[00:00:00] Speaker 03:
Tenuation Environmental Company, NRC.

[00:01:06] Speaker 02:
Good morning, Your Honor.

[00:01:17] Speaker 01:
May it please the Court, I'm Justin Propper, attorney for Appellant Attenuation Environmental Company.

[00:01:24] Speaker 01:
It seems to me there's a threshold issue that I would submit is dispositive of the case, and that is, is there any obligation

[00:01:37] Speaker 01:
on the part of the government with respect to exercising options.

[00:01:42] Speaker 01:
If it's an unfettered right, we lose.

[00:01:46] Speaker 01:
If there is any discretion or review that's required to go into whether or not an option is to be exercised, I would submit we win.

[00:02:00] Speaker 03:
And I'll get into the reasons.

[00:02:01] Speaker 03:
Didn't the contract board

[00:02:03] Speaker 03:
conclude that there were certain standards that had to be abided by and that the government met those standards?

[00:02:10] Speaker 01:
I'm sorry.

[00:02:11] Speaker 03:
Didn't the contract board here?

[00:02:13] Speaker 01:
The appeals board?

[00:02:15] Speaker 01:
Yes.

[00:02:18] Speaker 01:
And I was going to get into the standard first, but I'll address your question, Your Honor.

[00:02:24] Speaker 01:
Where the board went awry is

[00:02:30] Speaker 01:
when it found that there were actual reasons to justify why the option wasn't exercised.

[00:02:35] Speaker 01:
The reasons that the judge cited to were all after the fact rationales created by someone who wasn't involved in the decision making process at a time when counsel for the NRC was involved.

[00:02:50] Speaker 01:
The evidence is undisputed and I think indisputable.

[00:02:57] Speaker 01:
that there was one and only one person who was responsible for reviewing the contract.

[00:03:01] Speaker 01:
That was Kelly Jamies.

[00:03:02] Speaker 02:
Can we go back to your initial thought, which was that if the government has discretion under this options clause, then you lose.

[00:03:11] Speaker 02:
That's what I heard you say.

[00:03:12] Speaker 01:
If the government has no discretion, meaning they have the unfettered unilateral right to do whatever they want,

[00:03:19] Speaker 01:
and which is the argument that the government is making.

[00:03:21] Speaker 02:
We'll call that discretion, but okay.

[00:03:23] Speaker 02:
So what about it says the government may extend the term of this contract and then it says but they have to give 15 days notice and then it's very clear it says the preliminary notice does not commit the government and then later in Part B it says if the government, if the government exercises this option.

[00:03:43] Speaker 02:
So why don't the words like may and if

[00:03:46] Speaker 02:
and preliminary notice does not commit, why don't those give the government the option?

[00:03:52] Speaker 01:
I mean, this is the whole question, right?

[00:03:54] Speaker 01:
So the cases cited by the government in the one Federal Circuit case as government systems advisors has different language than what we're dealing with here.

[00:04:06] Speaker 01:
In that case, it says at the option of the government, which this court held was a unilateral right

[00:04:12] Speaker 01:
that cannot be breached no matter what the reasons or lack of reasons are for not exercising an option.

[00:04:18] Speaker 03:
So what is your view about what standard we ought to apply or how?

[00:04:22] Speaker 03:
What are the criteria we would use?

[00:04:24] Speaker 01:
So the answer to that question, Your Honor, would be in the digital text in the United States case, which was the United States Court of Federal Claims decision dealing with options.

[00:04:36] Speaker 01:
And in that case, there was a one-year base contract and four-year

[00:04:42] Speaker 01:
or four one-year options.

[00:04:44] Speaker 01:
And in that case, the contract was terminated for convenience.

[00:04:49] Speaker 01:
But the government, in that case, took the position that there was no way they could be liable, because with respect to options, the defendants argued that the government was not obligated to exercise any of the options in DTI's contract.

[00:05:03] Speaker 01:
And it was an IDIQ contract.

[00:05:06] Speaker 01:
And the court of claims, in denying a motion to dismiss, held that although

[00:05:12] Speaker 01:
Still at the allegation stage, the matter's pled in the case currently before the court and the reasoning of the ASBCA and CCI, although not binding race-sufficient issues needing resolution to warrant denying the government's motion to dismiss.

