[00:00:00] Speaker 04:
Okay, Mr. Rizzo.

[00:00:07] Speaker 03:
Good morning, Your Honors.

[00:00:09] Speaker 03:
So we first want to talk about the issue in our matter about whether, as a matter of law, the three terminated contracts were requirements contracts or IDIQ contracts.

[00:00:19] Speaker 03:
And as you've read from the Board's decision, the Board gave two reasons why they believe that they were IDIQ contracts.

[00:00:26] Speaker 03:
The first being, rather remarkably, they found no language of exclusivity.

[00:00:30] Speaker 03:
And I think we all agree that for a requirements contract, the hallmark aspect is exclusivity of performance of a specific task by a specific contractor.

[00:00:41] Speaker 03:
So they found no language of exclusivity in the contracts.

[00:00:45] Speaker 03:
And then the second, the presence of IDIQ clauses and boilerplate IDIQ language was moving to the board.

[00:00:54] Speaker 03:
And we think both those reasons are wrong.

[00:00:56] Speaker 04:
Do you agree that under provision H2 that the government could have brought in another supplier for the geographic area assigned to SAGE?

[00:01:12] Speaker 03:
No.

[00:01:13] Speaker 03:
No?

[00:01:15] Speaker 03:
My response to that is H2, first of all, it's an options clause.

[00:01:20] Speaker 03:
And under the Federal Circuit case law, options clauses don't give any right to the government or the contractor until they're exercised?

[00:01:29] Speaker 03:
No, you're not answering my question.

[00:01:32] Speaker 04:
If they did exercise, did they have the right to exercise the provision to bring in another contractor for the same geographic area?

[00:01:40] Speaker 03:
Theoretically, if the government exercised that option,

[00:01:44] Speaker 03:
the purpose of that option being to reward exemplary performance by SAGE.

[00:01:51] Speaker 03:
To the contrary, if there was performance that... No, no, no.

[00:01:55] Speaker 04:
Just answer my question.

[00:01:57] Speaker 03:
If the government... That's what the contract said.

[00:01:59] Speaker 03:
That's what the clause says.

[00:02:00] Speaker 04:
If they exercised the option in H2, they could have brought in another contractor to perform in the same geographic areas.

[00:02:08] Speaker 03:
Yes, sir.

[00:02:09] Speaker 03:
Okay.

[00:02:10] Speaker 03:
Okay.

[00:02:11] Speaker 03:
On H2, what I'd also like you to keep in mind is the purpose.

[00:02:17] Speaker 03:
The purpose of H2 underscores exclusivity.

[00:02:21] Speaker 03:
The purpose of H2 says this is a contractor that is performing one task in one area.

[00:02:27] Speaker 03:
If this contractor is exemplary, we will give that contractor additional area.

[00:02:33] Speaker 03:
So it underscores exclusivity.

[00:02:35] Speaker 03:
And the other thing about H2 that we wanted to bring to your attention is

[00:02:43] Speaker 03:
In addition to the option argument I make, H2 to us is another example of just mistakes that the government made in the contract.

[00:02:54] Speaker 03:
H2 references a number of IDIQ clauses, which we think are inappropriate in this requirements contract.

[00:03:01] Speaker 03:
And there are a litany of clauses that the government cites in this contract that are wholly inappropriate.

[00:03:08] Speaker 03:
And I want to make sure that we bring those to your attention so you're aware of them.

[00:03:14] Speaker 03:
Given the record on page 771, the government also includes a 52-237-2 clause, which is the protection of government buildings, equipment, and vegetation.

[00:03:28] Speaker 03:
It's a clause that applies to performance on government installations.

[00:03:32] Speaker 03:
This was not performance on a government installation.

[00:03:35] Speaker 03:
And in fact, the contract makes clear at page 128 that the government is providing no facilities, no equipment, and no materials.

[00:03:44] Speaker 03:
So that's an errant clause.

[00:03:46] Speaker 03:
The government has clauses on notice of intent to disallow costs, which are also errant clauses in this front fixed price contract.

[00:03:58] Speaker 03:
Page 774, the government has a termination for convenience clause, a termination for convenience of the government short form clause and cost reimbursement clause.

