[00:00:00] Speaker 03: I now call case number 192261, Safeguard-Based Operations versus United States. [00:00:09] Speaker 03: Council, whenever you're ready. [00:00:11] Speaker 01: Thank you. [00:00:13] Speaker 01: Good morning. [00:00:13] Speaker 01: May it please the court, Alex Thomas-Chuck for Appellant Safeguard-Based Operations, LLC. [00:00:19] Speaker 01: During this argument, I may refer to the appellant simply as safeguard. [00:00:24] Speaker 01: This case involves an unusual situation where the procuring agency [00:00:29] Speaker 01: the Federal Law Enforcement Training Center, also referred to as FLETC, evaluated Safeguard's proposal through multiple rounds of corrective actions at the GAO, then saw an opportunity to disqualify Safeguard. [00:00:45] Speaker 01: Disqualification was arbitrary and capricious and based on the actions of a few key individuals who wanted to quote unquote send a message and quote unquote get rid of Safeguard. [00:00:57] Speaker 01: That decision, which was spiteful, perhaps even vengeful, should not stand, especially since this contract will run until 2025 and safeguard was significantly less expensive than the awardee. [00:01:11] Speaker 03: Well, let me ask you a question about your motivation theory. [00:01:17] Speaker 03: I mean, there were other at least some whose price point was lower than yours, correct? [00:01:26] Speaker 01: Your Honor, your question broke up a little bit. [00:01:29] Speaker 01: There were a total of seven offerors for this small disadvantaged business award, and the prices ranged quite a bit from low to high. [00:01:39] Speaker 01: Right. [00:01:40] Speaker 03: But the answer to my question has to be yes. [00:01:42] Speaker 03: There were at least two offerors who were disqualified for the same reason Safeguard was disqualified for, whose price was lower than Safeguard's, right? [00:01:56] Speaker 01: I don't know if their price was lower in each instance. [00:01:58] Speaker 01: There were actually a total of four bidders, including Safeguard, who were ultimately disqualified. [00:02:04] Speaker 03: One was priced higher than Safeguard and two were priced lower, correct? [00:02:10] Speaker 01: That could well be the case, Your Honor. [00:02:11] Speaker 01: Yes, I was focused mostly on the awardee in our proposal, but there were... But if that's the case, if there were lower priced bidders who were disqualified, [00:02:23] Speaker 03: then how could you argue that this was designed just to target Safeguard? [00:02:29] Speaker 01: It was designed to target Safeguard because of the particular history that Safeguard had with FLETC, the Procuring Activity. [00:02:37] Speaker 01: Safeguard's joint venture partner SRM actually performed the contract from 2012 to 2018. [00:02:46] Speaker 01: And it, along with three other bidders, was disqualified for not copying the Schedule B prices [00:02:53] Speaker 01: The plug numbers that FLETC had provided. [00:02:56] Speaker 01: The other offerors, however, had other issues with their technical proposals as reflected in the various decisions of Mr. Williams, the source selection authority. [00:03:07] Speaker 01: So this was a procurement in which price was an important factor, but it wasn't the only factor. [00:03:13] Speaker 04: Council, let me interrupt to be sure I understand your position on appeal. [00:03:19] Speaker 04: Is it based on the argument thus far that unless we agree that there was some sort of bad faith, there was nothing wrong with the procurement, the standard and the clarification or whatever else we might call it? [00:03:40] Speaker 04: of the bidding requirements that unless we agree that there was some sort of bad faith to be explored, that there's nothing to complain about? [00:03:51] Speaker 01: Respectfully, no, Judge Newman. [00:03:54] Speaker 01: That's not our position at all. [00:03:55] Speaker 01: There was a manifest error in the conduct of the procurement because, as we point out in our briefs, one of the key issues [00:04:04] Speaker 01: And respectfully, one of the errors we believe that the lower court made below is not reading the solicitation per its plain language. [00:04:14] Speaker 01: In 16 separate instances in the contract line items in Schedule B, safeguard and other offerors were instructed, and this is in all caps surrounded by asterisks, do not submit pricing for these claims. [00:04:31] Speaker 01: And we adhered to that instruction, as apparently did three other offerors. [00:04:36] Speaker 03: So with that- I know, but sir, but as you well know, the Court of Federal Claims and the government here in its position is relying on Amendment 3, which clarifies to the extent there was ambiguity in their view, I guess, what you're saying. [00:04:55] Speaker 03: And Appendix- the addendum or the Amendment Number 3 is quite clear, correct? [00:05:01] Speaker 03: I don't think it's clear. [00:05:03] Speaker 01: In point of fact, if you look at Amendment 3, that language continues to include the direction in all caps and asterisks. [00:05:15] Speaker 01: Do not submit pricing for these claims. [00:05:18] Speaker 01: That language appears without any strikethroughs, without any commentary. [00:05:23] Speaker 01: It's not deleted. [00:05:24] Speaker 01: That language appears in Amendment 3. [00:05:26] Speaker 01: It also appears continuing through Amendment 5. [00:05:30] Speaker 01: So at all times throughout the conduct of this procurement, the instruction, do not submit pricing for these cleanse, was part of the solicitation. [00:05:40] Speaker 03: But the amendment says that you're supposed to include in response to a question about, well, does that mean we include your numbers or nothing? [00:05:48] Speaker 03: And the answer was include the list of not to exceed amounts or blah, blah, blah, blah, blah. [00:05:57] Speaker 01: It says that, doesn't it? [00:05:59] Speaker 01: Respectfully, Your Honor, I don't think that resolved the issue because you still have the language in Amendment 3 in the contract line item schedule, do not submit pricing for these CLINs. [00:06:11] Speaker 01: Buried in an attachment to Amendment 3 in the question and answers is a hortatory statement. [00:06:19] Speaker 01: Please include these numbers. [00:06:22] Speaker 01: And I would note that these numbers themselves, they don't include any labor costs. [00:06:26] Speaker 01: This is all for supplies and what is referred to in the jargon as sort of other direct costs, supplies, TVs, replacement TVs, that sort of thing. [00:06:36] Speaker 01: There's absolutely no discretion with respect to those numbers. [00:06:41] Speaker 01: Those are numbers provided by the procuring agency, FLETC. [00:06:46] Speaker 01: They were disclosed to all of the offerors with the statement, please include these numbers. [00:06:55] Speaker 03: At the same time, I understand you're arguing that you think please include means that the government will is saying that it itself will please include them. [00:07:07] Speaker 01: No, I'm not saying that