[00:00:51] Speaker 03: Next case is Veterans Contracting Group versus the United States, 2018-1409. [00:00:58] Speaker 03: Mr. Whitcomb. [00:01:02] Speaker 03: Thank you, Your Honor. [00:01:12] Speaker 02: If it please, it's court. [00:01:13] Speaker 02: My name is Joseph Whitcomb, and I represent Veterans Contracting Group on its appeal. [00:01:17] Speaker 02: We have actually two appeals before the court. [00:01:20] Speaker 02: today, both 1409 and 1410. [00:01:25] Speaker 02: Ironically, these two cases, again, turn on the definition of a single word. [00:01:31] Speaker 02: In this instance, the word is unconditional. [00:01:34] Speaker 03: And we're dealing with the 09 case here, because government counsel is different between the two cases. [00:01:40] Speaker 02: Understood. [00:01:41] Speaker 02: So case 1409, as this court is aware, deals with the roofing contract that was before [00:01:50] Speaker 02: was a VA SDVOSB set-aside contract. [00:01:56] Speaker 02: In the facts leading up to the appeal, back in July of 2017, Veterans Contracting Group was, in our view of the world, erroneously removed from the CVEVIP database. [00:02:17] Speaker 02: and I'll beg the court's forgiveness in advance for the number of acronyms that are used in this, but they were removed from the, this database in our view of the world, again, prematurely because they were never part of the procedural, it's their procedural due process, but the VA should have done before removing it in our view of the world. [00:02:35] Speaker 02: And what we argued with the lower court was they should have issued a notice of intent or notice of proposed cancellation. [00:02:44] Speaker 02: That's pursuant to 38, what was then 38 CFR [00:02:47] Speaker 02: 74-2E, I may be misquoting. [00:02:52] Speaker 03: But the Claims Court found that the VA acted arbitrarily and capriciously and they restored your client to the eligibility list, right? [00:03:04] Speaker 02: Yes, Your Honor, they did. [00:03:07] Speaker 03: The difficulty and what brings us here today is that in the interim, in the... The minute canceled the solicitation because none of the bids were price competitive. [00:03:17] Speaker 03: What do you, what do you want here? [00:03:19] Speaker 02: Okay. [00:03:19] Speaker 02: So thank you, your honor, for that question, because that's exactly why we're here. [00:03:23] Speaker 02: In our view of the world, the contracting officer adjudicated unilaterally, the very thing that was before the court of federal claims, which was the VCGs or veteran contracting groups, eligibility to compete on that procurement. [00:03:38] Speaker 02: So we, we filed the protest pre award or pre, I keep saying that pre award, pre submission. [00:03:44] Speaker 02: So before the submission date. [00:03:46] Speaker 02: Only by a number of hours, but we submitted the protest at 5 a.m. [00:03:51] Speaker 02: Eastern Time. [00:03:52] Speaker 02: Bid opening was due at 9 a.m. [00:03:54] Speaker 02: Eastern Time. [00:03:56] Speaker 02: The point of the complaint, the fulcrum of the complaint was Veterans Contracting Group was illegally removed from the VetBiz database. [00:04:07] Speaker 02: A few hours later, with or without the knowledge, and we would concede that it's possible that the VA didn't have actual knowledge [00:04:16] Speaker 02: but the contracting officer didn't have actual knowledge of the protest, moved forward and opened the bits. [00:04:27] Speaker 02: However, the way appellees have framed this case is that the VA was, it took the VA another 20 days or so, 21 days. [00:04:39] Speaker 05: I think you're making this awfully complicated. [00:04:42] Speaker 05: I mean, basically the VA [00:04:44] Speaker 05: erroneously refused to consider you in connection with the solicitation because you were improperly excluded from the list. [00:04:54] Speaker 05: And they had now created a new solicitation as a result of the cancellation, which excludes you being considered as a veteran-owned business. [00:05:03] Speaker 05: All of a sudden, even though they made a mistake, all of a sudden, as a result of that mistake, you can't even be considered for the contract as a veteran-owned business, right? [00:05:12] Speaker 02: That is