IN THE UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT

No. ___________

ROTHE DEVELOPMENT CORPORATION,
A Texas Corporation,
Plaintiff-Appellant

v.

UNITED STATES DEPARTMENT OF DEFENSE;
UNITED STATES DEPARTMENT OF THE AIR FORCE,
Defendants-Appellees

ON APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS

APPELLEES' MOTION FOR CLARIFICATION OR,
IN THE ALTERNATIVE, TO LIFT THE STAY PENDING APPEAL,
AND REQUEST FOR EXPEDITED RULING ON THE MOTION

The Fifth Circuit recently transferred this case to this Court after finding that this Court has exclusive appellate jurisdiction under 28 U.S.C. 1295(a)(2). We are, in this motion, asking this Court to address a stay ordered by the Fifth Circuit prior to transferring the case to this Court.

On April 30, 1999, appellant Rothe Development Corporation (Rothe) filed a notice of appeal to the Fifth Circuit. On the same date, a single judge of the Fifth Circuit entered a stay pending appeal enjoining implementation of a military contract that the government had awarded to International Computers & Telecommunications, Inc. (ICT). Although the Fifth Circuit later held that it had no jurisdiction and transferred the case to this Court, it declined to rule on Appellees' motion to vacate the stay pending appeal, ordering instead that the motion be "CARRIED WITH THE CASE." Rothe Dev. Corp. v. United States Dep't of Defense, 194 F.3d 622, 626 & n.9 (5th Cir. 1999). The Fifth Circuit mandate issued on January 12, 2000 (X9).(1)

Appellees -- the Department of Defense and Department of the Air Force (collectively DOD) -- hereby request that this Court clarify that the stay issued by the Fifth Circuit judge is no longer in effect or, in the alternative, vacate the stay.

STATEMENT

1. This case involves a constitutional challenge to a DOD contract awarded under § 1207 of the National Defense Authorization Act of 1987 (1207 program). In the program, Congress established an annual goal of awarding 5% of DOD contracting dollars to certain entities, including small businesses owned and controlled by "socially and economically disadvantaged individuals" (SDBs). 10 U.S.C. 2323(a) & (b). Congress created a rebuttable presumption that members of certain minority groups are socially and economically disadvantaged. 10 U.S.C. 2323(a)(1)(A); 15 U.S.C. 637(d)(3)(C); 13 C.F.R. 124.105(b), 124.106, 124.601-124.609 (1998).(2) Individuals who are not members of those minority groups may qualify for disadvantaged status by demonstrating that they personally have suffered social disadvantage (D51, Ex. I-B at 136).(3) 13 C.F.R. 124.105(c)(1)(i) (1998).

The 1207 program authorizes DOD to use various mechanisms to try to achieve the 5% goal, including race-neutral devices. 10 U.S.C. 2323(a), (c) & (e). DOD may use a price-evaluation adjustment of up to 10% for SDBs in some types of procurements. 10 U.S.C. 2323(e)(3); 48 C.F.R. 219.7000-219.7003 (1997). If the price-evaluation adjustment is applicable, all businesses -- regardless of their size or the disadvantaged status of their owners -- may submit offers (D51, Ex. I-C ¶ 5). DOD applies the adjustment by increasing the offers of all non-SDBs by 10% and determining the lowest offer using the adjusted numbers. 48 C.F.R. 219.7002 (1997).

DOD is required by law to suspend use of the price-evaluation adjustment for one year after any year in which DOD awards more than 5% of its contracts to SDBs. 10 U.S.C. 2323(e)(3)(B)(ii). Because DOD met the goal in fiscal year 1998, DOD has suspended use of the price-evaluation adjustment until at least February 24, 2000 (D51, Exs. I-F, I-G).

2. When this litigation began, Rothe (a non-SDB) was performing a DOD contract covering the Network Control Center and Switchboard Operations (NCC/SO) at Columbus Air Force Base (AFB), Mississippi, a pilot training facility (D51, Ex. I-C ¶ 2). Rothe's contract was scheduled to expire March 31, 1999 (X3 ¶ 2). Another contractor -- TennMark Telecommunications, Inc. (TennMark) -- was responsible for Base Telecommunications Services (BTS) (D51, Ex. I-C ¶ 2).

