i represent the appellant contract management in this matter the this this matter arises out of a contract that was set aside for hubs and suggest for a contract maybe facilities that   in the record there's indication that when the firm called up and asked about it being set aside the hubs and the contracting officer didn't want to do that they initially were going to respond and say this is the starkly been set aside for small businesses and they want to preserve that it was only when the contracting officer was told by the s b a no you have to set this aside as a as a hub it was changed from the small business to hubs and set aside so i think it was clear that if there had been discretion at that time it would have remained a small business set aside contract management challenge the s b a and the federal acquisition regulations that clearly make this mandatory on the grounds that the small business act which authorizes feticide did not make it mandatory but it was discretionary the district court ruled against us and held that language of the act itself made this mandatory so this was not a case where we looked at whether the interpretation of the agency was reasonable and enacting the regulations the district court found the act itself made it mandatory and the language it's in fifteen c six fifty seven eight of the language is that a contract opportunity shall be awarded pursuant to this section on the basis of competition restricted to qualified hubs and small business concerns and then there some conditions about the threshold level and that there be at least two hubs that would fit and the district court interpret that language that that mandated a set aside under the provision if that were to h businesses and if that threshold was met i know him if he can see interprets it that way and it's a reasonable interpretation even though it might otherwise be interpreted as you would like  interpreted how much difference do we give to the agency in that circumstance well it's my position that we don't have to worry about the deference in this case because the agency didn't interpret any language that was ambiguous or uncertain or unclear or didn't address the issue the district court found that act itself did specifically address the issue and that the act itself made the set aside mandatory so we don't really issue dealing with the situation where we have to look to the deference of the agency somewhere in the agency they decided it was mandatory right but they decided it was mandatory based upon the same interpretation congress is clear and the act itself and addresses the issue that is to be governed by the regulations then we don't have to get to the issue of the of deference to the agency because it's the act itself that is guiding it i think there's within the overall and over writing purpose of of the small business act which is a rather large comprehensive act which covers lots of things way beyond what we're dealing with here but it does deal with  government contracts set asides and i believe that if you look at the act and try to give meaning to all portions of the act and and all of the other provisions of the act and then overall intent of congress that the only reasonable interpretation of this is that the language which says that that the contract shall be awarded refers to the requirement for competition rather than the requirement that have to be set aside under the hubs and there's a number parts to it on satisfy the first part of that section is a discretionary where they can do sole source awards without any competition doesn't apply here what's that but those that doesn't apply here this is the second section which comes after the sole source clearly discretionary one and says it doesn't say that it has to be awarded to a hub zone and it says if the contracts awarded pursuant to this section then it has to be done under competition and it's if there is prior now it can't be awarded to any other small business at all that's correct your honor but the reason i think that what it's talking about in the second part where you have the first part is clearly discretionary sole source the second part which  is you have two or more and a threshold is met then you have to have competent that language closely parallels the language under the ape program which were which were the only other set asides first specific group that existed in the small business act at that time and that that section's a lot longer and it has a lot of other things in it but it's dealing with economically and socially disadvantaged business is owned by socially and economically disadvantaged and in that section you have originally only a discretionary sole source award stand and then that was changed so that now the s b a if the same threshold that parallel between the language that they had and the structure that they had before they enacted the habs own program in the day program which everybody agrees is discretionary when they enacted the hubs and they used almost identical language you will agree it's not the identical language but there's a very small change in the language and i don't think that that shows an intent by congress to make a radical change from what he just did before that because if the hudson is interpreted as being mandatory it's the only set aside that's mandatory so it's it's unique i mean it's significantly different than any other set aside and i don't think that the small change in language between the trumps the like well no i don't i don't think it does i mean well no i don't think it does for a variety of reasons one i think there's nothing in the legislative history that shows that congress intended it to be mandatory there's a lot of talk in the legislative history that they were concerned about how the a program and the hub zone program would interact with each other but that makes sense because the aid program is directed towards businesses that are owned by economically and socially disadvantaged people and hub zone program is aimed at trying to employ people in economically disadvantaged areas so it seems that can be somebody well ye she couldn't qualify for the hub zone because there's a requirement you have to have thirty five percent of your employees living in my client's