correct, John. [00:05:13] Speaker 02: That was our position in the lower court. [00:05:15] Speaker 02: Our position is here, but what Judge Leto... Wait, I'm a little confused. [00:05:19] Speaker 04: You mean after they canceled this solicitation, they've now issued a new solicitation for this roofing business? [00:05:28] Speaker 02: That was not an STBOSP set aside, which is a separate issue. [00:05:31] Speaker 02: In our view of the world, that's contravened to rule two. [00:05:34] Speaker 04: But that's a... I mean, if you have a protest against that, that's a different protest. [00:05:37] Speaker 02: That is right. [00:05:38] Speaker 02: And we are not here about that protest. [00:05:39] Speaker 02: Wait, wait, wait. [00:05:40] Speaker 02: We're not here about that procurement. [00:05:42] Speaker 02: We're not here about the subsequent procurement. [00:05:44] Speaker 02: We're here about the procurement that went down in July of 2017. [00:05:48] Speaker 02: The reason that that protest is... Are you saying we can't consider what happened here? [00:05:53] Speaker 02: No, no, I'm not. [00:05:54] Speaker 02: Of course I'm not. [00:05:55] Speaker 02: I'm not suggesting that at all. [00:05:57] Speaker 05: If they merely canceled the procurement and had another procurement, which allowed you and other veteran-owned businesses to compete for the contract, [00:06:08] Speaker 05: It's hard to see that you would have a complaint here. [00:06:12] Speaker 05: So there's a necessary fact here from the fact that the new procurement excludes you. [00:06:21] Speaker 02: Okay, that's a slight misstatement. [00:06:23] Speaker 02: It didn't preclude veterans. [00:06:24] Speaker 02: It just didn't. [00:06:26] Speaker 02: It precluded you as a veteran's preference. [00:06:29] Speaker 02: That's correct. [00:06:30] Speaker 02: That's a more accurate statement, Your Honor. [00:06:31] Speaker 02: It didn't preclude veterans. [00:06:32] Speaker 02: Certainly veterans could compete in any procurement that comes out, even if they're full and open. [00:06:36] Speaker 02: But in this instance, it left off the set-aside element, which was the advantage that our clients would have enjoyed in the first solicitation. [00:06:46] Speaker 02: Had they simply re-competed it as an SDV OSB set-aside, I don't think that would have eliminated any harm because this court has had a lot to say about re-competing solicitations after bid opening when the prices have been aired because of the undue prejudice that that [00:07:04] Speaker 02: affords the original offer. [00:07:06] Speaker 05: Put that to one side. [00:07:10] Speaker 05: If they had canceled this solicitation and had a new solicitation which allowed you to compete with the veteran's preference, that would have been permissible, right? [00:07:19] Speaker 02: I believe that our singular argument in that instance would have simply been the prejudice visited upon our clients and whether or not the VA had gotten over the bar of [00:07:32] Speaker 02: canceling a solicitation after bid opening in a construction contract like this one. [00:07:38] Speaker 05: And you did challenge the new solicitation and Judge Leto said, I can't consider that challenge because it's raised you to cut it because I've already decided that. [00:07:47] Speaker 05: Yes, that is correct. [00:07:50] Speaker 02: That is an accurate statement. [00:07:53] Speaker 02: Our position from which we begin is that the contracting officer, Judge Leto's lower court decision related to the [00:08:02] Speaker 02: July 2017 procurement was that the contracting officer did not act, did not abuse his discretion in canceling the procurement and re-competing it. [00:08:15] Speaker 02: And our position was that the contracting officer usurped the authority of the court by determining unilaterally before Judge Leto had an opportunity to decide BCG's eligibility. [00:08:29] Speaker 04: But there wasn't a preliminary injunction or anything that [00:08:31] Speaker 04: or a TRO that prohibited the VA from moving forward with the cancellation process, was there? [00:08:38] Speaker 02: The preliminary, actually, on the very day that they issued the cancellation, Judge Leto issued his decision. [00:08:43] Speaker 02: Right. [00:08:44] Speaker 