[00:05:26] Speaker 01:
And the cases that were relied upon were board decisions which held damages may be awarded for unexercised option years of a contract if a contract approves that the decision not to exercise an option was a product of bad faith

[00:05:41] Speaker 01:
are so arbitrary and capricious as to be an abuse of discretion.

[00:05:45] Speaker 01:
So the digital tech case.

[00:05:47] Speaker 03:
So the answer to my question is that you would say the standard is that you would have to show that the decision not to grant the extension, the option, was bad faith.

[00:06:02] Speaker 01:
No.

[00:06:03] Speaker 01:
Bad faith or an abuse of discretion and or arbitrary.

[00:06:06] Speaker 03:
Or arbitrary or capricious.

[00:06:07] Speaker 03:
Correct.

[00:06:07] Speaker 03:
Which leads to an abuse of discretion.

[00:06:10] Speaker 01:
That's what you're asking.

[00:06:11] Speaker 01:
Correct.

[00:06:12] Speaker 01:
advocating or suggesting that there was bad faith associated with the denial.

[00:06:16] Speaker 03:
So you're saying it's arbitrary?

[00:06:17] Speaker 03:
It was arbitrary?

[00:06:18] Speaker 01:
Correct.

[00:06:18] Speaker 01:
And there can be nothing more arbitrary, Your Honor, than doing nothing.

[00:06:22] Speaker 04:
And in this case, it goes a step further because... I understand doing nothing is not exercising the option.

[00:06:28] Speaker 04:
How is that arbitrary?

[00:06:29] Speaker 04:
You exercise the option or you don't exercise the option?

[00:06:33] Speaker 04:
They chose not to exercise the option, so how is that arbitrary?

[00:06:37] Speaker 01:
Because in order to have an abusive discretion standard, in all the cases we cite in our brief, Your Honor, address this point.

[00:06:43] Speaker 01:
There has to be reasons for why the option wasn't exercised.

[00:06:49] Speaker 01:
Because otherwise you abuse your discretion.

[00:06:51] Speaker 01:
It goes to the threshold issue when you're dealing with any discretionary right.

[00:06:56] Speaker 04:
In the cases from... I tell my kids, you can eat green beans or lima beans.

[00:07:01] Speaker 04:
I don't give a rat's patootie which one they choose, but they got to choose one.

[00:07:04] Speaker 04:
I give them the option.

[00:07:06] Speaker 04:
They choose one.

[00:07:07] Speaker 04:
What says, name one case that tells me that when the government refuses to exercise an option is required to put on record the reasons for doing so?

[00:07:18] Speaker 01:
There's neither a case that goes one way or the other specifically dealing with options, but terminations for convenience, Your Honor, which also... It's different.

[00:07:27] Speaker 04:
You're terminating a contract.

[00:07:29] Speaker 04:
This is not terminating a contract.

[00:07:31] Speaker 04:
It's refusing not to enter into a new one.

[00:07:33] Speaker 01:
Then the case, Your Honor, that I would say that is digital

[00:07:37] Speaker 01:
tax to the United States, dealing with options, Your Honor.

[00:07:40] Speaker 04:
I think their argument is frivolous.

[00:07:43] Speaker 04:
Frivolous.

[00:07:44] Speaker 04:
I think the nature of options gives the person discretion to choose one way or the other, and I don't think that they have any reason to put their bases on.

[00:07:52] Speaker 04:
Now, there's a different scenario if they do put a base on, and that base is clearly bad faith or abusive.

[00:07:58] Speaker 04:
That's different.

[00:07:59] Speaker 04:
That creates a scenario, and that's why those cases exist.

[00:08:02] Speaker 04:
Like what if the government says, I don't like the way you look.

[00:08:05] Speaker 04:
I'm going to give this contract only to people that look different.

[00:08:08] Speaker 04:
Those sorts of things are like, wait, time out.

[00:08:10] Speaker 04:
Government's got to exercise fair dealing.

[00:08:12] Speaker 04:
That's totally out of bounds.

[00:08:14] Speaker 04:
But an option like this, whether they want to extend it or not, I don't see how they don't have unfettered discretion to decide what to do it, so long as they don't do something illegal in the process, something completely bad faith,

[00:08:28] Speaker 04:
something that would be a complete abuse of discretion, but simply not telling you why they choose to exercise an option, I don't see how that could ever be an abuse of discretion.