your honor, but I'm saying that that language is hortatory and is less directional than the language that appears in Amendment three itself in the pricing schedules where you have the language do not submit pricing for these cleanse. [00:07:24] Speaker 01: in 16 separate instances. [00:07:26] Speaker 03: If that's the case, if there's a problem between do not submit and please include that makes the solicitation confusing or ambiguous, why wouldn't that be a patent ambiguity that you would have an obligation to inquire about? [00:07:45] Speaker 01: Well, first of all, the lower court found, and this is in the appendix at page 41, that there was no ambiguity, number one. [00:07:53] Speaker 01: And we frankly share that view, that there was no ambiguity, that the language in the Schedule B cleanse governed. [00:08:02] Speaker 01: But if someone were to have found now that there's an ambiguity, at worst it's a latent ambiguity. [00:08:12] Speaker 01: I don't think it comes even close to being a patent ambiguity. [00:08:16] Speaker 01: And if it's a latent ambiguity, then it should be construed against the government as the drafter of the solicitation. [00:08:21] Speaker 01: Well, how could it be latent? [00:08:22] Speaker 01: I mean, it's on the face of the solicitation. [00:08:24] Speaker 03: You've got the language, do not submit, and you've got the language, please include. [00:08:31] Speaker 01: Because after Amendment 3 was issued, you have Amendment 5, which repeats the same language in the Cleanse. [00:08:40] Speaker 01: Do not submit pricing for these Cleanse. [00:08:44] Speaker 01: Furthermore, if you go, and to the extent we're getting into ambiguity questions, there is an order of precedence clause set forth in the solicitation itself, which makes it very clear that the Schedule B governs. [00:08:57] Speaker 01: That is the most important item, as one would expect, because that lays out what the labor requirements are and what the pricing is. [00:09:05] Speaker 01: But you don't get, first you have to find whether there's an ambiguity. [00:09:10] Speaker 03: All right. [00:09:11] Speaker 03: Assuming there is an ambiguity, then you'd have to apply the patent ambiguity standard. [00:09:16] Speaker 03: And only then would you get to the order of precedent clause, right? [00:09:20] Speaker 01: Well, we don't think there is an ambiguity, just to be clear, Your Honor, and we haven't argued one. [00:09:25] Speaker 01: We submit that the solicitation, considered its entirety, directed us not to submit pricing for these claims. [00:09:32] Speaker 01: Apparently, three other offerors made the same reading. [00:09:36] Speaker 01: and went ahead and did not submit pricing for these cleans. [00:09:41] Speaker 01: Look, the most important thing is why does this matter? [00:09:44] Speaker 01: Everyone understood what the pricing for these cleans was. [00:09:49] Speaker 03: Interestingly, Counsel, though, you argued earlier that the government, through a cost-realism adjustment, was not allowed to just put those numbers in for you. [00:10:02] Speaker 03: And now you're arguing, at least with respect to your waiver and clarification, or even with respect to your it doesn't matter view, is that they should have just accounted for those. [00:10:15] Speaker 01: Your Honor, that's not accurate either, with all due respect. [00:10:18] Speaker 01: And the reason I say that is because there is one sentence in the GAO protest in which there's made a reference to [00:10:27] Speaker 01: the uh... the price evaluation but at the time that that gao protest filing was submitted there was no understanding about what adjustment had been made it was only through uh... the litigation at the at the court of federal claims in which i became involved that we found out exactly how what he had dealt with the pricing issue so i don't think it's fair to say [00:10:52] Speaker 01: that we argued at the GAO that the government couldn't adjust prices. [00:10:56] Speaker 01: I don't think that's actually a fair reading of what was said. [00:11:00] Speaker 01: There was no understanding at the time that that GAO protest was submitted, how the evaluation had unfolded. [00:11:07] Speaker 01: And the reason there was no understanding about that is because for two of the post award GAO protests, the agency immediately reported it was going to take corrective action. [00:11:20] Speaker 01: So there was never any full record about how the agency had evaluated the prices really until the decision of the merits by the GAO and even then only to a limited extent, not the extent to which the record was revealed at the Court of Federal Claims when the administrative record was produced by the government. [00:11:43] Speaker 01: So I don't think our position with respect to this issue has changed. [00:11:47] Speaker 01: respectfully we submit that the solicitation is not ambiguous that the uh... the language in the clinton governed apparently other offer or spelt the same way and i i i i think the critical part of this is that we were disqualified we weren't considered on the merit and i think that the reason that the the lower court sort of made that finding [00:12:13] Speaker 01: was because it determined that the error was material, and we would submit that it was not, because there was no discretion involved in it. [00:12:21] Speaker 01: This was purely a transcription matter, and it didn't... All right. [00:12:26] Speaker 03: Can I just stop you there? [00:12:27] Speaker 03: And I know your time has expired, but let me just review the bidding here with respect to this question of ambiguity or lack of ambiguity and how the original solicitation and the amendment sort of sink. [00:12:40] Speaker 03: The government's position and what the court of claim said is this language, do not submit pricing for these CLINs, was intended to mean that you shouldn't come up with your own pricing. [00:12:54] Speaker 03: Don't submit your own independent pricing for this. [00:12:58] Speaker 03: Whether or not that was clear or unclear, there was a question asked and answered in the amendment, which is presumably how any ambiguity should be clarified. [00:13:08] Speaker 03: You would agree with that, would you not? [00:13:10] Speaker 03: If there is any ambiguity, it should be clear. [00:13:12] Speaker 03: It can and should be clarified by questions and answers. [00:13:17] Speaker 01: I would think that would be preferable. [00:13:19] Speaker 03: All right. [00:13:20] Speaker 03: So the question was, this question was posed, like, do you want us to submit your pricing or some pricing or whatever on these CLINs? [00:13:30] Speaker 03: And the answer to the question was, for bidding purposes, please include the following not to exceed amounts. [00:13:39] Speaker 03: That seems quite clear to me. [00:13:42] Speaker 03: I understand your position is because they said, please, maybe they didn't really mean it. [00:13:47] Speaker 03: But if we reject that argument, then they are clarifying what obviously some people