[00:00:02] Speaker 00:
The next case for argument is 171082, Augusta, Westland, North America versus United States.

[00:01:01] Speaker 00:
Okay, I think we're ready.

[00:01:03] Speaker 00:
Mr. Sciabetti.

[00:01:08] Speaker 04:
Thank you, Your Honor.

[00:01:09] Speaker 04:
May I please the court?

[00:01:10] Speaker 04:
The court should reverse the trial court's preliminary injunction for three reasons.

[00:01:14] Speaker 04:
First, because the court erred in finding that the Army's justification and approval for the purchase of 16 urgently needed Lakota helicopters was arbitrary and capricious based on its misinterpretation of terms of art and various other flawed legal conclusions.

[00:01:29] Speaker 04:
Second, because the trial court exceeded its jurisdictional authority in declaring that the Army's Aviation Restructure Initiative, or ARI, violated SICA and the FAR.

[00:01:39] Speaker 04:
And third, because the trial court improperly supplemented the administrative record with information that was neither before the Army nor necessary for effective judicial review of the allegations presented by Augusta Wesley.

[00:01:52] Speaker 00:
Could you just, before you get started, this is just to understand what is happening now.

[00:01:58] Speaker 00:
I know there's a dispute or question raised with respect to whether or not this was a preliminary or permanent injunction, but what's happened in the interim?

[00:02:07] Speaker 00:
Anything?

[00:02:08] Speaker 00:
Nothing, Your Honor.

[00:02:08] Speaker 00:
We just did a standstill, no award, nothing.

[00:02:11] Speaker 04:
That's correct, Your Honor.

[00:02:12] Speaker 04:
With respect to the 16 helicopters now, as the record shows, there was a prior contract that had options.

[00:02:18] Speaker 04:
helicopters were being produced subject to the exercise of options on the previous contract.

[00:02:24] Speaker 04:
However, with regard to the 16 helicopters, which again, the JNA makes clear that award was necessary by June 2016.

[00:02:31] Speaker 04:
Here we are now in July 2017 and no award has been made.

[00:02:35] Speaker 04:
The JNA also makes clear that delaying award past that date risks for the Army shutdown or a breaking service on the line that produces the Lakota helicopters.

[00:02:45] Speaker 04:
And we're now in a territory where that's a real risk.

[00:02:48] Speaker 04:
as well as the fact that the Army, because of the lead time for producing such a helicopter, is going to have a gap where they're not going to have the needed helicopters on the timeline in which they were originally needed.

[00:02:58] Speaker 00:
What about Count 2 and what the court of claims judge did with respect to Count 2?

[00:03:03] Speaker 00:
Are there any consequences in connection with the preliminary injunction or permanent injunction with respect to the ARI or the executive order?

[00:03:10] Speaker 04:
There are, Your Honor, not specifically, certainly as it relates to the 16 helicopters that are the subject of the J&A.

[00:03:17] Speaker 04:
But in addition, there are other purchases that could materialize down the line that maybe aren't impacted as of this moment today.

[00:03:25] Speaker 04:
But because the scope of the trial court's injunction is fairly broad as it respects the ARIs and her misreading of the ARI to suggest that that ARI set a standard that going forward, only the code of helicopters would be purchased

[00:03:39] Speaker 04:
That suggests there's a possibility that if another JNA, whether using the same rationale and the same justification used by this JNA or any other that justified the sole source of helicopters to a child for Lakota helicopters, could potentially fall under the ambit of the same injunction.

[00:03:56] Speaker 04:
And so that is hanging over the Army's head as well.

[00:03:58] Speaker 04:
Thank you.

[00:03:59] Speaker 04:
And that's one of the reasons that the holding with regard to the ARI is so problematic here, in addition to the fact that it potentially opens the door to a flood of protests that reach into operational policy decisions such as the ARI.

[00:04:13] Speaker 03:
I get your point on that, but how do we limit?