[00:08:36] Speaker 01:
Well, this is a little different, Your Honor, because the woman who was responsible for making the recommendation, whose recommendation would have been accepted by the contracting officer, Claudia Melpgard, that is undisputed, testified she would have exercised the option had she known it was her job to do so.

[00:08:52] Speaker 01:
How can it not be an abuse of discretion

[00:08:54] Speaker 01:
And an arbitrary decision, if it's me, I raise my hand, it's my job.

[00:08:59] Speaker 01:
I'm supposed to review it.

[00:09:00] Speaker 01:
Even the other contracting officer who wasn't involved, Ms.

[00:09:04] Speaker 01:
Malone, testified it was this woman's job and she should have done a review as part of her job, but she didn't know it was her job.

[00:09:13] Speaker 01:
She didn't know it was her job on the first option, which she recommended that the option be exercised and it was done, but she didn't know it was her job this time.

[00:09:22] Speaker 01:
as the judge kept saying during the hearing, someone was asleep in the White House.

[00:09:27] Speaker 01:
Yeah, no one knew it was her job.

[00:09:29] Speaker 01:
I asked Ms.

[00:09:30] Speaker 01:
Jamerson if you had done your job, if you had done your job.

[00:09:34] Speaker 01:
We're not asking for the government to do some crazy, unbelievable jumping over hurdles.

[00:09:42] Speaker 01:
We're just asking for the person who's responsible for doing the review to actually do the review.

[00:09:46] Speaker 04:
No, what you've asked for in your briefs is a really broad standard.

[00:09:50] Speaker 04:
that would apply to lots of cases outside the context of your very narrow factual situation.

[00:09:56] Speaker 04:
You had to ask for that broad standard because it's the only way to shoehorn your facts in.

[00:10:00] Speaker 04:
That's the problem.

[00:10:01] Speaker 04:
The broad standard you've asked for would extend to lots and lots of cases.

[00:10:05] Speaker 04:
I don't see a way to have a standard that is as narrow as to only apply to your cases and not sweep in all these others.

[00:10:14] Speaker 01:
Your Honor, in procurement decisions, in bid protests,

[00:10:19] Speaker 01:
in termination for convenience in every single case where there's any type of discretionary decision.

[00:10:26] Speaker 01:
And this is a discretionary decision.

[00:10:27] Speaker 01:
Are you abusing your discretion?

[00:10:29] Speaker 01:
Every single one of those examples, Your Honor.

[00:10:30] Speaker 04:
I wouldn't mind.

[00:10:31] Speaker 04:
You're yelling at me right now.

[00:10:32] Speaker 01:
Oh, I'm sorry.

[00:10:33] Speaker 04:
You're yelling at this court.

[00:10:34] Speaker 04:
You're angry, and you're emotional.

[00:10:35] Speaker 04:
And I'd ask you to tone it down.

[00:10:37] Speaker 01:
I apologize, Your Honor.

[00:10:37] Speaker 01:
I have a loud voice, and I do get emotional.

[00:10:40] Speaker 04:
The voice got louder when I told you I thought your case was frivolous.

[00:10:43] Speaker 04:
So maybe you want to back it down a little.

[00:10:45] Speaker 01:
I apologize, Your Honor.

[00:10:46] Speaker 01:
I didn't mean to offend you.

[00:10:48] Speaker 01:
With respect to an abuse in each of those instances, your honor, whether it's termination, convenience, procurement issues, bid protests, they're all abuse of discretion standard.

[00:10:58] Speaker 01:
All I'm asking this court to apply is that when there's a discretionary determination, there actually has to be some reason to justify the decision.

[00:11:08] Speaker 01:
And in this case, there was no reason because the evidence is undisputed that if Ms.

[00:11:13] Speaker 01:
Jamerson had done her job, she would have recommended that the option be exercised

[00:11:18] Speaker 04:
and we wouldn't be here because this country... Is it your view that the government has to articulate its reasons?

[00:11:24] Speaker 01:
It just, no, it doesn't.

[00:11:26] Speaker 01:
It just has to have a reason.

