[00:00:06] Speaker 00: The next case for argument is 172547 Treadwell Corporation versus the United States. [00:00:59] Speaker 05: We're ready whenever you are. [00:01:15] Speaker 05: Yes, thank you, your honor. [00:01:16] Speaker 05: May it please the court. [00:01:18] Speaker 05: The central question of this case is contract interpretation, which this court reviews to know about. [00:01:25] Speaker 05: The solicitation [00:01:27] Speaker 05: stated a 15-month delivery schedule for completion of production units. [00:01:31] Speaker 05: This was confirmed by the agency. [00:01:33] Speaker 03: Do you agree that a plaintiff has to establish both of the first two factors? [00:01:40] Speaker 03: Yes, sir. [00:01:42] Speaker 03: If we find no error in the Court of Federal Claims determination as to either, then you lose. [00:01:51] Speaker 03: Yes, sir. [00:01:52] Speaker 01: I can speak to that question first. [00:02:04] Speaker 05: Irreparable harm as a legal matter results from the loss of a fair opportunity to compete for a contract. [00:02:11] Speaker 05: The court below [00:02:12] Speaker 05: found that Treadwell remains in the same position whether or not it issues injunctive relief. [00:02:16] Speaker 05: And that's simply flatly wrong. [00:02:18] Speaker 01: Firstly, they relied firstly on the fact that he waited eight months before you asked for a preliminary injunction, right? [00:02:25] Speaker 05: We filed our preliminary injunction along with our bid protest. [00:02:28] Speaker 05: Until the time of filing of the bid protest, Treadwell was led to believe by the agency that the agency had complied with the evaluation requirements of the solicitation. [00:02:38] Speaker 05: They were led to believe that in [00:02:40] Speaker 05: by active efforts to convince Treadwell that they had reviewed, that Hamilton had proposed that the agency had reviewed its schedule for production units. [00:02:51] Speaker 05: That question was placed squarely to the agency during and after debriefing, immediately after the award. [00:02:59] Speaker 05: And Treadwell personnel asked, did you review Hamilton's delivery schedule for production units? [00:03:06] Speaker 05: The agency said yes. [00:03:08] Speaker 05: And this record shows Hamilton did not propose a schedule. [00:03:12] Speaker 05: So what happened in the eight months? [00:03:15] Speaker 05: In the course of those eight months, Treadwell did not know that it had been had until the agency issued a change to the contract, which relieved Hamilton of the exact requirement that the agency assured Treadwell Hamilton had proposed to meet and had evaluated Hamilton as being able to meet. [00:03:38] Speaker 05: It confirmed Treadwell's suspicion, and it belied what the agency had said, which was that Hamilton had proposed to meet it, and they had evaluated them as being able to meet it. [00:03:48] Speaker 03: Do you challenge the Court of Federal Claims' consideration of the balance of the hardships and public interest in the Blue Bridge? [00:03:57] Speaker 05: Yes, I do, Your Honor. [00:04:01] Speaker 05: Yes, Your Honor. [00:04:02] Speaker 05: Those issues are not directly spoken to in my principal brief. [00:04:08] Speaker 03: So if that's true, then you're conceding that these factors weigh against a preliminary injunction. [00:04:16] Speaker 05: Your Honor, on that point, we do not concede that. [00:04:20] Speaker 03: You didn't raise it. [00:04:21] Speaker 05: Yes, Your Honor. [00:04:23] Speaker 03: So if you didn't raise it, you're conceding it, right? [00:04:28] Speaker 03: That is the law, right? [00:04:32] Speaker 04: You've at least waived any right to challenge the findings of the trial court on that issue. [00:04:38] Speaker 05: The findings of the trial court on that issue are made in a footnote. [00:04:43] Speaker 05: The findings of the trial court on that issue are made in a footnote. [00:04:46] Speaker 04: So what? [00:04:48] Speaker 04: She made the findings. [00:04:49] Speaker 04: You didn't challenge them in your blue brief. [00:04:52] Speaker 05: That's waver. [00:04:55] Speaker 05: They flow directly from an error of law, which this court reviews de novo. [00:05:03] Speaker 05: If this court reviews the error of law, which the trial court... Can you identify any case [00:05:08] Speaker 03: where a party receiving a preliminary injunction despite conceding the balance of hardships and public interest weighed against the issue of preliminary injunction prevailed. [00:05:22] Speaker 05: I cannot cite you such a case, Your Honor, but the findings on balance of the hardships and preliminary