[00:04:15] Speaker 03:
I mean, it seems to me you have a good argument here, but it also seems to me that there's a way we write that that opens up a huge gaping hole that DOD can drive

[00:04:27] Speaker 03:
holes through any time it decides it wants to work with a favored manufacturer by having somebody unconnected to procurement issue a policy decision that you then rely on to sole source a contract.

[00:04:42] Speaker 04:
I understand, Your Honor, but in the situation that you posit, there still would ultimately be a sole source, and there would be some documentation that justified that sole source.

[00:04:50] Speaker 04:
And that would be the procurement decision that would be subject to review by the courts.

[00:04:54] Speaker 04:
So there's no need to reach back, particularly in a case such as this one.

[00:04:58] Speaker 03:
Right.

[00:04:58] Speaker 03:
But let me just give you a hypothetical.

[00:05:00] Speaker 03:
I'm not suggesting that any of this happened here, because I don't think it.

[00:05:03] Speaker 03:
I mean, it clearly didn't, based on the facts.

[00:05:04] Speaker 03:
But suppose there's a general in the Air Force out there that really, really just wants to work in Boeing and somehow decides that we're going to buy a new plane, but she only wants to buy it from Boeing.

[00:05:20] Speaker 03:
And so somehow she writes a policy statement

[00:05:24] Speaker 03:
that puts in specifications or manufacturing capabilities or whatever that she knows only Boeing can accomplish.

[00:05:32] Speaker 03:
And so when that comes out, and the procurement people that get it, they say, well, we can't do anything except sole source this to Boeing.

[00:05:43] Speaker 03:
How do we get around that?

[00:05:44] Speaker 03:
Because the sole source award, if we can't review the policy statement, seems right.

[00:05:50] Speaker 03:
If the policy statement is not reviewable, that we have to have this specification, these kind of manufacturing capability, blah, blah, blah, then the sole source justification is upheld even if the Air Force has somehow inappropriately directed the contract to Boeing.

[00:06:10] Speaker 04:
The law already has tools to address exactly that situation.

[00:06:13] Speaker 04:
The law provides for review of a solicitation or sole source that's unduly restrictive of competition

[00:06:19] Speaker 04:
The sole source would have to rely on one of the exceptions to CECA for full and open competition, both in the statute and as implemented by the HWAR.

[00:06:26] Speaker 04:
And so that decision would rise or fall on its own merits based on whether... I'd posit to answer your question more directly.

[00:06:34] Speaker 04:
If the justification said, we have to buy Boeing because General So and So said we have to buy Boeing, I'm not aware of an exception to CECA that would allow such a JNA to pass scrutiny.

[00:06:45] Speaker 00:
Well, no, nobody would be that unsubtle under any circumstance.

[00:06:49] Speaker 00:
So if you say in the ARI or whatever, you create the requirements and the contingencies so that as a practical matter, it can only be Boeing, but it doesn't use the name.

[00:07:02] Speaker 00:
So it's not apparent on its face that the intent of this was necessarily to get Boeing to get the contract, but the requirements are there.

[00:07:14] Speaker 00:
Can you second guess those when you're then challenging the sole source contract?

[00:07:18] Speaker 04:
Certainly to an extent, Your Honor.

[00:07:20] Speaker 04:
So for example, it sounds like what you're describing would likely be justified under a brand name or equal specification or a similar type of situation.

[00:07:28] Speaker 04:
So in a brand name or equal type of solicitation, what you do is you say, either we want Boeing or we want an equal product that has all of these characteristics, which are the salient characteristics of Boeing.

[00:07:40] Speaker 04:
Protesters can and have challenged such solicitation saying you've basically restricted it to Boeing or nobody else and you have to properly justify such a brand name justification.

[00:07:49] Speaker 04:
There are provisions for a brand name justification, but they're much more stringent.

[00:07:53] Speaker 04:
And so in this case, the army relied instead on a FAR justification for use of other than full and open competition that allows a product to be deemed available only from one source if there's going to be substantial duplication of costs that result

[00:08:09] Speaker 04:
as well as or in addition to unacceptable delays.

[00:08:13] Speaker 04:
Because both were present here, the Army's justification was reasonable.

