GOLDEN IT, LLC v. US
Oral Argument — 09/04/2024 · Case 23-1992 · 16:54
0:00
Judge Taranto
We move the argument next in number 231992, Golden IT versus United States.
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Mr. Levin.
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Appellant Attorney (Jon Davidson Levin)
Thank you, Your Honors.
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May it please the Court.
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I'm going to keep my comments brief.
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Your Honors have read the documents, and this is a fairly narrow and factual issue,
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so I just want to make two points.
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The Court erred in determining that there was no prejudice on price
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because Golden could not improve its price evaluation,
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but we contend that Golden did not have to improve its price evaluation.
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And there are two reasons for that.
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First, the government found that the awardees' prices were aligned
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and that they understood the...
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Judge Hughes
But it's undisputed, right,
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that the awardees' prices were aligned and that they understood the...
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The eight other offerors that got awards had no risk on price.
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Appellant Attorney (Jon Davidson Levin)
Yes, Your Honor.
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Judge Hughes
And your pricing proposal had risk.
1:06
Appellant Attorney (Jon Davidson Levin)
Yes, Your Honor.
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Judge Hughes
How is there any possible way you would have gotten one of those awards
1:12
if they all have no risk and you have risk?
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Appellant Attorney (Jon Davidson Levin)
Well, there are a couple of points I'd make in response to that.
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I think the first is to look to what the evaluators
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and the...
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And the Source Selection Authority, or SSA, decided.
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And what they said were that the prices were aligned.
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Judge Hughes
No, but that's not what I'm asking
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because the trial court found that they properly evaluated as having some risk.
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I forget which term they used.
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And the other ones had no risk.
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And so whether your prices are in line with those or not
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doesn't go to the question of risk.
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And you're not challenging that risk determination here.
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And so once you're stuck with that risk determination
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versus no risk for the other ones,
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it doesn't really matter what the actual number is.
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It's the risk that's associated with which would automatically
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take you out of getting an award, wouldn't it?
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Appellant Attorney (Jon Davidson Levin)
I think what I would focus on, Your Honor,
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is not the prices that...
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each offeror proposed or that the government awarded,
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but the language that the government used in making its decision.
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And so, yes, Your Honor, you are correct
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that Golden had moderate risk.
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But the agency's determination
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was focused on two other facts that are important.
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The first fact is that the agency found...
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the labor categories to be in love.
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The second is that the offerors understood the requirements.
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And the point in our brief is that moderate risk rating notwithstanding,
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those are things that the agency found with respect to Golden, too.
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And so the court did consider the risk factor,
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but it did not...
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it did not consider all of the factors.
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But originally, they would have been awarded six, right?
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Judge Cunningham
Yes, Your Honor.
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And then they decided to award eight
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because they didn't have logical distinctions among the eight, right?
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Yes, Your Honor.
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It sounds like they have a logical distinction between Golden
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and their remaining eight with this moderate risk.
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Appellant Attorney (Jon Davidson Levin)
Well, that's a good question, Your Honor.
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I'm not sure I would agree with that characterization in its entirety.
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And again, I'm just going to return to the...
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I don't want to beat...
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the same language,
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but the government, the source selection authority in that memo,
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made an additional finding beyond that.
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She said that they understood the requirements
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and the pricing was fair and reasonable.
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And that's similar to what the evaluators found.
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And Golden presented the same facts.
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And so the trial court focused just on the risk factor,
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but it did not consider the entire basis
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for the agency's award determination.
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And I think that's a very important distinction.
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Judge Hughes
Because the crux of your argument is
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that once all these non-price factors got fixed,
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that the agency, that your client had a potential
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to be awarded one of these contracts,
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even though it was moderate risk and everybody else was no risk.
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Yes.
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Yes.
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Do you have any proof or suggestion that that would be the case?
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It seemed very illogical to me
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when they were trying to only award six
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and they ended up awarding eight,
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that they would pile in a ninth that had a risk when nobody else did.
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That's a factual finding, this prejudice, right?
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So we have to find clear error in the logic of that
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or in the record that shows they would have considered.