injunction are three steps removed from the error of law that underlies this case. [00:05:32] Speaker 05: The error of law that underlies this case led... It's a four-part test, yes. [00:05:36] Speaker 05: It is a four-part test, Your Honor. [00:05:39] Speaker 05: The government has not cited any case where only the final two factors were sufficient to support a preliminary injunction. [00:05:49] Speaker 05: Moreover, those factors, they are three steps removed from the error of law that's at the heart of the issue of this case. [00:05:55] Speaker 05: The court below's error of law led it to conclude that Treadwell has no success on the merits. [00:06:00] Speaker 05: If Treadwell has no likelihood of success on the merits, that's because there is no procurement error. [00:06:05] Speaker 05: That is the court below's logic. [00:06:07] Speaker 05: Continuing with that logic, since there is no procurement error, then there is no interest in protecting the integrity. [00:06:14] Speaker 03: Did you seek an expedited appeal in this case? [00:06:19] Speaker 05: No, Your Honor. [00:06:19] Speaker 05: And in hindsight, that would have been. [00:06:21] Speaker 03: Doesn't that weigh against finding that Treadwell could be irreparably harmed absent a preliminary injunction? [00:06:30] Speaker 05: Your Honor, we completed the briefing and submittal of the documents in this case, the appendix and other documents in this case, [00:06:37] Speaker 05: As expeditiously as possible, I believe we required one seven-day extension to complete the appendix. [00:06:42] Speaker 05: And in hindsight, Your Honor, I would have been well served to seek an emergency, to file an emergency motion for expedited appeal. [00:06:49] Speaker 03: So in effect, you're conceding the question I just asked. [00:06:52] Speaker 03: It weighs against you. [00:06:57] Speaker 05: Your Honor, in terms of where this, this is a developmental contract. [00:07:01] Speaker 05: This isn't a contract that the entire contract is going to be over in the time. [00:07:05] Speaker 03: That's a yes or no. [00:07:09] Speaker 05: Yes, Your Honor. [00:07:11] Speaker 01: Can we go back to irreparable harm? [00:07:13] Speaker 01: Because beyond the eight months it took for you to file this, the Court of Federal Claims, I think you alluded to this briefly, relied on the fact that you wouldn't be in a better position or a different position profit-wise with or without an injunction. [00:07:33] Speaker 05: And to that, Your Honor, the loss of an opportunity [00:07:35] Speaker 05: When Hamilton delivers production units to the Navy, that requirement will be fulfilled. [00:07:40] Speaker 05: That portion of the contract will be completed. [00:07:43] Speaker 05: Treadwell will have lost the opportunity to perform that work, earn profit from it, lost the opportunity to compete. [00:07:50] Speaker 05: This case is no different than any other post-award bid protest in which the plaintiff seeks an injunction to prevent the work from being performed pending the resolution of the dispute. [00:08:00] Speaker 05: I'd like to speak to Judge Wallach's [00:08:05] Speaker 01: How would that work? [00:08:07] Speaker 01: So if you were to prevail at the end of the day in the absence of an injunction, what happens then? [00:08:12] Speaker 01: If they find there was an error in the solicitation, they'd have to rerun it. [00:08:17] Speaker 05: And Treadwell would have an opportunity to compete and meet the agency's requirement, except to the extent that that requirement has been met pending this action, which is the very purpose of a preliminary injunction. [00:08:30] Speaker 05: To speak to Judge Wallach's point, [00:08:32] Speaker 05: There remains plenty. [00:08:33] Speaker 05: This isn't the type of situation where the contract is completed and has run. [00:08:38] Speaker 03: Does that speak to my point? [00:08:44] Speaker 05: The irreparable harm that has not occurred yet, any delay by Treadwell in filing the initial protest or, as you accurately pointed out, in not filing an emergency motion for expediting this action, [00:09:01] Speaker 05: does not mean that preliminary relief will not have a meaningful impact on this contract. [00:09:07] Speaker 05: To my knowledge, production units have not yet been delivered. [00:09:11] Speaker 05: Preliminary relief will still prevent the requirement from being met. [00:09:15] Speaker 05: And it will prevent the irreparable harm of Treadwell losing the opportunity to compete for that. [00:09:19] Speaker 05: Let me ask you a technical question. [00:09:22] Speaker 03: Throughout this