[00:08:17] Speaker 03:
So your view is, I suppose, particularly because you already had a fleet of these helicopters.

[00:08:23] Speaker 03:
You were entitled to buy another couple hundred or slightly less than that.

[00:08:27] Speaker 03:
I don't remember the numbers.

[00:08:28] Speaker 03:
Under the other already awarded contract, you were only buying 16 more here, which if you'd gone out and sold an open competition and got an entirely new one,

[00:08:38] Speaker 03:
had all these kind of detrimental effects.

[00:08:41] Speaker 03:
But if it were flipped, and we still had this kind of policy statement that we only have 16 of these helicopters in our fleet, but we love them, so we're going to only use them for training helicopters.

[00:08:56] Speaker 03:
And then the procurement office goes out and say, well, we need 1,000 new helicopters, but we're going to sole source them because they said we're only going to use this one.

[00:09:06] Speaker 03:
How do we get to review that?

[00:09:07] Speaker 04:
Well, then you would review the sole source that says, we have to buy 1,000 of these because they said they love the 16.

[00:09:14] Speaker 04:
And that would be a procurement decision subject to review.

[00:09:17] Speaker 04:
And it doesn't sound like it would survive scrutiny such as that.

[00:09:19] Speaker 04:
But that's, of course, not the situation we have here.

[00:09:22] Speaker 04:
Instead, we have a tentative review.

[00:09:25] Speaker 01:
Just to clarify, would we then be reviewing the content and quality of analysis in the ARI in that example?

[00:09:32] Speaker 01:
No, not necessarily, Your Honor.

[00:09:33] Speaker 04:
You need reviewing the procurement decision.

[00:09:35] Speaker 04:
And I think it would be appropriate for the court, of course, to review that decision and look at how it impacts upon the actual procurement decision.

[00:09:43] Speaker 04:
The court needn't blind itself.

[00:09:44] Speaker 04:
We didn't argue here that the court shouldn't even look at the ARI.

[00:09:47] Speaker 04:
We only argued that the court had no jurisdiction to declare that the ARI violated SICA and the FAR, and that it standardized solely on this particular brand of helicopter for all future purchases, which, of course, it does not, just on the face of the document.

[00:10:02] Speaker 04:
It only regards the use and deployment of existing Army helicopters that it already had, subject to the 2006, and again, I know, competitively awarded contract.

[00:10:11] Speaker 04:
And so the addition of 16 helicopters to those that were already subject to competition is what the court should have restricted its review to.

[00:10:21] Speaker 00:
This is related, and I don't want to belabor it too much.

[00:10:25] Speaker 00:
But just reading your brief, it seems to me that you're fighting distributed solution really hard.

[00:10:32] Speaker 00:
And your answer to distributed solution is not to deal with what that opinion said, but to deal with, well, this is what the various courts of claims and subsequent cases have interpreted.

[00:10:42] Speaker 00:
So why don't you tell us about distributed solution?

[00:10:45] Speaker 00:
And I know you call a potential Pandora's box if we construe it too widely.

[00:10:51] Speaker 00:
But we're bound by distributed solution.

[00:10:53] Speaker 00:
So tell us.

[00:10:54] Speaker 00:
why that case doesn't dictate a different result here than you're advocating.

[00:10:59] Speaker 00:
Certainly, Your Honor.

[00:11:00] Speaker 04:
In distributed solutions, this court relied on the statutory language in 41 U.S.C.

[00:11:05] Speaker 04:
section 111, which defines the term procurement, which is, of course, the jurisdictional touchstone to include, quote, all stages of the process of acquiring property or services beginning with the process for determining the need for property or services and ending with contract completion and closeout.

[00:11:22] Speaker 04:
So here, Your Honor, there's no determination of need in the ARI.

[00:11:25] Speaker 04:
All that the ARI does is say we're going to use these helicopters that we're using over here for medevac and a variety of different purposes.

[00:11:32] Speaker 04:
We're going to move those down to Fort Rucker and instead use them to train new pilots on this dual-engine helicopter.

