[00:00:17] Speaker 02:
This case is also Veterans Contracting Group versus the United States, 2018-14-10.

[00:00:23] Speaker 02:
So we'll hear from you again, Mr. Lifton.

[00:00:29] Speaker 01:
Thank you, Your Honor.

[00:00:33] Speaker 01:
If it pleases the Court, my name is Joseph Whitcomb, and I represent the Veterans Contracting Group on case number 1410 before this Court.

[00:00:40] Speaker 01:
In this issue, this case turns around the SBA's

[00:00:46] Speaker 01:
in our view, the world recalcitrant allegiance to a definition of a word.

[00:00:52] Speaker 04:
In this case, the word is unconditional.

[00:00:57] Speaker 04:
The government has terminated the contract for convenience and so why doesn't that render this move?

[00:01:06] Speaker 01:
For the reasons that we briefed before, there is a collateral damage question, which is still before this court, which is the

[00:01:14] Speaker 01:
The SBA's actions in this instance resulted in the removal of veterans contract VCG from the VIP database.

[00:01:26] Speaker 01:
That's why we're here in the first place.

[00:01:29] Speaker 01:
That's why it's not moot.

[00:01:32] Speaker 01:
The second reason is there was, in our view of the world, a constitutional violation as it applies to veterans contracting group and other

[00:01:40] Speaker 01:
veterans in this application of the Wexford standard for the history that it was applied from 2006 forward, because... Relief, are you seeking for that?

[00:01:48] Speaker 01:
One is a declaratory relief, Your Honor.

[00:01:50] Speaker 03:
We're in the Court of Federal Claims.

[00:01:52] Speaker 03:
The Court of Federal Claims is largely, I mean, on review from the Court of Federal Claims, largely does not issue declaratory judgments.

[00:01:58] Speaker 03:
It issues money judgments.

[00:02:01] Speaker 03:
It can issue equitable relief in order to carry out those money judgments, but it doesn't have declaratory judgment authority.

[00:02:09] Speaker 01:
it does have authority to rule on constitutionality of provisions and it does have the authority to carry it to and and in the tension of your honor's first well let's move past that i don't want to get a debate on that but what relief besides the declaratory judgment do you think we could have the court of federal claims provide in this case in this case it would be a

[00:02:36] Speaker 03:
What we're seeking is a reversal of the lower court's decision, which was that the SBA's determination... I understand what you think the error is and what the court did, but what relief would that lead to?

[00:02:47] Speaker 01:
One, for one thing, the SBA's determination back in January or sorry, April of 2017 rendered, as it stands today, as we sit here before you, the SBA's determination is that

[00:03:04] Speaker 01:
is that DCG is ineligible to compete for non-VA STD-OSB procurements until it fixes its operating agreement.

[00:03:14] Speaker 01:
That was the ruling from the area office that was upheld by the Office of Hearings and Appeals and that Judge Leto found was not arbitrary and capricious.

[00:03:21] Speaker 04:
But there's a new standard.

[00:03:23] Speaker 01:
There is a new standard, but that new standard has not been applied directly to Veterans Contracting Group as it relates to their operating agreement.

[00:03:32] Speaker 03:
Well, isn't it premature to determine what that new standard is going to be until it's actually applied in the context of a new qualification and a new procurement?

[00:03:45] Speaker 03:
How are we to know what SBA is going to do with the new standard as applied to BCG?

[00:03:51] Speaker 01:
Well, BCG also was ineligible to compete for contracts that were non-VA, STBSD, so to speak.

[00:03:59] Speaker 03:
Those contracts aren't part of this case though.

[00:04:03] Speaker 01:
But its eligibility is before this case.

[00:04:05] Speaker 01:
Its eligibility to compete for those contracts historically is still before this case.

[00:04:10] Speaker 04:
The new regulation gives you everything you want for the future, right?

[00:04:14] Speaker 01:
We are of the mind that the answer to that is yes.

[00:04:17] Speaker 01:
The October 1, 2018 regulation grants, puts the definition in place from 8A and WOSBs and applies it to SDVOSBs.

[00:04:31] Speaker 03:
And with regard to

[00:04:32] Speaker 03:
these, this universe of contracts you supposedly weren't eligible to compete for, what kind of relief do you think we could give to that?

[00:04:41] Speaker 03:
I mean, these contracts are either been awarded or canceled or performed or the like, and they're not even part of this case.

