a price at which it would be arguably illegal for the government to make an award and in this instance that's clearly not the case because the pricing that was submitted by landshark that lenhart submitted sorry was thirty five that or sorry plants are considered in a price that was higher than than the government ever paid for the services i think the government would be perfectly it would be perfectly allowable in those circumstances for the government to reject that price if land charge price would come in  hundred and fifty percent of the g s a punch or above is just a pricing that i believe the government would certainly have a basis for challenging charge pricing as unreasonable but in this instance all it has done is found that la charge pricing was unreasonable because if you exceed it and i g c e which was based entirely on a predecessor contract which was performed by a large multinational publicly traded company i get the idea we don't have that many of these  cases is it and then i get the government can respond to this too which is the relationship between the at the g s a pricing and what goes on in the individual contracts is there anything and there's so much paper in this area so many far provision is there anything that relates the reasonableness of a particular bid in a particular contract to this at the g s a funding thing so schedules supply schedules it states expressly that the g s a has in fact has reviewed these prices and found them reasonable and therefore the contracting officer does not need to do an additional review we offered that in our in our briefings at the lower court and this court and the government has responded with well that doesn't mean the contracting officer can't do a review and we can see that it doesn't mean that accounting officer can't do a review we just we just believe that the only legal conclusion that contracting officer could come to is that these prices are fair and reasonable because they have been previously approved by the by the g s a now the government is also advanced an argument that in this instance there's a statement of work so therefore  a four report doesn't apply and our position is well wait a minute if that's that would be true if the statement of work made the requirements of the profile of the contract less onerous th requires of contracting officer have a reasonable expectation of getting two offers and secondly that has already has an expectation and we believe that whether you read those two those two phrases together or apart they come to the same conclusion which is which is you have to have a reasonable expectation to contact have a reasonable expectation of getting two offers and you can say they're for being able to make an award at a reasonable price or you even if you argue separately that being able to make  reasonable price but competition is the st tool that the contracting officer has to use as to whether or not the price is fair and reasonable now under the g s schedule that competition is vetted in advance as i'm sure the court is aware getting on addition to the t s a schedule being the minutes on the test for reasonableness your position is because we're only here because at least they're too competitive bids going on and that somehow competition normal market forces result absent collusion that result in competition results in fair and reasonable pricing and in the  form of it requires landshark to destroy the pill bottles and not just documents it requires that the destruction be done on site as opposed to being able to be done offsite it requires a number of things that land short and it requires that a certificate of destruction be submitted and so forth all of these things are perfectly normal but later is also operating under the restraints that neither its small business competitor or its large competitor are operating under namely thirteen c f r one hundred and twenty five dollars which is the limitations  can and it's twenty nine dollars of our reply brief we actually point to case law on this front which is and i'm quoting it's a fundamental principle of government determined the competition must be based on an equal basis that is offers must be treated equally and be provided with a common basis for the preparation of their proposals landshark was the only one of the three offers operating under the requirement that it not some contract more than fifty percent of the contract value was situated contractors and that means not just other contractors in this instance it means not just contractors that are service disabled themselves and self described as t v o s p's for short but also that they have to be they have the subcontractors in order to be able to contract out more than fifty percent had to be verified and listed in the bet does database which i'm sure this court is where but and and neither should it nor the small business concerns safety sick or required to do that  made that clear a reasonable price so we're looking at price not not conduct or difficulty that is performing on the contract we're looking at price and in this case said it appears need to be competitive with large concerns in order for it to be to reap the benefit of a set aside then it doesn't need to set aside the government the case law is is sufficient that demonstrates that the government or to bid because it was a service there was a nest of us be set aside and secondly that we would argue that their pricing is irrelevant to the to the calculus of whether the price is fair and reasonable again the g s a has already determined that this price is f reasonable that's the st before and under the only definition for fair and reasonable found anywhere in the far is that for a price not to be fair and reasonable it must exceed a price that any prudent person would pay for the service a prudent person in this instance here because it would have been relevant if for example no service disabled veteran small business had bid that would have given the government a nother place to go but in this instance there was a s t v o s b that submitted that  which was qualified by the g s a and it was therefore in our view of the world therefore fair and reasonable and what we are and what we're trying to get away from your honor what we're asking this court to to operate under very different circumstances then small businesses or large concerns whether we're talking about economies of scale or whether we're talking about the rules and regulations that they operate under they are operating pricing has has so far been left completely to the discretion of the contracting officer and we believe that there are other out there other restraints to include whether the g s a has already found that price is fair and whether the government has already paid previously i mean in the late short shredding has at any given time twenty five or thirty different contracts being performed at this price in different parts of the country that what the government has done and we believe is read into the statute to say that the statutory provision we're debating here includes the standard can be award commute made it a fair and reasonable price continues to say and you're saying that's reasonable in the standard is set by t and as long as that is met and not exceeded it is by definition reasonableness that's what i understand your to be but the statute continues to say that offers value to the united states  and that is another kind of word that gives the u s discretion in the u s some discretion to what the best value is to be united but there might be two offers that some theory o fair and reasonable but they're supposed to pick the one that offers the best value to the united states right that we have to get that