[00:11:38] Speaker 04:
There's no determination that we're going to need more helicopters going forward.

[00:11:42] Speaker 04:
There's no determination that if and when we buy helicopters going forward, that those will have to be Lakota helicopters.

[00:11:48] Speaker 04:
Now, certainly it's beyond dispute, as we acknowledge in our brief, that the presence of a large fleet of those type of helicopters for training at Fort Rucker will have some practical impact.

[00:11:56] Speaker 04:
But the court shouldn't allow that practical impact to allow jurisdiction to go back, flow backwards to a decision that only had to do with the distribution of existing assets that were already within the Army's inventory.

[00:12:12] Speaker 04:
the court should instead have confined its analysis to the JNA itself, which is the procurement decision.

[00:12:18] Speaker 04:
And so that doesn't run contrary to distributed solutions.

[00:12:21] Speaker 04:
It just suggests that to redistribute its solutions in a way that would allow any policy decision that has any conceivable impact on future procurements down the line to fall within the ambit of the court's big progress.

[00:12:35] Speaker 01:
So going back to Judge Hughes' hypothetical, if in fact there were only 16 helicopters

[00:12:42] Speaker 01:
in your possession and there was a decision in the ARI to go get an additional thousand more, just like these 16, then you would agree that that would be an example that fits within the Distributed Solutions Rule, that that would be something within the Court of Federal Claims jurisdiction.

[00:12:58] Speaker 04:
If the ARI, to make sure I understand your question, declared that they would

[00:13:02] Speaker 04:
want to purchase 1,000 additional helicopters, then yes, I would agree that would be a procurement decision.

[00:13:06] Speaker 04:
Because then it's defining a need and setting a procurement down right there.

[00:13:11] Speaker 01:
Or just if it said, we need 1,000 more of these.

[00:13:15] Speaker 04:
Again, that would arguably be defining a need.

[00:13:17] Speaker 04:
Whereas here, there's no discussion at all of future procurement.

[00:13:21] Speaker 04:
I see that I'm in my rebuttal time.

[00:13:22] Speaker 04:
May I answer your question?

[00:13:25] Speaker 00:
Yep.

[00:13:25] Speaker 00:
Thank you.

[00:13:37] Speaker 02:
May I please the court?

[00:13:38] Speaker 02:
I'd like to begin with distributed solutions.

[00:13:41] Speaker 02:
In this case, conspicuously absent from Appellant's presentation, is any mention of the sources sought notice.

[00:13:48] Speaker 02:
That sources sought notice was issued in September 2014 for 155 Airbus UH72s.

[00:13:53] Speaker 02:
So to go to Chief Judge Prost's question, this is an unsubtle procurement.

[00:14:04] Speaker 02:
This is essentially a brand name

[00:14:06] Speaker 02:
procurement, because the UH-72 is just the Army's moniker or designation.

[00:14:12] Speaker 00:
But weren't those the 100, however, that you're talking about, weren't those under the 2006 contract that was initially awarded?

[00:14:19] Speaker 02:
It's impossible to say, Your Honor.

[00:14:22] Speaker 02:
That sources sought notice in announcing the 155.

[00:14:27] Speaker 02:
That is the identical type of document, even more clearly a procurement document, a beginning of the procurement process.

[00:14:36] Speaker 02:
than the RFI in distributed solution.

[00:14:39] Speaker 02:
The sources sought notice said that it is a... But I don't understand.

[00:14:45] Speaker 00:
You're here presumably defending and arguing for what the Court of Claims found.

[00:14:51] Speaker 00:
Now, was her analysis, did it on the ARI bring in what you're talking about here?

[00:14:56] Speaker 00:
Yes, it did.

[00:14:57] Speaker 00:
OK.

[00:14:58] Speaker 02:
So the sources sought notice said it was an acquisition to procure 155, it says,

[00:15:04] Speaker 02:
Eurocopter 145s, which is the Airbus designation of these same helicopters.

[00:15:13] Speaker 02:
Just like in distributed solution, once the court has that jurisdictional hook, no question that that source of sought notice began the process for identifying the need for goods and services.