04: But during this, I mean, you're talking about usurping the court's authority, but during this time period, you had not asked for a TRO. [00:08:53] Speaker 04: You didn't ask for a preliminary injunction, even when you filed your complaint. [00:08:56] Speaker 04: It wasn't until you amended it. [00:08:59] Speaker 04: And so during this time, the VA was [00:09:01] Speaker 04: acting within the structure of its regulations and the like to consider a cancellation, wasn't it? [00:09:06] Speaker 02: Well, respectfully, Your Honor, the complaint was filed on July 28th. [00:09:12] Speaker 02: There was an oral argument on July 31st. [00:09:15] Speaker 02: In that oral argument, we raised the issue of the preliminary injunction in TRO. [00:09:19] Speaker 02: There's a conversation between Judge Leto, Ms. [00:09:22] Speaker 02: Westerkamp, and myself about [00:09:24] Speaker 02: whether or not we have properly raised the motion. [00:09:27] Speaker 02: And Judge Leto said, well, I might take your motion as an oral motion today on July 31st on the preliminary injunction. [00:09:34] Speaker 02: And then he set the scheduling for the motion and the briefing. [00:09:40] Speaker 04: Did you ask for a TRO at that hearing? [00:09:44] Speaker 02: I will admit that we did not expressly ask for a TRO at that hearing. [00:09:49] Speaker 02: No, we did not. [00:09:52] Speaker 04: What legal authority is there to suggest that the VA couldn't invoke its regulations to consider cancellation during this process? [00:10:00] Speaker 02: Well, and that goes back to the issue of whether or not, I think the government can cancel anytime it wants for any legal reason. [00:10:07] Speaker 02: Our basis is that the reason for canceling was illegal. [00:10:11] Speaker 02: And that was that there were no qualified veteran owned businesses at the time of submission. [00:10:17] Speaker 02: And that was what we have argued successfully was that [00:10:21] Speaker 02: Veterans Contracting Group was in fact eligible. [00:10:23] Speaker 04: That turned out to be the case after the fact, but at the time, you weren't in the database that the contracting authority had to rely on. [00:10:32] Speaker 02: Because the VA broke its own regulations. [00:10:35] Speaker 02: Because the VA failed to issue its notice requirement under its own regulations, its notice of proposed cancellation. [00:10:43] Speaker 02: Had the VA followed its own regulations and issued Veterans Contracting Group a notice of proposed cancellation, which would have afforded it 30 days [00:10:51] Speaker 02: to respond to the proposed cancellation, during which time VCG would have remained in the database pursuant to the VA's own regulations, then the basis for the contracting officer's cancellation wouldn't have existed. [00:11:07] Speaker 03: What do you want us to do with this cancelled solicitation? [00:11:13] Speaker 02: Right now it is, we have no clear representation from the government as to the status of this roofing contract. [00:11:21] Speaker 02: If we have asked and we have not gotten any clear representation on the status of this roofing contract, whether it's moved forward, whether it's actually completed, we don't know where it is. [00:11:31] Speaker 02: And not for lack of asking. [00:11:33] Speaker 02: It was recomputed, it was rewarded, but to our knowledge, we don't know that it has gone forward. [00:11:39] Speaker 02: If it has not, Your Honors, we would ask that this be... [00:11:47] Speaker 02: If we're right and veterans contracting group was illegally removed, then it was eligible for competition on July 21st when it submitted it or July 28th when it submitted its proposal. [00:11:59] Speaker 02: And therefore it should have been the awardee. [00:12:01] Speaker 02: Now there are a number. [00:12:04] Speaker 04: Wait, are you asking us to award you the contract or just find that the cancellation of the solicitation was arbitrary and capricious and therefore order that the solicitation be [00:12:17] Speaker 04: reopened. [00:12:20] Speaker 02: The latter with a caveat, Your Honor, which is that it begins with the declaration that BCG was illegally removed in the first place. [00:12:30] Speaker 02: One of the reliefs that we sought