DOD decided to consolidate the BTS and NCC/SO work at the base into a single contract to improve contractor accountability and the quality of services (D51, Ex. I-C ¶ 2). DOD issued the solicitation for the consolidated contract in March 1998, and announced that it would use the 10% price-evaluation adjustment in considering offers (D51, Ex. I-C ¶¶ 1, 2, 6). ICT, Rothe, and three other firms submitted offers. ICT, an SDB owned by Asian-Pacific Americans, was deemed the low offeror after DOD applied the 10% adjustment (D51, Ex. I-C ¶¶ 7, 10; D51, Ex. I-Q ¶ 3). Rothe's offer would have been considered lower than ICT's if DOD had not used the adjustment (D51, Ex. I-C ¶ 10).

The new contract was phased in starting January 1, 1999 (X3 ¶ 5). ICT assumed responsibility for the BTS work on that date and was scheduled to begin performing the NCC/SO work on May 1, 1999 (X4 ¶ 5; X3 ¶ 5).

3. On November 5, 1998, Rothe filed suit against DOD, alleging that the contract award violated the Fifth Amendment's equal protection component. Rothe moved for a preliminary injunction to bar ICT from performing its contract during the litigation. On November 25, 1998, the district court denied the motion, concluding that Rothe would suffer no irreparable harm (D12, D78). Rothe did not appeal that ruling.

On April 28, 1999, the district court granted summary judgment to DOD, concluding that the 1207 program satisfied strict scrutiny. The court held that the federal government had a compelling interest in remedying the effects of racial discrimination on federal contracting, and that the 1207 program was a narrowly tailored means of achieving that goal (X2).

4. On April 30, 1999, Rothe filed a notice of appeal to the Fifth Circuit. That same day, Rothe filed a motion with the Fifth Circuit for a stay pending appeal, seeking to enjoin DOD "from implementing, performing, or commencing any work under Contract No. F34608-98-D-0021 [the contract awarded to ICT]" (X6 at 19). Fifth Circuit Judge Jerry Smith entered a single-judge order the same day stating, in its entirety: "IT IS ORDERED that the motion of appellant for stay pending appeal and for emergency expedited consideration of motion for stay pending appeal is GRANTED" (X7). DOD interpreted the order as enjoining the implementation of the contract that DOD awarded to ICT using the price-evaluation adjustment. On May 7, 1999, DOD moved for reconsideration of the stay, which was denied without explanation (X8).

5. Immediately upon receiving the stay order on April 30, 1999, DOD suspended performance of ICT's contract, and ICT has not performed work under the contract since that date (X3 ¶¶ 7-8). Since then, most of the work that otherwise would have been covered by ICT's contract has been divided between Rothe and TennMark, the incumbents on the earlier contracts (X3 ¶ 8). DOD has extended Rothe's contract (which was scheduled to expire April 30, 1999)(4) to allow Rothe to continue working on the NCC/SO at Columbus AFB until the Fifth Circuit stay is lifted or DOD can award a new consolidated contract after a resolicitation (X3 ¶¶ 7-8). Because the stay also required ICT to cease work on the BTS portions of its contract (work that TennMark had previously performed), DOD was forced to award an emergency contract to TennMark to cover BTS work at the base (X3 ¶ 7).

DOD has extended ICT's contract through September 2000, but because of the stay, ICT has not performed any work under that contract extension. DOD extended ICT's contract to preserve the government's options to complete the contract implementation in the event the stay is lifted (X3 ¶ 8).

The basis of DOD's decision to issue the solicitation that led to the award of the ICT contract -- that a consolidated contract is necessary to improve contractor accountability and quality of services at the base -- remains true (X3 ¶ 8a). Because DOD cannot afford to forego these benefits indefinitely, it has issued a new solicitation for a consolidated contract covering work that otherwise would have been performed under ICT's contract (X3 ¶ 8a). Because the price-evaluation program was suspended at the time that solicitation was issued, the 10% price-evaluation adjustment whose constitutionality Rothe challenges in this appeal would not be applied in the competition for the new contract (X3 ¶ 8a). If the stay pending appeal remains in effect, DOD has tentative plans to award a contract pursuant to the new solicitation as early as January 31, 2000 (X3 ¶ 10). Performance of that new contract, however, could begin no sooner than April 1, 2000 (X3 ¶ 10).

If the stay is lifted, however, DOD plans to cancel the new solicitation and implement its contract with ICT immediately. DOD estimates that ICT could begin performing work under that contract within two weeks after the stay is lifted (X3 ¶ 11).

