[00:00:00] Speaker 04:
We move the argument next in number 231992, Golden IT versus United States.

[00:00:08] Speaker 04:
Mr. Budden.

[00:00:09] Speaker 02:
Thank you, Your Honors.

[00:00:10] Speaker 02:
May it please the Court?

[00:00:13] Speaker 02:
I'm going to keep my comments brief.

[00:00:16] Speaker 02:
Your Honors have read the documents.

[00:00:19] Speaker 02:
And this is a fairly narrow and factual issue.

[00:00:24] Speaker 02:
So I just want to make two points.

[00:00:28] Speaker 02:
The court erred in determining that there was no prejudice on price because Golden could not improve its price evaluation.

[00:00:38] Speaker 02:
But we contend that Golden did not have to improve its price evaluation.

[00:00:43] Speaker 02:
And there are two reasons for that.

[00:00:46] Speaker 02:
First, the government found that the awardees' prices were aligned and that they understood the

[00:00:55] Speaker 05:
It's undisputed, right, that the eight other offers that got awards had no risk on price.

[00:01:03] Speaker 01:
Yes, sir.

[00:01:04] Speaker 05:
And your pricing proposal had risk.

[00:01:06] Speaker 01:
Yes, sir.

[00:01:07] Speaker 05:
How is there any possible way you would have gotten one of those awards if they all have no risk and you have risk?

[00:01:16] Speaker 02:
Well, there are a couple of points I'd make in response to that.

[00:01:21] Speaker 02:
I think the first is to look to what

[00:01:24] Speaker 02:
the evaluators and the source selection authority or SSA decided.

[00:01:32] Speaker 02:
What they said was that the prices were aligned

[00:01:35] Speaker 05:
No, but that's not what I'm asking, because the trial court found that they properly evaluated as having some risk.

[00:01:43] Speaker 05:
I forget which term they used.

[00:01:46] Speaker 05:
And the other ones had no risk.

[00:01:49] Speaker 05:
And so whether your prices are in line with those or not doesn't go to the question of risk.

[00:01:56] Speaker 05:
And you're not challenging that risk determination here.

[00:02:01] Speaker 05:
And so once you're stuck with that risk determination versus no risk for the other ones, it doesn't really matter what the actual number is.

[00:02:10] Speaker 05:
It's the risk that's associated with which would take you out of the award, wouldn't it?

[00:02:18] Speaker 02:
I think what I would focus on, Your Honor, is not the prices

[00:02:25] Speaker 02:
that each offeror proposed or that the government awarded, but the language that the government used in making its decision.

[00:02:35] Speaker 02:
And so, yes, Your Honor, you are correct that Golden had a moderate risk.

[00:02:44] Speaker 02:
But the agency's determination was focused on two other facts that are important.

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The first

[00:02:55] Speaker 02:
is that the agency found the labor categories to be in law.

[00:03:00] Speaker 02:
The second is that the offerors understood the requirements.

[00:03:09] Speaker 02:
And the point in our brief is that moderate risk rating notwithstanding, those are things that the agency found with respect to Golden II.

[00:03:23] Speaker 02:
So the court did consider the risk factor, but it did not consider all of the factors.

[00:03:30] Speaker 02:
But usually they would have been awarded six, right?

[00:03:33] Speaker 03:
Yes, Your Honor.

[00:03:33] Speaker 03:
And then they decided to award eight because they didn't have logical distinctions among the eight, right?

[00:03:38] Speaker 03:
Yes, Your Honor.

[00:03:39] Speaker 03:
It sounds like they have a logical distinction between golden and there are many eights with this moderate risk.

[00:03:47] Speaker 02:
That's a good question, Your Honor.

[00:03:49] Speaker 02:
I'm not sure I would agree with that characterization in its entirety.

[00:03:54] Speaker 02:
And again, I'm just going to return to the, I don't want to beat the same language, but the government, the source selection authority in that memo made an additional finding beyond that.

[00:04:09] Speaker 02:
She said that they understood the requirements and the pricing was fair and reasonable.

[00:04:15] Speaker 02:
And that's similar to what the evaluators found.

[00:04:18] Speaker 02:
And Golden presented the same facts.

[00:04:23] Speaker 02:
And so the trial court focused just on the risk factor, but it did not consider the entire basis for the agency's award determination.

[00:04:37] Speaker 02:
And I think that's a very important distinction.

[00:04:40] Speaker 05:
Because the crux of your argument is that once all these non-price factors got fixed, that the agency, that your client had a potential to be awarded one of these contracts even though it was moderate risk and everybody else was no risk.

[00:04:58] Speaker 05:
Yes, that is... You have any proof or suggestion that that would be the case?

[00:05:03] Speaker 05:
It seemed very illogical to me when they were trying to only award six

[00:05:08] Speaker 05:
And they ended up awarding aid that they would pile in a ninth that had a risk when nobody else did.

