[00:00:01] Speaker 04:
The next argued case is number 21-1469, System Studies and Simulation Against the United States.

[00:00:57] Speaker 04:
Okay Mr. English, when you're ready.

[00:01:06] Speaker 02:
Good morning and may it please the court.

[00:01:08] Speaker 02:
This court should reverse the Court of Federal Claims judgment in this case for three reasons.

[00:01:13] Speaker 02:
First, the Court of Federal Claims has interpreted this court's bid protest precedent to recognize a presumption of prejudice in cases where the government acts arbitrarily and capriciously or without a rational basis.

[00:01:28] Speaker 05:
court of federal claims aired by failing to apply that.

[00:01:45] Speaker 05:
where we say you need to show prejudicial error even in the face of finding arbitrary action.

[00:01:51] Speaker 05:
Those are our precedents that we have to follow.

[00:01:54] Speaker 05:
How do we find it?

[00:01:56] Speaker 05:
For you on that question, where that case, I mean, unless you disagree and can explain to me why, that case says you need to show prejudicial error in the face even of arbitrary action.

[00:02:09] Speaker 02:
Sure, Your Honor.

[00:02:10] Speaker 02:
For every Glenn defense, there's an Impreza, there's an Emory Worldwide.

[00:02:15] Speaker 02:
This year, we've got Veterans for Life.

[00:02:20] Speaker 02:
that the Court of Claims comes from its interpretation of Impreza and Emory Worldwide, which I believe were decided in 2001.

[00:02:29] Speaker 02:
And in those cases, this court articulated the protestor's burden in a disjunctive fashion.

[00:02:36] Speaker 02:
The protestor can prove arbitrary and irrational action, ground one,

[00:02:40] Speaker 02:
or prove a prejudicial violation of statute of regulation, ground two.

[00:02:45] Speaker 02:
And in those cases, the court said, when the protester makes a challenge... When you say the court, you mean the court of federal claims?

[00:02:50] Speaker 02:
No, Your Honor, I mean this court.

[00:02:53] Speaker 02:
In what case?

[00:02:53] Speaker 02:
In Preza, and I can't say the rest of that court, that case name, from 2001.

[00:02:59] Speaker 02:
I can give Your Honor a side.

[00:03:00] Speaker 05:
I read Impressa.

[00:03:02] Speaker 05:
I know you cited it.

[00:03:04] Speaker 05:
Impressa simply states that a procurement may be sent aside if the award lacked a rational basis.

[00:03:12] Speaker 05:
Of course that's true.

[00:03:13] Speaker 05:
Impressa didn't discuss prejudice one way or the other, did it?

[00:03:17] Speaker 02:
It didn't discuss prejudice.

[00:03:18] Speaker 02:
And I would concede that there's not a case where this court has articulated a presumption of prejudice.

[00:03:24] Speaker 02:
What the conundrum at the Court of Claims, and for practitioners there, is there is a strong line of cases which I recognize are not binding on this court.

[00:03:31] Speaker 02:
uh, where various courts of claim judges, court of claim judges, apply this presumption.

[00:03:37] Speaker 02:
And it comes from that bifurcated standard that we see in Impreza.

[00:03:41] Speaker 02:
Not a discussion of prejudice per se, but the discussion about the substantial chance test and where that comes into play in a protester's burden of proof has only been applied, at least in Impreza as articulated,

[00:03:53] Speaker 02:
on the second prong, when the challenge is made on the ground of a violation of law.

[00:03:58] Speaker 02:
That carries forward to Emory Worldwide.

[00:04:00] Speaker 02:
We see it again in Syntec, I believe, in 2009.

[00:04:03] Speaker 02:
In the same year, we see the Lobat case from this court, which articulates the standard as we see it in Glenn Defense Marine, or Glenn Defense.

[00:04:13] Speaker 05:
And so we've got this... I guess what I'm hearing from you, so tell me if I'm wrong,

[00:04:17] Speaker 05:
that there may or may not, what I'm hearing you tell us, there's at least, at a minimum, there's confusion at the Court of Federal Claims.

[00:04:24] Speaker 05:
Obviously, the Court of Federal Claims here wasn't confused and thought that the standard was Glenn, which is our case.

