[00:00:00] Speaker 06:
379, PDS Consultants versus United States.

[00:00:53] Speaker 06:
You're splitting your time again, this case?

[00:00:57] Speaker 01:
Yes, I am.

[00:00:57] Speaker 06:
So we're running the clock individually for you at eight minutes of your time.

[00:01:04] Speaker 01:
Good morning.

[00:01:05] Speaker 01:
May it please the court?

[00:01:06] Speaker 01:
The trial court failed to understand that while the 2006 VBA requires VA to apply the rule of two when it's conducting a competitive procurement, here VA was ordering goods not through competition,

[00:01:22] Speaker 01:
but through a non-competitive process involving a mandatory source.

[00:01:26] Speaker 06:
Why is that clear that it only applied to a competitive procurement?

[00:01:31] Speaker 06:
What is it in the statutory language?

[00:01:34] Speaker 06:
Is there anything the kingdom tells us about the limitations of the 2006 requirements?

[00:01:40] Speaker 01:
The court needs to read the plain language of 8127D in the context of the existing statutory and regulatory procurement framework, which would be CICA and the FAR.

[00:01:52] Speaker 01:
The 8127D tells VA how to have a competition, but it doesn't tell VA when to have the competition.

[00:02:00] Speaker 01:
VA needs to look at CICA and the FAR to determine when it should have a competition.

[00:02:05] Speaker 01:
And the CICA provides some important exceptions to when the agency must have open and full competition.

[00:02:12] Speaker 01:
One is when there's a mandatory source, and that's what we have here with the JWA, the ability one procurement list.

[00:02:21] Speaker 01:
A5 provides a specific exemption to open and full competition, and the JWOD is one of those exceptions.

[00:02:28] Speaker 01:
It says that the agency shall procure the product or service from the list.

[00:02:32] Speaker 06:
OK, so I'm confused because it seems to me the government changed its position a few times as we got to this point.

[00:02:40] Speaker 06:
So the position you're articulating today is consistent with the position you've had at some points.

[00:02:46] Speaker 06:
But at other points, right, the regulations changed and said,

[00:02:50] Speaker 06:
OK, we're going to apply this for what's already on the procurement list, but not for future additions.

[00:02:57] Speaker 06:
Is that right?

[00:02:58] Speaker 06:
So how does the position that the government took at least a couple of times as we were getting here, comport with what you're telling us now about how competitive stuff is not included?

[00:03:08] Speaker 01:
So what's important to recognize is that VA has consistently taken the position

[00:03:17] Speaker 01:
that the JWOD, the Ability 1 Procurement List, is a mandatory source.

[00:03:23] Speaker 01:
Later in 2017, VA tried to draw a bright line rule, but still understood that the JWOD, Ability 1 Procurement List, was a mandatory source for at least a portion of time before January 2010.

[00:03:36] Speaker 01:
And so again, the distinction here is between the competitive procurements where the rule of two would arise.

[00:03:45] Speaker 01:
The rule of two is a form of a restricted competition.

[00:03:49] Speaker 01:
Well, it is a restricted competition.

[00:03:51] Speaker 01:
It's still a competition.

[00:03:52] Speaker 01:
But we never get to whether VA needs to have a restricted competition if there's a mandatory source like we have here.

[00:04:00] Speaker 01:
And the FAR tells us that this is a mandatory source.

[00:04:03] Speaker 01:
So not only does CECA take the JWOD completely out of competition and make rules for competition, such as the rule of two,

[00:04:11] Speaker 01:
inapplicable, but we have the FAR, and that's in 8.002, telling us that the ability one procurement list is a mandatory source.

[00:04:20] Speaker 01:
And so sort of in the hierarchy, you would have the contracting officer would first look to see if there's a mandatory source.

[00:04:28] Speaker 01:
If there is, that's sort of the end of the inquiry for the contracting officer.

[00:04:33] Speaker 01:
I'm sorry, assuming that the procurement list has it.

[00:04:36] Speaker 06:
If what you're saying is correct, why then when Congress passed its earlier version of the statute in 2003, did it feel the need to explicitly exempt the ability one listing if, as you say, we're going to put the FAR regulations on top of this and exclude that?

[00:04:57] Speaker 01:
There's many differences, Your Honor, between

[00:05:00] Speaker 01:
the 2003 Veterans Benefit Act, which was applied to all agencies, and the 2006 VBA, which applies only to VA.

[00:05:09] Speaker 01:
And so, for example, in addition to the difference that you noted, 8127 I specifically prioritizes contracting preferences for VA.

[00:05:23] Speaker 01:
That wasn't in the 2003 Veterans Benefit Act.