brief, I keep noting that you cite non-precedential opinions. [00:09:32] Speaker 03: Where you do that, can we assume that you haven't identified any binding precedent which might support you? [00:09:42] Speaker 05: The citation of those cases, Your Honor, is more... Yes, Your Honor, I have not identified any case with as compellingly similar factual pattern as those cases to which I've cited you. [00:09:57] Speaker 05: I believe the logic and reasoning of those cases is highly relevant. [00:10:00] Speaker 03: So the answer is yes, we can presume that. [00:10:09] Speaker 05: Also on the topic, I want to revisit the topic of the balance of hardships in the public interest. [00:10:21] Speaker 05: In the balance of the hardships, the court below found that Treadwell's subpoena. [00:10:26] Speaker 04: Can you just explain to me your argument on the merits? [00:10:28] Speaker 04: I don't understand it at all. [00:10:29] Speaker 04: It seems like you suggest that the government set a schedule that required the test article and the first production unit to be delivered at the same time. [00:10:44] Speaker 05: They set a schedule that required the production unit to be delivered 15 months after they ordered it, whenever they ordered it. [00:10:51] Speaker 05: That's right, Your Honor. [00:10:52] Speaker 04: But that doesn't mean it was 15 months [00:10:55] Speaker 04: from the date of the contract is 15 months from the date of the order. [00:10:59] Speaker 05: Right. [00:10:59] Speaker 05: But you have to be able to build it within 15 months from whenever it's ordered, including the date of the contract. [00:11:06] Speaker 05: And there's no dispute in this case that it's not. [00:11:08] Speaker 04: I mean, I don't understand where you get that proposition. [00:11:11] Speaker 04: The government never evinced an intent to order it on the day the contract was ordered. [00:11:17] Speaker 04: They had complete discretion when they ordered it. [00:11:19] Speaker 05: They had complete discretion. [00:11:20] Speaker 04: But to the extent that they're reviewing Hamilton's proposal, or if that's the name, I forget, [00:11:26] Speaker 04: they can determine whether they think that they'll meet the production schedule when they feel like ordering it. [00:11:32] Speaker 04: And it is incredibly far-fetched to think that the government is going to order the testing and the production unit on the first day. [00:11:40] Speaker 04: That's why there's a testing unit to determine whether it meets the requirements. [00:11:44] Speaker 05: First, Your Honor, that's precisely how this contract has been handled in the past. [00:11:47] Speaker 05: I know that's not in the record. [00:11:50] Speaker 04: When Treadwell held this contract... I don't know why you're telling us about stuff that's not in the record. [00:11:54] Speaker 05: Furthermore, Your Honor, [00:11:55] Speaker 05: The order, the date the production unit was ordered from triggers that requirement. [00:12:02] Speaker 05: The proposal has to show the ability to meet that requirement within that amount of time. [00:12:07] Speaker 05: If it doesn't show, if this was a months after first article requirement, there's language for that. [00:12:13] Speaker 05: The agency used months after first article approval language in this very same solicitation at appendix 361. [00:12:21] Speaker 05: If that was its intent, that is what it should have stated in the solicitation. [00:12:26] Speaker 05: If they had some hidden intent that they were not going to issue it on the first day, [00:12:31] Speaker 05: Then that was an improper basis on which to make their determination. [00:12:35] Speaker 04: You think there's somewhere in the solicitation that says the agency was going to issue its order for the first production unit on the first day? [00:12:42] Speaker 05: No, Your Honor. [00:12:43] Speaker 05: But if they did order it on the first day, then you had to meet that requirement. [00:12:47] Speaker 04: But that's completely illogical that they would order it on the first day. [00:12:51] Speaker 04: That's the whole point of the clause, is it not? [00:12:54] Speaker 04: It's a lot. [00:12:55] Speaker 04: I think you're saying that [00:12:57] Speaker 04: This far-fetched possibility is here, and they didn't show that the awardee would meet this far-fetched possibility. [00:13:04] Speaker 04: I think if we're going to impose your illogical reading on that, you at least have to have some evidence that that's what the solicitation meant. [00:13:12] Speaker 05: The evidence, Your Honor, is that that was the words of the