[00:11:29] Speaker 01:
It can be any reason that's reasonable.

[00:11:31] Speaker 04:
In this case, there... How do we review reasons if the government doesn't articulate them?

[00:11:36] Speaker 01:
Well, they don't have to articulate in the sense they don't have to tell the contractor.

[00:11:40] Speaker 01:
But there actually has to be some reason, Your Honor, why

[00:11:45] Speaker 01:
you decided in the way that you did when there's a discretionary obligation on the part of the government, right?

[00:11:51] Speaker 04:
So if you're in order to not... It doesn't create an obligation, it creates an opportunity.

[00:11:57] Speaker 04:
That's the difference.

[00:11:58] Speaker 04:
There's not an obligation.

[00:12:00] Speaker 01:
An obligation was the wrong choice of words, you're correct.

[00:12:02] Speaker 01:
When you're making a discretionary determination, discretion, in order to not abuse that discretion, all you need is to sit down, discuss it, and have a reason why you did what you did.

[00:12:14] Speaker 01:
If you don't communicate to the contractor, that's fine.

[00:12:16] Speaker 01:
But when the contractor sues you, you have to be able to articulate to the court, this is why we did it.

[00:12:21] Speaker 01:
And then judges ultimately will decide, was that reasonable?

[00:12:25] Speaker 01:
And it's not a high standard, particularly when there's wide discretion.

[00:12:28] Speaker 02:
I'm having a hard time seeing how the argument you're making today is consistent with our decision and government systems advisors.

[00:12:37] Speaker 02:
This court looked at similar language in an options clause.

[00:12:43] Speaker 02:
and said the government had discretion and a story.

[00:12:47] Speaker 01:
Right.

[00:12:48] Speaker 01:
In that case, Your Honor, the language was different.

[00:12:50] Speaker 01:
It was at the option of the government, not that the government may exercise.

[00:12:54] Speaker 01:
To me, that was the language that this court was relying upon to say that there was no obligation at all.

[00:13:04] Speaker 02:
So you have a different interpretation of the contract, and you think that it obligates the government to do something.

[00:13:11] Speaker 01:
obligates the government to just do a review.

[00:13:14] Speaker 01:
And if they did a review and said at the time, you know what, attenuation, you didn't do X, Y, or Z correctly, or we want to go in a different direction, or anything, anything, that's reasonable.

[00:13:29] Speaker 03:
Well, wouldn't you assume that the contract would articulate what the standards are if that's what the parties had agreed to?

[00:13:35] Speaker 03:
And then the absence of standards, as Judge Stowe started the argument, which she pointed out that the contract says,

[00:13:41] Speaker 03:
The only obligation on the government is you have to give preliminary written notice and then give written notice of exercising the option.

[00:13:49] Speaker 03:
So you've got a contract and it specifies what you have to do

[00:13:56] Speaker 03:
in order to satisfy this.

[00:13:57] Speaker 03:
Why aren't you reading standards into a contract that you never agreed to?

[00:14:03] Speaker 01:
And it goes, I guess the answer is there's an applied duty of good faith and fair dealing in every contract.

[00:14:07] Speaker 01:
So when you have a discretionary clause like this, it's discretionary.

[00:14:11] Speaker 01:
The government can do it or not do it, but the courts have held that when you have a discretionary clause, whether it's bid protest, procurement, termination convenience, or indigenous tax, an option, that you have to

[00:14:23] Speaker 01:
act basically in good faith that you have to not have abused your discretion when you make a determination.

[00:14:29] Speaker 04:
I'm not sure you have to act in good faith so much as you just can't act in bad faith.

[00:14:33] Speaker 04:
That's what the standard you read before said, right?

[00:14:35] Speaker 04:
There's a difference, right?

[00:14:36] Speaker 04:
There's a difference between acting affirmatively in good faith and not acting in bad faith.

[00:14:40] Speaker 01:
There is.

[00:14:41] Speaker 01:
And the good faith, Your Honor, goes to the abuse of discretion.

[00:14:45] Speaker 01:
So bad faith is one thing, right?

[00:14:47] Speaker 01:
But in order to act in good faith from an abuse of discretion standpoint, you have to, to me,

[00:14:53] Speaker 01:
And this is the argument from the cases that we cited and how I read them.