[00:05:26] Speaker 01:
And then you have 8128A, which is in the 2006 Veterans Benefit Act, but not a comparable provision in the 2003 Veterans Benefit Act.

[00:05:38] Speaker 01:
So you see Congress approaching the issue differently.

[00:05:42] Speaker 01:
And because Congress didn't, for example, in the Rossello case, where there was an issue about changes in the bill over time,

[00:05:55] Speaker 01:
and Congress deleting a provision in the final version.

[00:05:59] Speaker 01:
We don't have that here.

[00:06:00] Speaker 01:
We just have Congress approaching the issue in two different ways, providing, for example, in 8128A.

[00:06:07] Speaker 05:
But they did it two different ways, in two different time frames.

[00:06:12] Speaker 05:
And in one, they specifically provided for a broad exception.

[00:06:18] Speaker 05:
And then the other, they did not, right?

[00:06:21] Speaker 01:
That is true, but we can't read the 2006 VBA to alter the normal process where a contracting officer would go to a mandatory source, and then if the mandatory source doesn't, if there is no mandatory source, then to move on to non-mandatory sources.

[00:06:43] Speaker 01:
The court can't read Congress to be altering that process with

[00:06:49] Speaker 01:
by assuming that Congress was doing that implicitly or sub silencio.

[00:06:54] Speaker 05:
Congress, when it wanted in 2006... Well, what about the language of 8127D tells you that it was not meant to apply to all contracts?

[00:07:06] Speaker 01:
Because first of all, it's talking about restricted competitions, which is a term of art that falls under SICA 3303,

[00:07:17] Speaker 01:
which is still competition, but just one form of competition.

[00:07:22] Speaker 01:
It's restricted to a particular, usually a particular socioeconomic group that the Congress is trying to promote.

[00:07:30] Speaker 05:
So the language itself and then- Didn't Kingdom Ware say that 8127D requires the VA to apply the rule to all contracting determinations, period?

[00:07:42] Speaker 01:
There are instances in the Supreme Court's decision where it uses broad language, referring to contracting generally.

[00:07:48] Speaker 01:
But what's key is that nowhere does the court indicate that it is addressing mandatory non-competitive sources like we have here.

[00:07:58] Speaker 01:
And the issue in that case wasn't about mandatory sources.

[00:08:02] Speaker 01:
It was about the federal supply schedule, which is not mandatory and non-competitive.

[00:08:07] Speaker 01:
It is a competitive process, which the trial court got wrong.

[00:08:11] Speaker 01:
The trial court misunderstood that.

[00:08:13] Speaker 01:
And the court never mentions or even discusses mandatory non-competitive sources.

[00:08:18] Speaker 01:
But while the court's silent on mandatory and non-competitive sources, the court does mention specifically in several places competition and competitive procedures.

[00:08:29] Speaker 01:
So for example, at page 1977 of the court's opinion, when the court says admittedly that the department is required to use the rule of two before awarding a contract to another supplier,

[00:08:41] Speaker 01:
In the very next sentence, the Supreme Court goes on to say, the use of the word shall demonstrates that 8127D mandates the use of the rule of two in all contracting before using competitive procedures.

[00:08:53] Speaker 01:
So that general language that's referring generally to contracting in Kingdeware needs to be read in the context of the issue there.

[00:09:03] Speaker 01:
And the fact that the court then goes on to specifically reference competitive procurements.

[00:09:08] Speaker 06:
I know your time is up, so I'm not going to count this against you.

[00:09:11] Speaker 06:
But I just have a housekeeping question that your friend can answer as well.

[00:09:16] Speaker 06:
I just want to make sure what contracts we're talking about, what we're not talking about.

[00:09:19] Speaker 06:
It's my understanding that the only issues in dispute here related to the contract for VISN 2 and 7.

[00:09:29] Speaker 06:
Is that correct?

[00:09:31] Speaker 06:
Is it your view that the parties agree

[00:09:32] Speaker 06:
that those are the only remaining contracts?

[00:09:34] Speaker 01:
Yes.

[00:09:35] Speaker 01:
It's Visions 2 and 7.

[00:09:36] Speaker 01:
And those are the only two.

[00:09:39] Speaker 06:
We've got the court, the CFC's order, which talked about contracts and have dates September 30, 2017, and the contract by 2018 of January.

[00:09:53] Speaker 06:
And then she proceeded to stay her judgment.

[00:09:57] Speaker 06:
So have those contracts not been awarded at all, the ones that she was referring to?

[00:10:02] Speaker 06:
Are they just stayed?

[00:10:03] Speaker 06:
The award of those contracts are stayed?

[00:10:06] Speaker 01:
The trial court stayed her injunction, which was going to require VA to apply the rule of two, conduct, potentially conduct competitive procurements.