ARGUMENT

I. THIS COURT SHOULD CLARIFY THAT THE FIFTH CIRCUIT STAY IS NO LONGER IN EFFECT

The Fifth Circuit properly held that it had no jurisdiction over Rothe's appeal. Rothe, 194 F.3d at 626. Under 28 U.S.C. 1295(a)(2), this Court has exclusive jurisdiction to hear an appeal from the final judgment in this case because the district court's jurisdiction was based, in part, on the Little Tucker Act, 28 U.S.C. 1346(a)(2). See Rothe, 194 F.3d at 626.

"'Without jurisdiction [a] court cannot proceed at all in any cause.'" Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 94 (1998). Consequently, because the Fifth Circuit had no jurisdiction over Rothe's appeal, it necessarily lacked authority to enter a stay pending appeal. See In re BBC Int'l, Ltd., 99 F.3d 811, 813 (7th Cir. 1996) (transferring case to Federal Circuit after concluding that Seventh Circuit lacked jurisdiction over petition for writ of mandamus; denying motion for stay because "[a]s we lack authority to issue mandamus, we lack authority to issue stays"). Having concluded that it lacked jurisdiction, the Fifth Circuit should have vacated the stay when it transferred the case. That is what this Court did in Ben-Shalom v. Secretary of the Army, 807 F.2d 982, 988 (Fed. Cir. 1986), where it initially issued a stay pending appeal, but later held that it lacked jurisdiction and that the case should be transferred to another circuit. In its transfer order, this Court properly recognized that the stay would "be lifted and no longer effective when the transfer is completed." Ibid. In accordance with Ben-Shalom, this Court should clarify that the Fifth Circuit stay became ineffective upon the transfer of the appeal.

II. IF THE STAY IS IN EFFECT, IT SHOULD BE VACATED

A court should weigh four factors in determining whether a stay is appropriate under Fed. R. App. P. 8(a):

(1) whether the stay applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies.

Hilton v. Braunskill, 481 U.S. 770, 776 (1987). The party advocating the stay bears the burden of proof on these issues. Texas v. United States Forest Serv., 805 F.2d 524, 525 (5th Cir. 1986).(5) That burden is particularly heavy where, as here, the stay interferes with military procurement. See Hayes Int'l Corp. v. McLucas, 509 F.2d 247, 258 (5th Cir.), cert. denied, 423 U.S. 864 (1975). Rothe has failed to prove that a stay is justified.

A. The Balance Of Hardships Weighs Heavily Against A Stay

The stay is causing substantial harm to DOD, ICT, and the public interest that outweighs any injury Rothe would suffer were the stay lifted.

1. Harm To DOD

The stay is causing the government substantial harm by significantly delaying DOD's efforts to consolidate the BTS and NCC/SO work at Columbus AFB into a single contract. A key purpose of the consolidation is to improve contractor accountability (X3 ¶ 3). Splitting the functions between different contractors -- the situation that existed before consolidation and still exists because of the stay -- delays repairs and creates disputes about responsibility for providing services (X3 ¶ 3). The stay also has postponed DOD's efforts to obtain other important services and benefits. Unlike Rothe's contract, the ICT contract that was stayed covers new technological requirements -- such as management of software licensing agreements and the operation of an encryption system -- that would provide heightened security for the Columbus AFB communications system. The Columbus system carries classified military information and thus security is a critical factor (X3 ¶ 3). Moreover, Rothe's contract does not impose firm deadlines for responding to outages in the communication networks, a safeguard included in the ICT contract (X3 ¶ 3).

Continuation of the stay will further delay DOD's ability to obtain the improved benefits and services of a consolidated contract. Although DOD plans to award a new consolidated contract pursuant to a resolicitation if the stay pending appeal remains in place, performance of that new contract could begin no sooner than April 1, 2000 (X3 ¶ 10). If the stay were lifted, however, ICT could begin performing its consolidated contract within about two weeks of the Court's order (X3 ¶ 11).

2. Harm To ICT

The stay has had a severe adverse effect on ICT by disrupting its ongoing operations at Columbus AFB (X4). Whereas "[t]he purpose of a stay is simply to preserve the status quo," Flynn v. Sandahl, 58 F.3d 283, 287 (7th Cir. 1995), the stay issued on April 30, 1999, upset the status quo by ousting ICT as the incumbent prime contractor four months after its contract took effect and four months after ICT had assumed responsibility for the BTS at Columbus AFB. Rothe had never performed any BTS work during any stage of this litigation. In addition, at that point, ICT had incurred significant expenses in preparing to perform the NCC/SO work starting May 1, 1999 (X4 ¶ 5).