[00:04:31] Speaker 05:
I still am asking you to look at Glenn, to look at the statements we've made, not the Court of Federal Claims or their interpretation of what we may or may not have said, and tell me how we can get around our precedent

[00:04:44] Speaker 05:
which separates the two and doesn't require an automatic presumption of prejudice in light of arbitrary action?

[00:04:52] Speaker 02:
I don't know that there is a way around it, Your Honor.

[00:04:54] Speaker 02:
I think we need a clear statement on that.

[00:04:56] Speaker 02:
And so I would disagree, respectfully, that the Court of Claims wasn't confused.

[00:05:00] Speaker 02:
The same judge at the Court of Claims within 12 months of deciding our case had applied a presumption of prejudice.

[00:05:07] Speaker 02:
in the HVF West case and something in another case I can't remember.

[00:05:11] Speaker 05:
I can't respond to that.

[00:05:13] Speaker 05:
I don't know what the context was.

[00:05:15] Speaker 05:
Obviously, you can presume prejudice.

[00:05:17] Speaker 02:
I'm sorry.

[00:05:19] Speaker 02:
Our point is there is confusion at the Court of Federal Claims as to how to interpret the various pronouncements the court has made on prejudice.

[00:05:28] Speaker 05:
What do you think Glett is confusing about the Glenn case?

[00:05:31] Speaker 02:
I don't think anything is confusing about it.

[00:05:33] Speaker 05:
So in that case, we answered in a way.

[00:05:36] Speaker 05:
in the contrary to what you're arguing here.

[00:05:38] Speaker 02:
I certainly agree.

[00:05:39] Speaker 05:
OK, so how did we as a panel overturn, go against a pronouncement we had in one of our presidential opinions?

[00:05:47] Speaker 05:
That was presidential, wasn't it?

[00:05:49] Speaker 02:
I believe it was, Your Honor.

[00:05:50] Speaker 02:
And so I don't think the court has ever spoken directly as to whether there is a presumption or not.

[00:05:55] Speaker 02:
I don't think the presumption itself, if it exists, is necessarily contrary to the rule of prejudicial error.

[00:06:02] Speaker 02:
Because the rule of prejudicial error would just say that the court of federal claims has to consider whether an error is harmless before it sets aside an agency's action.

[00:06:10] Speaker 02:
Whereas a presumption is an evidentiary convention that will essentially say who speaks first on that point.

[00:06:15] Speaker 02:
If there's irrational action, then presumably the presumption would be rebuttable and the court would take account of the rule of prejudicial error

[00:06:23] Speaker 02:
as part of the rebuttal analysis that would necessarily go forward.

[00:06:26] Speaker 02:
If the error was a violation of law, then it would be the protester's burden in the first instance to prove prejudice by meeting the substantial chance standard.

[00:06:37] Speaker 03:
So viewing the matter that way, how could that possibly make a difference in this case where

[00:06:44] Speaker 03:
Regardless of who spoke first, the Court of Federal Claims went through the particulars and said this could not possibly have changed the result.

[00:06:56] Speaker 02:
Well, I think the Court of Federal Claims in the reconsideration opinion says that the presumption exists.

[00:07:03] Speaker 02:
She recognized that there is a presumption.

[00:07:05] Speaker 02:
But said that in order to get the presumption, you have to prove prejudice as opposed to dealing with that in a rebuttal situation.

[00:07:13] Speaker 02:
There was no evidence offered by the government or the intervener.

[00:07:17] Speaker 02:
from a rebuttal standpoint.

[00:07:19] Speaker 02:
But we think there's prejudice irrespective of the presumption.

[00:07:22] Speaker 02:
We've highlighted that only because there were contemporaneous cases where protesters got the benefit of it, and we didn't.

[00:07:29] Speaker 03:
Is the teeny bit of confidential information here confidential at your behest or at somebody else's behest?

[00:07:37] Speaker 02:
I believe it's at the intervener's behest.

[00:07:40] Speaker 02:
The actual description of the strength is the thing specifically that I realize is

[00:07:45] Speaker 02:
confidential call being confident.

[00:07:47] Speaker 02:
It's not yours.

[00:07:48] Speaker 02:
It's not ours.

[00:07:49] Speaker 02:
But that strength, which I won't describe in open court, carried with it an expectation that the government would have these substantial cost savings.

[00:07:59] Speaker 02:
That was something that was the subject of great discussion amongst the evaluation team.

[00:08:03] Speaker 02:
We see the emails where some members of the evaluation team thought that that savings would make up the entire price premium.