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Do you have anything that suggests
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that the government would have added in a ninth offerer
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that had a risk factor that the other eight didn't?
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It doesn't sound to me like the way government contracts work.
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Appellant Attorney (Jon Davidson Levin)
I think, Your Honor,
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that that is not the entirety of the agency's finding.
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And I think that's sort of the critical issue here.
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And then there is a secondary point.
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Judge Hughes
But that's what the prejudice finding is based on here,
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or the no prejudice finding.
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And that's what we're reviewing for clear error.
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Appellant Attorney (Jon Davidson Levin)
As I read the decision,
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it is that there was no prejudice
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because Golden could not improve its price evaluation.
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And I don't think that is an accurate characterization
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based on the contemporaneous record.
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Judge Hughes
I don't understand what you mean by that.
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The government wasn't going to reopen this.
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They weren't required to reopen this.
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So you were stuck with the evaluation you got.
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They weren't going to give you a new evaluation on price
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just because you got other things corrected.
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So if that's the case,
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if that's correct,
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and I think there's certainly no clear error
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in the fact that they wouldn't have reopened
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the evaluation on price,
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then again, you're still stuck with a risk factor.
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Appellant Attorney (Jon Davidson Levin)
Your Honor,
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the court will overturn,
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even if a factual finding was made,
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the court will overturn,
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will overturn a decision
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if it has a definite and firm conviction
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that a mistake was made.
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And here, by not considering the entirety
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of the government's decision,
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the source selection authority,
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and the evaluation team,
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the trial court committed that clear error
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because the trial court contended or determined
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that the issue that created the risk
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was the sole determining factor
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in its decision-making process.
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And that is not accurate based on the record itself.
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And the record itself says, again,
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that Golden's labor categories were in line,
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which is exactly what it found
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with respect to the awardees,
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and that based on the definition we have
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of moderate risk,
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that it had some confidence
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that Golden could perform the requirements.
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Judge Cunningham
My understanding is part of the concern
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was about getting the correct caliber of staff
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with respect to the concern with Golden's proposal.
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Are you telling me that that concern
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was also raised with respect to one of the other bidders
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that were awarded?
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Appellant Attorney (Jon Davidson Levin)
Thank you, Your Honor.
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No.
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That, just to be, to give you a straight answer,
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the answer is no.
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That was not considered.
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In response to that,
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and in response to the second point
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that Judge Hughes raised,
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the court did find that there was,
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there was no record on the non-price factor
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and there is no record
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of what the agency might have done
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had it had to contend with this.
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And the relevant information
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that I'm pointing to is confidential,
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but I would, I'll point you to Appendix 11657.
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There is information in the record
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that indicates that,
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that the agency may very well
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have reached a different decision
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had it considered,
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had it done a complete trade-off
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based on that high confidence rating
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and the moderate risk rating
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because there was some similarity there.
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And we don't have a record in front of us
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about what the agency...
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Judge Taranto
I'm sorry, just, just,
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I know you're trying to avoid
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saying anything.
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I am.
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You're not supposed to say anything.
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I'm supposed to say.
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But is that the point
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that you make in your reply brief
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but did not make in your blue brief
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about the relatively small dollar difference
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between at least one of the winners
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and your claim?
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Appellant Attorney (Jon Davidson Levin)
Well, we were responding
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to the government's argument, Your Honor,
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that the agency,
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that the agency,
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that the agency,
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that Golden's price was not, we couldn't have received the award.
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And we were responding to that point specifically, and that's on pages 12 and 14.
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But yes, Your Honor, that is, we were responding to that.
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Judge Taranto
And do I remember correctly that the flaws that the claims court found in the agency's process
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did not go specifically to the reasons for thinking that your pricing, particularly about labor, was risky?
10:45
Appellant Attorney (Jon Davidson Levin)
The non-price factors? That's correct, Your Honor.
10:48
Judge Taranto
These were two separate things.
10:51
Appellant Attorney (Jon Davidson Levin)
Yes, Your Honor, they were two separate things.
10:53
And I think to the extent it's a meaningful point,
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I think that's the most important distinguishing characteristic.
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of the system studies and simulation case.