[00:15:24] Speaker 02:
Once it has that jurisdictional hook, it can look at the whole context of this procurement.

[00:15:31] Speaker 02:
It came out after our supplemental complaint that there was an execute order from April 2014 that designated the Army's training helicopter to be the UH-72.

[00:15:43] Speaker 02:
That necessarily meant, because the previous fleet, the TH-67 training helicopters, first purchased in 1993, the existing fleet of training helicopters at Fort Walker were 200 units.

[00:16:00] Speaker 02:
training helicopters, that fleet was going to have to come from somewhere.

[00:16:04] Speaker 02:
And to go to Judge Hughes' hypothetical earlier, this case is not about a mere 16 aircraft of a value of $150 million.

[00:16:16] Speaker 02:
Really, the Army, its latest estimate is that it's going to buy 113 new UH-72s under a new contract, sole source to Airbus.

[00:16:28] Speaker 02:
That procurement approaches a $1 billion.

[00:16:31] Speaker 02:
Wait, but that's not before us.

[00:16:34] Speaker 03:
We have 16 before us, right?

[00:16:36] Speaker 03:
That's the ones that Judge Braden enjoined.

[00:16:40] Speaker 02:
If you read, in her opinion, in the first paragraph, she mentions a status report filed by the Army a few weeks before the hearing on the cross motions below notifying the court

[00:16:57] Speaker 02:
that the Army intended to buy 97 additional UH-72s, sole source from Airbus.

[00:17:05] Speaker 02:
And so she mentions it there.

[00:17:08] Speaker 02:
She mentions it later in the recitation of facts.

[00:17:10] Speaker 02:
And that's why the ARI, the X-Lord, is so important here, because that essentially dictates that there's going to be 200 new UH-72s somewhere in the Army fleet.

[00:17:27] Speaker 00:
But you can challenge that decision when it's made, right?

[00:17:33] Speaker 00:
I don't understand.

[00:17:33] Speaker 02:
Your Honor, we didn't have the excellent until after we received the administrative record 16 months after.

[00:17:41] Speaker 00:
But nothing's been done yet.

[00:17:43] Speaker 00:
Those helicopters haven't been purchased.

[00:17:45] Speaker 00:
There hasn't been anything issued with regard to those helicopters, right?

[00:17:48] Speaker 00:
So you're asking us to decide a question which you will have the ability to challenge if and when it's ever made, right?

[00:17:57] Speaker 03:
You know, with specific justifications for why 97 more as opposed to just 16 more is still necessary to do under a sole source competition.

[00:18:10] Speaker 03:
We don't have any of that record before us.

[00:18:12] Speaker 02:
I believe you do, Your Honor.

[00:18:15] Speaker 02:
When you look at there was a declaration... How did they do it?

[00:18:18] Speaker 03:
They haven't issued any kind of procurement yet.

[00:18:21] Speaker 03:
I mean, if you're saying that all they're going to do is point back to the ARI, then

[00:18:26] Speaker 03:
Maybe then they get in a little trouble if they keep doing that over and over without even more significant justifications.

[00:18:33] Speaker 03:
But we don't know what their additional justifications are going to be until we have that.

[00:18:37] Speaker 03:
It seems like you should address the 16 helicopters that are at issue in Judge Braden's opinion.

[00:18:44] Speaker 02:
I'll be happy to do that, Your Honor.

[00:18:48] Speaker 02:
The justification and approval for the 16 aircraft on its face

[00:18:55] Speaker 02:
we believe is insufficient.

[00:18:57] Speaker 02:
For an initial matter, I can point to evidence in the record that in late 2005, the Army knew that it had a requirement for 17 additional aircraft in addition to the 16, and then in early 2016, knew that it had a requirement for another 18, and then additional 60

[00:19:23] Speaker 02:
It's unspecified in the declaration when those were going to come online.

[00:19:28] Speaker 01:
As an initial matter, the- Why does that make the JNA for these extra 16 irrational?

[00:19:37] Speaker 02:
Well, it just starts from the wrong starting point.