[00:08:10] Speaker 02:
And here, S cubed is the highest rated offeror across all evaluation factors.

[00:08:15] Speaker 02:
And it has a substantial cost savings benefit.

[00:08:18] Speaker 02:
to the government because its price is a lot lower.

[00:08:20] Speaker 02:
And so we have a situation, irrespective of the presumption, where one of four strengths, this strength that we can't say out loud in open court, was one that the SSA expressly relied on.

[00:08:34] Speaker 05:
It was a strength of the staffing factor that... Well, let me ask you, since we're not talking about specifics here, but just let me ask you, do you agree that... under what standard do we review the court's analysis and conclusions with respect to those questions?

[00:08:49] Speaker 05:
Does the stand for the evidence review?

[00:08:51] Speaker 02:
Clear, Your Honor.

[00:08:53] Speaker 02:
The standard that would apply to the court's determination as to whether there was prejudice or not, I believe, is the clearly erroneous standard.

[00:08:59] Speaker 02:
And where we think it was clearly erroneous is because the SSA specifically said there are four things, and this was under one of four non-price evaluation factors, there were four things that CAE offered that make me decide I want to award this contract to CAE.

[00:09:17] Speaker 02:
And she specifically relied on all four of them, including this strength and expressly

[00:09:22] Speaker 02:
the substantial cost savings benefit that the government believed it carried with it.

[00:09:27] Speaker 02:
And so the problem is there was no way for the Court of Federal Claims to go and weight those relative strengths when the SSA didn't do it herself.

[00:09:36] Speaker 02:
What the court said was, the Court of Federal Claims, was that because there was no discussion about this particular strength in the cost savings benefit,

[00:09:45] Speaker 02:
As part of the price analysis it was that shows that it didn't really factor into the decision The problem is the SSA said it expressly multiple times and so there was no way for the court in its in its in the first instance to predict how that was going to shake out just because there was no discussion of this strength at the price stage because for many reasons, but primarily because

[00:10:12] Speaker 02:
The reason the court federal claims found this strength irrational in the first place was because the cost savings tied to CLEM-4, I believe it was, which was a plug number.

[00:10:24] Speaker 02:
It was a $100,000 plug number.

[00:10:26] Speaker 02:
And if you didn't bid it, the government put the $100,000 into your proposal.

[00:10:30] Speaker 02:
So everybody bid the same thing.

[00:10:32] Speaker 02:
If the SSA had tried to adjust the price with these cost savings benefits, she clearly expected

[00:10:39] Speaker 02:
at Clean 4, it would have been doubly irrational because there was a limit to what Clean 4 could do.

[00:10:45] Speaker 02:
And so we see the Court of Federal Claims decision there as sort of circular.

[00:10:50] Speaker 02:
The reason it's prejudicial, or excuse me, the reason the court found that this strength was irrational was because Clean 4 was capped and there's no way to find a substantial cost savings benefit.

[00:11:00] Speaker 02:
But then the reason it didn't matter was because there was no discussion of the cost savings benefit as it relates to this

[00:11:06] Speaker 02:
And so we have a situation, and I'm not aware of another case in government contracting where there's actually been a finding of an irrational evaluation decision.

[00:11:19] Speaker 02:
And on a case this close, and we have Wellpoint and others where it's not close, or the Oracle case.

[00:11:24] Speaker 02:
But we actually have the higher rated, lower cost offeror.

[00:11:29] Speaker 02:
And the Court of Federal Claims impedes into the weighting of strengths behind a specific non-price, or excuse me, non-price evaluation factor, and makes a forecasted judgment in a case this close.

[00:11:43] Speaker 02:
And that's where, in our view, the Court of Claims really went awry, regardless of whether there's a presumption, is to make that decision in the first instance.

[00:11:52] Speaker 02:
That's part of the SSA's business proposition.

[00:11:56] Speaker 02:
That's a decision that she has to make.

[00:11:58] Speaker 02:
And we think once the Court of Federal Claims found that the SSA not just that the technical evaluation team assigned an irrational strength, but that the SSA specifically and expressly relied on it,

[00:12:13] Speaker 02:
That would require the Court of Federal Claims to send that decision back to the SSA to get a decision in the first instance as to whether that's still the value proposition the government wants.