may have thought was ambiguous, very explicitly. [00:13:58] Speaker 03: So what's the problem with that? [00:14:00] Speaker 03: Are they not allowed to clarify something that some people perceived as ambiguous? [00:14:05] Speaker 03: Are they not allowed to do that? [00:14:06] Speaker 03: Do they not have the authority to do that? [00:14:08] Speaker 03: If they hadn't said please, if they had said, you must include the not to exceed remarks, would that be sufficient? [00:14:16] Speaker 01: I think the problem in this particular case, Your Honor, and for example, look at the appendix at page 4251, where in amendment three, the language appears in CLIN item 7AA, the service request maintenance item. [00:14:34] Speaker 01: It says explicitly, do not submit pricing for these CLINs. [00:14:38] Speaker 01: And that language is part of Amendment 3. [00:14:41] Speaker 01: It was repeated in Amendment 5. [00:14:43] Speaker 01: And I think if you view the solicitation in its entirety, you've got language or directive language not saying, please, do not submit pricing for these clins in all caps with half risks. [00:14:55] Speaker 03: But the answer is that the assumption is that they meant don't submit your own pricing. [00:15:01] Speaker 03: But how can you be clearer than in response to a question [00:15:05] Speaker 03: An answer being, should I submit your numbers or should I not? [00:15:10] Speaker 03: And it says, for bidding purposes, please include the following not to exceed amounts. [00:15:15] Speaker 03: How could they have said it more clearly other than taking out the word please? [00:15:19] Speaker 01: Well, they could have amended the claim structure in Schedule B. For example, in page 4251, they could have lined through the direction, do not submit pricing for these claims. [00:15:31] Speaker 01: Or they could have deleted that. [00:15:33] Speaker 01: Or they could have said in the answer. [00:15:34] Speaker 03: Well, their view is they meant it. [00:15:36] Speaker 03: Because they meant the otherwise, when you're supposed to submit pricing, the normal interpretation of that is you're supposed to come up with your own price for those particular tax. [00:15:49] Speaker 03: And they didn't want you to do that. [00:15:51] Speaker 03: They wanted you to use fear not to exceed amount. [00:15:55] Speaker 01: Right. [00:15:56] Speaker 01: I think the problem is, is that it doesn't, the CLIN language, the direction doesn't say do not submit independent pricing for these CLINs. [00:16:04] Speaker 01: It says do not submit pricing for these CLINs, period. [00:16:09] Speaker 01: Okay. [00:16:09] Speaker 03: Well, couldn't it mean don't, that pricing refers to offer or provided pricing, whereas not to exceed amounts that you're pleased to include [00:16:21] Speaker 03: that you're asked to please include refers to the amounts that the government provided. [00:16:27] Speaker 03: So you've got offer or provided pricing and government provided amounts. [00:16:33] Speaker 01: It could have said that, your honor, but it didn't. [00:16:35] Speaker 01: And it didn't change again in amendment number five. [00:16:39] Speaker 01: And we read the text literally, which is, I think, what the law of this circuit requires, that if the solicitation language says do not submit pricing for these cleans, that means do not submit pricing for these cleans. [00:16:51] Speaker 01: And that's how we interpreted it. [00:16:55] Speaker 03: Can I ask one further just cleanup question? [00:16:57] Speaker 03: You started by talking about the bad faith allegations or assertions you make. [00:17:03] Speaker 03: If we conclude that the government, hypothetically, if we conclude the government properly disqualified because of the things we've talked about here, do we have to reach the issue? [00:17:16] Speaker 03: Do we appropriately reach the issue of supplementing the record or not? [00:17:20] Speaker 03: I think yes, we do, and we raise that as a separate issue in our... But if we conclude that the government had a legitimate reason to disqualify you, then how could you ever prove that faith prejudiced you in the bid process? [00:17:38] Speaker 01: Well, because we sought, based on our amended complaint in Count 3, we sought discovery, limited discovery I would note, [00:17:48] Speaker 01: on that issue and we were foreclosed from pursuing it. [00:17:52] Speaker 01: And the sequence of events is very troublesome, and we submit that evidence would have been obtained that would have supported and proven the allegation of bad faith. [00:18:03] Speaker 01: So I think, respectfully, that is still an issue before the court, even if you conclude that [00:18:09] Speaker 01: that our reading of the interpretation was incorrect, and I have another point I want to make about that, but I believe I'm into my rebuttal time. [00:18:17] Speaker 03: What's the law there? [00:18:18] Speaker 03: I mean, you could have, if you conclude that the government had a legitimate reason to disqualify you, does that, can bad faith, finding a bad faith still supersede that or not? [00:18:30] Speaker 01: I think the law is unsettled in that area, but we would submit in this case it does, because it would explain why the decision was originally to evaluate us on the merit. [00:18:38] Speaker 01: Indeed, you have the contracting officer in the record concluding we should be in the competitive range. [00:18:45] Speaker 01: And then at the last moment on September 20th, you have a two-sentence decision of the source selection authority basically disqualifying us. [00:18:53] Speaker 01: Something pretty significantly happened during the course of this procurement. [00:18:57] Speaker 01: And respectfully, it doesn't make a lot of sense. [00:19:00] Speaker 01: And had we been enabled to have some limited discovery on that issue, we submit that would have turned up sufficient and substantial evidence in support of our claim of breach of the duty of good faith and fair dealing, Your Honor. [00:19:14] Speaker 03: And it would have been based on those affidavits that you submitted, correct? [00:19:19] Speaker 01: Well, we had an account three in the complaint and then we had two particular affidavits that we submitted that are part of the record and we submit those constitutes what are referred to in the law as hard facts and that we should have been entitled to at least some limited discovery with respect to the hard facts that had been alleged both in the amended [00:19:41] Speaker 01: count three, as well as in the two affidavits. [00:19:44] Speaker 01: Yes. [00:19:46] Speaker 03: Okay. [00:19:47] Speaker 03: Thank you. [00:19:47] Speaker 03: We'll restore rebuttal time. [00:19:49] Speaker 03: Let's hear from the government. [00:19:50] Speaker 03: Mr. Oliver. [00:19:54] Speaker 03: Good morning, Your Honor. [00:19:55] Speaker 03: I'm sorry. [00:19:56] Speaker 02: Oh, no, you're right. [00:19:57] Speaker 03: Mr. Oliver. [00:19:58] Speaker 02: Okay. [00:20:00] Speaker 02: Mr. Oliver. [00:20:01] Speaker 02: Good