[00:19:42] Speaker 02:
The source of thought notice said that the Army was going to purchase 155 UH-72 sole source from Airbus.

[00:19:53] Speaker 02:
Fast forward to before the year.

[00:19:54] Speaker 00:
You're talking about the 2006 contract?

[00:19:57] Speaker 01:
Yes, ma'am.

[00:19:58] Speaker 01:
OK.

[00:19:59] Speaker 01:
And the source and sought notice, just so I understand, you're using that to claim that the AR, the Court of Federal Claims, had jurisdiction over the ARI?

[00:20:10] Speaker 02:
No, Your Honor.

[00:20:11] Speaker 02:
I'm saying that the source and sought notice is the beginning of a procurement process.

[00:20:16] Speaker 02:
It says that it's an acquisition to procure 155 UH-72 sole source from Airbus.

[00:20:22] Speaker 02:
Once that, you know, that's the equivalent of the RFI in the request for information in distributive solutions.

[00:20:31] Speaker 02:
Once the court had jurisdiction, they can look and see where does this requirement for 155 come from.

[00:20:37] Speaker 02:
And then, you know, as it came out, that requirement was driven by this execute order that would, you know, redesignate the training helicopter for Fort Rucker to be

[00:20:51] Speaker 02:
the UH-72.

[00:20:53] Speaker 02:
And so there you have a requirement for 200.

[00:20:55] Speaker 02:
Well, where are they going to come from?

[00:20:56] Speaker 02:
Well, at the end of the day, the Army ended up exercising the last 100 options under the 2006 contract.

[00:21:08] Speaker 02:
And now, lo and behold, before the hearing below, they announced they need to buy another 100.

[00:21:15] Speaker 02:
Those are additional trainers and backfills for the ones

[00:21:18] Speaker 02:
that they redeployed to Fort Rock.

[00:21:21] Speaker 03:
Just to make sure I'm clear, the 100 additional that they purchased under a pre-existing contract, you're not challenging that today.

[00:21:31] Speaker 03:
No, you are.

[00:21:33] Speaker 03:
I think you may have tried to challenge it.

[00:21:35] Speaker 03:
The low you lost, and you're not arguing against that today.

[00:21:37] Speaker 02:
That's correct.

[00:21:37] Speaker 03:
We argued that the... And the only other additional ones, even though you keep talking about all the other ones, that were actually

[00:21:46] Speaker 03:
purchased, or at least a procurement was issued, a sole source procurement was issued, was 16.

[00:21:52] Speaker 02:
The Army issued their justification, a final JNA.

[00:22:00] Speaker 02:
There were interim JNAs.

[00:22:02] Speaker 02:
Initially, there was a JNA, a draft JNA, from June 2014 for that 155 aircraft.

[00:22:08] Speaker 03:
But the one that we're looking at is the one they issued, which is for 16, right?

[00:22:14] Speaker 02:
That is the subject of Count 3 in our complaint.

[00:22:18] Speaker 02:
Yes.

[00:22:21] Speaker 03:
So as to that... So why is looking solely at the 16 sought to be procured under that, is it arbitrary and capricious?

[00:22:32] Speaker 02:
I believe it is, Your Honor.

[00:22:33] Speaker 02:
First, the starting proposition for that is that the requirement is for UH-72s.

[00:22:40] Speaker 02:
These are commercial helicopters that

[00:22:43] Speaker 02:
Augusto makes, our client makes, Bell Helicopters of course, a lot of people make commercial helicopters.

[00:22:50] Speaker 02:
They had an opportunity, they had a 10 year up to 500 unit contract from 2006 with Airbus for these helicopters.

[00:22:57] Speaker 02:
There's a far preference and a statutory preference for using commercial lightens whenever possible.

[00:23:05] Speaker 02:
Well here the Army, they're not even taking advantage of any improvements in the marketplace in developments in

[00:23:12] Speaker 02:
commercial helicopters in the last 10 years.

[00:23:13] Speaker 03:
It doesn't seem like you're addressing the reasons the Army put forth for why it was using a sole source award for those 16 and explaining why those reasons are arbitrary and capricious.