[00:12:23] Speaker 02:
Because this unarticulated cost savings benefit that the government expected but it's not quantified

[00:12:30] Speaker 02:
There's no way for the Court of Federal Claims to understand, in the first instance, how the government viewed that.

[00:12:36] Speaker 02:
It could have viewed CAE's proposal as essentially cost neutral.

[00:12:41] Speaker 02:
It could get the three other strengths that it offered.

[00:12:44] Speaker 02:
Plus, it could get this one that potentially, in the view of some people on the government's evaluation team, completely negated the price premium.

[00:12:53] Speaker 02:
And so we need that decision in the first instance from the SSA and not from the Court of Claims.

[00:12:59] Speaker 02:
And that is where the clear error arises.

[00:13:01] Speaker 02:
Again, regardless of the presumption, that is where we see the clear error coming from the Court of Claims in our view.

[00:13:08] Speaker 02:
I think I'm into my rebuttal time, so if there are no questions, I'll stop there.

[00:13:13] Speaker 04:
Thank you.

[00:13:21] Speaker 04:
Now, my notes here say the other side is appearing by video.

[00:13:27] Speaker 04:
Please tell us who you are.

[00:13:31] Speaker 01:
Yes, Your Honor.

[00:13:31] Speaker 01:
This is Evan Wissert from the United States.

[00:13:34] Speaker 01:
And we actually have the defendant intervener, CAE's counsel, is present as well.

[00:13:38] Speaker 01:
We're going to allocate two minutes of our argument time to them.

[00:13:40] Speaker 01:
And they're going to address specifically the issue of potential waiver or forfeiture of the prejudice presumption argument before this court.

[00:13:49] Speaker 01:
I will address all the other remaining issues in the case.

[00:13:52] Speaker 04:
Okay.

[00:13:56] Speaker 01:
May it please the court, we ask that this court affirm the trial court's factual finding that there was no prejudice resulting from the Army's erroneous evaluation of the procurement strength that it had identified.

[00:14:09] Speaker 01:
The trial court, consistent with the instructions from this court, made a full and complete evaluation of the administrative record, determined what the reasonable likelihood of the result would have been absent the evaluation error,

[00:14:23] Speaker 01:
and made a factual finding that in this case, the agency's decision would not have changed.

[00:14:28] Speaker 01:
And in particular, I want to highlight that the trial court followed very closely the guidance that this court issued pretty recently in the oracle decision in how the trial court is supposed to evaluate prejudice, what sorts of standards of review apply, and came to that same conclusion that this court applied in oracle, which is where there is evidence in the record,

[00:14:47] Speaker 01:
that does not provide a reasonable likelihood that the result would have been different.

[00:14:54] Speaker 01:
It is within the scope of the trial court's discretion in making factual findings from the record to say that the award decision would have been the same.

[00:15:03] Speaker 01:
And that's exactly what the trial court did here.

[00:15:05] Speaker 01:
I want to first address the presumption of prejudice.

[00:15:08] Speaker 01:
I don't know that it should be a substantial issue in this case.

[00:15:11] Speaker 01:
As I think the Court has recognized, Glenn Defense Marine appears to address that question.

[00:15:16] Speaker 01:
To the extent there is any remaining confusion at the Court of Federal Claims level, we would echo the request from S3 to provide a clear statement.

[00:15:25] Speaker 01:
I think the Court did provide that clear statement in the dying court opinion from just a couple months ago.

[00:15:30] Speaker 01:
We submitted a Rule 28j letter notifying the court of that decision.

[00:15:34] Speaker 01:
We also referenced it in our briefing.

[00:15:37] Speaker 01:
I think the issue there is that because the prejudice analysis in Dime Corp was a secondary consideration, the court didn't reach it.

[00:15:44] Speaker 01:
The court affirmed there were no procurement errors.

[00:15:46] Speaker 01:
And so the holding itself did not reach the issue of prejudice.

[00:15:50] Speaker 01:
But the court did make a footnote that appeared to be in direct response to the briefing.

[00:15:55] Speaker 05:
Well, let me get to the part that the other side was arguing this morning is none of that matters.

[00:15:59] Speaker 05:
We don't care about what side.

[00:16:00] Speaker 05:
standard to apply what presumption, we ought to win, or at least we have established clear error on these facts in this record.

[00:16:07] Speaker 01:
Certainly, Your Honor.