[00:14:57] Speaker 01:
And I guess I took offense, and that may be the wrong word, to making a frivolous argument, because I don't think in my career I've done that.

[00:15:10] Speaker 01:
And I think in this case, the standard, if applied, and there's an abuse of discretion standard, when the evidence is undisputed that the option would have been exercised had the government not made a mistake, that that's an arbitrary decision.

[00:15:23] Speaker 01:
because it was only due to a mistake that my client didn't have the benefit of work during that final option period, which would have been substantial.

[00:15:33] Speaker 03:
You're well into your rebuttal, so we can serve two minutes for a reply.

[00:15:37] Speaker 01:
Thank you, Your Honor.

[00:15:38] Speaker 01:
I appreciate that.

[00:15:53] Speaker 00:
May it please the court?

[00:15:56] Speaker 00:
Attenuation has no contractual right to the exercise of an option.

[00:16:01] Speaker 03:
Well, there are no standards whatsoever?

[00:16:04] Speaker 03:
Bad faith?

[00:16:06] Speaker 00:
Not written into the contract, Your Honor.

[00:16:09] Speaker 04:
No, but in contract law.

[00:16:11] Speaker 04:
I mean, not written into the contract.

[00:16:12] Speaker 04:
But are you saying that if the government acted in bad faith and said, I don't like white people, so I'm not renewing your contract,

[00:16:19] Speaker 04:
I'm not going to exercise this option that they couldn't bring a cause of action under those circumstances?

[00:16:24] Speaker 00:
I don't know what the cause of action could be in that circumstance, Your Honor, in the conceited absence.

[00:16:30] Speaker 04:
You don't think that the law lays out at least a bad faith exception to unfettered discretion?

[00:16:38] Speaker 00:
Not that I'm aware of.

[00:16:39] Speaker 03:
Well, that would be unlawful if you were acting in a discriminatory fashion.

[00:16:43] Speaker 03:
Is there no way to rectify that other than filing that discrimination

[00:16:48] Speaker 00:
I don't know if there would be a cause of action for that or not, Your Honor.

[00:16:52] Speaker 00:
Of course, there is no bad faith in this case, so I don't think the court needs to address what would, if we're talking about bad faith, meaning animus essentially, I don't think the court needs to address, if you have a government agent making, deciding not to exercise an option out of animus, whether that would be legal or not, or whether that would be actionable.

[00:17:17] Speaker 00:
The implied duty of good faith, that relates to existing contractual rights, that under the implied duty of good faith and fair dealing, the government cannot interfere with the party's performance of the contract or its existing contractual rights, but they have no contractual right to have an option be exercised.

[00:17:41] Speaker 00:
Under the language of this contract, theoretically a contract could be made that

[00:17:48] Speaker 00:
that puts some sort of standards that the government has to follow or obligates the government to exercise an option in certain circumstances, but this contract doesn't do that.

[00:18:02] Speaker 00:
Under the language of this contract, attenuation has no more right to receive an option than a person on the street has a right to receive a government contract.

[00:18:16] Speaker 00:
And there's no statutory right to have an option exercised.

[00:18:22] Speaker 00:
The regulations governing exercise of an option, those only relate to the affirmative exercise and are not for the benefit of the contractor in any event.

[00:18:34] Speaker 00:
So there is no right for them to sue for the non-exercise of an option.

[00:18:41] Speaker 03:
Did the contract board, the civilian board, agree with you?

[00:18:45] Speaker 03:
Did they not apply some standard of abuse of discretion, arbitrary increases?

[00:18:50] Speaker 00:
That's the standard that the board applied, Your Honor.

[00:18:54] Speaker 03:
So you're disagreeing with the board?

[00:18:55] Speaker 00:
Yes, Your Honor.

[00:18:57] Speaker 00:
The board reached the right result, but we think the standard applied by the board is incorrect.

[00:19:04] Speaker 02:
Do you think we should be following the government system advisors case where

[00:19:10] Speaker 02:
That's the kind of analysis that should be done where you interpret the contract language and see whether the government had discretion.

[00:19:18] Speaker 00:
Yes, Your Honor.

[00:19:19] Speaker 02:
What standard would apply?