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Judge Taranto
You'll have your rebuttal time, or four minutes of it anyway,
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and we'll hear from the government.
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Appellant Attorney (Jon Davidson Levin)
Thank you, Your Honors.
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Appellee Attorney (Douglas Glenn Edelschick)
May it please the Court.
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I'd like to start with the argument that was made on page 4 of the reply brief
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and was touched upon here today,
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that there was a relatively small amount of difference, 1% or so,
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between Golden's total price, as it was proposed, and another offeror's price.
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This argument mixes apples and oranges.
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The agency assessed the moderate risk because Golden discounted its proposed labor rates.
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They heavily discounted those labor rates.
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Judge Taranto
But wasn't that a significant determinant of the bottom?
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Appellee Attorney (Douglas Glenn Edelschick)
Yes, so the bottom line price was a function of two things.
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The proposed labor rates and the number of labor hours.
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So what Golden did was they heavily discounted their labor rates,
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but then they proposed dramatically more hours than any other offeror.
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And so the agency assessed Golden a moderate risk here
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because its discount of the rates was so high,
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so high that there was a concern that Golden couldn't attract the people that it would need to do the work.
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And a risk assessment like this is a quintessential judgment call for an agency to make,
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and it was plainly rational based on the discounts up to 54% in Golden's proposal.
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Again, far more.
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Judge Taranto
If I remember right, there hasn't been anything presented to us that,
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that there was a similar underlying situation with the close winner.
13:24
Appellee Attorney (Douglas Glenn Edelschick)
Not at all, Your Honor.
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The offeror who was close in total price,
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their pricing was discounted no more than 26% off the GSA rates.
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So less than half of what Golden's was.
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So the way they got there is,
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was the point of concern, not the end point.
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And turning to the prejudice issue,
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the trial court did not clearly err when it found that Golden's proposal
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would still be inferior to all of the awarded proposals,
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even if the agency would have corrected some errors
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in the evaluation of Golden's technical proposal and its prior experience.
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Correcting those errors perhaps could have brought Golden up
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to the table.
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to the level of the awardees on the non-price factors.
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But Golden still would have had a problem.
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It still would have remained inferior on price because of its pricing risk,
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something that no awardee had.
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The agency was not looking to make an infinite number of awards.
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They only went from six to eight because they couldn't make a rational distinction
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between the eight awarded proposals.
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But here, there was a clear distinction.
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Golden had stuck out like a sore thumb
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because of those heavily discounted labor rates
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which created the pricing risk.
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Judge Cunningham
Now, counsel, I know that you can't speak to it
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maybe liberally in light of the fact that
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Appendix Page 11657 is confidential.
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But do you want to respond at some high level
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without revealing any confidential information on the open record
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to the citation that opposing counsel pointed us to?
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Appellee Attorney (Douglas Glenn Edelschick)
Your Honor, I would just say that, you know,
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there's no support on that page or anywhere else in this record
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that would suggest that the agency would make an award under these circumstances.
15:26
I'm not sure I was tracking the...
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Judge Cunningham
The page is 11657.
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Appellee Attorney (Douglas Glenn Edelschick)
No, I got the citation.
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I just don't understand the relevance of that page to the argument.
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But nevertheless, there's no support in this record
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for the suggestion that they would have...
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Nonetheless, Golden would have received an award
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notwithstanding the undisputed pricing problem
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with their pricing risk.
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And because the trial court properly found no prejudicial error
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based on the agency's rational risk assessment,
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this court should affirm.
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Thank you.
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Judge Taranto
Mr. Levin.
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Appellant Attorney (Jon Davidson Levin)
Your Honors, I've already said everything that I think there is to say
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and I can repeat that.
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I can repeat myself or just rest on the arguments I've made.
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Judge Hughes
We love it when people give us back time.
16:40
Judge Taranto
And 18-page briefs, even better.
16:43
Appellant Attorney (Jon Davidson Levin)
Thank you, Your Honor.
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We believe this is a very narrow and straightforward issue.
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Do Your Honors have any questions for me?
16:50
Well said. Thank you.
16:52
Thank you very much.
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Thanks to both counsels.
16:53
Thank you.