language right your honor yes and i do not i believe that the meeting has to extend to all of the policies of the united states contracting officer's discretion of determining what is fair and reasonable under those circumstances is given full effect it won't if there would it's easy to imagine a scenario or many scenarios in which the contracting officer could contrive and i g c e or find making the determination that a price is not fair and reasonable that what it is that contracting officer is doing by extension is saying it would be illegal for us to make this contract contract award because those are the that's the restraints that eight thousand one hundred and twenty seven we put on the contracting discouraging high prices you want to step back a little bit and point out that the rule of two is an initial set aside determination that happens up front by the v a and determining whether or not competition should be restricted or in that comes later that is a distinct and separate inquiry and regarding the actual pricing arguments that ranch has made in its argument elected point out that we believe those are ways because they were not discussed in its opening brief the opening brief was focused almost exclusively on this idea that the rule of two is a mandate to automatically awards landshark regardless of total price and i believe the court's question at the beginning was sort of hey what is the upper limit yes thank you i'm sorry you didn't already covered this is judge prospect they are what about your friends argument about how if the amount of money is on the at that g s a staff schedule and the government has already be evaluating those close to each other to then determine best value and essentially the f s s pricing is a relevant and landshark concession that a review can be done by the contracting officer should be dispositive here again this opening brace it said there was no discretion actually said that the i believe the quote is that the contracting officer could not set aside and then make an expos facto determination later that the prices were too high or that they were unreasonable and now it's  reasonable and especially in the context of the i g c which again was based on f s s pricing which was probably just primarily made up of other small businesses and that i do you see actually was generated and i'm going to look at that in the context of the previous contract that was for about two hundred and fifty thousand dollars versus about the five hundred thousand dollars or so that is that now a contracting else you look at those and found that price was just too far out of line with what had been submitted rs were responsible to put their best foot forward and the government evaluated and accordingly but to go briefly back to the point i was tempted to make before the questions came but on the  about looking at something other than just the lowest price but i'm not sure that miss particular particular case and cases may go arguments with persuasive that such you know competitive factors  system and allowed bids from small businesses big businesses everybody and the to service disabled businesses came in let's say fifty percent over the next lowest price from the small business would it be proper for the contracting officers say this is not fair and reasonable by comparing the service disabled businesses to the small businesses two service disabled businesses that have submitted the contracting officer is determined that it should be set aside for services businesses but for whatever reason goes ahead and uses a cas is when there's a cascading solicitation and there are two services two or more services able businesses call him a contractor and determining whether that it should be the work to be made to service disabled business can it compare to the office from their service disabled businesses with the rest of the cascading offers and say this is not fair and reasonable because they are higher or does it st have to look and determine whether in isolation the service disabled kids are fair and reasonable well if it's like this list of patient that is proper under the statute or whether you have to make a fair and reasonable determination just basically on whether the two services able businesses are acceptable and this is presuming make the hypothetical slightly more complicated everybody comes back within ten percent of the government asked about either under or over and the service to save old are both slightly over and about ten or fifteen percent over the small businesses i mean the government can award over a cost estimate i think you agree why if they're required to set aside with the fact that it be of ten to fifteen percent might be within that range but there may be other considerations sort of like there was here and depends on case where there's only so much funding available and you can actually award at that price that is a different have that discretion to pay a little bit extra to get those to a sort of  landmark's arguments thank you thank you instead the government looked across the entire universe of fifty one dollars offers under the federal supply schedule and came up with a number that looked like ninety eight thousand a year if it had limited its research if its intent to set aside was genuine it would have limited its research to just what s t v a species would be under this case and put its price estimate together accordingly but it didn't do that it looked at the entire universe so i think again if the government if the v a in this and it and it didn't look at it didn't restrict it to its analysis of its estimate so its basis for its estimate on what this contract would cost leave us be set aside was based on what a with the predecessor concern had had done that it looked at the universe of price offerings on the but it averaged those out and it averaged all fifty one dollars out and came up with a number that is very different from the number it would have come up with if it had looked at just was rejected as being not fair and reasonable and in this instance based only on the government's independent government cost estimate which it later conceded was was in some ways flawed and a change that i just see on more than one occasion but again in that instance even under the flawed analysis it was the government relied on dissimilarly situated the previous argument which is the government had better resources for determining what it should have expected from s t v o s b offers on this contract namely the entire universe of offers that are publicly available to the government argue that the cancellation of this this elicitation and the reconstitution was was illegal because land sharks again this has the trappings of the of the hypothetical the judge use raised in previous case which was in this instance there was no cascading there were the rule two was satisfied it was set aside there were two offers which has that baked in competition which should under bar part thirteen and fifteen give the government was shredded but it was which is a large multinational publicly traded company and and it argued that it exceeded the government argued that land sharks pricing exceeded available funding and is trying to advance the argument that it would that awarding the land shark would've been a violation of the anti deficiency act but alas short supply that is the anti deficiency act relates to the government's allotment of money for the entire year there is no allotment of congressional allotment of money asides exist in the st place but secondly late short events in our previous argument operate under different set of rules than other small businesses and certainly different from large concerns i doesn't so that a