[00:04:49] Speaker 01:
But the, if, if the, if 1410 is moot, if, then 1409, I don't know, maybe saying that backwards, if basically, if the SPA's actions

[00:05:01] Speaker 01:
If we don't get a ruling that SPA's actions were arbitrary and capricious, then there's no basis for challenging the VA's actions for the arbitrary removal.

[00:05:10] Speaker 01:
Because the VA's entire... Wait a moment.

[00:05:12] Speaker 01:
I don't understand.

[00:05:13] Speaker 04:
The two cases... Judge Leto has said it was arbitrary and capricious.

[00:05:17] Speaker 04:
The government didn't appeal.

[00:05:18] Speaker 04:
Obert, done with.

[00:05:20] Speaker 04:
That's the assumption in the 09 case.

[00:05:26] Speaker 01:
Yes, Your Honor, I agree.

[00:05:29] Speaker 03:
I mean, I don't think this case affects the 09 case at all.

[00:05:33] Speaker 03:
I mean, I may differ with you on the views of the effect on what the 09 case is, but what relief would the court of federal claims order in this case given that the standard has changed and the contract at issue in this case has been canceled?

[00:05:54] Speaker 01:
The cancellation of that contract only happened days ago.

[00:05:57] Speaker 01:
It's still canceled.

[00:05:58] Speaker 01:
But I'm saying, Your Honor, we haven't had it.

[00:06:00] Speaker 01:
Nothing has told as it relates to the cancellation of that procurement.

[00:06:04] Speaker 01:
We wouldn't have standing to cancel.

[00:06:07] Speaker 03:
Well, that's the problem with I don't understand what your argument is to why this case isn't moved.

[00:06:13] Speaker 03:
The contract that you were challenging the award of is gone.

[00:06:17] Speaker 03:
There's nothing we can't reinstate the contract.

[00:06:21] Speaker 03:
I mean, if we reinstate the contract, it would be to your adversary.

[00:06:25] Speaker 03:
you know, kick them out and reopen solicitation.

[00:06:27] Speaker 03:
We can't do any of that kind of relief.

[00:06:31] Speaker 03:
The standard has changed.

[00:06:32] Speaker 03:
So even if we could order a declaratory judgment that the previous standard was wrong, what effect would it have since that standard's no longer in place?

[00:06:43] Speaker 01:
Well, the effect it would have is that we suspect that Veterans Contracting Group was not the only party harmed by the application of the Wexford standard.

[00:06:52] Speaker 03:
And if those parties have

[00:06:54] Speaker 03:
complaints about that they can bring it in an appropriate case where there's an appropriate entry to them.

[00:07:04] Speaker 01:
Our only argument here before this court is that BCG was harmed by the application of the Wexford standard.

[00:07:11] Speaker 01:
It has attorney's fees that it has fought for the last year and a half as it relates to this misapplication of the Wexford case.

[00:07:19] Speaker 01:
It has the preparation cost obviously as it related to the

[00:07:23] Speaker 01:
the end as a related to the demolition case.

[00:07:26] Speaker 03:
It has other damages that are still associated with this misapplication of the way this case in this case that is relates to where did you preserve any of this or where did you make any of these arguments in your response to the government's motion to dismiss as moot.

[00:07:42] Speaker 03:
We argued that... This is the first time I'm hearing that you're damaged because you had attorney's fees.

[00:07:47] Speaker 03:
Did you make a request for attorney's fees?

[00:07:49] Speaker 01:
Honestly, Your Honor, I came in here assuming that the mootness issue had been decided because the government's motion for mootness was denied yesterday.

[00:07:58] Speaker 01:
So I didn't come prepared to argue on the issue of mootness because... It was denied pending this argument.

[00:08:05] Speaker 02:
We were giving you an argument.

[00:08:06] Speaker 01:
Yes.

[00:08:08] Speaker 01:
Okay, so for the issues that we...

[00:08:11] Speaker 01:
For the reasons we argued in that brief, we don't believe that this case is moved.

[00:08:15] Speaker 01:
We don't believe that the collateral damage that that case caused has gone away.

[00:08:19] Speaker 04:
But you didn't argue anything about attorney's fees in that court, right?

[00:08:23] Speaker 01:
We did not argue in that case about attorney's fees.