[00:04:11] Speaker 03:
The short form clause in this contract is particularly troubling because the short form clause is supposed to be used in situations where a contractor does not have, does not have major investments on its own nickel at the beginning of contract performance.

[00:04:28] Speaker 03:
And clearly, this was a contract where the government asked our client Sage to invest in capital, to invest in offices, to invest in facilities, to invest in people at an extremely high level, with the only ability to recover on that being from the less than 1% profit margin in the contract.

[00:04:50] Speaker 03:
On exclusivity, Your Honor, again, exclusivity is the hallmark of a requirements contract.

[00:04:56] Speaker 03:
We're not aware of any situation where the Federal Circuit has found exclusivity and ruled that the contract was IDIQ.

[00:05:06] Speaker 03:
And the third made, we think, rather general and ineffective analysis of the contract clauses which apply, starting with 6.2.1.2 on page 733 of the appendix.

[00:05:22] Speaker 03:
That clause assigns to SAGE

[00:05:26] Speaker 03:
all unsold inventory in its awarded geographic area.

[00:05:31] Speaker 03:
The contractor shall also receive all case files for the unsold inventory.

[00:05:37] Speaker 03:
So when it comes on board, it gets all of the unsold inventory from the incumbent contractor.

[00:05:43] Speaker 03:
In addition to that, 6.2.1.1

[00:05:47] Speaker 03:
On the 31st day, the contractor begins to receive all new acquisitions in accordance with the performance work and will continue to receive the new acquisitions.

[00:05:59] Speaker 00:
Council, is exclusivity basically an all or nothing proposition or can you have some statements about exclusivity without making a contract a per se requirements contract?

[00:06:12] Speaker 03:
We're not aware of the situation where that's happened, Your Honor.

[00:06:17] Speaker 03:
I think it's particularly important in a case like this where during the solicitation phase, SAGE was told twice it would be the only contractor in these areas and that it would receive all the inventory.

[00:06:31] Speaker 03:
The contract underscores those two representations that were made in the solicitation.

[00:06:37] Speaker 04:
But there's no contention that if there was an exclusivity right that it was breached.

[00:06:44] Speaker 04:
There's no contention that there was a breach of any exclusivity, right?

[00:06:48] Speaker 04:
The contention is that the government mis-estimated its requirements.

[00:06:54] Speaker 04:
The contention is that this is a requirements contract.

[00:06:57] Speaker 04:
No, no, no.

[00:06:58] Speaker 04:
Answer my question.

[00:06:58] Speaker 04:
There's no contention that assuming, hypothetically, that it was an exclusivity provision, that that was breached.

[00:07:08] Speaker 03:
There is no contention that the exclusivity is breached.

[00:07:12] Speaker 03:
The contention is that if this is a requirements contract, the liability of the government is not capped at the guaranteed minimum.

[00:07:20] Speaker 03:
Even though the contract says explicitly that it is.

[00:07:24] Speaker 03:
If it's a requirements contract, it can't be capped at the guaranteed minimum because then there's no consideration.

[00:07:30] Speaker 03:
The purpose of a requirements contract is the government agrees to give all of its requirements

[00:07:35] Speaker 03:
and the contractor agrees to perform all of its requirements.

[00:07:39] Speaker 03:
If either side of that is ineffective, then it's a contract that is unenforceable as illusory, and the Federal Circuit, that's a determination that the Federal Circuit is loath to make, Your Honor.

[00:07:52] Speaker 03:
So what we are asking

[00:07:56] Speaker 03:
What we are asking of you is a determination as a matter of law because of the exclusivity in this contract that this is a requirements contract.

[00:08:06] Speaker 03:
What that would do is return this matter to the board where SAGE has a termination for convenient settlement proposal just to get even in its performance.

[00:08:18] Speaker 03:
It's asked for the $3.1 million to recover its costs plus profits on other issues, as you are aware.

[00:08:25] Speaker 00:
What's your response on Cole's pest control?

[00:08:28] Speaker 00:
How do you respond on that case?

[00:08:30] Speaker 03:
On the Cole pest control case?