morning. [00:20:02] Speaker 02: May it please the court. [00:20:04] Speaker 02: I'm going to start with amendment three. [00:20:07] Speaker 03: Could you just, I'm sorry, just for purposes, for my purposes of understanding this, could you just start a little bit with the last question about whether or not we would reach the issues of bad faith or discovery, the connection with bad faith if we were to conclude hypothetically that the government acted appropriately in the disqualification? [00:20:29] Speaker 02: Yes, your honor. [00:20:31] Speaker 02: I'll start with that question. [00:20:32] Speaker 02: The answer is no, you do not need to reach bias. [00:20:35] Speaker 02: You do not need to reach supplementation if the court finds, as did the trial court, that the agency's decision to exclude safeguards was indeed rational. [00:20:46] Speaker 02: And the reason is because the standard, a couple of reasons. [00:20:50] Speaker 02: The standard set forth by this court in both Axiom and Tony provides that supplementation is only warranted if the omission of the [00:20:59] Speaker 02: evidence in question, it would preclude effective judicial review. [00:21:06] Speaker 02: And so here the Trump Court correctly found that there was ample evidence in the record that the agency's decision to qualify was rational, that the safeguard did not include required price information in its proposal, as did several other offerors, all of whom [00:21:26] Speaker 02: or to qualify on exactly that basis. [00:21:30] Speaker 04: Well, Council, you're not saying that it's perfectly acceptable for the procurement to be conducted in bad faith if, in fact, the result can be justified on some other basis? [00:21:45] Speaker 04: Is that the government's position? [00:21:47] Speaker 02: No, no, no, Your Honor. [00:21:49] Speaker 02: The question is the threshold standard for when you [00:21:53] Speaker 02: The protester is entitled to supplement the record. [00:21:58] Speaker 02: And here our position, Your Honor, is that the protester, safeguard, has not provided the type of hard evidence that overcomes the presumption of regularity. [00:22:11] Speaker 02: There must be some questions in the evidence that they have put forth that [00:22:16] Speaker 02: questions the rationality of the contracting office decision. [00:22:19] Speaker 02: The focus of count three of their complaint, which is what Mr. Thomas-Shuck was referencing, is based upon the idea that the agency excluded safeguard for pretextual reasons, right? [00:22:33] Speaker 02: And that is the record evidence, the administrator record utterly reflects that. [00:22:41] Speaker 02: On page, the appendix page, [00:22:45] Speaker 02: 7999 you see your honor that as with reference I believe in the costly with Mr. Thomas Suck that there were two other offers who had lower prices. [00:22:58] Speaker 02: And they start. [00:23:00] Speaker 03: Yeah but didn't they have didn't at those other offers have other problems with their bids that would have disqualified them for other reasons. [00:23:10] Speaker 02: Well, that may be the case that they were not as good as DNO in terms of their other issues. [00:23:17] Speaker 02: But the important point, Your Honor, is that the source selection authority in its source selection decision document put an asterisk by all those authors, not only safeguards, but the other two authors whose prices were lower than safeguards, who were ineligible [00:23:38] Speaker 02: for award because of their fair. [00:23:40] Speaker 03: Well, your, your counsel, your friend on the other side said that the other offer or two price was lower than safeguards had disqualifying factors that safeguard didn't have not compared to, you know, but compared to safeguard. [00:23:59] Speaker 03: In other words, safeguard would have not [00:24:03] Speaker 03: been disqualified while those lower-priced offerors would have been. [00:24:09] Speaker 02: Respectfully, Your Honor, that's incorrect. [00:24:11] Speaker 02: Again, I'll refer you to the source selection decision on appendix page 8003. [00:24:17] Speaker 02: It focuses on what the source selection decision had to say regarding safeguards. [00:24:22] Speaker 02: And here it says that this offeror referring to safeguards proposal was technically not compliant with their price and failed to conclude. [00:24:29] Speaker 02: But in [00:24:32] Speaker 02: Or select in the prior source like if you look at there on page 7996. [00:24:36] Speaker 02: OK, you see the factor rating that was provided. [00:24:41] Speaker 02: I won't put this in the public recording. [00:24:43] Speaker 02: I won't say what the rating is, but you'll know for the record on page 7996 of the appendix what that rating is. [00:24:51] Speaker 02: OK, and so that that rating, which is not a good rate compared to all the other ratings that you see on that page, all of them [00:25:00] Speaker 02: were not on the same level at CNO. [00:25:04] Speaker 04: So I hope you're saying that if they would have lost the bid anyway, it makes absolutely no difference whether there was good faith or bad faith. [00:25:15] Speaker 02: Well, that is, yes, Your Honor, there is evidence in the record that because of- The answer to my question is that's the government's position. [00:25:24] Speaker 04: If they would have lost anyway, it makes no difference if there was at least [00:25:30] Speaker 04: let's say a prima facie position, let's say sufficient, they say, to our discovery. [00:25:37] Speaker 04: You say it doesn't matter because they would have lost anyway. [00:25:42] Speaker 02: Well, I think our position is slightly different than that because this is a best value procurement. [00:25:50] Speaker 02: Okay, so this is not like a lowest price TA where I can say, well, they are ranked 39 out of 40. [00:25:55] Speaker 02: In terms of price, therefore, there's no way they could have won. [00:25:58] Speaker 02: It's kind of based on a hypothetical that it's hard to answer. [00:26:00] Speaker 02: I can point, Your Honor, to the ratings that they received, which were lower than the intervenors, and suggest that they wouldn't have won. [00:26:10] Speaker 02: But I can't say that. [00:26:11] Speaker 04: You're talking about the merits. [00:26:13] Speaker 04: I want to know what the government's position is about procurement, about good faith and fair dealing, about transparency. [00:26:21] Speaker 02: Yes. [00:26:22] Speaker 02: Yeah, no. [00:26:23] Speaker 02: Our position is this and I'll try to say as plain as I can. [00:26:27] Speaker 02: It is our position is simply consistent with what the Federal Circuit statements are regarding supplementation that the only reason we are saying that the reason we are saying that safeguard is not entitled to supplementation. [00:26:41] Speaker 02: is that they have failed to meet the standard set forth in action and comment, which provides that record, the evidence that they seek to provide must be necessary for effective judicial review. [00:26:51] Speaker 02: And the reason in