[00:08:27] Speaker 01:
In that brief, we didn't argue about attorney's fees.

[00:08:29] Speaker 01:
We argued about the collateral damage.

[00:08:30] Speaker 01:
We argued about the fact that, in this instance, what I think is ultimately at stake here is that veterans have been treated historically differently in our view of the world, disparately, based on this Wexford standard.

[00:08:41] Speaker 01:
And that that issue has not been, that issue has not been in our view of the world.

[00:08:46] Speaker 03:
We can agree with you on that.

[00:08:48] Speaker 03:
It seems like the government agrees because they've changed the standard.

[00:08:51] Speaker 03:
What's the actual relief that results from that conclusion?

[00:08:56] Speaker 01:
Well, I don't know if it would, I don't believe that it would fall within the purview of this court, but if our arguments are correct and that the reason for the Wexford standard being wrong was constitutional, then I think that opens the doors to lots of other types of relief, including

[00:09:09] Speaker 01:
1983 actions and the like.

[00:09:10] Speaker 03:
Well, you need to go file those in the appropriate court.

[00:09:14] Speaker 03:
Are you asking us to issue a declaratory judgment that the government acted unconstitutionally so that you can go force it elsewhere?

[00:09:24] Speaker 03:
I don't see how the Court of Federal Claims has any jurisdiction over that kind of claim.

[00:09:28] Speaker 01:
I think the Court of Federal Claims has jurisdiction over whether or not BCG's procedural due process rights

[00:09:37] Speaker 01:
were violated, which we argued in the lower court.

[00:09:39] Speaker 03:
We also argued... In connection with the procurement.

[00:09:41] Speaker 03:
In connection with the procurement and in connection with its overall entitlement, which we are here... But once the procurement goes away, the court of federal claims doesn't have freestanding jurisdiction over constitutional due process claims.

[00:09:56] Speaker 01:
But I think that ignores the fact that the eligibility to compete for STDOSB contracts is a property right.

[00:10:05] Speaker 01:
established by statute.

[00:10:07] Speaker 03:
And at that point- Are you pivoting to a taking claim now?

[00:10:10] Speaker 03:
Because I don't see that anywhere in your response to us in opposition to the motion to dismiss or certainly not in the proceedings below.

[00:10:20] Speaker 01:
Arguments in the proceedings below were that the SBA misapplied, adhered to a Wexford standard simply because it could.

[00:10:30] Speaker 03:
And it- Right, and you've gotten the relief

[00:10:34] Speaker 03:
at least tentatively that you want, which is that they've changed the standard.

[00:10:41] Speaker 03:
So you want a declaration that in retrospect they shouldn't have done that?

[00:10:47] Speaker 01:
I'm saying that it was still damaged by the award of this contract earlier.

[00:10:54] Speaker 03:
It may have been, but the contract's been canceled and you have not stated in any

[00:11:02] Speaker 03:
clear way what kind of monetary relief or otherwise injunctive relief in the typical bid protest manner that we could order or have the Court of Federal Claims order.

[00:11:14] Speaker 01:
Well, they are small.

[00:11:17] Speaker 01:
They are included in our brief, which is what this Court has ruled over and over again, which is simply its preparation cost and its

[00:11:23] Speaker 01:
proposal costs.

[00:11:24] Speaker 03:
Did you say that in response to the opposition and your opposition?

[00:11:27] Speaker 01:
I believe we did.

[00:11:28] Speaker 03:
Can you point it to me because I looked for bid prep costs and I didn't see it.

[00:11:32] Speaker 01:
I don't know if we argued in that motion or in our earlier motions.

[00:11:39] Speaker 03:
Well this is a mootness in response to the cancellation of the contract.

[00:11:51] Speaker 01:
Council, you're going to do rebuttal time.

[00:11:54] Speaker 02:
Why don't you look for the answer and you can provide it on rebuttal.

[00:12:00] Speaker 02:
Thank you.

[00:12:00] Speaker 02:
Ms.

[00:12:00] Speaker 02:
Speck.

[00:12:10] Speaker 00:
Good morning, Your Honor.

[00:12:11] Speaker 00:
Elizabeth Speck for the United States.

[00:12:13] Speaker 00:
We would again renew our request that the Court dismiss this... Why was this contract terminated for convenience?

[00:12:19] Speaker 00:
Certainly, Your Honor.