[00:08:32] Speaker 03:
Yes.

[00:08:33] Speaker 03:
So the Cole pest control case is, I believe the language in Cole pest control does not mandate exclusivity.

[00:08:46] Speaker 03:
The Cole pest control has language that discusses

[00:08:51] Speaker 03:
on the properties that are assigned by the government agency.

[00:08:56] Speaker 03:
And in our case, there's no such condition, there's no limitation.

[00:09:01] Speaker 03:
Our client is entitled to all of the properties.

[00:09:04] Speaker 03:
So that's our response to that case.

[00:09:07] Speaker 03:
And we cited a case which is crown laundered, a case from the Court of Federal Claims.

[00:09:15] Speaker 03:
And the Crown Laundry case found, notwithstanding the presence of IDIQ clauses, that it was a requirements contract.

[00:09:25] Speaker 03:
And the logic that the court used to get there was, we need to analyze the situation, the totality of the situation.

[00:09:33] Speaker 03:
And the court was... But that's not binding on us.

[00:09:35] Speaker 03:
It is not binding, although it relies very heavily on Federal Circuit cases to reach that decision, Your Honor.

[00:09:43] Speaker 03:
And I think it's the right analysis.

[00:09:46] Speaker 03:
The analysis is, what does the totality of the contract say?

[00:09:49] Speaker 03:
We need to take into account the exclusivity promises.

[00:09:53] Speaker 03:
We need to take into account whether the government could have made a mistake on labeling it in an IDIQ contract, just like the other dozen or so mistakes it made in the contract clauses that it chose.

[00:10:08] Speaker 03:
So our position is if you analyze the contract as a whole, you will read exclusivity, and exclusivity being a hallmark of a requirements contract should lead you to conclude that this is a requirements contract which would keep Sage's claims alive, Your Honor.

[00:10:34] Speaker 04:
an IDIQ contract that provision limiting the government's liability doesn't mean anything, right?

[00:10:42] Speaker 03:
If it's a requirements contract, there's one provision in the contract that expressly limits the government's liability.

[00:10:51] Speaker 03:
That is in H2, Your Honor.

[00:10:53] Speaker 03:
And as I said before, the parties should not look at H2 as a matter of law unless and until that option is exercised, which didn't happen.

[00:11:04] Speaker 03:
But that being said, if this is a requirements contract, then the limitation that's in that provision does not apply.

[00:11:15] Speaker 03:
And if the court were interested in harmonizing the potential application of that provision in the event that the government did exercise the option, our argument on H2 is that

[00:11:31] Speaker 03:
the language about reaching the guaranteed minimum applies to the point in time when the government can decide to exercise its option to increase geographic area for exemplary performance or to decrease geographic area on the basis that the contractor isn't performing.

[00:11:52] Speaker 03:
So that clause, as part of the totality of the circumstances, as we believe,

[00:11:58] Speaker 03:
really does underscore exclusivity and adds to our argument that this is a requirements contract.

[00:12:05] Speaker 03:
I've saved three minutes for rebuttal and I'll step down now unless there's any other questions.

[00:12:09] Speaker 00:
I have one more question before you sit down.

[00:12:12] Speaker 00:
Appendix page 733 that you took us to, there is that reference to 6.2.1.1.1.

[00:12:21] Speaker 00:
So three ones is what I was trying to say.

[00:12:23] Speaker 00:
Yes.

[00:12:25] Speaker 00:
I don't see the same sort of suggestions regarding exclusivity in here.

[00:12:30] Speaker 00:
What is your response or do you feel like that does not matter in terms of your argument?

[00:12:35] Speaker 03:
Oh, it matters.

[00:12:36] Speaker 03:
6.2.1.2 is the commitment that all of the incumbent contractor's old inventory will go to my client's age.

[00:12:47] Speaker 03:
6.2.1.2 is the statement that on the 31st day,

[00:12:53] Speaker 03:
The contractor SAGE shall begin to perform marketing sales for all new acquisitions, so it ties together.

[00:12:59] Speaker 03:
SAGE gets the old and SAGE gets the new.