solicitation. [00:13:15] Speaker 05: Which words? [00:13:17] Speaker 05: Production units shall be due 15 months after data border anything about it being ordered on the first day It also says that the ordering period is from the first day to 60 months That's not a dispute in this the government concedes that your honor, right? [00:13:30] Speaker 05: It's any time within that 16 including the first day But student to the extent that you know [00:13:37] Speaker 05: To the extent, Your Honor, suggest that this was an illogical or improper solicitation that they shouldn't be able to issue it on the first day. [00:13:43] Speaker 05: I think that's the government position as well. [00:13:45] Speaker 04: Your reading of the solicitation is illogical and absurd. [00:13:48] Speaker 04: This is a typical government solicitation with the first article testing and then a production period. [00:13:53] Speaker 04: This is the way these things work. [00:13:56] Speaker 05: I'll reserve the remainder of my time. [00:13:57] Speaker 05: Thank you. [00:14:07] Speaker 06: Good morning, Your Honors. [00:14:08] Speaker 06: May it please the Court, I'm Sean Siakinen. [00:14:11] Speaker 06: On behalf of the government, with me at council table is John Ciricello, Ciricella, for Intervenor Hamilton Sunstrand. [00:14:20] Speaker 06: There are just a few points I'd like to respond to and correct that came up just now. [00:14:24] Speaker 06: First, there is a case that was not... You're going to take all day, aren't you? [00:14:28] Speaker 06: No. [00:14:29] Speaker 06: I hope to be up here for no more than a couple of minutes, Your Honor, and hopefully less than that. [00:14:33] Speaker 06: But I did want to [00:14:34] Speaker 06: draw to the Court's attention, winner versus National Resource Defense Council. [00:14:39] Speaker 06: This is 555 U.S. [00:14:41] Speaker 06: 7 at pages 23 to 24, 2008 Supreme Court decision that is not cited in our brief but does show that a plaintiff seeking the extraordinary remedy of a preliminary injunction must demonstrate each factor. [00:14:56] Speaker 06: I also want to respond to the suggestion that Hamilton did not propose a delivery schedule that's [00:15:02] Speaker 01: clearly wrong at page 1145 and 1251 in the appendix, you'll see that they did propose a... Well, something happened here that bugs me a little, and that is that when they asked you for kind of clarification, right, or they were stating their position, which is contrary to the one you were serving, is the intent of the contract. [00:15:22] Speaker 01: And you all didn't respond, right? [00:15:25] Speaker 01: Am I misunderstanding what happened here? [00:15:28] Speaker 01: I mean, weren't there periods of time in which you could have come forward and cleared up whatever misunderstanding may have existed? [00:15:36] Speaker 06: And I believe that the Navy did so. [00:15:38] Speaker 06: This was addressed in Q&A 37 or 38 in solicitation number two, which was the modification number two to the solicitation, which was issued just a few weeks before the initial proposals were submitted. [00:15:52] Speaker 06: Treadwell specifically requested [00:15:55] Speaker 06: that the solicitation be modified to include the alternate version of the first article approval clause, which would have allowed for compensation for work on production units prior to first article approval. [00:16:09] Speaker 06: And I also want to call to this court's attention a particular regulation that is cited in passing in our brief, but is not quoted. [00:16:18] Speaker 06: 48 CFR 9.308-1, [00:16:23] Speaker 06: says, quote, if it is necessary to authorize the contractor to purchase material or to commence production before first article approval, the contracting officer shall use the first article approval clause with its alternate to. [00:16:38] Speaker 06: The Navy rejected that request, making crystal clear that work on production units was not intended to be required prior to first article approval. [00:16:47] Speaker 06: I believe that what Your Honor is referring to is [00:16:52] Speaker 06: Treadwell's subsequent assertions in the proposal that it submitted after this question had been resolved, claiming, attempting to essentially decree by Fiat that, nevertheless, that this still should be how it works. [00:17:10] Speaker 06: And you're right, the Navy did not, there was nothing in the record to suggest that the Navy specifically responded to that statement. [00:17:16] Speaker 06: But that's simply not how government [00:17:19] Speaker 06: procurement law works, uh, offers on, on government solicitations