this instance, in this case, that it's not that the evidence that they have provided is necessary for, is not necessary for effective judicial review is precisely because the evidence is for several reasons. [00:27:06] Speaker 02: One is because the administrative record evidences the fact that there was no pretest [00:27:11] Speaker 02: And second, the evidence that we have brought forth is not connected to the actual procurement decision, as we've argued in our Federal Circuit brief, and as I believe the trial court found as well. [00:27:21] Speaker 02: That, Your Honor, is why we're arguing that the supplementation is not warranted. [00:27:27] Speaker 02: Again, it's the evidence that the attorney for the agency had a bias. [00:27:33] Speaker 02: Again, the attorney for the agency, the statement and questions were regarding a different case [00:27:38] Speaker 02: SRM and a civil board of contract appeal case, not this case, not this client. [00:27:44] Speaker 02: It was an affiliate of Safeguard, which is SRM, not Safeguard itself. [00:27:48] Speaker 02: One, and second, as the trial court found, the attorney was a non-voting member of the selection authority board who had no control over the SSA's decision, according to their record evidence. [00:27:59] Speaker 02: There must be something that the court, this court has found and impressed us, that there must be something that it could force regarding publication. [00:28:08] Speaker 02: regarding evidence that you're seeking discovery of, that suggests that the contracting officer's final decision is suspect, or that the administrative record is suspect. [00:28:19] Speaker 02: And our position, Your Honor, is that they have not provided any evidence. [00:28:25] Speaker 03: Well, it is a fact. [00:28:27] Speaker 03: It is a fact, is it not? [00:28:28] Speaker 03: And I understand that this isn't in the affidavits that the court rejected. [00:28:33] Speaker 03: But those affidavits reveal that [00:28:36] Speaker 03: Ms. [00:28:37] Speaker 03: Wood and Mr. Kane were involved in a not too pleasant lawsuit with Safeguard previously. [00:28:47] Speaker 03: And it does seem a little odd that they weren't even involved with the solicitation given that. [00:28:54] Speaker 02: Well, I'm not sure if it was odd. [00:28:57] Speaker 02: I mean, the contracting officer was involved in the [00:29:03] Speaker 02: the provision of services that is at issue here. [00:29:08] Speaker 02: We have the same type of services that were at issue in that contract. [00:29:12] Speaker 02: Those are different contracts and again those SRM and not Safeguard. [00:29:15] Speaker 02: But again the question really is did the processor, did Safeguard provide well-grounded hard evidence that gives some reason to question the administrative record that was put forth which indicates that the agency disqualified [00:29:33] Speaker 02: on a consistent basis off work that did not include required information. [00:29:36] Speaker 02: They didn't target safeguard. [00:29:37] Speaker 02: Contrary to their allegations, the record indisputably defeats the notion that they selectively targeted safeguard. [00:29:46] Speaker 02: And so there wasn't rational basis. [00:29:48] Speaker 02: Had they included the required information, they would have been in a different footing than they are now, and so they were disqualified. [00:29:56] Speaker 02: The only rationale for disqualifying was we're doing something that they unquestionably did not do. [00:30:02] Speaker 03: Which is why I move on to that. [00:30:04] Speaker 03: Why don't we move on to that issue, which is the major portion of this appeal. [00:30:10] Speaker 02: Yes, Your Honor. [00:30:12] Speaker 02: And so regarding Amendment 3, I'll note one thing first. [00:30:17] Speaker 02: I noticed that Council for Safeguard in today's argument has reprised an argument that [00:30:24] Speaker 02: that safeguard made before the trial court with the trial court rejected. [00:30:28] Speaker 02: That is, that the please include is auditory, not mandatory. [00:30:32] Speaker 02: But I would know that you look at safeguards brief, I'm pretty sure they did not reference please include. [00:30:38] Speaker 02: That was not their argument. [00:30:41] Speaker 02: And so to that extent, that argument's waived. [00:30:43] Speaker 02: Certainly, had they made that argument, we would have resubmitted, or not resubmitted, we would have argued again, as we did below, that blue and gold [00:30:52] Speaker 02: If that's the argument, then that's a patent error that they should have brought to the agency and waived it. [00:30:58] Speaker 02: But we didn't make that argument because, again, they didn't raise it. [00:31:01] Speaker 02: But more affirmatively, what counsel argued regarding the text is really missing is that they rely heavily upon the language in the original solicitation and in the amendment that says, do not, include, do not finance pricing. [00:31:17] Speaker 02: No question it says that, but again, the job of the court in interpreting the solicitation, which includes both the original solicitation as well as the amendment, is to give effect to both that language as well as Amendment 3. [00:31:31] Speaker 02: And so when you do so, there's only really two types of prices, right? [00:31:35] Speaker 02: There's the prices that the author will provide, and then there's the prices that the government provides. [00:31:41] Speaker 02: And so amendment 3, question 9, and in question 16 makes it crystal clear that offerors are going to include the government-furnished crisis. [00:31:50] Speaker 03: Well, if it's so crystal clear, counsel, if it's so crystal clear, how come four out of seven offerors got it wrong? [00:31:59] Speaker 02: Right. [00:31:59] Speaker 02: Well, I will speculate, because I don't have any administrative record regarding the other three, or have any real knowledge as to why Safer didn't. [00:32:07] Speaker 02: But my best guess, Your Honor, is that they did not read [00:32:11] Speaker 02: all of Amendment 3. [00:32:14] Speaker 02: They signed off on Amendment 3. [00:32:16] Speaker 02: It's part of the solicitation. [00:32:17] Speaker 02: There's no question about that. [00:32:18] Speaker 02: They don't argue that. [00:32:20] Speaker 02: But the thing is, they didn't read, as did the other authors, the questions in which they asked, the legitimate question. [00:32:28] Speaker 02: The original solicitation said reference to listed prices for these plans, listed government ceiling and not to exceed prices, but they didn't provide it. [00:32:36] Speaker 02: So of course, authors, certain authors said, well, what would you like us to do? [00:32:40] Speaker 02: What are those prices? [00:32:41] Speaker 02: And so I do submit that the answer- Do we know who asked those questions? [00:32:46] Speaker 02: No, we don't know. [00:32:47] Speaker 02: We do know it was an off-roar, but we don't have a way- I mean, which is not in the record, so I can't tell the court which off-roar submitted