The stay continues to inflict substantial and increasing injury on ICT (X4). The loss of revenues and profits imposes a significant hardship on ICT (X4 ¶¶ 6-8). For more than eight months, the stay has deprived ICT of revenue and profit that it would have received as the prime contractor (X4 ¶¶ 6-8). This harm is irreparable; ICT cannot recoup any lost profits from the government for the work enjoined by the stay.(6) Rothe has failed to offer any persuasive justification why this financial burden should fall entirely on ICT.

3. Harm To The Public Interest

The stay is not in the public interest. The public undoubtedly has a strong interest in the efficient and secure operations of Columbus AFB, a key site for pilot training. The stay interferes with this important interest by delaying DOD's efforts to improve the quality of communications and computer services at the base.

The stay also frustrates the public interest by impeding Congress's goal of remedying the effects of racial discrimination on government contracting. Leaving the stay in place could discourage SDBs from competing in the future for contracts that are awarded under congressionally-authorized remedial programs. SDBs may be reluctant to invest the time and effort necessary to compete for such contracts if there is a significant risk that after winning a contract, the win can be upset when an unsuccessful bidder obtains a stay that will deprive the winning firm of its contract for months (or even years) as the litigation winds its way through the courts.

4. Effect On Rothe

The stay has effectively given Rothe a benefit that a court could not award even if Rothe were to prevail in this litigation. Because of the stay, DOD has extended Rothe's contract, which was scheduled to expire April 30, 1999, to allow it to perform the NCC/SO work until the stay is lifted or a new consolidated contract is awarded pursuant to a resolicitation. Thus, for the past eight months, Rothe has enjoyed the benefits of what is, in effect, a sole-source contract. Even if Rothe ultimately were to prevail in this litigation, it would not be entitled to a judicial award of such a contract; at most, Rothe would be entitled to bid preparation costs and (if DOD chose to go forward with the procurement) an opportunity to compete for the contract in a resolicitation without the 10% price-evaluation adjustment. See CACI, Inc.-Federal v. United States, 719 F.2d 1567, 1575 (Fed. Cir. 1983); Delta Data Sys. Corp. v. Webster, 755 F.2d 938, 940 (D.C. Cir. 1985); Delta Data Sys. Corp. v. Webster, 744 F.2d 197, 204 (D.C. Cir. 1984) (per Scalia, J.).

The district court could not have ordered DOD to award Rothe the disputed contract because Rothe cannot show that it would have won the contract "but for" the use of the price-evaluation adjustment. See Delta Data Sys., 744 F.2d at 204; see also CACI, Inc.-Federal, 719 F.2d at 1575 (noting general rule that "a disappointed bidder has 'no right . . . to have the contract awarded to it in the event the . . . court finds illegality in the award of the contract'"), quoting Scanwell Labs., Inc. v. Shaffer, 424 F.2d 859, 864 (D.C. Cir. 1970). The fact that Rothe was the lower offeror in the original competition held with a 10% price-evaluation adjustment does not establish that it would have won a competition held without that adjustment. Had DOD conducted the original competition without the price-evaluation adjustment, additional or different firms may well have entered the competition and the competitors may have submitted different offers (D51, Ex. I-M at 67-68, 71-73; D58, Ex. III-J at 37).

B. Rothe Failed To Prove A Likelihood Of Success On The Merits

The parties have filed lengthy merits briefs with the Fifth Circuit that will be transferred, along with the appeal, to this Court. For the convenience of the Court, DOD is attaching a copy of its Fifth Circuit brief to this motion (X5). That brief shows that Rothe has little likelihood of success on the merits. We will summarize our arguments here.