[00:23:26] Speaker 03:
You're telling me why they should have gone a different way.

[00:23:30] Speaker 02:
Yeah.

[00:23:30] Speaker 02:
Well, I'll start with a lot of the J&A, the actual 16, was driven by Airbus's ownership of the TDP, the technical data package.

[00:23:41] Speaker 02:
So the unique qualifications of Airbus was that it owns the technical data, the tooling, that kind of thing for the UH-72 without considering other manufacturers.

[00:24:01] Speaker 02:
So Airbus was considered the only interested source.

[00:24:06] Speaker 02:
To get to the two

[00:24:10] Speaker 02:
The two criteria for FAR 63021 has an ability for the government to buy more of the same thing if it's indeed a follow-on contract.

[00:24:27] Speaker 02:
There's no FAR definition for follow-on contract.

[00:24:30] Speaker 02:
The district or the trial court believed that it wasn't a follow-on contract.

[00:24:36] Speaker 02:
But even under the government's definition, it says it's a procurement.

[00:24:39] Speaker 02:
that's necessitated by a prior procurement action.

[00:24:43] Speaker 02:
That can't be the X order in the government's view because that's not a procurement decision.

[00:24:47] Speaker 02:
So it has to be this 2006, the procurement that ended with the government buying UH-72s.

[00:25:00] Speaker 02:
We don't believe it's a follow-on procurement, but if you conclude that it is a follow-on procurement, then the Army has to show

[00:25:08] Speaker 02:
either that there will be a substantial delay in fielding a replacement aircraft or additional costs that will not be recovered by the benefits of competition.

[00:25:20] Speaker 02:
As to delay, and this also goes to the risk that the government was talking about a minute ago, as to delay, this is entirely self-inflicted.

[00:25:30] Speaker 02:
If you look at the J&A, the Army first started considering a replacement or

[00:25:36] Speaker 02:
a replacement of buying new UH-72s in October 2012.

[00:25:40] Speaker 02:
It took them a full year until October 2013 until Airbus said, well, we're not going to sell you our tooling.

[00:25:51] Speaker 02:
We're not going to sell you our data package.

[00:25:53] Speaker 02:
And so we had the proceedings below.

[00:25:57] Speaker 02:
Instead of saying, OK, we'll go back and we'll fix the J&A that the

[00:26:06] Speaker 02:
trial court found inadequate, we're going to appeal this thing.

[00:26:10] Speaker 02:
So now we're almost a year away from the trial court's conclusion, and yet the government is here saying that there's this inordinate risk if the injunction is upheld.

[00:26:26] Speaker 02:
Also, the trial court was absolutely correct that the JNA overstated the amount of time it would take

[00:26:35] Speaker 02:
to run a commercial procurement.

[00:26:37] Speaker 02:
The government already has UH-72s.

[00:26:39] Speaker 02:
They essentially deemed whatever the requirements the UH-72 has to be adequate for both general missions and training missions.

[00:26:49] Speaker 02:
And so there's no reason it should take the government's estimate of 36 months and all that cost to run a new procurement for commercial helicopters.

[00:26:59] Speaker 02:
As to cost,

[00:27:01] Speaker 02:
When you look at the JNA and the independent government estimate that's attached to the JNA and supports the cost analysis, it only looks at additional costs and additional sustainment costs.

[00:27:15] Speaker 02:
It doesn't look, doesn't take an objective, dispassionate view of that.

[00:27:22] Speaker 02:
When you look at the purchase costs of a competing aircraft versus the UH-72, it looks at

[00:27:31] Speaker 02:
the purchase price that the government's been paying on a 10-year, 500-unit contract and compares that to the list price of an Augusta Westland aircraft.

[00:27:42] Speaker 02:
As if, if there were a new procurement with Augusta, Bell, Sikorsky, all these other manufacturers of commercial aircraft, that the government would only get the list price or a price, or would only get from Augusta the price that we have listed on aircompare.com,

[00:28:01] Speaker 02:
the IGE received that price.