it. [00:32:54] Speaker 02: But we do know that there were two questions that were directly on point. [00:32:58] Speaker 02: That question and question nine, as well as question 16, which is, will the government provide a ceiling number for the clean bed issue to be included for submission in volume three press? [00:33:10] Speaker 02: Now, again, that language defeats the argument that the paper actually makes in appeal, which is, oh, well, yes, this language simply means it's referring to kind of what would happen post-contract, the resulting prices. [00:33:24] Speaker 02: It's not something necessarily that has to do with bidding or to be included in the process. [00:33:28] Speaker 02: Well, of course, the text of this directly defeats that. [00:33:33] Speaker 02: And the answer to question nine says for bidding purposes. [00:33:37] Speaker 02: And then the question in question 16, excuse me, is that the question is regarding what is to be included for submission in volume three price. [00:33:47] Speaker 02: And so it's clear, so I did submit that the language could not be clear that the agency wanted these prices to be in the proposal, in the price proposal. [00:33:56] Speaker 02: And that was important. [00:33:57] Speaker 02: That was material. [00:33:59] Speaker 02: Because these prices, although, yes, they're government-funded prices, so we know what they are, they nonetheless are rolled up. [00:34:07] Speaker 02: into a total evaluated price that the agency then uses to evaluate the price of all of the offerors. [00:34:16] Speaker 02: So if you do not include the $6.1 million worth of prices in your proposal, your agency will not be operating on an Apple to Apple basis. [00:34:26] Speaker 02: And I would like to actually provide a response to Safeguard Answer, a response that, yes, it is absolutely [00:34:35] Speaker 02: true, as I believe Your Honor pointed out, that in one of the GAF protests, the agency had been itself saying, OK, well, the off-the-wall or near safeguard did not include the required prices. [00:34:52] Speaker 02: We will increase their price by $6.1 billion and evaluate that. [00:34:57] Speaker 02: But then, safeguard protested. [00:35:01] Speaker 02: And on page 87 of the appendix, [00:35:06] Speaker 02: You'll see exactly what this is. [00:35:09] Speaker 02: This is Safeguard's brief to the GAF. [00:35:12] Speaker 02: And they say that the agency irrationally adjusted Safeguard's proposed price. [00:35:19] Speaker 02: And contrary to what Mr. Thomas said, the agency, the protestant was crystal clear what the agency did. [00:35:26] Speaker 02: They go on to say, again, page 8769 of the appendix, [00:35:30] Speaker 02: Uh, perhaps the most inexplicable and clearly erroneous aspect of the agency's evaluation was it to increase, to increase safety or a proposed firm fixed price for this effort by approximately $6.2 million. [00:35:46] Speaker 03: Can I, can I ask you about that? [00:35:48] Speaker 03: I'm a little confused by what you're saying because I thought the point was that the agency rejected the bid and [00:35:55] Speaker 03: their position is you should have just added those numbers in to make them all comparable. [00:36:00] Speaker 03: So I'm not clear. [00:36:00] Speaker 03: The agency did not add that 6.1 million in to the bottom line. [00:36:06] Speaker 02: Did they? [00:36:08] Speaker 02: I'm sorry. [00:36:08] Speaker 02: Let me be clear, because the procurement history of this is somewhat peculiar. [00:36:14] Speaker 02: And so far, there were several GAO projects, and there were several corrective actions. [00:36:18] Speaker 02: And so in earlier iterations of this procurement, the agency [00:36:22] Speaker 02: acknowledged that the prices were not included by Safeguard and they on their own, the agency, adjusted the price accordingly and raised their price by $6.1 million. [00:36:37] Speaker 02: But at a certain point in August of 2018, Safeguard did what I just said. [00:36:41] Speaker 02: You can't do that. [00:36:42] Speaker 02: You're increasing our price. [00:36:44] Speaker 02: There's a FARC revision, 15.404, that says in a form 6 price, you can't do that. [00:36:50] Speaker 02: You can't adjust our pricing base and okay, we're not going to do that then. [00:36:54] Speaker 02: We will make corrective action and we will use the price you submit. [00:36:58] Speaker 02: And so, some technology, there was a final source selection phase and the final one was the agency determined that state-funded proposal was noncompliant because it did not include. [00:37:09] Speaker 03: So if state-funded is not objected to your increasing their price by $6.1 million, would this all have been resolved and we wouldn't be here? [00:37:19] Speaker 02: the agency would have just fixed it in? [00:37:22] Speaker 02: I'm sorry, I didn't mean to cross talk over you, Your Honor. [00:37:25] Speaker 02: Go ahead. [00:37:28] Speaker 02: No, Your Honor, we would, I'm sure, I mean, first of all, but I would say we would still be here because Safeguard almost certainly would have still lost, even with the, I mean, I mean, we actually know that because they were still losing while the agency was increasing their price. [00:37:45] Speaker 02: I don't want to be adjusting their price to include the required pricing information. [00:37:50] Speaker 02: They were still losing. [00:37:51] Speaker 02: They were losing to the intervener to be enough. [00:37:54] Speaker 02: And they were protesting and protesting. [00:37:56] Speaker 02: So we're pretty certain had the agency continue to adjust the price, they still would have protested and say, and for on various grounds. [00:38:03] Speaker 02: And we still, well, at least it would have gotten to the point. [00:38:06] Speaker 03: My question is a little different. [00:38:08] Speaker 03: My question is, we are here on a particular issue. [00:38:12] Speaker 03: which was whether the agency could disqualify them for not having put the numbers in. [00:38:17] Speaker 03: And you're telling me the history of this case is the agency indeed was willing to put those numbers in and presumably, and this is my question, and it would have done so in the absence of safeguards objection to it doing that. [00:38:32] Speaker 03: Do you understand my question? [00:38:34] Speaker 02: I do understand your question, Your Honor, yes. [00:38:39] Speaker 02: Can you answer it? [00:38:40] Speaker 02: Given the fact that the agency did, in fact, adjust their price during the procurement history, if State Star had not brought to the attention of the agency bar 15.404, which says you can't understand this type of procurement with this fixed price, you can't just add the price. [00:39:00] Speaker 02: Would we still be here? [00:39:02] Speaker 02: That's hard to say, because it's getting out the space like the agency itself would not at some point realize, well, we can't do that. [00:39:08] Speaker 02: And would they have eliminated [00:39:10] Speaker 02: safeguard, not on a price non-compliance basis, but on the basis that