at the lower court that Judge Leto denied us was the retroactive application of that preliminary injunction back to the date of removal. [00:12:41] Speaker 02: And our legal view of the world is if it was illegal to remove them in the first place and to really restore them to their [00:12:47] Speaker 02: to their rightful place. [00:12:49] Speaker 02: The relief has to be granted retroactively because if there's 10 days or two days or three days under which they were ineligible to compete and ineligibility was erroneous, then they have been harmed. [00:13:01] Speaker 02: Whether it's related to this procurement or others, their status as a service disabled veteran eligible to compete for VA set-asides for whatever period of time was wrongly interrupted. [00:13:13] Speaker 03: You're well into your rebuttal time. [00:13:16] Speaker 03: You can continue or save it. [00:13:18] Speaker 02: All right. [00:13:19] Speaker 02: I will save it. [00:13:20] Speaker 03: Thank you. [00:13:21] Speaker 00: Mr. Maeger. [00:13:29] Speaker 00: Thank you, Your Honor. [00:13:30] Speaker 00: May it please the Court? [00:13:33] Speaker 05: This to me looks a little bit like a shell game. [00:13:37] Speaker 05: You know, you improperly excluded them from the database. [00:13:40] Speaker 05: You're not arguing that it was proper. [00:13:43] Speaker 05: And you're saying, aha, because of our wrongful conduct, it was permissible for us to cancel a solicitation. [00:13:52] Speaker 05: And that doesn't seem right somehow. [00:13:55] Speaker 01: Your Honor, that's not what we're arguing. [00:13:57] Speaker 01: First, as a point of clarification, the court never held that it was illegal for the VA to remove veterans contracting from the database. [00:14:08] Speaker 01: The VA proceeded under 38 section 3. [00:14:12] Speaker 05: I thought that the Court of Federal Claims held that they were improperly excluded from the database. [00:14:18] Speaker 01: They found that it was arbitrary and capricious for them to be excluded. [00:14:21] Speaker 05: Well, let them improperly exclude. [00:14:22] Speaker 01: Well, there is a degree of difference because in a bid protest, there are different standards of view. [00:14:26] Speaker 01: There's a question whether you're acting in violation. [00:14:29] Speaker 05: Why are you fighting? [00:14:31] Speaker 05: I mean, the Court of Federal Claims held that they were wrongfully eliminated from the database. [00:14:35] Speaker 05: You're not appealing that. [00:14:37] Speaker 05: And so we have to assume that that's correct, right? [00:14:39] Speaker 01: But it's important here that they had never sought to enjoin the opening of this. [00:14:43] Speaker 05: No, no, that's a different question. [00:14:44] Speaker 05: They were improperly excluded from the database, right? [00:14:47] Speaker 01: Yes, so that's not being contested here. [00:14:48] Speaker 05: Right. [00:14:49] Speaker 05: So what you're saying is because they were improperly excluded from the database, it was okay for us to cancel the contract because they weren't in the database. [00:14:57] Speaker 05: That seems wrong. [00:14:58] Speaker 01: Yes, but the terms of the solicitation expressly provided, and this veteran contracting would have been aware of, [00:15:05] Speaker 01: that all prospective bidders must be verified, visible, and certified in that database at the time of offer submission. [00:15:12] Speaker 05: But it's your wrongful conduct that kept them out of the database. [00:15:16] Speaker 01: And yet they had to challenge that conduct prior to the time that bids were due in order to stop the VA from ultimately... What is it, latches? [00:15:24] Speaker 01: What do you say? [00:15:25] Speaker 01: It's a matter of... The contracting officer is required to comply with both regulations and the terms of the contract. [00:15:32] Speaker 01: The terms of the contract expressly provided [00:15:35] Speaker 01: that in order to qualify, you need to be in the database at the time you were submitted. [00:15:40] Speaker 01: They were not in the database. [00:15:41] Speaker 05: Yeah, because of your wrongful conduct. [00:15:43] Speaker 05: They weren't in the database at the time. [00:15:45] Speaker 05: And you're