located in hawaii didn't have thirty five percent of his current employees in they only do business  i think if i think if there's disgrace and no i think if there's discretion it's remanded and the contracting officer had to have the discretion that they had originally which was that they wanted to award it just wondered from a business as a side i think the contracting officer should have the discretion to choose which contract type earth satisfy tight best carries out the intention of congress when they set up the service i think and that's one of the difficulties that a practical matter i have with making these mandatory is that it really means that even if a contract is so is that it somewhere where there is no zones near it and there's no possibility in a realistic possibility that any employment at zone residence which is the whole purpose of the act so i think the discretion the contracting officer needs to have is to look at these contracts and say well if i were here here's a contract that is located near son this would be a good contract to put under the hub zone program or here's a contract that has to be performed at the company's home office rather than on a military facility so that would be a good contract to set aside under the hub zone because then the hubs business will be hiring people from that area to to award a contract and a lot of military bases are out in the middle of nowhere as we all know and there may be no hub zones anywhere near  as a practical matter it won't increase the employment law of the situation well it may be the situation here we don't know my client who was performing this contract had about ten percent of his employees from the zone there's no guarantee on this contract for instance if you've got to have his own who qualifies in detroit because they're in a hub zone it's not a contract in hawaii i mean clearly they're not going to ship their employees or move employees from detroit to hawaii to perform the employees that matter of fact i believe that company that followed on to my client followed the usual practice in these areas which is they hired my client's former employees to perform the work because they are all trained to the work and a so in fact i believe the practical matter you substitute the hub's own company for a small business but the employees remain the same all that change was maybe some management and now it's owned by a company but the hubs o but i believe that's a practical reason why congress wouldn't have wanted this to be interpreted as as mandatory why they didn't say it was mandatory because it it does have this lack of any control over where the work is going to be done but i a trumpet well as i pointed out in the reply brief congress is now put in another step aside which is the service disabled veterans organization set aside which follows very much the same pattern you can have a sole  source warg to one service disabled veterans organization if there is more than two it's more discretionary languages as it may be done on the basis of competition if there are two in that act it says preferences with other set asides or other protests programs and the only two programs it mentions is you can't put a program over to service disabled veterans organization if the contracts being performed under  and i don't think when congress enacted so if we're saying one trumps the other we have to sort of look at this i think and say well now we've got a new an act which doesn't in any way refer to any preferences for have zones and case the propositional phrases pursuant to the section on the basis of competition that the natural reading is that both of those phrases are part of the shall or both of those things are required and second even if even if it were think it's very likely that you're going to have john serial companies in detroit bidding on the contracts in hawaii but there's nothing in the statute that restricts where the work is to be done but doesn't the hub's own classification require two things one of nothing about the employees that are actually put on the job that's right is that it could be kind of could be different employees but again these are not going to be huge corporations that have a really large number of employees one of my clients chief competitors is cardinal maintenance which is a company based in detroit that performs lots of janitorial contracts and why and the fact is that most small business is have to bid on contracts all over the country in order to get the work they don't just did locally so that i'm not just trying to raise a red herring here i mean this is a real problem and as i pointed out in the brief if you if you do a search where the contractors it's pretty hard for a contracting officer to do that search and find out that is there are hundreds of them there and not determined that it's a reasonable probability don't get to a war and as we saw in this one that we put in the  a is really interpret ing this is mandatory the way they say they didn't in this case they matter fact is in the record it says we hope nobody else asked about the other contracts because they were afraid that if somebody asked them they have to in fact make it a hub zone but if it's mandatory they should have been doing that anyway the one of the one of the questions was you have to have thirty five employees again is another practical problem what seen thirty five percent what happens is if these contracts are awarded in areas that are hub zones these are small businesses if you only have fifty or sixty employees you get a contract in an area where you get another twenty employees on that contract and you can't hire anybody in the hubs it disqualifies you from the hub zone program because you now don't have thirty five percent and that is a problem that companies qualify initially with the thirty five percent but they have difficulties maintaining that thirty five percent unless they can have places where they're hiring people that are working in the design so i just believe that the mandatory provisions are the interpretation has to has worked to defeat congress intent rather than to carry it out of hiring people in these areas thank you thank you very much thank you for the fine argument both of you and i will be submitted