[00:12:20] Speaker 00:
The main reason for the termination for convenience was this was a demolition contract for VA buildings.

[00:12:28] Speaker 00:
There was a large increase in asbestos found in the buildings, and the change was large enough to make a modification out of scope of the original contract.

[00:12:37] Speaker 00:
At the time, the termination for convenience contract was issued.

[00:12:42] Speaker 00:
Approximately 16% of the contract had been completed.

[00:12:46] Speaker 00:
That was primarily site work.

[00:12:49] Speaker 00:
And the agency's plan going forward is to re-solicit this as part of a combined project with a site build out in March of 2019, approximately.

[00:13:00] Speaker 04:
And will that be bid?

[00:13:03] Speaker 04:
Will the solicitation be for veteran-owned businesses?

[00:13:06] Speaker 00:
I don't know at this time, Your Honor.

[00:13:07] Speaker 00:
I think they're still evaluating the requirements and whether they would have a sufficient number of veteran-owned small businesses.

[00:13:15] Speaker 00:
At the time, and again, if the

[00:13:17] Speaker 00:
The SBA's regulations at 13 CFR 125.30 would permit veterans contracting group to go back before the SBA and explain why it should be eligible to be a service disabled veteran-owned small business.

[00:13:37] Speaker 00:
And that would be decided under the new standard based on the regulations that were effective as of October 1st.

[00:13:46] Speaker 00:
Your Honor, in terms of, I don't know if the court has any other questions, in terms of the bid prep and proposal costs, the complaint, which is unfortunately not part of the appendix, never asked for a bid prep and proposal cost.

[00:13:59] Speaker 00:
It said award VCG attorney fees and expenses.

[00:14:03] Speaker 00:
So bid prep and proposal costs have never been a part of this.

[00:14:07] Speaker 00:
Again, to the extent attorney's fees would ever be an issue,

[00:14:10] Speaker 00:
The government's position would still be substantially justified.

[00:14:13] Speaker 00:
The Small Business Administration was acting in accordance.

[00:14:17] Speaker 00:
OHA was acting in accordance with its precedent at the time.

[00:14:19] Speaker 04:
Would the claim for EG fees that EG would apply here, right?

[00:14:24] Speaker 04:
I believe so.

[00:14:24] Speaker 04:
Yeah, so would a claim for EG fees prevent mootness?

[00:14:28] Speaker 00:
I don't believe so, Your Honor.

[00:14:30] Speaker 00:
I think, again, the government, the step for jurisdiction is whether it's an injury in connection with a procurement or a proposed procurement.

[00:14:38] Speaker 00:
And here, there simply is no procurement injury to be remedied, which is the jurisdictional hook.

[00:14:44] Speaker 04:
There are no cases that address that question about attorney's fees and mootness?

[00:14:50] Speaker 00:
Not that I have off the top of my head, Your Honor.

[00:14:54] Speaker 00:
Again, we would submit that if there's no jurisdiction, then the court cannot address that question.

[00:14:59] Speaker 00:
Again, there's just simply no competitive injury to be remedied by the court here.

[00:15:08] Speaker 00:
If the court has no further questions, we respectfully request that the court either dismiss this as moot or affirm the judgment of the lower court.

[00:15:19] Speaker 02:
Thank you.

[00:15:20] Speaker 02:
Thank you, counsel.

[00:15:23] Speaker 02:
Mr. Whitcomb, you have three minutes plus for a bottle if you need it.

[00:15:28] Speaker 01:
Okay, so the court has raised the issue of fine when the new regulations on October 1, 2018 give... You didn't request...

[00:15:36] Speaker 01:
uh... the preparation process and i think that uh... that's correct uh... when we were done with jenny authority that says that request for each of these prevents the underlying case from the coming i do i do agree with that and i don't believe that that that point which it from becoming but also the second issue of our case case separate case the the case will understand that we are free to case these pieces of context on a regular basis is that if the if the government has acted in in a way that is unreasonable

[00:16:06] Speaker 01:
That is the standard by which EGIC fees.

[00:16:08] Speaker 04:
Well, sure, that's the standard.

[00:16:10] Speaker 04:
But are there any cases that say a request for EGIC fees, it prevents mootness?

[00:16:17] Speaker 01:
I would be happy to brief that issue after the fact, Your Honor.

[00:16:19] Speaker 01:
I don't have any offhand that would discuss the issue of mootness.