[00:19:21] Speaker 00:
If the standard would have to be whatever the contract says.

[00:19:26] Speaker 00:
If the contract does not set forward any standards for the government to not exercise an option, then that should be the end of the story if the government does not exercise the option.

[00:19:38] Speaker 00:
This contract does have standards governing the affirmative exercise that the government has to give a notice prior to exercising it.

[00:19:50] Speaker 03:
Now, your friend cited a court of claims case, right?

[00:19:53] Speaker 03:
And they at least denied the government their motion to dismiss.

[00:19:57] Speaker 03:
So it seems like at least that court of claims judge may have disagreed with your fraud theory of the authority of the government.

[00:20:06] Speaker 03:
Are you familiar with the case?

[00:20:08] Speaker 00:
The digital tax case?

[00:20:10] Speaker 00:
Right.

[00:20:12] Speaker 00:
That decision was relying on the precedent of the board, which the board has been applying for.

[00:20:19] Speaker 03:
I thought it was a court of claims, no?

[00:20:22] Speaker 00:
Digital tax?

[00:20:25] Speaker 03:
Maybe I'm wrong.

[00:20:39] Speaker 00:
It's a Court of Federal Claims, Your Honor.

[00:20:43] Speaker 00:
So it's not binding.

[00:20:46] Speaker 03:
So do they use the same standard that the Civilian Board of Contract Appeals used here, which is that there's not complete absolute unfettered discretion or whatever, that there's some standards that are applied?

[00:20:58] Speaker 03:
So does the Court of Claims generally disagree with the government's view as well?

[00:21:03] Speaker 00:
Yes, Your Honor.

[00:21:06] Speaker 00:
Typically, the Court of Federal Claims will

[00:21:09] Speaker 00:
They'll use, in some cases, they'll use a standard of bad faith.

[00:21:16] Speaker 00:
I'll say, in the absence of bad faith, the government has discretion, complete discretion to not exercise an option.

[00:21:27] Speaker 03:
And the one case we'll revoke on is the one the judge stole?

[00:21:32] Speaker 00:
Government systems advisors, Your Honor, yes.

[00:21:35] Speaker 00:
The court cited that in high shear.

[00:21:39] Speaker 00:
but there was not any really extensive analysis of it.

[00:21:44] Speaker 00:
I think government systems advisors is the controlling precedent here.

[00:21:53] Speaker 00:
As to just some of the factual issues, attenuation is argued that Ms.

[00:22:03] Speaker 00:
Jamerson, who is the contracting officer's representative,

[00:22:07] Speaker 00:
for the base contract wanted to exercise the option, her testimony.

[00:22:19] Speaker 03:
Well, is she the woman that your friend said didn't know that she had the authority to do it, or is that a different individual?

[00:22:26] Speaker 00:
Well, the person with authority was the contracting officer, who is Claudia Melger.

[00:22:32] Speaker 03:
Wasn't there testimony that she would have done with whatever Ms.

[00:22:35] Speaker 03:
Jameson wanted?

[00:22:37] Speaker 00:
Well, her testimony on that is at page 1028 and 1031 of the record.

[00:22:51] Speaker 00:
So first she was asked, is it still true from what you testified to at your deposition?

[00:23:01] Speaker 00:
that you had no substantive role in making a recommendation or decision on whether to exercise a second option.

[00:23:07] Speaker 00:
Yes or no?

[00:23:08] Speaker 00:
Is that still true?

[00:23:10] Speaker 00:
And Ms.

[00:23:10] Speaker 00:
Milgar answered, so I had a role.

[00:23:14] Speaker 00:
However, yes, that was a mistake.

[00:23:17] Speaker 00:
And then later on, the board judge

[00:23:29] Speaker 00:
said so long as they put together the package properly and whatever they review the package but I mean if the technical people are recommending that they exercise the option then as a contract specialist she will go along with that and uh... she answered absolutely correct so she's as long as the contract she's testified essentially that if

[00:23:59] Speaker 00:
the contracting officer's representative asks her to exercise the option and has put together the package, which is their internal process for making sure that the requirements under the federal acquisition regulations for the affirmative exercise have been met, then she would review that package.

[00:24:24] Speaker 00:
And assuming that those requirements are met,

[00:24:28] Speaker 00:
then she would go along with that recommendation.