trying to take advantage of that and say, well, maybe we were wrongful. [00:15:50] Speaker 05: But the fact is they weren't in the database. [00:15:52] Speaker 05: And that's what Judge Aletto said. [00:15:54] Speaker 05: That doesn't make any sense to me. [00:15:56] Speaker 01: And Judge Aletto did provide them with some form of relief, just not the drastic remedy of an injunction in this case, because they had not sought [00:16:04] Speaker 01: us to enjoin the opening of bids because they hadn't sought to enjoin the cancellation until after the cancellation had occurred, we provided notice to the court that we were in the process of canceling the solicitation. [00:16:16] Speaker 01: No injunction was forthcoming. [00:16:18] Speaker 01: The VA simply followed its normal regular processes, especially in the context of an invitation for bids. [00:16:25] Speaker 01: In invitation for bids, the date of bid opening is an extremely significant date. [00:16:29] Speaker 01: I mean, as this court is aware, a responsiveness to an offer is determined at the time that bids are open. [00:16:34] Speaker 01: That's not something that we get the ability to waive. [00:16:37] Speaker 01: That's the law. [00:16:38] Speaker 01: And so if they were not responsive pursuant to the terms of solicitation on data bids openings... Even though it was because of your wrongful conduct? [00:16:48] Speaker 01: Even though it was because there's a section of the VA that the court held had acted in arbitrary, vicious fashion in removing them from the database. [00:16:56] Speaker 01: Yes. [00:16:57] Speaker 04: And that's why they're... Wait, can you stop? [00:16:59] Speaker 04: At the time of the bid opening, though, that determination had not been made. [00:17:05] Speaker 04: Is that correct? [00:17:06] Speaker 04: I'm sorry, which determine? [00:17:07] Speaker 04: That the exclusion was arbitrary. [00:17:08] Speaker 01: The court hadn't found that they were arbitrary. [00:17:10] Speaker 01: And you are, I mean, we can't go with the presumption that the agency's conduct will be arbitrary, that their removal from the database was arbitrary. [00:17:19] Speaker 04: There's express regulation which requires their removal. [00:17:23] Speaker 04: Throughout this proceeding up to the actual cancellation date, did you concede that this was arbitrary? [00:17:31] Speaker 04: No, we did not. [00:17:32] Speaker 04: So how could the contracting officer have [00:17:35] Speaker 04: not excluded them from this bid opening or once they open the bids and saw that they weren't in the debate. [00:17:45] Speaker 01: I don't see any way that they could not have otherwise unless we were in the circumstance where the court had issued its junction or issued some ruling on the exclusion from the database prior to the completion of cancellation or prior to the opening of bids. [00:18:03] Speaker 01: That's closer to the situation in Miles Construction, a case that the court does discuss. [00:18:08] Speaker 01: That case is not binding on this court. [00:18:09] Speaker 01: It's another similar case involving veteran-owned businesses and issues with the database. [00:18:17] Speaker 01: But in that case, they qualified at the very time, the relevant time period. [00:18:21] Speaker 01: Here, that's very different, and the court does properly distinguish between that. [00:18:25] Speaker 05: There are plenty of cases where somebody undertakes a wrongful act without knowing it was wrongful. [00:18:32] Speaker 05: And the remedy is to undo the consequences of that. [00:18:36] Speaker 05: That's all they're asking here. [00:18:38] Speaker 05: There was a wrongful act. [00:18:39] Speaker 05: They want to undo the consequences of the wrongful act. [00:18:43] Speaker 01: And yet the contracting officer, the court properly found that they still acted reasonably in not assuming that the portion of VA that had been in charge of the database had acted arbitrary and capriciously in complying with the VA's regulations. [00:18:58] Speaker 01: I don't understand what you're saying. [00:19:00] Speaker 01: The contracting officer ultimately [00:19:02] Speaker 01: acted reasonably. [00:19:04] Speaker 05: At the time, he thought he was acting reasonably, but as it turned