[00:05:14] Speaker 05:
That's a factual finding, this prejudice, right?

[00:05:18] Speaker 05:
So we have to find clear error in the logic of that or in the record that shows they would have considered.

[00:05:24] Speaker 05:
Do you have anything that suggests that the government would have added in a ninth offer that had a risk factor that the other eight didn't?

[00:05:32] Speaker 05:
It doesn't sound to me like the way government contracts work.

[00:05:38] Speaker 02:
I think, Your Honor, that that is not the entirety of the agency's finding.

[00:05:45] Speaker 02:
And I think that's sort of the critical issue here.

[00:05:48] Speaker 02:
And then there is a secondary point.

[00:05:50] Speaker 05:
But that's what the prejudice finding is based on here, or the no prejudice finding.

[00:05:55] Speaker 05:
And that's what we're reviewing for clear error.

[00:05:59] Speaker 02:
As I read the decision, it is that there was no prejudice because Golden could not improve its price about each

[00:06:08] Speaker 02:
And I don't think that is an accurate characterization based on the contemporaneous record.

[00:06:16] Speaker 05:
I don't understand what you mean by that.

[00:06:19] Speaker 05:
The government wasn't going to reopen this.

[00:06:21] Speaker 05:
They weren't required to reopen this.

[00:06:23] Speaker 05:
So you were stuck with the evaluation you got.

[00:06:26] Speaker 05:
They weren't going to give you a new evaluation on price just because you got other things corrected.

[00:06:32] Speaker 05:
So if that's correct, and I think there's certainly no clear error in the fact that they wouldn't have reopened the evaluation on price, then again, you're still stuck with a risk factor.

[00:06:48] Speaker 02:
Your Honor, the court will overturn, even if a factual finding was made, the court will overturn a decision

[00:06:59] Speaker 02:
if it has a definite and firm conviction that a mistake was made.

[00:07:04] Speaker 02:
And here, by not considering the entirety of the government's decision, the source selection authority, and the evaluation team, the trial court committed that clear error.

[00:07:17] Speaker 02:
Because the trial court contended or determined that the issue that created the risk was the sole determining factor

[00:07:27] Speaker 02:
in its decision-making process, and that is not accurate based on the record itself.

[00:07:34] Speaker 02:
And the record itself says, again, that Golden's labor categories were in line, which is exactly what it found with respect to the awardees, and that based on the definition we have of moderate risk, that it had some confidence that Golden could perform the requirements.

[00:07:54] Speaker 03:
My understanding is part of the concern was about getting the correct caliber of staff with respect to the concern with Goldman's proposal.

[00:08:04] Speaker 03:
Are you telling me that that concern was also raised with respect to one of the other bidders that were awarded?

[00:08:12] Speaker 02:
Thank you, Your Honor.

[00:08:14] Speaker 02:
No.

[00:08:14] Speaker 02:
Just to give you a straight answer, the answer is no.

[00:08:19] Speaker 02:
That was not considered.

[00:08:22] Speaker 02:
In response to that, and in response to the second point that Judge Hughes raised, the court did find that there was no record on the non-price factors.

[00:08:34] Speaker 02:
And there is no record of what the agency might have done had it had to contend with this.

[00:08:45] Speaker 02:
And the role of an information that I'm pointing to is confidential.

[00:08:50] Speaker 02:
But I would point you to Appendix 11657.

[00:08:56] Speaker 02:
There is information in the record that indicates that the agency may very well have reached a different decision had it considered, had it done a complete trade-off based on that high confidence rating and the moderate risk rating because there was

[00:09:19] Speaker 02:
some similarity there.

[00:09:22] Speaker 02:
And we don't have a record in front of us about what the agency.

[00:09:29] Speaker 04:
I'm sorry.

[00:09:30] Speaker 04:
I know you're trying to avoid saying anything that you're not supposed to say.

[00:09:35] Speaker 04:
But is that the point that you make in your reply brief but did not make in your blue brief about the relatively small dollar difference between at least one of the winners and your client?

[00:09:51] Speaker 02:
But we were responding to the government's argument, Your Honor, that the agency, that Golden's price was not, we couldn't have received the award.

[00:10:13] Speaker 02:
And we were responding to that point specifically, and that's on pages 12 and 14.

[00:10:18] Speaker 02:
But yes, Your Honor, that is, we were responding.

[00:10:21] Speaker 04:
And do I remember correctly that the flaws that the claims court found in the agency's process did not go specifically to the reasons for thinking that your pricing, particularly about labor, was risky?

[00:10:46] Speaker 02:
The non-price factors, that's correct.

[00:10:49] Speaker 04:
These were two separate things.

[00:10:51] Speaker 02:
Yes, Your Honor, they were two separate things, and I think to the extent it's a meaningful point, I think that's the most important distinguishing characteristic of the system studies and simulation case.

[00:11:09] Speaker 04:
You'll have your rebuttal time, or four minutes of it anyway, and we'll hear from the government.