large concern like try to for example is not restricted in the amount of business that is subcontract it's not restricted in any of those things is there no regulation that governs the amount of self importance it does land shark unlike a company like try to or or when it goes in to perform under most contracts it's required to start from scratch it's got to go buy all new containers for example as opposed to being able to transfer containers over they might have to buy might have to buy the vehicle something clearly landshark is not advancing the idea that the government should shoulder all of those additional costs but we're arguing that comparing landshark to large concerns and it's  i'm sorry as i misspoke comparing last short to large offers is unfair because it's again it's an it is a money group an even playing field land shark has to plan or different rules as to in many instances start from scratch as opposed to a large company fear and reasonable standard and best value of the government standard is only with respect to comparing the two offer ours in this case even if both of the the people that met this rule of two came in with ten million dollars that the court that the judge the contracting officer would be evaluating just as between the two of them is one fair and reasonable is one more fair and more  think that everybody else would have been a one million so is it still fair and reasonable because the only thing we can compare is the two offers against each other as opposed to what other bidders that don't meet the rule with two would have come up with in that so i would suggest to answer your question is no in the instance where one is by going to want to spend millions the government could reject it under other basis like it's never paid that price before no prudent person would ever pay it because no one dollar ever has as an and the previous case and this case the government has paid that price there was so all we're trying to get to is that the factories will price is a low bar a lower bar than the government is bringing a low bar for the contractor to get over not an exceptionally high bar again the government had no idea at onset of this contract what i do you see was it couldn't know all it knew for sure is what it would cost it to perform and it offered a price and again competition and market forces are supposed to be the thing that drives fair and reasonable pricing right and if the government were under your honour's hypothetical started toward contract at five million dollars i assure you it wouldn't be doing it for very long because it would be a rush to the market there would be a rush to the market that would that would drive down pricing but in this instance there were two offers those two offers were competitive with other pricing that s t b o s b is a paid in the marketplace and so therefore the government's finding that this price was not that last march price was not fair and reasonable and rejecting it is contrary to law because it's it's it's finding that it was not fair and reasonable was based arbitrary standard of a predecessor contract a dated just to get st into our primary argument our argument is that they lack standing because their proposed price exceeds available funding and for that reason they never had a substantial land sharks offer was more than four times that funding level courts have routinely concluded that they have neither the authority nor the expertise required to instruct an agency on how to conduct its internal affairs and this check interference with improperly removes management authority from the agency to which congress delegated that authority plan charts response to that issue is remarkable without  today where as a decision that mandated the government to do something differently with its i c t and candombe where speaks to discrete period of time in the part your process it doesn't address the time before the contracting officer makes a decision about whether to restrict competition and it doesn't deal with you know the word decision it deals with the decision about whether competition should be restricted and so it can get where it's not the answer to that to the government having some requirement to make to develop its i think many in a different way raise the price that it willing to spend on this project sensually and sure that's that's entirely their argument is that you know you can't look the on the bidding prices of the service disabled businesses particularly if they're confirmed by the federal supplies got joy and i've been paid at that rate for four and  if that argument is correct then the government's independent estimate there's a relevant and i don't understand your anti deficiency argument at all that the statute requires congress could if it wanted to say we don't care give services able businesses as big of an advantage as possible and as long as they're qualified on the supply schedule and they perform the services you have to pick from them no matter how much it costs you as long as fits within your appropriations that's what you have to pay and that's you know i'm sure that your friend on the other side with take exception with the way i've described it but if that's their argument they have standing to make that argument and we have to address that argument on the merr i you know i i guess i still see an issue of you know i mean what we're talking about and i know my colleague was more precise about standing in his in his theory in terms of making to call it that they have a substantial chance of winning the thing but in determining that we have to look at the legal arguments they're making do or die well i don't think there is under their legal arguments they would have a substantial chance of the work i mean you can't predict the legal merits and then say under our structure to our construction you would never get your word because you're way outside of our independent us to make their argument is your independent estimate sho disregarded because the supply schedule should be what controls well your honor i guess it means it seems to me that it so it's so far  that i don't think it i mean just because the court is getting into whether or not they're interested parties because of kingdom where i'm i'm not that doesn't strike me as a merit the rule too in this case was satisfied the government's argument so far has been that land sharks pricing was not fair and reasonable because it exceeded my g c e which we argue in this case that  unavailing here because that funding limit is was not created consist it was just created soley on the contracting officers estimate the conjuring officer had more than an ability to go back and get additional funding contracting officer needed to in order to make toward but congress has mandated clear it the government must to work when it can and in this instance the government clearly could happen when the government would have easily the government had to turn it around and have the government made an award to land shark it clearly would have survived a big protest based on price reasonableness if somebody else with a large offering come along and said hey there's no way you can make this award to land shark because it prices on reasonable because it exceed what you paid in the past the government would have clearly prevailed in that protest because it has the discretion to line the line charge price was very reasonable because it clearly paid that price in the past what the government has done is make that argument in reverse and said well we can find that it's not fair and reasonable because we could get it at a lower price and to cover court has no other questions or concerns i will rest thank you we thank both parties and