out, he wasn't acting reasonably. [00:19:11] Speaker 05: And they're just saying, if you act wrongfully, you can't rely on your own wrongful conduct to deny us relief. [00:19:20] Speaker 01: I mean, first, it's not directly the contract. [00:19:23] Speaker 01: It's not the contract officer's own wrongful conduct. [00:19:25] Speaker 01: It's the government's own wrongful conduct. [00:19:27] Speaker 01: It is an arbitrary and capricious action. [00:19:30] Speaker 01: by the, as the court held, by another section of the VA that was simply complying with its regulations. [00:19:38] Speaker 01: And in complying with the regulations, the court imposed a duty to look further into the questions of removal and SBA removals. [00:19:48] Speaker 01: And it was reasonable for the contracting officer not to assume that that would happen. [00:19:52] Speaker 05: Once the court had ruled, the contracting officer would have to... Nobody's saying that the contracting officer was unreasonable about what he did at the time. [00:19:59] Speaker 05: But the fact is that he, in doing it, was relying on wrongful conduct by the government, which has now been finally determined to be wrongful. [00:20:09] Speaker 05: And yet you're saying there's nothing that can be done about it. [00:20:12] Speaker 05: And that just seems to me that it's a hard road ahead. [00:20:16] Speaker 01: It's simply too late. [00:20:18] Speaker 01: There was things that could have been done about it, had veterans contracting either sought a preliminary injunction or a TRO against the bid opening, had they sought [00:20:28] Speaker 01: You know, had they challenged the term to solicitation. [00:20:31] Speaker 05: What case says it's too late to do something about it? [00:20:34] Speaker 01: Well, it says that responsiveness is determined as a general matter. [00:20:40] Speaker 01: Responsiveness to an invitation for bid is to determine the time of bid opening. [00:20:46] Speaker 01: If their problem is with the term that might give rise to these situations, you know, their issue was with the fact that the contract specified they need to be in the database. [00:20:55] Speaker 01: They're not in the database. [00:20:56] Speaker 05: What case says that you can't undo wrongful conduct because the government official thought it wasn't wrongful at the time? [00:21:03] Speaker 01: I'm not aware of a case barring one from retroactively doing that. [00:21:08] Speaker 01: And I don't think the court held that that was the case. [00:21:10] Speaker 01: It just held that an injunction wasn't appropriate here, that the contracting officer did act reasonably. [00:21:16] Speaker 01: That's different from... I'm not aware, though, of a case that also supports the notion that you could go back in time [00:21:24] Speaker 01: when you've sat on your rights and not filed a motion for a TRO, not filed a motion for preliminary injunction, not attempted to stop the conduct at issue and ultimately undo that. [00:21:35] Speaker 01: Moreover, I mean, in a record review case, the contracting officer has to rely upon the record before them. [00:21:41] Speaker 01: The contracting officer, it's been repeatedly stated that these cases are limited record review cases. [00:21:47] Speaker 01: The court considers what was before the decision maker at the time. [00:21:50] Speaker 04: So your view is at the time the contracting officer and then the approving authority, which is at a much higher level, made the cancellation decision, the record didn't show that it was arbitrary and capricious. [00:22:02] Speaker 01: That's absolutely correct, Your Honor. [00:22:04] Speaker 04: And this different error doesn't somehow turn that into a now arbitrary and capricious error. [00:22:14] Speaker 01: That's correct, Your Honor. [00:22:14] Speaker 04: And that the error, which you have, I guess, decided not to appeal, [00:22:20] Speaker 04: on the exclusion, the remedy for that can't be to undo a cancellation that was appropriate under then existing legal authority. [00:22:31] Speaker 01: That's correct, Your Honor. [00:22:32] Speaker 03: Now, in the next case, which we're not really going to get into yet, the government has moved to dismiss the mootness. [00:22:43] Speaker 03: Why are