[00:10:21] Speaker 06:
She refers to these two contracts.

[00:10:24] Speaker 06:
So have these two contracts been awarded?

[00:10:27] Speaker 06:
The one she referenced, the date of

[00:10:30] Speaker 06:
September 30th, 2017 and January 21st, 2018.

[00:10:34] Speaker 06:
Has the government gone ahead and awarded those contracts?

[00:10:37] Speaker 01:
The government has gone ahead and awarded contracts to the ability one nonprofit agency, Winston Salem, and has stayed its injunction, which would have required VA to apply the rule of two.

[00:10:50] Speaker 01:
If the rule of two is satisfied, then VA would have competed.

[00:10:52] Speaker 06:
So what happens if we were to agree hypothetically with the court of federal claims?

[00:10:59] Speaker 06:
Do those contracts get undone?

[00:11:01] Speaker 06:
Does the other side just get an award of new contracts?

[00:11:08] Speaker 06:
What's the relief provided, assuming, of course, that we would affirm the CFC?

[00:11:16] Speaker 01:
Your Honor, to be honest, I don't know exactly what mechanism VA would have to use if they would have to terminate the existing contracts.

[00:11:25] Speaker 01:
Because one of them has option periods.

[00:11:29] Speaker 01:
So the option period could run, and then VA could choose not to renew or enter into additional option periods.

[00:11:41] Speaker 06:
OK.

[00:11:42] Speaker 06:
Thank you.

[00:11:57] Speaker 02:
Good morning, Your Honors.

[00:11:59] Speaker 02:
There's been a lot of discussion about the mandatory language in the 2006 VBA, but the JWOD statute also contains mandatory language.

[00:12:07] Speaker 06:
It also has an absolute... So what guide... I appreciate that, and I think we all understand what the language says, so I don't mean to cut you off.

[00:12:13] Speaker 06:
Of course.

[00:12:13] Speaker 06:
So what do we want to do with that?

[00:12:15] Speaker 06:
What are the rules of construction?

[00:12:17] Speaker 06:
There's no dispute, you've got two mandatory statutes, and what do we do?

[00:12:21] Speaker 06:
Is one of the principles we apply which is more specific or less specific?

[00:12:25] Speaker 06:
Do we apply a temporal thing?

[00:12:28] Speaker 06:
The last one gets precedent over the former one.

[00:12:31] Speaker 06:
What are the rules that you would have us apply?

[00:12:32] Speaker 02:
So the rules that Your Honor mentions are, of course, some of the rules of canons of statutory construction that could be applied here.

[00:12:39] Speaker 02:
But these, importantly, are just guidelines.

[00:12:40] Speaker 02:
And you need to look at the totality of the circumstances.

[00:12:43] Speaker 02:
And another important canon here is if you can try to reconcile the two statutes to give meaning and intent to both, that's what the court should do.

[00:12:52] Speaker 02:
And so here, in order to do that, it's important

[00:12:55] Speaker 02:
to think about the context, not just that my colleague from the government has articulated in terms of the FAR, but additionally of the Small Business Act itself.

[00:13:05] Speaker 02:
The 2006 VBA is silent as to JWAT.

[00:13:09] Speaker 02:
Everyone accepts that.

[00:13:10] Speaker 02:
Everyone acknowledges that.

[00:13:12] Speaker 02:
This is a statute that's been in existence and has been interpreted for over 80 years.

[00:13:16] Speaker 02:
And so for Congress to simply decide that it's going to make a big change in the way that this statute is applied without mentioning it would be at a minimum odd.

[00:13:25] Speaker 02:
And so what are we to take from that?

[00:13:26] Speaker 02:
What clues did Congress give us?

[00:13:28] Speaker 02:
There is a statute that is mentioned directly in the 2006 VBA, separate from the 2006 VBA, which is the Small Business Act.

[00:13:35] Speaker 02:
The text of the 2006 VBA is replete with references to the Small Business Act.

[00:13:40] Speaker 02:
Definitions are imported.

[00:13:42] Speaker 02:
And what the Small Business Act imposed many, many years earlier, so after the enactment of JWAT, but well before the enactment of the 2006 VBA, was its own mandate.

[00:13:53] Speaker 02:
There was a separate mandate.

[00:13:55] Speaker 02:
for contracts to be set aside for small business in excess of the, anytime you're over the simplified acquisition threshold.

[00:14:03] Speaker 02:
This was an existing mandate prior to the enactment of the 2006 VBA to which VA and all other agencies were required to adhere.

[00:14:11] Speaker 02:
That's an existing mandate.