[00:13:02] Speaker 03:
And if you look at the 1.1.1 that's below it on the third line, also SAGE will continue to receive new acquisitions in this area following the 31st day.

[00:13:13] Speaker 03:
So there isn't a reasonable expectation in our view of anything other than exclusivity in that provision.

[00:13:25] Speaker 04:
Okay, we'll give you two minutes for one.

[00:13:27] Speaker 04:
Thank you.

[00:13:37] Speaker 04:
Okay, let's top one.

[00:13:45] Speaker 01:
Government respectfully requests that you affirm the decision of the CBCA.

[00:13:49] Speaker 01:
The board properly held that the contract was an IDIQ contract.

[00:13:52] Speaker 01:
such that Sage was not entitled to anything beyond the guaranteed minimum, which is undisputed that HUD satisfied.

[00:13:59] Speaker 01:
The board also properly held that HUD's exercise of option year two was proper, and the board properly, as well as the board properly held that HUD did not breach the bridge contract by diverting inventory or to, or just, in essence, just by using real alternatives.

[00:14:13] Speaker 01:
As I said, this contract is clearly an, is clearly an IDIQ contract, and the board's holding on that was well reasoned and proper.

[00:14:19] Speaker 01:
The plain language of this contract shows this is an IDIQ and case law is clear.

[00:14:23] Speaker 01:
When a contract is clear and unambiguous, this court should go no further and look not beyond the plain language.

[00:14:28] Speaker 02:
There's a lot of indicia pointing us to why this should be understood as an IDIQ contract.

[00:14:35] Speaker 02:
Well, what was the government trying to accomplish with 6.2.1.1 and 6.2.1?

[00:14:44] Speaker 01:
The government was 6.1 point, you're correct your honor, was all the initial of an IDIQ contract.

[00:14:51] Speaker 01:
But 6.2.1.1 and 6.2.1.2 solely deal with the ramp up of the contract.

[00:14:56] Speaker 01:
They deal with what occurred in a specific period of time.

[00:14:59] Speaker 01:
They deal with what happened on the 31st day, what happened on the 61st day.

[00:15:02] Speaker 04:
But your problem is that in the Q&A, in connection with the solicitation, it was characterized

[00:15:10] Speaker 04:
as giving the contractor exclusive rights if it was the only contractor assigned to that area, which it was in this case.

[00:15:19] Speaker 01:
Right.

[00:15:19] Speaker 01:
Your Honor, but there's no right, there's no requirement that the government to actually not go outside the IDIQ.

[00:15:24] Speaker 01:
This is an IDIQ.

[00:15:25] Speaker 01:
It's not a requirements contract.

[00:15:26] Speaker 01:
The government was free on this case.

[00:15:28] Speaker 04:
I don't think you're answering my question.

[00:15:31] Speaker 04:
Judge Chen made reference to these provisions of the contract, 6.211 and 6.212, as perhaps creating an exclusive right to that territory, absent the exercise of the option in H2.

[00:15:49] Speaker 04:
And the government is saying, no, no, you shouldn't construe those clauses as giving an exclusive right.

[00:15:55] Speaker 04:
And the problem I'm having with that is the Q&A in connection with the solicitation, which seems to recognize that if there's only one contractor for the area, that's an exclusive contract.

[00:16:10] Speaker 01:
First off, the court will look to the language of the contract, not the Q&A.

[00:16:16] Speaker 04:
Certainly, if we find that 6.211 and 12 are ambiguous, we can look to the Q&A, correct?

[00:16:24] Speaker 04:
Certainly, but 6.211... Well, let's assume for the moment that we find that they're ambiguous, okay?

[00:16:31] Speaker 04:
Doesn't the Q&A suggest that there's an exclusivity right here?

[00:16:36] Speaker 01:
The Q&A suggests, as I understand, Your Honor, a single award, a single award IDIQ, which in this case is when you have a single award, that generally means that one contractor gets that work for the specific area.

[00:16:48] Speaker 01:
But being that it's an IDIQ, there's no restriction, which would exist in the case of a requirements contract, there's no restriction on HUD going outside the IDIQ.