are not entitled to, to, to unilaterally decree, uh, that, that an answer that they previously received is incorrect. [00:17:31] Speaker 06: And, and even if that were the case, we would be in the paracel app world where, where this, this distill at a minimum would have been something that should have been brought up prior to, uh, prior to, uh, the contract being awarded. [00:17:43] Speaker 01: Can you respond to one of the points he made on irreparable harm, which was that the CFC was incorrect by saying he's not going to put him in a better position profit-wise, because even if he were to reveal at the end of the day and they would have a resolicitation, [00:18:01] Speaker 01: everything that's been done over this period of a year or years is not going to be part of that new solicitation, so it would affect his profit line if he were to prevail, right? [00:18:11] Speaker 06: I would make two points on that, Your Honor. [00:18:13] Speaker 06: The first is that that would be reviewed strictly for an abuse of discretion to the extent that the question is whether the trial court correctly made a factual finding as to the harm that Treadwell was likely to suffer. [00:18:26] Speaker 06: And the second point that I would make is that Treadwell has submitted no evidence at any point in this litigation in the past year, year and a half to support any of its alleged harms. [00:18:36] Speaker 06: It's never submitted a declaration or an affidavit. [00:18:39] Speaker 06: The government did submit a declaration, pages 205 to 209 of the appendix from the Navy making clear [00:18:46] Speaker 06: what the harm would be to the Navy if a preliminary injunction was issued. [00:18:50] Speaker 01: No, I appreciate that. [00:18:51] Speaker 01: But what kind of evidence? [00:18:52] Speaker 01: I mean, there's no dispute that this contract is ongoing. [00:18:56] Speaker 06: That's correct. [00:18:57] Speaker 01: And that certain work is being done. [00:18:59] Speaker 01: And therefore, if this case is resolved in your friend's favor six, eight, 12 months from now, there won't be as much needed to be done in any new solicitation. [00:19:13] Speaker 01: What kind of proof do you need for that proposition? [00:19:16] Speaker 06: I would expect some sort of evidence beyond attorney argument, but to respond more directly to Your Honor's point, I think when this was briefed first for the trial court and then also several months ago before this court, I don't know that the parties anticipated that this litigation could potentially continue [00:19:39] Speaker 06: as long as it has. [00:19:41] Speaker 06: And still, to this point, production units have not been delivered. [00:19:44] Speaker 06: They're scheduled to be delivered in November of 2018. [00:19:46] Speaker 06: So to this point, nothing has accrued or units have not been delivered to the government. [00:19:54] Speaker 06: So at this point, if for whatever reason Treadwell were to prevail in its appeal and the contract were to be re-solicited, Treadwell would not at this point be in any worse position. [00:20:06] Speaker 01: Well, what's the status of the regular appeal? [00:20:09] Speaker 01: I'm sorry, the status of... Is this of the regular case? [00:20:11] Speaker 01: Is this just up here on a preliminary injunction? [00:20:14] Speaker 06: It is, Your Honor. [00:20:14] Speaker 06: It's on interlocutory review as allowed by statute, and the trial court has stayed the proceedings pending this appeal. [00:20:23] Speaker 06: Really? [00:20:24] Speaker 06: Yes. [00:20:29] Speaker 06: If this court has no further questions, we would ask that the judgment of the trial court be informed. [00:20:34] Speaker 00: Thank you. [00:20:35] Speaker 00: Thank you. [00:20:41] Speaker 02: Good morning, Your Honors. [00:20:42] Speaker 02: If it pleases the court, I will be very brief. [00:20:45] Speaker 02: I just want to address one issue that counsel for Treadwell addressed. [00:20:52] Speaker 02: And that said that Treadwell had no idea with respect to the basis for its claims until it received the modified delivery order and the modified copy of the contract in December. [00:21:05] Speaker 02: And that is actually the lie by the record. [00:21:09] Speaker 02: The record shows that on September 8th, following the award, in response to a FOIA request Treadwell received, a copy of the contract is initially awarded. [00:21:22] Speaker 02: And that contract, as initially awarded, had a specific note indicating that no production units would be delivered before the first article was approved. [00:21:32] Speaker 02: So as of September 