[00:16:08] Speaker 01:
And applying the clear error standard, the rule that originated the instruction from this court about how to determine prejudice started from Bannon in 2005.

[00:16:19] Speaker 01:
And that is to say that the trial court is to take a trial on the record essentially from the administrative record, make factual findings in the first instance, not be as deferential to the decisions of the agency as it is in the APA standard, the arbitrary capricious standard.

[00:16:36] Speaker 01:
because the trial court is the first tribunal to assess prejudice.

[00:16:41] Speaker 01:
That's what Bannon said, that there would have been no reason for the agency to make a determination in the first instance to say, well, how would this decision have come out differently if some error were obtained?

[00:16:52] Speaker 01:
So what Bannon instructed the trial court to do and that this court reaffirmed in Oracle is to say,

[00:16:57] Speaker 01:
look at the entire scope of evidence in the record, and if it is possible to discern how this would have resulted differently to make that determination.

[00:17:06] Speaker 01:
And I think really the core dispute here between the parties is that S3 is pointing to some of the evidence in the SSA's decision, where the SSA did list out the four strengths that issue here.

[00:17:17] Speaker 01:
But S3 ignores what we pointed out at the trial court and before this court and what the trial court ultimately relied on, which was the summation of the SSA's decision.

[00:17:25] Speaker 01:
If you look at appendix 14873, and I think it's the last paragraph of 14872 and then carries over into 14873.

[00:17:39] Speaker 01:
After reciting the four strengths and providing the explanation from the SSA as to why those strengths were reasonably provided to CAE,

[00:17:50] Speaker 01:
The SSA then provides the condensed trade-off analysis, where she says, the core concern we have here is the staffing capabilities of the contractor.

[00:18:01] Speaker 01:
And that relates back to the solicitation language.

[00:18:04] Speaker 01:
It relates back even further to some of the pre-solicitation discussions the Army had.

[00:18:08] Speaker 01:
The real problem the Army had in providing these helicopter training services was lack of available staffing and the contractors inability to provide sufficient staffing for the contract.

[00:18:19] Speaker 01:
That is the Army's paramount concern.

[00:18:21] Speaker 01:
And the SSA proceeds to explain that it is CAE's

[00:18:24] Speaker 01:
strengths, which specifically address that concern.

[00:18:29] Speaker 01:
And it's that attribute of CAE's proposal, its ability to meet the staffing requirements of the Army.

[00:18:35] Speaker 01:
That is what justifies the price premium and makes the trade-off beneficial to the government to pay more for the staffing benefits that CAE's proposal provides.

[00:18:46] Speaker 01:
Now, she doesn't break down in more detail what she means about the staffing benefits, but it's fairly easy to discern that the strength at issue here has nothing to do with staffing.

[00:18:56] Speaker 01:
It's a billing proposal.

[00:18:58] Speaker 01:
It simply would allocate how the payments to CAE would be structured under certain circumstances.

[00:19:03] Speaker 01:
That has nothing to do with how many FTEs, CAEs providing what level of training it's providing to its staff, any of those issues.

[00:19:10] Speaker 01:
So this is really just a disagreement about which part of the SSA's analysis matters more.

[00:19:16] Speaker 01:
We both presented our positions.

[00:19:18] Speaker 01:
We both presented our view of the evidence to the trial court.

[00:19:21] Speaker 01:
And the trial court, within its sound discretion, made a finding of fact.

[00:19:25] Speaker 01:
It found that the summation that we pointed to backed up by the references we provided to the solicitation and the other discussions that the agency had

[00:19:34] Speaker 01:
was enough of a record for the trial court to determine that, yes, the agency's decision was rooted mostly in the staffing factors.

[00:19:43] Speaker 01:
And so this particular strength relating to a billing item would not have changed that trade-off analysis, but that was clear enough from the record for the court to make that finding.

[00:19:53] Speaker 01:
And the other point I would make is I know that counsel for S3 referenced some circularity potentially in the trial court's decision.

[00:20:00] Speaker 01:
I think it's really S3's argument that ends up being circular here.

[00:20:04] Speaker 01:
Because what the trial court said, one of the main reasons why this particular strength was erroneously given had no rational basis is because, in large part, that it didn't really play into the trade-off analysis.

[00:20:19] Speaker 01:
As I said, it was a proposal that related to the billing practices, yet it had absolutely no presence in the price evaluation.