you not arguing that this is moot? [00:22:47] Speaker 03: Because the contract has been canceled. [00:22:49] Speaker 01: Well, the challenge would be erroneous to argue that a challenge to a cancellation becomes moot when that cancellation occurs. [00:23:03] Speaker 01: I mean, that's effectively what they're challenging. [00:23:06] Speaker 01: So that challenge to cancellation is not moot. [00:23:07] Speaker 01: There are cases where if, and in this case, we've gone forward, we had a new solicitation. [00:23:15] Speaker 01: That new solicitation was challenged by veterans contracting. [00:23:18] Speaker 01: They lost. [00:23:18] Speaker 01: That challenge was not appealed. [00:23:20] Speaker 01: We awarded a new contract. [00:23:21] Speaker 05: What's the status of the contract now? [00:23:23] Speaker 01: I do not know the status of the contract, but I do know it is not substantially complete. [00:23:28] Speaker 01: And that is the standard for mootness. [00:23:30] Speaker 01: And so because the subsequently awarded contract is not substantially complete at this time, we have not argued that this case is moot. [00:23:44] Speaker 01: Unless there are any further questions? [00:23:46] Speaker 01: We respectfully request this court affirm the decision of the United States Court of Federal Claims. [00:23:50] Speaker 01: Thank you. [00:23:51] Speaker 03: Thank you, Mr. Maeger. [00:23:53] Speaker 03: Mr. Whitcomb has almost three minutes for a bottle if you need it. [00:23:58] Speaker 02: I do, and I appreciate that, Your Honor. [00:24:02] Speaker 02: In listening to my own argument and listening to the government's argument, I think I understand where the focus of this case lies, and that is whether or not [00:24:12] Speaker 02: contracting officer's actions, and I think that's Judge Hughes' point, were the contracting officer's actions arbitrary capricious, and what we've argued all along is that the Veterans Administration's actions were illegal or arbitrary capricious. [00:24:28] Speaker 04: What we're reviewing here is the contracting officer's cancellation, right? [00:24:34] Speaker 02: Yes, you're wrong. [00:24:34] Speaker 02: We are. [00:24:35] Speaker 04: I mean, that's the case that was presented, and that's [00:24:38] Speaker 04: we apply the APA standard, and we apply whether the contracting officer acted reasonably or not. [00:24:46] Speaker 04: And Judge Leto found that the contracting officer acted reasonably at the time in canceling the contract. [00:24:55] Speaker 02: Because that was not, I'm sorry to interrupt you. [00:24:58] Speaker 02: No, go ahead. [00:24:58] Speaker 02: There was two things that Judge Leto ruled. [00:25:01] Speaker 02: One was that the contracting officer didn't act arbitrarily. [00:25:04] Speaker 02: And the second was that the relief should not be [00:25:07] Speaker 04: uh... afforded retroactively which would really for the separate error which was the exclusion right so in both of those issues are are before this court on appeal but if we decide that the contracting officer didn't act arbitrarily in canceling the contract and how can we do that based upon the other air i believe based on judge zykoff point which is that the agency [00:25:35] Speaker 02: not the contracting officer, but the agency generally acted arbitrarily and capriciously beginning with when it removed the VCG from the database in the first place, denying it its procedural due process rights. [00:25:47] Speaker 02: That was another part of Judge Lettter's ruling was. [00:25:48] Speaker 04: But you never asked for any kind of temporary restraining order to stop the cancellation or stop the opening of bids. [00:25:56] Speaker 04: So once the contracting officer canceled the contract and that, let's assume that that decision is [00:26:04] Speaker 04: is reasonable and not arbitrary and capricious, then what kind of relief can you get? [00:26:10] Speaker 04: I mean, you're asking us to undo a reasonable decision by the contracting officer because it was later determined that there was error in other parts of the process. [00:26:21] Speaker 02: So what I'm asking for is that the VA be held accountable for its overall [00:26:28] Speaker 04: I understand your general theory, and I agree