[00:16:57] Speaker 01:
Because what it says is to the extent there's a single award IDIQ.

[00:17:00] Speaker 04:
I don't understand what you're saying.

[00:17:01] Speaker 04:
I mean, here's a Q&A which says if there's one contractor for the area, it's exclusive.

[00:17:07] Speaker 04:
And why can't I use that to interpret 6.2 as conferring exclusivity?

[00:17:16] Speaker 01:
Because a single award IDIQ is distinct from a requirements contract.

[00:17:21] Speaker 04:
The fact that there's only... That's assuming the result.

[00:17:28] Speaker 01:
You, sir, with all due respect, Your Honor, the contract, first of all, if you look to the language of the contract, the contract states it's an IDIQ contract.

[00:17:38] Speaker 01:
It makes it very clear and contains all the indications.

[00:17:40] Speaker 01:
And I have a single award IDIQ contract.

[00:17:43] Speaker 01:
And the single award IDIQ contracts work in the sense how a single award is intended to work is that there's one contractor assigned for that specific award area.

[00:17:54] Speaker 01:
But unlike a requirements contract, it does not guarantee exclusivity.

[00:17:58] Speaker 01:
It guarantees that if we choose to use that IDIQ, then we will use that single contractor.

[00:18:06] Speaker 01:
That is what is guaranteed here.

[00:18:08] Speaker 01:
That's what was intended and what was clear from the Q&A.

[00:18:12] Speaker 01:
And that's what is clear from the plain language of the contract.

[00:18:14] Speaker 01:
It was a single award.

[00:18:15] Speaker 01:
There's no requirement that HUD had to satisfy

[00:18:18] Speaker 01:
all of its requirements through this IDIQ.

[00:18:20] Speaker 01:
That would have existed had it been in a requirements contract, but it's not.

[00:18:23] Speaker 01:
HUD was certainly free to go outside the IDIQ.

[00:18:26] Speaker 01:
They were certainly free after they, all they had to do was satisfy the care.

[00:18:30] Speaker 02:
I guess the question comes back to how do we just understand the plain words in 1112 and 111, where it suggests that, okay, SAGE is going to inherit everything, it's going to keep getting new things,

[00:18:47] Speaker 02:
And so there's a suggestion at least that there could be exclusivity embedded inside these provisions.

[00:18:58] Speaker 01:
With all due respect, Your Honor, we would disagree.

[00:19:00] Speaker 01:
Those provisions develop at a specific point in time.

[00:19:02] Speaker 01:
What exclusivity requires is a perspective promise throughout the life of the contract to give all work.

[00:19:08] Speaker 01:
All it suggests is on the 31st day they get the existing acquisitions.

[00:19:12] Speaker 01:
and they get things transferred.

[00:19:14] Speaker 01:
All it suggests is they get stuff at the 61st.

[00:19:17] Speaker 04:
Let's assume for the moment you're wrong about that, okay?

[00:19:21] Speaker 04:
Let's assume that we mean 6.2 as creating exclusivity, which can be undone by exercising the option in H2.

[00:19:32] Speaker 04:
Is this still an IDIQ contract?

[00:19:36] Speaker 01:
Yes, Your Honor.

[00:19:37] Speaker 01:
It's undisputedly an IDIP contract.

[00:19:40] Speaker 01:
H2 talks about, if you interpreted this as a requirements contract, H2 would essentially defeat the consideration and render a requirements contract unenforceable.

[00:19:52] Speaker 02:
I guess I'm a little, let me try again with what I heard Judge Dykask.

[00:19:58] Speaker 02:
If there's an exclusivity provision in this contract,

[00:20:03] Speaker 02:
Can an IDIQ contract have an exclusivity provision in it?

[00:20:10] Speaker 02:
And if the answer is no, that's fine, but I'd like to hear.

[00:20:13] Speaker 01:
IDIQ contract cannot have an exclusivity provision on it.

[00:20:17] Speaker 01:
An IDIQ contract allows the contractor.

[00:20:20] Speaker 01:
They can go outside the IDIQ that if you had the exclusivity provision, exclusivity is a hallmark of a requirements contract.