[00:20:28] Speaker 01:
And the trial court correctly noted that if this was a substantial element of the trade-off analysis as a billing proposal, you would expect to see some sort of variation, even a contingent variation, in the price analysis as part of the SSA's discussion.

[00:20:43] Speaker 01:
That was completely absent.

[00:20:45] Speaker 01:
And also, even though it was allocated as a strength under the technical factors, because of the nature of the strength, it was hypothetical in application.

[00:20:54] Speaker 01:
And it had no relevance to CAE's capability to perform or how much staffing it was being able to dedicate to the contract.

[00:21:02] Speaker 01:
And that is all clearly stated in the SSA's decision.

[00:21:05] Speaker 01:
She does not provide any explanation as to how this particular proposal that related to billing

[00:21:13] Speaker 01:
would have impacted the technical side of their capabilities.

[00:21:17] Speaker 01:
So it was because of the fact that this strength, despite being described as a strength, when you looked at the trade-off analysis, did not actually enter the picture in the discussion of the trade-offs, the specific trade-offs of technical strength and staffing levels versus the price premium on either side of that balancing scale.

[00:21:38] Speaker 01:
Anything related to this particular strength was absent.

[00:21:42] Speaker 01:
And that was in large part not only the basis for the court's determination that the harm was not prejudicial, that was a large part of the reason why the court determined the strength was erroneously given in the first place.

[00:21:53] Speaker 01:
Because the court determined that had it been something the agency truly believed to be material to the success of the contractor, it would have been mentioned in the bottom line summation of the SSA's evaluation, and it was not.

[00:22:08] Speaker 01:
So that's where I think S3's argument sort of turns in on itself.

[00:22:13] Speaker 01:
They argued successfully and prevailed in the trial court in explaining why this strength was really irrelevant and did not deserve a strength in the evaluation process.

[00:22:23] Speaker 01:
The trial court agreed and specifically emphasized the fact that it was not present to a large degree in the trade-off analysis.

[00:22:30] Speaker 01:
Now, S3 wants to turn that around and say, well, because it was an erroneous strength, necessarily the trade-off analysis was irrational.

[00:22:37] Speaker 01:
But I think the particular findings that the court made reject that argument wholesale.

[00:22:42] Speaker 01:
And at least there has been no presentation from S3 that that analysis of the trial court was clearly erroneous by any means.

[00:22:53] Speaker 01:
The one thing I do want to emphasize as well

[00:22:58] Speaker 01:
And this goes to some of the argument that Esfrey made about the trial court not substituting its judgment for the agency, which is a phrase that this court in the Court of Federal Plains uses from time to time.

[00:23:10] Speaker 01:
But that is meant to be a restraining impulse when conducting the APA review.

[00:23:15] Speaker 01:
that when the trial court is reviewing under the arbitrary capricious standard, it should hold its hand and not substitute its judgment for the agency unless the decision of the agency is contrary to law or truly arbitrary and capricious.

[00:23:29] Speaker 01:
That standard about not substituting judgment for the agency has never been applied in a prejudice analysis.

[00:23:34] Speaker 01:
And it makes no sense to apply in a prejudice analysis the way that Eskri is arguing for here, because it would turn that restraining principle

[00:23:42] Speaker 01:
into an offensive principle that would sort of seek out and reverse agency decisions when it may not be necessary.

[00:23:50] Speaker 01:
Applying that same general principle that the court should attempt to preserve the decisions, and this comes right out of the APA.

[00:23:57] Speaker 01:
It's why the rule of prejudicial error is applied in the first place.

[00:24:01] Speaker 01:
But the court should preserve the agency decisions as much as possible, unless there is truly a good reason not to.

[00:24:07] Speaker 01:
That same underlying principle when applied to the prejudice analysis results in the outcome that the trial court came up with here, which is where there is evidence in the record where the SSA made a fairly clear statement of summation that this particular procurement strength had no basis on the bottom line tradeoff.

[00:24:24] Speaker 01:
There is no reason to send it back.

[00:24:26] Speaker 01:
It would just be an exercise in having the SSA restate what she essentially stated the first time and the court should not make the agency waste resources to do that.

[00:24:35] Speaker 01:
So unless the court has any questions at this point, I will yield to my counsel for the other argument.

[00:24:42] Speaker 04:
OK.

[00:24:43] Speaker 04:
Thank you.