[00:14:12] Speaker 02:
And for the entirety of that time, while that mandate was in existence, JWOD was always interpreted as having primacy over the Small Business Act mandate.

[00:14:22] Speaker 02:
What changes with the enactment of the 2006 VBA is it's actually a modification for VA only of the requirements under the Small Business Act.

[00:14:32] Speaker 02:
The Small Business Act dictates that you have a set-aside for small business in certain circumstances, but not which set-aside you use.

[00:14:40] Speaker 02:
You could use an 8A set-aside.

[00:14:42] Speaker 02:
You could use a women-owned business set-aside.

[00:14:45] Speaker 02:
You could use HUBZone.

[00:14:46] Speaker 02:
You could use the SDVOSB set-aside that's provided for, or any of the others that are in the Small Business Act.

[00:14:51] Speaker 02:
What the 2006 VBA changes for VA is you don't have the discretion anymore, VA, to decide which of these you're going to use.

[00:14:59] Speaker 02:
You now have to put the veterans organizations first.

[00:15:02] Speaker 05:
But isn't that the whole, I mean, that's the whole point of the 2006 act is that it was to benefit veterans, including disabled veterans.

[00:15:12] Speaker 05:
Correct.

[00:15:13] Speaker 05:
And the 2003 act had a specific exception that Congress presumably was aware of.

[00:15:18] Speaker 05:
and didn't write that exception into the 2006 act?

[00:15:21] Speaker 02:
Yes, Your Honor.

[00:15:22] Speaker 02:
I absolutely agree that the main purpose of the 2006 VBA is to benefit veterans.

[00:15:27] Speaker 02:
But it's in this context of small business set-asides.

[00:15:30] Speaker 02:
And it's a reprioritization of the small business set-asides.

[00:15:34] Speaker 02:
And that's set forth in 8127 I, which my colleague also mentioned, which puts the veteran SDV first, and then veterans, and then you go to 8A, and then you go to women-owned, and then you go to HUBZone as it's laid out there.

[00:15:48] Speaker 02:
That's something that didn't exist before the enactment of the 2006 VBA, and it's significant.

[00:15:53] Speaker 02:
The other significant change that's particularly noteworthy here is that if you think about how Kingdomware came about, if VA was already required pre-2006 VBA to do set-asides for small business, how did we end up with an FSS award?

[00:16:11] Speaker 02:
The reason is that the Small Business Act itself, at 644R, a 15 USC,

[00:16:15] Speaker 02:
exempts the FSS from the Small Business Set-Aside Mandate.

[00:16:20] Speaker 02:
And so what the 2006 VBA also does with its introduction of shell language is to remove that exemption as to the VA.

[00:16:28] Speaker 06:
OK.

[00:16:28] Speaker 06:
Thank you.

[00:16:30] Speaker 06:
Run out of time.

[00:16:45] Speaker 06:
Before you begin, and we won't run the clock yet, could you just respond if you have any disagreement with the government's view on the logistical issue I was asking about in terms of the remedy of what's happening now with respect to the ongoing contracts?

[00:16:58] Speaker 00:
Absolutely, Your Honor.

[00:16:59] Speaker 00:
It is our understanding that I appreciate you bringing this up because there has been some waffling down the court below as far as what contracts were at issue on this.

[00:17:09] Speaker 00:
The government tried to evade some of that through some partial corrective action.

[00:17:13] Speaker 00:
As I understand it, the latest information I had was for VISN 2, there was a contract in place through September 30, 2017 with an option to run until January 31, 2018.

[00:17:28] Speaker 00:
That's as far as we have in the record.

[00:17:31] Speaker 06:
So I would... Do you know if the option... Oh, we don't know.

[00:17:34] Speaker 06:
It's not in the record.

[00:17:35] Speaker 00:
Yeah, beyond January 13, 2018.

[00:17:36] Speaker 06:
But even so, that contract would have already terminated.

[00:17:39] Speaker 00:
That's exactly correct, Your Honor.

[00:17:40] Speaker 00:
I'm assuming based on what the VA had done leading up to that contract, where there had been various shorter term bridge contracts for the period between 6, 9, 12 months.

[00:17:50] Speaker 00:
I'm assuming that those have been awarded, but I don't know exactly that for certain.

[00:17:57] Speaker 00:
That's for Vision 2.

[00:17:59] Speaker 00:
For Vision 7, there is a blanket purchase agreement that is in place that is running between July 2016 and July 2021.

[00:18:09] Speaker 06:
So what kind of relief, if you were to prevail here, what kind of relief would you be entitled to with respect to that contract, the ongoing thing?

[00:18:21] Speaker 00:
Fundamentally, Your Honor, we think it would need to go back to a remand to Judge Firestone so that she could set new dates.