[00:20:27] Speaker 01:
In this case, there is no exclusivity provision.

[00:20:31] Speaker 04:
Let's assume that 6.2 creates exclusivity, but H2 provides the government with an option to undo the exclusivity.

[00:20:44] Speaker 04:
Is that inconsistent with an IDIQ contract?

[00:20:49] Speaker 01:
No.

[00:20:50] Speaker 01:
That would be consistent with an IDIQ contract, and it would be inconsistent with a requirements contract.

[00:20:54] Speaker 01:
Because in a requirements contract, the option to undo the exclusivity would render the consideration

[00:20:59] Speaker 01:
In the case of an IDIQ contract, this would be consistent with it because in the case, H2 essentially says you can undo this as you satisfy the guaranteed minimum.

[00:21:09] Speaker 01:
An IDIQ's contract, the consideration for it is the guaranteed minimum.

[00:21:13] Speaker 01:
What H2 does is it says when the guaranteed minimum is satisfied, we can undo it.

[00:21:19] Speaker 01:
The contract is over.

[00:21:20] Speaker 01:
We've satisfied our obligations and we are allowed to move on.

[00:21:24] Speaker 01:
increase or decrease the G gap gap or move away.

[00:21:27] Speaker 01:
So essentially H2 fully reinforces the contract status as an IDIQ, irrelevant of whether you would read exclusively.

[00:21:34] Speaker 02:
One reasonable way of reading Section 6 is, yes, it's contemplating Sage as being

[00:21:45] Speaker 02:
the sole contract and sole source, but it doesn't actually provide exclusivity across the life of the contract.

[00:21:53] Speaker 01:
Yes, Your Honor.

[00:21:54] Speaker 01:
That's the position that we posit in our brief.

[00:21:56] Speaker 01:
That's the position we posit here today.

[00:21:58] Speaker 01:
It contemplates that Sage will be the single award holder and then will receive the work, but it doesn't actually guarantee it.

[00:22:04] Speaker 01:
And H2 makes that clear that, you know,

[00:22:06] Speaker 01:
We have no further obligations to Sage once the guaranteed minimum is satisfied.

[00:22:10] Speaker 01:
That's the hallmark of an IDEIQ contract.

[00:22:12] Speaker 01:
The consideration for an IDEIQ contract is the satisfaction of the guaranteed minimum.

[00:22:16] Speaker 01:
In this case, HUD satisfied the guaranteed minimum, and when that consideration was satisfied, HUD's obligations ended.

[00:22:23] Speaker 01:
As I said, the plain language in this case is clear, and the court shouldn't attempt to read ambiguities where they don't exist.

[00:22:29] Speaker 01:
It identifies itself as an IDIQ.

[00:22:31] Speaker 01:
It has all the IDIQ's clauses, no requirements clauses, and it includes the guaranteed minimum, which is the hallmark of an IDIQ contract.

[00:22:40] Speaker 01:
As I said, the H2 is consistent with an IDIQ, but totally inconsistent with the requirements clause.

[00:22:47] Speaker 01:
Likewise, this contract has no indications of the requirements contract.

[00:22:50] Speaker 01:
It doesn't have the clauses.

[00:22:51] Speaker 01:
It doesn't have it.

[00:22:52] Speaker 01:
It doesn't have exclusivity for the perspective life of the contract.

[00:22:55] Speaker 01:
And it doesn't have guaranteed estimates.

[00:22:57] Speaker 01:
There's no indicia of an IDIQ contract.

[00:22:59] Speaker 01:
There's all the indicia here is that this is an IDIQ contract.

[00:23:03] Speaker 01:
There's no indicia of a requirements contract.

[00:23:06] Speaker 01:
And this court shouldn't attempt to allow Sage to insert ambiguity where it clearly doesn't exist.

[00:23:11] Speaker 01:
This contract is clearly an IDIQ contract.

[00:23:13] Speaker 01:
And it had satisfied the guaranteed minimums undisputed.

[00:23:16] Speaker 01:
Therefore, Sage is entitled to nothing further.

[00:23:18] Speaker 01:
They received the full benefit of the bargain.