[00:24:43] Speaker 01:
Thank you, Alex.

[00:24:45] Speaker 04:
Thank you, Mr. Wooster.

[00:24:48] Speaker 04:
Mr. Ginsburg.

[00:25:13] Speaker 00:
Thank you, Your Honors.

[00:25:14] Speaker 00:
Alex Ginsburg for CAE USA.

[00:25:17] Speaker 00:
I agree with the government's position, and our arguments are well laid out in our brief.

[00:25:22] Speaker 00:
I want to take just a moment to address an ancillary but potentially dispositive issue here, which is that S3 should be stopped from arguing the existence of any presumption of prejudice when it specifically urged the trial court to apply the substantial chance standard during its arguments.

[00:25:40] Speaker 00:
S3 advocated for the substantial chance test in its motion for judgment.

[00:25:45] Speaker 00:
And that's Appendix 193 to 194 in its reply in support of its motion for judgment, which is Appendix 317.

[00:25:54] Speaker 00:
There was no mention of any presumption of prejudice until Appellant's motion for reconsideration, Appendix 424 to 425.

[00:26:02] Speaker 00:
As this court noted in Key Pharmaceuticals v. Hurcon Lab 161, F3rd, 709,

[00:26:11] Speaker 00:
quote, ordinarily doctrines of estoppel, waiver, invited error, or the like, would prohibit a party from asserting as error a position that it advocated for a trial.

[00:26:24] Speaker 04:
Are you saying you had no opportunity to respond to that argument, or are you just saying they should be stopped on principle?

[00:26:34] Speaker 00:
Your Honor, at the trial level, the government and the intervener had no opportunity to respond because there was no argument about a presumption of prejudice advanced, if that answers your question.

[00:26:48] Speaker 00:
So we have addressed the issue in our briefs before this court, but not at the trial level.

[00:26:53] Speaker 00:
And to note, the other quote I wanted to mention from Keith Pharmaceuticals, quote, the impropriety of asserting a position which the trial court adopts

[00:27:02] Speaker 00:
and then complaining about it on appeal should be obvious on its face.

[00:27:06] Speaker 00:
And I think those words are well taken here.

[00:27:08] Speaker 00:
Appellant's primary argument against the application of waiver or estoppel is that the presumption of prejudice applies as a matter of law and cannot be waived.

[00:27:19] Speaker 00:
But the cases appellant relies on for that proposition were cases where the appellant failed to object

[00:27:25] Speaker 00:
to the trial court's application of a legal standard, not where the appellant expressly advocated for the standard it later alleged was erroneous.

[00:27:33] Speaker 00:
And they cite mycoindustries 955 at third one.

[00:27:38] Speaker 00:
But again, that case does not involve one where there was an express advocacy for a proposition later declared to be erroneous.

[00:27:45] Speaker 00:
Appellant also argued in its brief that traditional estoppel does not apply because appellant, quote, achieved no success

[00:27:52] Speaker 00:
by advocating for the substantial chance test in its briefs.

[00:27:55] Speaker 00:
And they have a case on that principle.

[00:27:58] Speaker 00:
But Appellant misinterprets what it means to, quote, achieve success in this context.

[00:28:02] Speaker 00:
Appellant succeeded because the trial court, in fact, applied the substantial chance test just as Appellant advocated.

[00:28:10] Speaker 00:
To achieve success in this context does not mean that Appellant had to win on the merits of its case.

[00:28:16] Speaker 00:
If that were so, then the doctrine of judicial estoppel essentially would have no purpose because a party such as the appellant would have no cause to assert error by the trial court nor to appeal.

[00:28:28] Speaker 00:
And those were the limited points I wanted to make, Your Honors, and otherwise we rest on our brief.

[00:28:36] Speaker 04:
Thank you.

[00:28:37] Speaker 04:
Mr. English, you have some rebuttal.

[00:28:48] Speaker 02:
Thank you, Your Honors.

[00:28:49] Speaker 02:
Just briefly as it relates to the waiver argument.

[00:28:53] Speaker 02:
Our point is it relates to the presumption, and we highlighted it because I do think it's something that needs real clarity from this court.

[00:29:01] Speaker 02:
If it is a thing, it should have applied in this case.

[00:29:04] Speaker 02:
If there is a presumption, the presumption would have applied to relieve S3 of any burden to make a showing in the first instance.