[00:11:17] Speaker 02:
Thank you, Your Honors.

[00:11:27] Speaker 00:
Good morning, and may it please the court.

[00:11:31] Speaker 00:
I'd like to start with the argument that was made on page four of the reply brief and was touched upon here today, that there was a relatively small amount of difference, 1% or so, between Goldin's total price

[00:11:50] Speaker 00:
as it was proposed, and another offer wars price.

[00:11:56] Speaker 00:
This argument mixes apples and oranges.

[00:11:59] Speaker 00:
The agency assessed the moderate risk because Golden discounted its proposed labor rates.

[00:12:07] Speaker 00:
They heavily discounted those labor rates.

[00:12:10] Speaker 04:
But wasn't that a significant determinant of the bottom line price being offered?

[00:12:18] Speaker 00:
Yes, so the bottom line price was a function of two things, the proposed labor rates and the number of labor hours.

[00:12:26] Speaker 00:
So what Golden did was they heavily discounted their labor rates, but then they proposed dramatically more hours than any other offeror.

[00:12:39] Speaker 00:
And so the agency assessed Golden a moderate risk here because its discount of the rates was so high, so high, that there was a concern that Golden couldn't attract the people that it would need to do the work.

[00:12:55] Speaker 00:
And a risk assessment like this is a quintessential judgment call for an agency to make.

[00:13:02] Speaker 00:
And it was plainly rational based on the discounts up to 54% in Golden's proposal.

[00:13:11] Speaker 00:
Again, far more.

[00:13:12] Speaker 04:
If I remember right, there hasn't been anything presented to us that there was a similar underlying situation with the close winner.

[00:13:24] Speaker 00:
Not at all, Your Honor.

[00:13:27] Speaker 00:
The offeror who was close in total price, their pricing was discounted no more than 26% off the GSA rates.

[00:13:39] Speaker 00:
So less than half of what Goldin's was.

[00:13:44] Speaker 00:
So the way they got there was the point of concern, not the end point.

[00:13:51] Speaker 00:
In turning to the prejudice issue, the trial court did not clearly err when it found that Goldin's proposal would still be inferior to all of the awarded proposals, even if the agency would have corrected some errors in the evaluation of Goldin's technical proposal and its prior experience.

[00:14:13] Speaker 00:
Correcting those errors perhaps could have brought Goldin up to the level of the awardees on the non-price factors,

[00:14:21] Speaker 00:
But Golden still would have had a problem.

[00:14:24] Speaker 00:
It still would have remained inferior on price because of its pricing risk, something that no awardee had.

[00:14:32] Speaker 00:
The agency was not looking to make an infinite number of awards.

[00:14:36] Speaker 00:
They only went from six to eight because they couldn't make a rational distinction.

[00:14:41] Speaker 00:
between the eight awarded proposals.

[00:14:45] Speaker 00:
But here, there was a clear distinction.

[00:14:47] Speaker 00:
Golden stuck out like a sore thumb because of those heavily discounted labor rates, which created the pricing risk.

[00:14:55] Speaker 03:
No, Counsel, I know that you can't speak to it maybe liberally in light of the fact that Appendix Page 11657 is confidential.

[00:15:05] Speaker 03:
But do you want to respond at some high level without revealing any confidential information on the open record?

[00:15:11] Speaker 03:
to the citation that opposing counsel wanted us to.

[00:15:17] Speaker 00:
Your Honor, I would just say that there's no support on that page or anywhere else in this record that would suggest that the agency would make an award under these circumstances.

[00:15:27] Speaker 00:
I'm not sure I was tracking the

[00:15:31] Speaker 03:
The page is 11657.

[00:15:32] Speaker 00:
No, I got the citation.

[00:15:35] Speaker 00:
I just don't understand the relevance of that page to the argument.

[00:15:40] Speaker 00:
But nevertheless, there's no support in this record for the suggestion that they would have nonetheless, Golden would have received an award, notwithstanding the undisputed pricing problem with their pricing risk.

[00:16:02] Speaker 00:
And because the trial court properly found no prejudicial error based on the agency's rational risk assessment, this court should affirm.

[00:16:12] Speaker 00:
Thank you.

[00:16:20] Speaker 04:
Mr. Levin.

[00:16:28] Speaker 02:
Your Honors, I've already said

[00:16:31] Speaker 02:
everything that I think there is to say, and I can repeat myself or just rest on the arguments I've made.

[00:16:38] Speaker 05:
We love it when people give us back time.

[00:16:40] Speaker 04:
And 18-page briefs, even better.

[00:16:44] Speaker 02:
Thank you, Your Honor.

[00:16:45] Speaker 02:
We believe this is a very narrow and straightforward issue.

[00:16:49] Speaker 02:
Do Your Honors have any questions for me?

[00:16:51] Speaker 02:
Well said.

[00:16:51] Speaker 02:
Thank you.

[00:16:52] Speaker 02:
Thank you.