[00:23:20] Speaker 01:
The bargain was, you're going to get a million dollars of work under each contract, and they got that million dollars of work.

[00:23:25] Speaker 01:
It's undisputed.

[00:23:26] Speaker 01:
They received everything.

[00:23:27] Speaker 01:
They're just attempting to bootstrap on and get more, because they were not as profitable as they wanted to be.

[00:23:34] Speaker 01:
In addition, just to address, and there's further questions on the first argument, just to address the other two arguments.

[00:23:41] Speaker 01:
The board's conclusion that has exercise of option year two is not illegal, it's proper.

[00:23:47] Speaker 01:
And as well as, you know, just like I said, with respect to the guaranteed minimum, even if it wasn't proper, even if the court had no further obligation to stage after they satisfied the guaranteed minimum, it is undisputed that they did prior to option year two, as well as

[00:24:02] Speaker 01:
The board properly held that HUD did not breach the bridge contract.

[00:24:06] Speaker 01:
As the language of the contract is clear, it's limited to RIOs, foreclosure sales.

[00:24:13] Speaker 01:
And the bridge contract, they did give them, it's also in dispute that they gave them all RIOs.

[00:24:17] Speaker 01:
And exclusivity for that bridge contract only existed for the services in the contract, which were RIO services.

[00:24:23] Speaker 01:
And so HUD did not breach that contract by using services outside the RIO program as they were allowed to do.

[00:24:31] Speaker 01:
Unless this court has any further questions.

[00:24:34] Speaker 04:
Okay, thank you.

[00:24:36] Speaker 04:
Thank you, Your Honor.

[00:24:45] Speaker 03:
So back to H2.

[00:24:47] Speaker 03:
Just want to make it clear, H2 does not eliminate exclusivity.

[00:24:52] Speaker 03:
H2 may reduce the exclusivity of a geographic area or it may increase it, but it doesn't do anything to add a second contractor.

[00:25:02] Speaker 03:
There's still exclusivity.

[00:25:03] Speaker 04:
You said to me in the opening argument that H2 did allow them to add a second contractor in the same geographic area.

[00:25:13] Speaker 04:
I'm trying, I realize that and I'm clarifying that.

[00:25:16] Speaker 04:
Clarifying?

[00:25:17] Speaker 04:
You're trying to take it back.

[00:25:19] Speaker 03:
I made a misstatement to you earlier.

[00:25:22] Speaker 03:
So however you want to characterize it, H2 does not add a second contractor to an area.

[00:25:30] Speaker 03:
H2

[00:25:32] Speaker 03:
either increases or decreases the geographic area.

[00:25:36] Speaker 03:
And to Ms.

[00:25:37] Speaker 03:
Toblin's argument about the impact of that, a potential option that exercises a reduction, the same impact occurs if the government terminates for convenience.

[00:25:52] Speaker 03:
And so if the conclusion is that the reduction impact

[00:25:57] Speaker 03:
takes away, makes a contract incapable of being a requirements contract, then no contract can be a requirements contract.

[00:26:05] Speaker 03:
Because every contract, as a matter of law, has a termination of revision.

[00:26:09] Speaker 03:
Sorry, Your Honor.

[00:26:10] Speaker 00:
How do you respond to follow up on what Judge Chin asked opposing counsel in terms of no exclusivity over the life of the contract?

[00:26:20] Speaker 00:
It's just exclusivity over a certain time period.

[00:26:22] Speaker 00:
Do you have a response to that?

[00:26:24] Speaker 03:
The response is we don't agree

[00:26:26] Speaker 03:
6.2.1.2 on the 61st day assigns all the old inventory of the other contractor.

[00:26:34] Speaker 03:
6.2.1 of the incumbent contractor.

[00:26:37] Speaker 03:
6.2.1.1 assigns all new inventory on a going forward basis.

[00:26:44] Speaker 03:
So I don't know what else there is, what else there would be left, Your Honor, and I apologize.

[00:26:51] Speaker 04:
Okay, I think we're out of time.

[00:26:52] Speaker 03:
I'll thank both Council and cases submitted.

[00:26:55] Speaker 04:
I'll close our session.