The district court correctly held that the congressionally-enacted 1207 program satisfies strict scrutiny under Adarand Constructors, Inc. v. Peña, 515 U.S. 200 (1995). The court properly recognized (X2 at 8) that Congress enjoys greater deference when authorizing race-based remedies than do state or local governments (X5 at 10-15). See City of Richmond v. J.A. Croson Co., 488 U.S. 469, 504 (1989); id. at 488-492 (plurality); id. at 521-523 (Scalia, J., concurring in judgment); Fullilove v. Klutznick, 448 U.S. 448, 472-478, 483 (1980) (plurality); id. at 499-500 & n.2, 508-510, 515-516 & n.14 (Powell, J., concurring). While a state or local government has only "the authority to eradicate the effects of private discrimination within its own legislative jurisdiction," Congress has the power to "identify and redress the effects of society-wide discrimination" through legislation with nationwide application. Croson, 488 U.S. at 490-492 (plurality). Congress need not make findings of discrimination with the same degree of specificity that federal courts require of states or localities. See id. at 489, 504; Fullilove, 448 U.S. at 478 (plurality); id. at 502-503, 515-516 n.14 (Powell, J., concurring). Thus, although federal race-based programs are subject to strict scrutiny, the judicial inquiry into compelling interest requires deference to Congress's factfindings and to its determinations that race-conscious remedies are necessary.

1. Compelling Interest

As the district court found, the federal government clearly has a compelling interest in adopting and implementing the 1207 program (X5 at 15-32). Indeed, every federal court that has reviewed the constitutionality of federal race-conscious contracting programs following the Supreme Court's Adarand decision has held that the evidence before Congress established the compelling interest necessary to support the enactment of affirmative action (X5 at 16).

The voluminous record cited in this case shows that Congress had a strong basis in evidence for concluding that remedial efforts were necessary to combat the continuing effects racial discrimination has on federal contracting opportunities for minorities. DOD's merits brief provides a detailed survey of congressional hearings, debates, and reports -- only a small fraction of which the district court cited in its opinion -- showing that the effects of discrimination impede the ability of minority-owned firms to compete for DOD and other government contracts and that remedial action is necessary to overcome these effects (X5 at 17-22). DOD also introduced a "benchmark study" prepared by the Department of Commerce, which contains a sophisticated statistical analysis showing that ready, willing, and able SDBs were significantly underutilized by the federal government in contracts awarded in the industry relevant to this case (X5 at 22-24). Other evidence produced by DOD -- including various studies of discrimination conducted by state and local governments -- confirms that, absent affirmative remedial efforts, government contracting procedures would perpetuate the continuing effects of racial discrimination (X5 at 25-26).

Moreover, as the district court found (X2 at 12-13), Congress had a strong basis in evidence to conclude that businesses owned by Asian-Pacific Americans (ICT's owners are of Korean ancestry) had been victims of discrimination affecting federal contracting. DOD produced voluminous documentation of such discrimination (X5 at 28-30), and Congress expressly found that Asian-Pacific Americans had suffered discrimination affecting their ability to compete in the free enterprise system. 15 U.S.C. 631(f)(1), 637(d)(3)(C). In combination, the evidence in this record is more than sufficient to establish that Congress and DOD had a compelling interest in implementing the 1207 program.

2. Narrow Tailoring

The district court also properly held, after carefully applying the factors set forth in United States v. Paradise, 480 U.S. 149 (1987), that the 1207 program is narrowly tailored.

First, the court correctly found (X2 at 11-14, 19-22) that the effects of discrimination continue to impede contracting opportunities for minorities, even though the federal government has tried numerous race-neutral alternatives over the years to try to overcome the effects of such discrimination. Congress did not adopt the 1207 program until it determined that myriad other means of combating racial discrimination in government procurement and in the private sector had been largely ineffective (X5 at 33-36). Since enactment of the 1207 program, DOD and other government agencies have continued to engage in significant race-neutral efforts, including outreach, training, and technical assistance, to help small firms, including SDBs, compete for defense contracts (X5 at 34-35).

Second, the 1207 program has several flexible features that avoid a rigid reliance on race (X5 at 36-42). The program does not benefit only minorities. Individual non-minority firms can qualify as SDBs and participate in the program by demonstrating that the owners have suffered social and economic disadvantage. The program is thus more narrowly tailored than the program the Supreme Court upheld as constitutional in Fullilove, which involved a 10% set-aside only for minority-owned businesses. 448 U.S. at 485-486 (plurality). Moreover, the price-evaluation adjustment does not set contracts aside exclusively for SDBs. Rather, qualified businesses, regardless of the race or disadvantaged status of their owners, are eligible to compete for the contract. The 10% adjustment was simply one of several factors affecting the contract award in this case; it did not guarantee that an SDB would win the contract. The 1207 program also contains important safeguards against over-inclusion. Minorities cannot benefit from the statutory presumption of disadvantaged status if their circumstances indicate they are not socially or economically disadvantaged. Moreover, no business, regardless of the race of its owner, can participate in the program if the owner exceeds the personal wealth limit or if the firm exceeds the size restrictions of the Small Business Act. 13 C.F.R. 124.106(b)(2) (1998); 15 U.S.C. 632(a), 637(d).