with you. [00:26:31] Speaker 04: It seems somewhat unfair here, but I don't understand the legal route that you're telling us how we get there. [00:26:39] Speaker 04: When the contract was reasonably canceled under the FAR regulation. [00:26:46] Speaker 02: It was reasonably, well first I don't agree with that. [00:26:49] Speaker 02: I don't agree that it was reasonably canceled if the basis for the cancellation, which was [00:26:55] Speaker 02: that they were simply not in the database was the VA's fault. [00:27:01] Speaker 02: How could it be reasonably canceled if they acted wrongfully? [00:27:04] Speaker 02: That's right. [00:27:05] Speaker 02: If the VA's the reason they weren't in the database, it wasn't VCG's bad act that caused it to not be in the database, then I think we wouldn't be here. [00:27:16] Speaker 02: It was the VA's bad act. [00:27:18] Speaker 02: Three days before this procurement came out, or I think maybe I'm mistaken, maybe less than a week [00:27:23] Speaker 02: before the submission date. [00:27:25] Speaker 04: But I don't understand what you expected the contracting officer to do once he opened the bids and found that you weren't in the database. [00:27:34] Speaker 04: He couldn't, you know, allow to really restore you to the database. [00:27:37] Speaker 04: He could look at the bids that were in the database. [00:27:39] Speaker 04: He determined that the two acceptable, the two ones that qualified were way too high and he submitted a cancellation request. [00:27:47] Speaker 02: He submitted a cancellation request not on the day of bid opening and certainly not even before he knew that [00:27:53] Speaker 02: BCG was contesting its eligibility. [00:27:57] Speaker 02: So that happened. [00:27:57] Speaker 02: It was a full 21 days. [00:27:58] Speaker 02: In fact, it was two hours before. [00:28:01] Speaker 04: But are you suggesting that he had the discretion to put you back in the bidding? [00:28:09] Speaker 02: No, I'm arguing that he had the discretion as agencies do every single day of staying any further activity on that contract. [00:28:18] Speaker 04: What obligation did he have that absent? [00:28:22] Speaker 04: direction by the court. [00:28:24] Speaker 02: Because he was making an eligibility determination that was before the court. [00:28:30] Speaker 04: But isn't it true? [00:28:30] Speaker 04: He didn't get to make the eligibility determination. [00:28:33] Speaker 04: That was made by a different part of the VA. [00:28:35] Speaker 04: All he could do was look at the database. [00:28:37] Speaker 02: I don't think that's accurate. [00:28:38] Speaker 02: I don't think that the only thing the contracting officer could do was simply blindly look at the database. [00:28:43] Speaker 02: There are a number of reasons a person might not have been in the database. [00:28:46] Speaker 02: They might have looked up the wrong DUNS number. [00:28:49] Speaker 02: The database itself could have been down. [00:28:51] Speaker 02: The contracting officer isn't required to put blinders on as it relates to the other factors that are at play. [00:28:58] Speaker 02: And as it relates to, and I've gone way over my time, so I can... Well, you can finish. [00:29:03] Speaker 02: So my point is the contracting officer did not, in our view of the world, have to or was obligated to operate in a vacuum. [00:29:10] Speaker 02: And going beyond that, I think it was unreasonable. [00:29:12] Speaker 02: We argue that it was unreasonable for that contracting officer to operate as if he were in a vacuum and unknowing of what else was going on around him. [00:29:20] Speaker 02: to include the fact that VCG had contested its eligibility, the idea that the VA had ignored its own regulations. [00:29:28] Speaker 02: All of that was, the contracting officer was well aware of all of that. [00:29:30] Speaker 02: By the time the actual cancellation decision came down. [00:29:33] Speaker 03: Thank you, counsel. [00:29:33] Speaker 03: We'll conclude the argument for this case. [00:29:36] Speaker 03: Thank you. [00:29:36] Speaker 03: Take it under advisement. [00:29:38] Speaker 02: Thank you. [00:29:38] Speaker 03: I appreciate that. [00:29:39] Speaker 03: And we need to have a little switch of