their technical proposal, as I mentioned earlier during this argument, was not. [00:39:19] Speaker 04: To follow up on this, then, on your position that they might or could have accepted the price adjustment, what I don't understand is why were they disqualified rather than given a decision on the merits? [00:39:38] Speaker 04: I mean, it doesn't [00:39:40] Speaker 04: You say that the agency may have made some mistakes, but they fixed everything. [00:39:45] Speaker 04: Safeguard should have known it was fixed, even though you had to look in the fine print to find it. [00:39:51] Speaker 04: And then, however, they were disqualified. [00:39:54] Speaker 02: How do you make that leap of reason? [00:40:02] Speaker 02: Ultimately, the AP determined that they could not, and it's just the correct vision, they could not simply adjust their prices under the cost realism provision of the FAR. [00:40:13] Speaker 02: So the only other way to make an abstract comparison would be to engage in discussions and for them to revise their proposals via discussions. [00:40:21] Speaker 02: But the solicitation was crystal clear that all the off-roaders needed to put their best foot forward and expect the proposal and not expect the AP to give them an opportunity to make corrections, material corrections. [00:40:32] Speaker 04: No matter how many mistakes, no matter how strange, no matter how much large type, repetitively they say do not include these line items, right? [00:40:45] Speaker 04: Nonetheless, you say that this is all their fault? [00:40:52] Speaker 02: Yes, Your Honor, because they do not include prices refers to [00:40:57] Speaker 02: their own prices in light of amendment 3 which there were 2 answers to 2 different questions concerning the right to that issue in the agency and both is unequivocally stated, please include the 8 the government for the private in your proposal and so that all those are 16 different contract line item totaling 6.1 million dollars and under the relevant case law that type of the mission. [00:41:25] Speaker 02: is a substance of admission, particularly because the prices, those $6.1 million, it rolled up into a total evaluated price. [00:41:34] Speaker 02: And so there's no way to, on an average basis, compare. [00:41:39] Speaker 04: But they didn't lose on price. [00:41:41] Speaker 04: They were disqualified. [00:41:43] Speaker 04: That's the question I haven't yet heard you answer. [00:41:48] Speaker 02: Right. [00:41:49] Speaker 02: Right. [00:41:49] Speaker 02: They didn't lose because of their price. [00:41:52] Speaker 02: They lost because they didn't submit [00:41:55] Speaker 02: the required pricing information that would allow the agency to compare prices on an Apple to Apple basis. [00:42:04] Speaker 02: Because BNO, the intervener provided, as did other offers, provided all the required information. [00:42:10] Speaker 02: And therefore, the agency could, in fact, do a best value judgment and compare on an Apple to Apple basis the prices of those offerors who complied with the solicitation. [00:42:20] Speaker 02: But those offerors who did not comply with the solicitation and did not provide [00:42:24] Speaker 02: the price of that issue, the $6.1 million worth of cleanse, you could not do an apples-apples comparison. [00:42:30] Speaker 02: The only way you could do that is if they could amend or revise their proposal, which the agency was clear that was not something that they could expect to do because discussions were not going to happen in the solicitation unless the agency decided that, but that was a, it was clear from the solicitation that discussions was not something the agency intended to do. [00:42:51] Speaker 02: And certainly these types of prices are not the type that fit within clarifications because as this Court has stated in the Dell Federal Systems case, clarifications are not to be used to cure proposal deficiencies or material emissions that alter in a material way the cost elements of the proposal. [00:43:10] Speaker 02: And that's exactly what it certainly did. [00:43:11] Speaker 02: I mean, all of these $6.1 million worth of prices certainly materially alters the safeguards proposed [00:43:20] Speaker 02: And so it was rational for the agency to exclude SafeDAR for failing to do what the solicitation required them to do, which was to include those prices in the proposal so that could then be rolled up and the agency could then evaluate the total evaluated price on an Apple basis the rest of the proposals that are compliant. [00:43:39] Speaker 03: And this then does go back to Judge Pro's question and the one I started with your friend on the other side with, which is that [00:43:50] Speaker 03: had there been a permissible cost realism that would have allowed the money to be put back in, the only question would be whether any other factor was sufficient to disqualify Safeguard. [00:44:05] Speaker 02: Well, right. [00:44:07] Speaker 02: That is correct. [00:44:08] Speaker 02: If the agency just evaluates, adjusts itself, notwithstanding the FARC revision, [00:44:15] Speaker 02: And which is what the agency did before that barbarism was brought to a detention by Safeguard. [00:44:22] Speaker 02: You know, Safeguard was still coming up on the short end of the stick, so to speak. [00:44:27] Speaker 02: Because the VNO still had a superior technical proposal, as the administrative record shows. [00:44:32] Speaker 02: And there were technical issues with Safeguard's proposal, again, as the administrative record shows. [00:44:36] Speaker 02: So there may have been other issues. [00:44:37] Speaker 02: I can't speculate what Safeguard would have done with that. [00:44:40] Speaker 02: So that certainly was what the record reflects. [00:44:50] Speaker 03: I've lost track of time. [00:44:51] Speaker 03: Have we heard the tone yet, or do you still have some time left? [00:44:55] Speaker 03: I have not. [00:44:57] Speaker 04: Quite a while ago. [00:44:59] Speaker 02: Oh, I'm sorry. [00:44:59] Speaker 02: I missed the tone. [00:45:01] Speaker 00: I'm sorry. [00:45:01] Speaker 00: Yes, we did play the tone earlier. [00:45:03] Speaker 00: Apologies. [00:45:05] Speaker 03: All right. [00:45:05] Speaker 03: All right. [00:45:06] Speaker 03: Well, thank you, Mr. Oliver. [00:45:08] Speaker 03: Let's hear from the other side for rebuttal. [00:45:12] Speaker 01: Thank you, Alex Tomaszczuk, again, for Safeguard. [00:45:14] Speaker 01: I think the issue, as reflected in the court's recent question, [00:45:18] Speaker 01: is whether it was appropriate for safeguard to be disqualified based on this record, or whether the agency, FLETC, should have considered our proposal on the merits. [00:45:29] Speaker 01: And we submit that the clear answer on this record is the latter. [00:45:32] Speaker 01: We should have been, our proposal should have been considered on the merits. [00:45:36] Speaker 01: And frankly, we don't know what would have happened because even if you put back in the $6.2 million plug number, and by the