[00:28:08] Speaker 02:
Also, if you look at the difference between the two costs of buying more air buses versus buying a different type of helicopter, almost all of that difference is in sustainment costs going out to 2014, 25 years.

[00:28:27] Speaker 02:
And one of the assumptions there is that

[00:28:30] Speaker 02:
the Army will have to maintain an entirely duplicative program office, the same costs associated with 400 aircraft of the UH-72s as it will for a mere 16 aircraft.

[00:28:49] Speaker 00:
Okay.

[00:28:49] Speaker 00:
Thank you.

[00:29:04] Speaker 04:
My friend mentions the JNA and states that it starts from the proposition or from the requirement that it would only purchase UH-72 helicopters.

[00:29:15] Speaker 04:
Of course, that's not correct.

[00:29:16] Speaker 04:
The JNA includes an extensive and thorough analysis as to whether another commercial helicopter would meet its needs.

[00:29:23] Speaker 04:
In fact, the comparison helicopter from the IGE

[00:29:26] Speaker 04:
was an Augusta Westland helicopter, a dual-engine helicopter that's similar to the Lakota helicopter.

[00:29:32] Speaker 04:
So the Army looked at whether an alternate helicopter would meet its needs and concluded, based on the IGE's thorough analysis, that substantial duplication of cost that would result both from procurement as well as from sustainment

[00:29:46] Speaker 04:
And my friend acknowledges that most of that cost is in sustaining, and the large reason for that is, as documented by the JNA, is the fact that you have a fleet of helicopters, part of which is one type, part of which is another type, requiring different service, different personnel to service them.

[00:30:01] Speaker 04:
different training packages that have to be set up, different cockpit trainers, which are stationary flight simulators, essentially.

[00:30:08] Speaker 04:
And so the Army rationally concluded that those additional sustainment costs wouldn't help well.

[00:30:14] Speaker 03:
I mean, I get it for these 16, but this is what really kind of troubles me about the government's argument, is that this kind of rationale could be used to lock in place a certain manufacturer of a certain type of helicopter or any other kind of really large dollar

[00:30:31] Speaker 03:
item for a decade or two because you can always make that justification.

[00:30:39] Speaker 03:
We don't want to train people on new equipment, blah, blah, blah.

[00:30:44] Speaker 03:
But it doesn't seem to me that that's consistent with open procurement policies.

[00:30:50] Speaker 03:
And so I'm just a little worried, particularly if I'm hearing that you're also considering buying another 90 helicopters on a sole source that

[00:31:00] Speaker 03:
If we issue a decision upholding your right to do 16 here, how do we contain it so that we're not giving you a loophole to get around open procurement policies?

[00:31:13] Speaker 04:
I understand, Your Honor.

[00:31:13] Speaker 04:
First, as you noted in colloquy with my friend, there is no purchase being made about 97 or any other number of helicopters at this point.

[00:31:22] Speaker 04:
There are very early stages of examining whether that's something that the Army wants to do.

[00:31:28] Speaker 04:
There's been no decision made.

[00:31:29] Speaker 04:
And if and when a decision is made to source those helicopters, that decision should be examined on its own merits.

[00:31:36] Speaker 04:
And certainly in examining such a justification, the court could look back at the whole procedure of the

[00:31:43] Speaker 04:
purchase and the program over time and find, for example, there's case law on splitting requirements.

[00:31:50] Speaker 04:
So if the court found that the Army was splitting its requirements improperly, then that's a fact that it could consider.

[00:31:57] Speaker 04:
So there are tools in the court's arsenal to examine whether these abuses that you suggest are taking place and to rein those in, Your Honor.

[00:32:05] Speaker 04:
I see that my time's expired unless there are any further questions.

[00:32:08] Speaker 04:
Thank you.

[00:32:08] Speaker 00:
We thank both sides.

[00:32:10] Speaker 00:
The case is submitted and that concludes our proceedings for this morning.

[00:32:18] Speaker ?:
The Honorable Court is adjourned until tomorrow morning at 10 a.m.