[00:18:27] Speaker 00:
PDS has never taken the position that a contract needs to stop in a moment and disadvantage the veterans that the VA is supposed to serve.

[00:18:36] Speaker 00:
We've always recognized that there may inevitably need be a wind down period.

[00:18:41] Speaker 00:
And we would recognize that that would be here.

[00:18:43] Speaker 00:
We were reluctantly okay with the dates the judge Firestone set of September 30th, 2017 and January 31, 2018 for the transitions on visit two and seven.

[00:18:56] Speaker 00:
Those were not the dates that we would have preferred, but those were the dates that the VA represented were all that they could accomplish.

[00:19:03] Speaker 00:
And Judge Firestone gave them the benefit of that doubt.

[00:19:06] Speaker 00:
We think that, frankly, going back again, there would need to be some discussion with the VA as far as what's practical, what's feasible.

[00:19:13] Speaker 00:
Fundamentally, there would need to be an analysis as far as record.

[00:19:16] Speaker 00:
All right.

[00:19:16] Speaker 00:
I appreciate it.

[00:19:17] Speaker 05:
I think you've been recently.

[00:19:18] Speaker 05:
One more housekeeping question.

[00:19:19] Speaker 05:
Yes.

[00:19:19] Speaker 05:
What's the status of the District of Columbia case?

[00:19:22] Speaker 00:
The status of the District of Columbia case is it stayed pending the resolution of this appeal.

[00:19:26] Speaker 00:
There is a parallel case as well out in Colorado, and I don't know the exact status on that, but I believe that one has also been stayed.

[00:19:37] Speaker 00:
Your Honor, my name is David Gallagher, and I'm here with Ms.

[00:19:40] Speaker 00:
Emily Terrio on behalf of PDS Consultants.

[00:19:43] Speaker 00:
We believe that this court should affirm the court below because the plain language

[00:19:49] Speaker 00:
of the Veterans Benefits Act in 8127D unambiguously requires.

[00:19:54] Speaker 06:
Let me just ask you about sort of legal principles.

[00:19:56] Speaker 06:
Absolutely.

[00:19:57] Speaker 06:
As your friend pointed out, we've got two statutes, both of which contain mandatory language.

[00:20:02] Speaker 06:
So is she not correct that one of the overriding or first principles we should apply is, is there a way that we can possibly reconcile these two statutes?

[00:20:14] Speaker 00:
Absolutely, Your Honor.

[00:20:14] Speaker 06:
OK.

[00:20:15] Speaker 06:
And so that leads her to say, yes, there is a way.

[00:20:19] Speaker 06:
Why is that wrong?

[00:20:21] Speaker 06:
If that's a principle we're supposed to try to apply.

[00:20:25] Speaker 00:
So we would agree on this point that it is important to reconcile these statutes and that they are not necessarily in conflict, although they do exist in tension.

[00:20:36] Speaker 00:
The fundamental problem with the formulation that the government has presented is that it undermines the plain language of the Veterans Benefits Act that is designed to put veterans first.

[00:20:48] Speaker 00:
Their attempt to reconcile the two statutes puts the ability one first and veteran second.

[00:20:55] Speaker 00:
And with all due respect, when it comes to the VA, and that's all that the VBA applies to is just VA procurements, our position is that the VA should and frankly under the statute must

[00:21:07] Speaker 00:
put vets first.

[00:21:09] Speaker 06:
And so you recognize they're in conflict, right?

[00:21:12] Speaker 06:
And the two were in direct conflict.

[00:21:14] Speaker 06:
They're both mandatory.

[00:21:16] Speaker 06:
And with respect to this particular group of contracts, there's a mandatory dictate in both statutes.

[00:21:22] Speaker 06:
So there's a conflict, right?

[00:21:24] Speaker 00:
There would certainly seem to be, in this situation, there's a lot of ink spilled in the briefs as to whether or not they're just in tension or attempts to harmonize them.

[00:21:33] Speaker 06:
But I think that frankly, I agree, Your Honor.

[00:21:38] Speaker 06:
Okay.

[00:21:38] Speaker 06:
And so therefore, the guiding legal principle of statutory interpretation you would have a supply is what?

[00:21:46] Speaker 06:
Specific versus general?

[00:21:49] Speaker 00:
Well, we would start by looking at the plain language of the statute.

[00:21:51] Speaker 00:
8127D sets out, and as the U.S.

[00:21:54] Speaker 00:
Supreme Court unanimously held in the Kingdomware decision,

[00:21:57] Speaker 00:
It sets forth an unambiguous shall requirement for the VA.

[00:22:01] Speaker 06:
So that's also true of the earlier statute.