[00:24:33] Speaker 00:
But it doesn't mean she automatically will exercise the option without the contracting officer's representative requesting it, demonstrating that it's appropriate to do so under the regulations.

[00:24:48] Speaker 00:
So if the regulations were not satisfied,

[00:24:56] Speaker 00:
And Ms.

[00:24:57] Speaker 00:
Jamerson, the contracting officer's representative, was begging to exercise the option.

[00:25:01] Speaker 00:
I don't think the contracting officer could or would go along with that.

[00:25:10] Speaker 00:
So I think the idea that Ms.

[00:25:13] Speaker 00:
Jamerson controls this, even though she does not have the authority, I think is not supported by the evidence.

[00:25:22] Speaker 03:
But your bottom line here is that none of that matters, even if it were the case.

[00:25:27] Speaker 00:
Yes, Your Honor.

[00:25:28] Speaker 00:
And Ms.

[00:25:30] Speaker 00:
Javerson herself testified at page 975 of the record, I didn't have a preference.

[00:25:41] Speaker 00:
And then she was asked, would you have recommended continuing to work with attenuation given the fact that attenuation was the existing contractor for which you had no issues?

[00:25:54] Speaker 00:
And she answered,

[00:25:55] Speaker 00:
I would have recommended it, but I wasn't asked for a recommendation.

[00:25:59] Speaker 00:
So I think what she means there is she didn't personally have a preference, but if somebody had gone to her and said, we want to exercise the option, but we need your recommendation, that she would have been willing to go along with that because she didn't herself have a preference one way or the other.

[00:26:16] Speaker 00:
But she was not advocating for affirmative exercise.

[00:26:24] Speaker 00:
And she was one of several people who were discussing whether it made sense and considering the issues at the time.

[00:26:34] Speaker 00:
Page 475 of the record, there's an email that she wrote, Ms.

[00:26:40] Speaker 00:
Jamerson wrote on September 16, that was 13 days before the option expired.

[00:26:45] Speaker 00:
She wrote in part,

[00:26:49] Speaker 00:
I guess I, we need to discuss internally with Lydia whether it would be beneficial to exercise the option.

[00:26:56] Speaker 00:
Given all the issues we've had with Task Order 1 and the uncertainty of timing of work, parentheses, I guess that's a good way to put it, and then there's a smiley face, closed parentheses, for Task Orders 2 and 3.

[00:27:10] Speaker 00:
So that's just one example of several different

[00:27:17] Speaker 00:
government officials discussing internally whether it made sense to exercise this.

[00:27:24] Speaker 00:
So the notion that this is entirely after the fact rationales for not exercising it I think is not supported.

[00:27:35] Speaker 00:
Clearly they were discussing it at the time before it expired.

[00:27:44] Speaker 00:
Some of those other, just to go over very briefly, some of those reasons.

[00:27:49] Speaker 00:
Ms.

[00:27:53] Speaker 00:
Jamerson was referring to all of the issues we've had with Task Order 1.

[00:28:00] Speaker 00:
Some of those issues related to attenuation's performance.

[00:28:09] Speaker 04:
There's no fact findings on any of this stuff in this record.

[00:28:12] Speaker 04:
So I don't know why you feel like you need to spin your wheels going over what reasons she might have come up with if she affirmatively decided not to exercise the option.

[00:28:22] Speaker 04:
There's no fact findings.

[00:28:24] Speaker 00:
I disagree with that, Your Honor.

[00:28:27] Speaker 00:
I think the board considered all of this evidence and concluded that there was a contract related basis under the rubric that the board was applying for the

[00:28:38] Speaker 00:
with the board, the way the board put it was lack of motivation.

[00:28:43] Speaker 04:
Nobody's... You're talking about this specific woman and what may or may not have been in her head.

[00:28:50] Speaker 04:
That's what you keep reading to us.

[00:28:53] Speaker 04:
You obviously think that this is a significant point and you should spend a lot of time on it.

[00:28:56] Speaker 04:
All I'm saying is I don't know that that's really a relevant consideration to the resolution of the case and nor do I think it's

[00:29:03] Speaker 04:
what the lower court decided, what was in her head, what she would have necessarily done one way or the other.