way, the government and the record [00:45:44] Speaker 01: describes it as a plug number. [00:45:46] Speaker 01: There was no discretion. [00:45:47] Speaker 01: Everyone knew what those numbers were. [00:45:49] Speaker 03: Well, let me interrupt you and ask you about that. [00:45:51] Speaker 03: Your friend on the other side characterized this as maybe even the starting point for all of this was when someone in the government decided to plug that number in, as you say, you were the ones that objected to their doing so. [00:46:07] Speaker 03: Is that accurate? [00:46:08] Speaker 01: It's not, Your Honor, and let me... Yes, it is. [00:46:13] Speaker 03: It's right in your protest. [00:46:14] Speaker 03: You cite the FAR provision that says that they can't use cost realism for that purpose in this type of solicitation. [00:46:23] Speaker 01: Because they didn't know at that point in time, and I'm going to go right back to where Mr. Oliver was at page 8769 of the appendix. [00:46:32] Speaker 01: He cites the GAO protest [00:46:34] Speaker 01: But the protester at that time, represented by a different council, didn't know what had transpired with respect to the price evaluation. [00:46:43] Speaker 01: Note that that is dated August 24 of 2018. [00:46:47] Speaker 01: That's the date of the document Mr. Oliver cites. [00:46:50] Speaker 01: I'd like to point into the record then at appendix page 3159, where you have a letter from FLETC's council, Mr. Cain, going back to the GAO four days later. [00:47:03] Speaker 01: And this is what he said. [00:47:04] Speaker 01: He's asking the GAO to quote unquote dismiss this protest. [00:47:07] Speaker 01: Specifically in response to the protestors allegations, the agency discovered that it made mistakes in the consideration of protestors proposal. [00:47:16] Speaker 01: The agency will correct these errors in a new source selection decision. [00:47:20] Speaker 01: So at the time that the protest allegation was made, Safeguard suspected but didn't know there was no agency report. [00:47:27] Speaker 01: It didn't have any of these documents that are now in the record. [00:47:30] Speaker 01: Well it knew, it knew that [00:47:32] Speaker 01: There was a price adjustment. [00:47:35] Speaker 01: You didn't know the nature of the price adjustment, Your Honor, because there were other, there's other suggestions earlier in the GAO that other adjustments were made to pricing. [00:47:44] Speaker 01: For example, there was, there's a reference in the record to a 2% adjustment, which is a discretionary adjustment that the agency apparently made because they weren't confident that the... But you knew that these price adjustments, I mean, you knew that they had added these numbers in. [00:48:01] Speaker 03: And you objected to it. [00:48:02] Speaker 01: No, I don't think that's accurate, your honor. [00:48:04] Speaker 01: I don't think they knew anything for certain at that point in time. [00:48:07] Speaker 01: And the temporal sequence of events is important because the protest was filed on the 24th, and four days later, FLETC saying they're going to, they've discovered a mistake and they're going to correct. [00:48:20] Speaker 03: Can you, can you just give me the second site that you just gave us? [00:48:24] Speaker 03: I'm having trouble finding it in the appendix. [00:48:26] Speaker 03: The second letter. [00:48:27] Speaker 01: Yes, the letter from Mr. Kane to the GAO is dated August 28, 2018, and it's at base page 3159. [00:48:37] Speaker 01: And then you get to the source selection decision, which is roughly one month later, and that's in the appendix at page 8003, where you've got two sentences about safeguards. [00:48:46] Speaker 01: The offeror's price proposal was technically noncompliant because their price volume failed to include government-provided amounts for the service work request cleanse. [00:48:54] Speaker 01: as required to Amendment 3. [00:48:56] Speaker 01: Therefore, this offeror is not eligible for award. [00:48:59] Speaker 01: So we have no idea what would have happened had they adjusted our prices, which they clearly had discretion to do, to go ahead and include, in fact, for all the other offerors that were disqualified. [00:49:10] Speaker 01: They could have added the $6.2 million. [00:49:12] Speaker 01: There was no discretion associated with that. [00:49:14] Speaker 03: Can I ask you one more? [00:49:16] Speaker 03: Your time is up. [00:49:16] Speaker 03: But let me ask, can I ask you one more question? [00:49:18] Speaker 03: And that's with regard to the language in the solicitation and then in the amendment. [00:49:24] Speaker 03: If the language had not said do not submit pricing for these CLINs, but it said do not submit your own pricing for these CLINs, would that have sufficient clarity that you would have known what then the import of the question in the amendment 3 meant? [00:49:44] Speaker 01: Probably, but of course that's not what happened here. [00:49:47] Speaker 01: That would have come closer, I think, to flagging the issue, but that's not what happened here. [00:49:52] Speaker 01: And with respect to Mr. Oliver's comment that Dell Federal controls, it does not. [00:49:57] Speaker 01: There's been no case that we found at the Federal Circuit where a vendor has been disqualified for failing to transcribe plug numbers. [00:50:04] Speaker 01: All of the cases involved issues where a vendor had discretion with respect to how to price a particular line item. [00:50:11] Speaker 01: There was absolutely no discretion involved here. [00:50:14] Speaker 01: Everyone knew what the numbers was. [00:50:16] Speaker 01: The agency clearly had the discretion and ability [00:50:19] Speaker 01: to add those numbers back in and do an evaluation on the merits, which is what they should have done. [00:50:24] Speaker 01: And we submit that the court erred below when it held that a transcription error that happens to involve a dollar figure, even if it's a government provided plug number, involves a quote unquote material price term. [00:50:36] Speaker 01: We don't think that's a correct statement of the law. [00:50:38] Speaker 01: That can't be a correct statement of law. [00:50:40] Speaker 01: This was a transcription error that did not impact the evaluation. [00:50:45] Speaker 01: FLETC had every opportunity they could to have evaluated us on the merits. [00:50:49] Speaker 01: They failed to do so for reasons which are contained in Ms. [00:50:54] Speaker 01: Curran's affidavit in the appendix at page 1273 where she specifically notes, and this is extraordinary, this is from counsel of record for safeguarding the protest, that she spoke with Mr. Kane who indicated that FLETC had determined a legal means to quote unquote get rid of Suresh. [00:51:10] Speaker 01: And that's referring to my client who is the owner of SRM. [00:51:14] Speaker 01: My time is up. [00:51:15] Speaker 01: Thank you. [00:51:16] Speaker 03: Thank you very much. [00:51:17] Speaker 03: We thank both sides and the case is admitted.