[00:22:03] Speaker 00:
That's absolutely true, Your Honor.

[00:22:04] Speaker 00:
And so that would then lead us to some of the parallel or to the canons of construction that have been included in our briefs.

[00:22:12] Speaker 00:
And there's the issue of the more specific would override the more general.

[00:22:16] Speaker 00:
And there's also the later in time would override the earlier in time.

[00:22:20] Speaker 00:
And I think, frankly, those two canons are informative here.

[00:22:24] Speaker 00:
And they certainly seem to indicate that the VA

[00:22:28] Speaker 00:
and the VA only should apply the VBA giving veteran-owned small businesses priority over Ability One for VA procurements.

[00:22:37] Speaker 00:
Fundamentally, the Ability One program will still have priority throughout the entire rest of the United States government.

[00:22:44] Speaker 00:
That shall is clear because the mandate under 8504A is clear that in general they shall have priority.

[00:22:51] Speaker 06:
You're creating an exception to that statutory

[00:22:53] Speaker 06:
requirement.

[00:22:55] Speaker 00:
That's definitely correct.

[00:22:56] Speaker 00:
And it's under the principle there of the more specific statute here would govern.

[00:23:01] Speaker 05:
And your friend on the other side would argue, we'll know what that is, is now you run up against the principle that says we don't favor repeals by implication, even partial repeals by implication.

[00:23:11] Speaker 00:
Well, Your Honor, I don't think that it's necessarily a repeal by implication here.

[00:23:15] Speaker 00:
As was discussed earlier, the way that Congress indicates as to which statutes have priority is it spells that out in a specific statutory language.

[00:23:23] Speaker 00:
Here, there's nothing in 8127.

[00:23:27] Speaker 00:
There are no exceptions for purchases from anyone other than a veteran-owned small business.

[00:23:34] Speaker 00:
Kingdom Ware specifically recognized it didn't authorize purchases from the federal supply schedule.

[00:23:39] Speaker 00:
But it says it's because there's no exception language that would allow purchasing from anyone else.

[00:23:45] Speaker 06:
The issue here is different than the specific issue that was the Supreme Court confronted in Kingdom.

[00:23:51] Speaker 06:
They weren't faced with

[00:23:53] Speaker 06:
the argument and arguably the fact that they were dealing with non-competitive contracts versus competitive contracts.

[00:24:00] Speaker 06:
That issue was not in any way, shape, or form presented to the Supreme Court in Kingdomware, right?

[00:24:05] Speaker 00:
Well, I would agree, Your Honor, that the facts here are slightly different from in Kingdomware.

[00:24:09] Speaker 00:
But I think that the whole being in the court's analysis in Kingdomware.

[00:24:13] Speaker 06:
Was that issue undertaken or litigated in the Kingdomware case?

[00:24:18] Speaker 00:
That issue was not directly addressed in Kingdomware.

[00:24:21] Speaker 00:
What was directly addressed by the US Supreme Court in Kingdom Ware was what priority does 8127 give, or excuse me, what mandate does 8127 give to the VA to purchase from veteran-owned small businesses.

[00:24:36] Speaker 00:
And the instruction was that subject to certain exceptions, limited exceptions in subparagraphs B and C of 8127 that allowed for non-competitive processes amongst

[00:24:49] Speaker 00:
of veteran-owned small businesses for lower value procurements, the 8127D mandate is that, in all other instances, the VA shall conduct a rule of two analysis.

[00:25:00] Speaker 00:
And that requires them to look in and assess whether or not there are two or more veteran-owned small businesses that could meet the agency's need.

[00:25:08] Speaker 00:
There's no exception for anything, including the FSS.

[00:25:11] Speaker 05:
Excuse me.

[00:25:12] Speaker 00:
I apologize.

[00:25:13] Speaker 05:
You referred to the holding in kingdomware.

[00:25:16] Speaker 05:
But the point is that

[00:25:18] Speaker 05:
There may be very broad language, but doesn't the holding have to be interpreted in view of the facts that were being considered?

[00:25:24] Speaker 00:
Well, Your Honor, I would read specifically from the Kingdomware decision here that says, we, quote, hold that 8127 is mandatory, not discretionary.

[00:25:36] Speaker 00:
Its text requires the department to apply the rule of two to all contracting determinations and to award contracts to veteran-owned small businesses.

[00:25:45] Speaker 00:
The act does not allow the department to evade the rule of two on the ground that it has already met its contracting goals or on the ground that the department has placed an order through the federal supply schedule.

[00:25:58] Speaker 03:
They don't say on the ground that the JWOD exists and sets a different priority, right?

[00:26:03] Speaker 03:
That's not a question that was addressed.