8th, there was conclusive proof to Treadwell [00:21:38] Speaker 02: that the basis it's articulating in the case that it filed on March 1st of the following year was framed very clearly for it. [00:21:47] Speaker 02: So it sat on its rights in a very significant way for those seven months. [00:21:54] Speaker 02: The only other point I'd like to make is that the impact of that delay, which Treadwell tries to minimize here today, actually has a rolling effect [00:22:08] Speaker 02: on the national interest and the balance of hardship factors, because if this case were to go back, and if the Navy were to be compelled to re-solicit the remaining requirements. [00:22:21] Speaker 02: That's conceded, though. [00:22:22] Speaker 03: I mean, the balance of hardships and the public interest seem to be conceded by the Navy. [00:22:29] Speaker 02: No, no, no. [00:22:29] Speaker 02: That's correct, Your Honor. [00:22:30] Speaker 02: But what I'm saying, the point I'm making is that that delay [00:22:35] Speaker 02: means that there will now have to be another first article that would have to be prepared by Treadwell. [00:22:42] Speaker 03: And that will take even- Which would adversely affect the public interest. [00:22:45] Speaker 02: Adversely affect the national interest, adversely affect the balance of hardships. [00:22:48] Speaker 02: And that's all I have to say, unless the Court has any further questions for me. [00:22:53] Speaker 02: Thank you. [00:22:58] Speaker 05: I'd like to very briefly speak to the merits. [00:23:02] Speaker 05: A schedule in which simultaneous orders are placed on day one of a contract does not mean that the contractor has to build the production unit before they build the first article. [00:23:12] Speaker 05: Both requirements simply need to be met. [00:23:14] Speaker 05: And in this case, the Navy had a requirement for production units within 15 months. [00:23:19] Speaker 05: It essentially admits that when it states that it had to obligate funding for those production units, and that is why it issued delivery order one. [00:23:29] Speaker 05: Delivery order one requires delivery of production units buyer before date certain. [00:23:34] Speaker 05: It also requires delivery of the first article buyer before that same date certain. [00:23:40] Speaker 05: That is not perhaps a standard way of conducting the procurement, but that is what the agency actually did. [00:23:47] Speaker 05: It issued delivery order one in exactly that way, and it did it to secure funding to the agency. [00:23:53] Speaker 05: And because it had announced that it had a requirement for production units within 15 months, [00:23:59] Speaker 05: from date of order, which could be the first date, which could be the date the contract is awarded. [00:24:05] Speaker 05: It was entitled to issue that order, and it, in fact, did so. [00:24:08] Speaker 05: And that was what it solicited. [00:24:10] Speaker 01: OK, can I just ask you a general question about this case? [00:24:13] Speaker 01: It seems a little ironic, inconsistent. [00:24:16] Speaker 01: I don't know the word. [00:24:18] Speaker 01: But by appealing this preliminary injunction, obviously, a preliminary injunction, the underlying interest is let's get moving again to resolve this case quickly. [00:24:26] Speaker 01: If not, it's hurting me. [00:24:28] Speaker 01: But the practical result is that you've spent now on appeals and the time, and we take very little time, but we take some time to write our decision. [00:24:39] Speaker 01: And in the interim, the merits case is being staked. [00:24:42] Speaker 01: It seems to sort of have not been the appropriate choice of avenues to pursue. [00:24:49] Speaker 05: Your Honor, the reason we took this appeal is because the trial court issued a very detailed legal finding. [00:24:56] Speaker 05: on what it believed the solicitation to say. [00:24:59] Speaker 05: The trial court said that it believed that 15 months equals 15 plus 15. [00:25:07] Speaker 05: If you look at the analysis, the legal analysis that the trial court did of the solicitation, it was incorrect. [00:25:13] Speaker 05: And that is at the heart of this case. [00:25:15] Speaker 04: Why didn't you just get a final decision on a permanent injunction and then appeal if you thought that that was what she was going to issue as the final decision? [00:25:24] Speaker 05: That may have been a better way to proceed. [00:25:27] Speaker 05: We thought this would be the most timely. [00:25:30] Speaker 01: Thank you. [00:25:30] Speaker 01: Thank both sides. [00:25:31] Speaker 01: The case is submitted.