[00:29:08] Speaker 04:
And I don't even know where you're going because it seems to me like you want us to make some sort of fact findings in the first instance, which is really weird considering the chief judge has tried to guide you at several times.

[00:29:19] Speaker 04:
Well, that's not really even relevant to your real argument, is it?

[00:29:22] Speaker 04:
But you're sort of missing those carefully crafted hints.

[00:29:26] Speaker 04:
You want to keep going, keep going.

[00:29:28] Speaker 04:
It's your one minute and 22 seconds.

[00:29:30] Speaker 04:
I'm just not sure what relevance this has to what's in front of us.

[00:29:35] Speaker 00:
It shouldn't be relevant other than these are the facts that the board relied on under the standard that the board applied.

[00:29:44] Speaker 00:
We think that standard was incorrect.

[00:29:46] Speaker 00:
We think the contract does not give attenuation any rights to have its option exercised.

[00:29:55] Speaker 00:
That should be the end of the analysis right there.

[00:29:58] Speaker 03:
Thank you.

[00:30:11] Speaker 01:
Thank you.

[00:30:11] Speaker 01:
I just want to bring to the Court's attention a few additional decisions I think support the proper standard, and one of which was cited by the government, TMI.

[00:30:23] Speaker 03:
Is it in your briefs?

[00:30:24] Speaker 01:
This was cited on page five of the government's breach, or actually it was page five of our reply brief is where we address it, but it's a TMI management system, 78 federal claims 445.

[00:30:40] Speaker 01:
And the actual holding in that case was that the renewal of this contract is within the broad but not unlimited discretion of the government.

[00:30:52] Speaker 01:
that dealt with options.

[00:30:53] Speaker 01:
And in that case, the court acclaimed, obviously not binding, but presumably aware of this court's precedent, held that the government's renewal of the contract was proper because it was within the broad but not unlimited discretion of the government.

[00:31:17] Speaker 01:
And that's the same standard we're asking this court to apply here.

[00:31:21] Speaker 01:
that the government's discretion is broad, but it's not unlimited.

[00:31:26] Speaker 01:
Another case, which is another Court of Federal Claims decision, E&E Enterprise Global v. United States, and that's 120 federal claims, 165, that dealt with 14 different task orders.

[00:31:46] Speaker 01:
That was the government's only obligation was to

[00:31:49] Speaker 01:
provide the minimum task orders which were 14 and the contractor alleged that it was entitled to remedies because the government terminated that contract and the government argued we have no obligations beyond these 14 and the court held that the implied duty of good faith and fair dealing covered that situation and the court held that

[00:32:14] Speaker 01:
Simply because an IDIQ contract permits the agency to issue some task orders and to not issue others does not mean that the government's conduct in administering the IDIQ contract is beyond judicial review.

[00:32:28] Speaker 01:
The court cannot therefore agree with the defendant.

[00:32:30] Speaker 01:
In this case, as a matter of law, the implied duty of good faith and fair dealing in the contract was not breached.

[00:32:37] Speaker 01:
And just as a last point, Your Honor, and I appreciate your courtesy, is if the standard applies,

[00:32:44] Speaker 01:
And it's the standard that the lower court or that the board applied that there's a four-part test whenever you have a discretionary determination, which comes from decisions time and again from this court, that if that applies, that the government abused that discretion because the evidence, notwithstanding what counsel argued, Ms.

[00:33:02] Speaker 01:
Jamerson said, I would have exercised recommended that the option be exercised if I had known it was my job.

[00:33:09] Speaker 01:
And Malone and Melgar, the two contracting officers, both said they would have done whatever Jamerson said.

[00:33:15] Speaker 01:
So it's not a case where there was a reason why the contract option wasn't exercised.

[00:33:19] Speaker 01:
It's a case where the only reason the option wasn't exercised is because of neglect on the government's part.

[00:33:24] Speaker 01:
That's what makes the decision arbitrary.

[00:33:26] Speaker 03:
Thank you, Your Honor.

[00:33:27] Speaker 03:
Thank you.

[00:33:28] Speaker 03:
We thank both sides.

[00:33:29] Speaker 03:
The case is committed.

[00:33:39] Speaker 01:
The honorable court is adjourned until tomorrow morning at 10 a.m.