[00:26:05] Speaker 00:
It's not a question.

[00:26:06] Speaker 00:
But specifically, what was addressed by the court was whether or not there were any exceptions in 8127.

[00:26:12] Speaker 04:
No, there was no exception.

[00:26:13] Speaker 04:
The VBA is saying it already met its goals.

[00:26:16] Speaker 04:
whether that was an exception that would apply, right?

[00:26:19] Speaker 00:
That was certainly an issue that was considered, Your Honor, but the court specifically indicated that there were no other exceptions spelled out in the plain language of the statute.

[00:26:27] Speaker 00:
I freely acknowledge that nothing at 8127 says that this will apply and override the Ability 1 program.

[00:26:33] Speaker 00:
It doesn't say that.

[00:26:34] Speaker 00:
But what the court acknowledged is there's no language in 8127D

[00:26:39] Speaker 00:
that allows for purchases from any other source outside of veteran owned small businesses.

[00:26:44] Speaker 05:
Do you agree with your friend on the other side that even before 2003 that the Ability One was viewed as an exception to all contracting even at the VA?

[00:26:57] Speaker 00:
Yeah, I think that's true, Your Honor.

[00:27:00] Speaker 00:
And I think probably rightly so prior to the enactment of the Veterans Benefit Act.

[00:27:06] Speaker 00:
There is priority.

[00:27:08] Speaker 00:
for the Ability One program.

[00:27:09] Speaker 05:
So what was the import or the impact of having put the Ability One exception expressly in the statute in 2003 and then it not appearing in the statute in 2006?

[00:27:21] Speaker 00:
Well, I think what it shows, Your Honor, is specifically Congress knows how to set the priority that it wants the agencies to implement.

[00:27:29] Speaker 00:
And in one situation where Congress considered priorities for veterans, and in the 2003 amendments to the Small Business Act, that specifically considered

[00:27:38] Speaker 00:
discretionary set-asides government-wide for service-disabled veteran-owned small businesses.

[00:27:45] Speaker 00:
And Congress, in that situation, and this is at 15 USC 657 F, Congress specifically in that situation said, for these government-wide procurements, we're going to give ability one priority.

[00:27:58] Speaker 00:
That's built into the statute in subsection C. But in this situation with the VBA, there's no such language that gives priority.

[00:28:07] Speaker 00:
What this court should take from that is this court knows how to express priority when it wants to.

[00:28:13] Speaker 00:
Another point on this, Your Honor, is that the Ability 1 program, the JWOD statute, actually also employs this canon of construction that Congress can specifically spell out when something has priority.

[00:28:26] Speaker 00:
41 USC 8504B specifically states that the federal prison industries program shall have priority over JWOD

[00:28:36] Speaker 00:
when it comes to buying products.

[00:28:39] Speaker 00:
So the fact of the matter is, is even the Ability One program that is trumpeted is so inviolate here throughout the briefing, even the statute recognizes that there are still priorities that ride over that.

[00:28:53] Speaker 00:
This is important, I think, Your Honor, because the VA has recognized that the VBA takes priority over federal prison industries.

[00:29:03] Speaker 00:
So if we have JWOD down here at level three, federal prison industries by statute is above that.

[00:29:09] Speaker 00:
And then above that, we have the VA that has previously recognized, including in federal register sites that we identify in our brief, that the VBA has priority over that.

[00:29:19] Speaker 00:
I think it's clear here the order and the priority that Congress is trying to express.

[00:29:24] Speaker 05:
What the government tries to- How does the FAR provision impact on the understanding of those priorities?

[00:29:30] Speaker 00:
Well, I think the PARC provision impacts in two ways.

[00:29:33] Speaker 00:
First, the FAR priority that's identified includes specific language at FAR 8.002 that specifically states, except as otherwise provided by law.

[00:29:46] Speaker 00:
And our position is that the VBA

[00:29:48] Speaker 00:
separately expresses that priority, that for purposes of VA procurements only, the VA should have priority.

[00:29:55] Speaker 00:
So the FAR has not been updated to reflect that, or the VAR, the Veterans Acquisition Regulation, has not been updated to reflect that because, frankly, our position is that the VA has not properly implemented the kingdomware decision or the VBA in the wake of the kingdomware decision.

[00:30:17] Speaker 00:
One other point that I'd like to make, Your Honor, is relating to this competitive versus mandatory.

[00:30:23] Speaker 00:
The only reference in 8127D to mandatory is, frankly, the mandatory shall language.

[00:30:32] Speaker 00:
But that word mandatory that the government has pointed to as requiring some sort of a special or a different dispensation for ability one, that's an invention.

[00:30:43] Speaker 00:
That language does not exist anywhere in 8127D.

