.

[00:22:00] Speaker 00:
Yes, Your Honor.

[00:22:01] Speaker 02:
OK.

[00:22:03] Speaker 00:
And to go back to Judge Pro's question about

[00:22:09] Speaker 00:
whether it's we're simply looking at the allegations versus looking at the merits.

[00:22:15] Speaker 00:
Eskridge here has failed in its briefing before this court, especially to challenge any aspect of the agency's actual evaluation.

[00:22:25] Speaker 00:
They don't cite in the record to any specific problem with the agency's evaluation.

[00:22:30] Speaker 00:
So it's more than that we're not looking at the,

[00:22:36] Speaker 00:
We're looking into the merits of the case.

[00:22:38] Speaker 00:
It's looking to the fact that Eskridge has failed to articulate any procurement error, specifically as to the agency's evaluation of these compensation rates.

[00:22:49] Speaker 00:
Again, the core of the argument appears to be in reference to the 2017 debriefing and the allegation that that should somehow have changed or informed the agency's evaluation

[00:23:06] Speaker 00:
the current solicitation, which is under guardian moving and storage, all procurements stand alone and the agency is not bound by any decisions it makes in a previous procurement.

[00:23:23] Speaker 00:
And to the extent Eskridge is alleging that there should have been a specific wage escalation rate in the option years, that's an argument that would be waived under blue and gold because

[00:23:36] Speaker 00:
were in a post-award context.

[00:23:39] Speaker 00:
And blue and gold requires that those types of solicitation challenges be brought pre-award.

[00:23:51] Speaker 00:
So unless your honors have any further questions for me, we would ask the court to affirm the trial court's decision finding a lack of standing.

[00:23:59] Speaker 01:
Can I just ask you one quick question?

[00:24:00] Speaker 01:
I think I read at page 25, you talking about the IGE estimate.

[00:24:06] Speaker 01:
You say it's only used to determine whether the proposed compensation is too high.

[00:24:12] Speaker 01:
I'm not sure you had any citation of authority for that statement.

[00:24:18] Speaker 01:
Do you know what I'm talking about?

[00:24:20] Speaker 01:
Yes.

[00:24:24] Speaker 00:
In the evaluation at page 860, I believe,

[00:24:33] Speaker 00:
Actually starting at page 859, subsection 8 is the price summary and 8D specifically talks about fair and reasonable pricing.

[00:24:45] Speaker 00:
And then the following two pages contains the agency's evaluation of whether the prices were fair and reasonable or whether they were too high.

[00:24:55] Speaker 00:
And this is the only point during the source selection decision which the agency discusses.

[00:25:01] Speaker 00:
the IGE rates and sort of how far off the offers were from the rates in the IGE.

[00:25:11] Speaker 00:
Okay, good.

[00:25:13] Speaker 00:
Thank you, your honor.

[00:25:17] Speaker 05:
And as I said, just to reiterate, I love seeing counsel stand up and say, no, it's here in the record.

[00:25:31] Speaker 05:
You can thank your friend.

[00:25:33] Speaker 03:
I was getting ready to thank her.

[00:25:35] Speaker 03:
Thank you counsel for pointing me to that that section in the appendix tabs a couple a couple of things first going back to appendix 859 where

[00:25:58] Speaker 03:
The government talked about fair and reasonable pricing, and that's how the compensation realism would be measured.

[00:26:05] Speaker 03:
First of all, the contractor has no knowledge of the source selection authority.

[00:26:13] Speaker 03:
And second of all, the same section of the price summary points to a price analysis under 15404, which determines if they cannot come to a

[00:26:27] Speaker 03:
Understanding of price reasonable say have to do a price realism whether that was done or not I cannot speak to that but the contractors understanding would be compensation realism under five to two to four six and that would be that your prices are too low and the government is corrected that there was an escalation done in each year, but our argument or Eskridge's argument was that the

[00:26:57] Speaker 03:
the incremental increases were not high enough to sustain the later option years, as they were told, measuring their own percentages in the debriefing from 2016.

[00:27:11] Speaker 03:
Thank you.

[00:27:14] Speaker 01:
Thank you.

[00:27:15] Speaker 01:
We thank both sides.

[00:27:16] Speaker 01:
The cases submitted have concluded the proceeding.

[00:27:32] Speaker 02:
You ought to go forward with the journey until tomorrow morning at 10 a.m.