[00:29:12] Speaker 02:
So I don't know how we waive the failure to make a showing if the presumption relieved us of the obligation to make that showing.

[00:29:19] Speaker 02:
And certainly the Court of Federal Claims addressed the presumption at length in its reconsideration decision.

[00:29:25] Speaker 02:
But I want to turn and spend the last couple of minutes talking about the issue of prejudice.

[00:29:31] Speaker 02:
And of course, with or without, if there is not a presumption, then it's the substantial chance test.

[00:29:37] Speaker 02:
And the information solutions case and the standard communications case that we cited granted there from the court of claims say that in the context of a trade-off decision, you show a substantial chance of success if your chances increase.

[00:29:52] Speaker 02:
And here there are four unique identified strengths under one technical sub-factor that tipped the award to CAE.

[00:30:01] Speaker 02:
And the Court of Federal Claims said one of the four, four legs of a stool, one of them is irrational.

[00:30:06] Speaker 02:
And the Court of Federal Claims said, there's still no prejudice.

[00:30:10] Speaker 02:
Certainly, we have a situation where our chances of award increase.

[00:30:14] Speaker 02:
We are the highest rated offeror overall.

[00:30:17] Speaker 02:
We have a substantial price savings that we've offered.

[00:30:20] Speaker 02:
One of four strengths is removed.

[00:30:22] Speaker 02:
I don't think the number is under sealed.

[00:30:24] Speaker 02:
That would give us two fewer strengths under that one sub-factor than CAE.

[00:30:29] Speaker 02:
And it would only give CAE one more strength than L3 DOS, which had an even greater price savings.

[00:30:35] Speaker 02:
And so just to tie this off, I looked at page 14823 of the administrative record.

[00:30:42] Speaker 02:
That's the email between members of the evaluation team, the government source selection team, where they say, and I won't read the precise number, but the some number of millions of dollars price premium, and there they're talking about L3 DOS's price premium, which is even greater, could be made up over the seven years because of this one strength.

[00:31:03] Speaker 02:
The Court of Federal Claims said that the SSA relied on it.

[00:31:07] Speaker 02:
There's nothing in the record from which the Court of Federal Claims could then say, but not really.

[00:31:12] Speaker 02:
And that's essentially what we have here, is it turns into essentially mind reading.

[00:31:17] Speaker 02:
It's irrational on its face, according to the Court of Federal Claims, that it was irrational for the SSA to rely on it.

[00:31:23] Speaker 02:
She said both of those things.

[00:31:26] Speaker 02:
But then the Court of Federal Claims said it didn't matter, and she didn't really rely on it because there's not a discussion here.

[00:31:31] Speaker 03:
That, in our view, is- I'm not sure the Court of Federal Claims said that the SSA didn't really rely on it.

[00:31:39] Speaker 03:
I think the Court of Federal Claims conducting the normal harmless error prejudice inquiry asked, take that out.

[00:31:49] Speaker 03:
Is there any reasonable chance the result wouldn't have been different?

[00:31:52] Speaker 03:
And when I read the record, what strikes me, the Court of Federal Acclaims is saying, is that the staffing, not the billing, was the key to deciding to award to CAE, notwithstanding any difference in dollars.

[00:32:16] Speaker 02:
certainly your honor but remember it's a best value trade-off decision and S3 had outstanding marks on the staffing factor too it also got outstanding and so the question then becomes that value judgment we know that this strength carried with it this irrational strength carried with it some amount of cost savings benefit that the government was clearly expecting maybe it would make up the entire price premium and so when we strip that out

[00:32:41] Speaker 02:
Is it, it's the SSA's decision to say, okay, well, these staffing benefits that we get with CAE, even though now we know we're not going to get this cost savings that might make up the entire premium, it's still worth it.

[00:32:52] Speaker 02:
That's the SSA's decision to make.

[00:32:54] Speaker 02:
And that's the decision that the Court of Federal Claims made for the SSA in this case.

[00:32:59] Speaker 02:
And that is where the clear error lies.

[00:33:01] Speaker 02:
I think I've overrun my time, Ron.

[00:33:03] Speaker 02:
So I'll stop there and let's do a quick follow-up.

[00:33:06] Speaker 04:
Thank you.

[00:33:07] Speaker 04:
Thanks to our counsel.

[00:33:08] Speaker 04:
The case is taken under submission.