[00:30:47] Speaker 00:
And the government's attempt to try to pull in and graft in concepts from the Small Business Act and from the Competition and Contracting Act and the FAR, I think, frankly, that's not the proper way to interpret this statute.

[00:31:02] Speaker 00:
The US Supreme Court indicated that this statute was unambiguous.

[00:31:05] Speaker 00:
And so I think we start with the language that's in the statute.

[00:31:10] Speaker 00:
And when it speaks in terms of competition,

[00:31:16] Speaker 00:
When it speaks in terms of competitive procurements in 8127D and restricted competition, I think it's rather clear that it's not referring to the Ability One program, but rather restricted competition amongst veteran-owned small businesses when the Rule of Two is satisfied.

[00:31:35] Speaker 00:
With regard to references to competition or mandatory sources that maybe exist under the FAR

[00:31:45] Speaker 00:
With all due respect, the proper way to interpret this is through applying the VBA statutory mandate.

[00:31:53] Speaker 00:
The mandate would override and should, frankly, drive the policy that's expressed in the federal acquisition regulation.

[00:32:00] Speaker 05:
Is it relevant that this contract was awarded by a contracting officer rather than by the secretary?

[00:32:08] Speaker 00:
I don't think that's a relevant fact, Your Honor.

[00:32:11] Speaker 00:
The authority has been delegated down.

[00:32:13] Speaker 00:
to the contracting officers to bind the United States of America.

[00:32:16] Speaker 00:
So I would view the authority of the two for purposes of conducting a procurement roughly co-equal.

[00:32:28] Speaker 00:
Unless the court has any other questions, PDS respectfully requests this court to affirm the trial court below.

[00:32:36] Speaker 00:
And thank you.

[00:32:49] Speaker 01:
The goal here is to harmonize 8127D with the JWOD.

[00:32:53] Speaker 01:
And the court can do that by reading 8127D's plain language and restricting it to the situation where VA has, in accordance with a whole set of rules for determining whether it's going to have a competition, whether VA has stepped into the competition lane, if you will.

[00:33:09] Speaker 01:
The JWOD is not in that lane.

[00:33:11] Speaker 01:
It's over here.

[00:33:11] Speaker 01:
It's a different set of rules.

[00:33:14] Speaker 01:
It's about a non-competitive process.

[00:33:16] Speaker 01:
And 8127D

[00:33:18] Speaker 05:
But whether it's competitive or not, I don't really understand the argument that it's not awarding a contract under JWOD.

[00:33:28] Speaker 01:
The agency would be awarding a contract under JWOD, but the question is whether the VA's obligation to conduct the rule of two exists only once VA has determined that it's going to have a competition.

[00:33:48] Speaker 01:
And that's what a restricted competition is, is once the VA has determined that it can have a competition, what's it going to look like?

[00:33:56] Speaker 01:
And here, VA never gets to that step of determining what its competition is going to look like, because the JWAT is a mandatory source under the FAR.

[00:34:05] Speaker 01:
And so a PDS and the trial court would have is rejigger

[00:34:10] Speaker 01:
how a contracting officer applies the CICA and the FAR.

[00:34:14] Speaker 01:
And so now, under CICA, agencies can or VA can use an urgent and compelling basis for avoiding competition altogether.

[00:34:23] Speaker 01:
Are we to read 8127D to mean that now VA must first determine if the rule of two will apply and can't go to that exception to competition altogether?

[00:34:34] Speaker 01:
That's what PDS is arguing, is that

[00:34:38] Speaker 01:
The statute requires competition, full stop, then decide whether it's going to be restricted or not.

[00:34:43] Speaker 01:
And you've now cut out a whole procurement scheme involving the FAR and CICA that VA now just doesn't apply anymore because of 8127D.

[00:34:54] Speaker 01:
And there's nothing in the statute to suggest that that was the Congress's intent.

[00:35:01] Speaker 01:
The issue in Kingdomware was whether the

[00:35:05] Speaker 01:
VA had discretion to use the federal supply schedule once it met its contracting goals.

[00:35:17] Speaker 01:
That's not the issue here.

[00:35:19] Speaker 01:
And the last thing I'll say is that there's nothing in 8127D that suggests that Congress was trying to override CICA and the FAR.

[00:35:26] Speaker 01:
And so again, if the court puts 8127D in the competition lane and recognizes that's where it

[00:35:33] Speaker 01:
it is and that it doesn't have anything to do with non-competitive procurements, then the court can avoid the conflict the trial court seemed to think there was.

[00:35:40] Speaker 06:
Thank you.

[00:35:41] Speaker 06:
We thank both sides and the case is submitted.