[00:16:23] Speaker 01:
As it relates to this case, however, I think the one thing that keeps us from being moot goes back to the area office's determination, which was ultimately upheld.

[00:16:34] Speaker 01:
It isn't relying, it states that in its order that Veterans Contracting Group, part of its ineligibility is it is then required to go into SAM.gov and remove its status of eligibility from SAM.gov until it gets leave from the SBA.

[00:16:52] Speaker 01:
It shouldn't be in a position of having to assume that the SBA will now grant its authority for, or its eligibility just because there's been a rule change.

[00:17:02] Speaker 01:
In other words, SBA,

[00:17:04] Speaker 01:
veterans contracting group would then still be charged with going back to the SBA.

[00:17:08] Speaker 01:
The area, I'm going to say this more clearly, the area offices charged with the SBA or the BCG rather could not hold itself out as a service disabled veteran small business until it had sought leave from the SBA to do so.

[00:17:22] Speaker 01:
It has not because of the pendants of this case.

[00:17:26] Speaker 01:
So therefore it is not, that keeps us from being moved.

[00:17:30] Speaker 01:
It can't, in my view of the world, simply go back and say, well, there's been a rule change.

[00:17:33] Speaker 01:
We can go back into SAM and certify ourselves as an STB OSB anymore.

[00:17:38] Speaker 01:
And if it's not able to do that, it's not able to compete for STB.

[00:17:43] Speaker 01:
It's not able to compete for STB OSB.

[00:17:45] Speaker 01:
I don't understand what you're saying.

[00:17:47] Speaker 01:
Part of the eligibility in any procurement is part of the search and reps that are either contained in the procurement itself or in the solicitation itself where the veteran-owned business checks a box on that procurement sheet or, secondarily,

[00:18:00] Speaker 01:
um, goes out or alternatively goes up to sam.gov and certifies that it is an STB OSB.

[00:18:08] Speaker 01:
The area office's determination on eligibility precluded veterans.

[00:18:13] Speaker 03:
But the trial court already decided that that wasn't correct.

[00:18:18] Speaker 01:
Only as it related to the vet meds database.

[00:18:21] Speaker 01:
It did not, it did not.

[00:18:23] Speaker 03:
That's the only part of this case that was before the trial court.

[00:18:25] Speaker 01:
No, no, your honor.

[00:18:26] Speaker 01:
I'm sorry for veterans.

[00:18:27] Speaker 03:
So you're asking us to issue a declaratory judgment to the SBA to correct its database.

[00:18:34] Speaker 01:
No, it's not.

[00:18:35] Speaker 01:
It's the area office of determination was that not just I don't, I frankly have no idea what you're talking about.

[00:18:42] Speaker 03:
Are you saying that you are prevented from going back to SBA and saying our status needs to be corrected?

[00:18:50] Speaker 01:
No, I'm saying that that's what it has to do.

[00:18:52] Speaker 01:
It has to go.

[00:18:53] Speaker 01:
The court's ruling, the court question was... And what would we do?

[00:18:57] Speaker 03:
Are you saying we can tell the SBA that you don't have to do that?

[00:19:01] Speaker 03:
That you should just be reinstated automatically even though there's now different regulations to apply?

[00:19:07] Speaker 01:
I'm saying yes.

[00:19:09] Speaker 01:
I'm saying that if this court rules that the SBA's determination was erroneous in the first place because of the arguments that we've made,

[00:19:15] Speaker 01:
then that eliminates any sort of, because we can't assume that it's going to be a matter of veterans contracting groups simply going to the SBA, seeking eligibility again, and then it will be instantly reinstated.

[00:19:26] Speaker 01:
We expect that there will be time before it will be able, which would put VCG in a position of having to go out and protest yet another procurement in order to fight about its eligibility to compete for STDOSPs, because Judge Leto's ruling was the SBA wasn't wrong.

[00:19:44] Speaker 01:
And the questions from the court today are, why can't VCG just reassert?

[00:19:48] Speaker 03:
Even if we said the SBA was wrong under the old standard, they have a new standard.

[00:19:53] Speaker 01:
But if it was wrong under the old standard, there's no assumption that VCG was wrong under the new standard.

[00:20:00] Speaker 02:
Thank you, counsel.

[00:20:01] Speaker 02:
We'll take the case under advisement.