Another flexible feature of the 1207 program is that the price-evaluation credit (even if its use is reinstated) would be available only in those industries in which minorities suffer competitive disadvantages (X5 at 41). The adjustment would be applied only in those industries in which the Department of Commerce determines SDBs are underutilized in relation to their capacity in the industry. See 48 C.F.R. 19.201(b); 63 Fed. Reg. 35,714. The Department of Commerce's benchmark study reveals a substantial under-representation of SDBs in the industry at issue in this case, thus showing that the use of price credits here were narrowly tailored (X5 at 41).

Third, the district court properly found that the 1207 program and the price-evaluation adjustment are limited in duration (X5 at 42-43). The 1207 program is authorized only through fiscal year 2003, Pub. L. No. 106-65, § 808, 113 Stat. 512 (1999), and expires automatically unless Congress determines that it is still needed (a determination Congress made just four months ago). Moreover, Congress requires suspension of the price-evaluation adjustment for one year after any year in which DOD awards more than 5% of its contracts to SDBs. 10 U.S.C. 2323(e)(3)(B)(ii). As noted earlier, DOD has suspended use of price-evaluation adjustments until February 24, 2000, and, if it determines that the 5% goal was achieved last year, the suspension will continue. The 1207 program also is subject to regular congressional oversight to determine whether it is still necessary to eliminate the effects of discrimination. DOD must annually report to Congress concerning attempts to meet the program's 5% goal and must analyze the impact the goal has on non-SDBs. 10 U.S.C. 2323(i)(3)(B). Congress repeatedly has held hearings on the operation of the 1207 program, and Congress and the DOD have amended the program several times to limit its impact on non-SDBs (X5 at 42).

Fourth, the district court properly concluded (X2 at 24-25) that the 5% goal is justified in relation to the percentage of minorities able to bid on federal contracts. That goal in fact is substantially below the pool of ready, willing, and able minority contractors in the relevant industry, and is significantly less than the percentage of minority businesses in the United States (X5 at 43).

Finally, the district court correctly found (X2 at 27) that the 1207 program does not unduly burden third parties such as Rothe. The price-evaluation adjustment has had only a minimal effect on non-SDBs. In each of the past three fiscal years for which data are available, SDBs received no more than one-fifth of 1% of the dollar value of DOD's prime contracts as a result of the adjustment (X5 at 44). In the industry relevant to this case, the price-evaluation adjustment was determinative in less than one-tenth of 1% of the total contract awards, and the Department of Commerce's benchmark study shows that non-SDBs in the relevant industry are significantly overrepresented in relation to their availability, indicating their overall success in securing federal contracts (X5 at 44). The 1207 program also contains a number of safeguards to protect non-SDBs. Pursuant to congressional mandate, DOD must reduce the level of price-evaluation adjustments if it is demonstrated that non-SDBs are being denied "a reasonable opportunity to compete for contracts" in particular industries. 10 U.S.C. 2323(e)(3). Moreover, the adjustments do not apply to certain types of procurements, including small-business set-asides -- the type of contracts on which Rothe usually bids (X5 at 44).

Rothe has not suffered undue harm as a result of this program. Aside from the procurement at issue here, Rothe has not lost a single contract as a result of the 1207 program, even though federal contracts have made up 95% of Rothe's business over the past 30 years (X5 at 44-45).

III. THE COURT SHOULD EXPEDITE ITS CONSIDERATION OF THIS MOTION

Expedited consideration of this motion is warranted for two reasons. First, as explained above, the stay is causing increasing harm to DOD, ICT, and the public interest that far outweighs any countervailing injury to Rothe. Second, DOD has issued a resolicitation for a new contract and tentatively plans to award that contract as early as January 31, 2000, if the stay is not lifted (X3 ¶¶ 9-10).

CONSULTATION WITH OPPOSING COUNSEL

Pursuant to Fed. Cir. R. 27(a)(5), DOD certifies that it has consulted David F. Barton, Rothe's counsel, who indicated he opposes this motion and plans to file a response.

CONCLUSION

This Court should expedite its consideration of this motion and should clarify that the stay pending appeal issued by the Fifth Circuit is no longer in effect. Alternatively, this Court should vacate the stay.

Respectfully submitted,

BILL LANN LEE
Acting Assistant Attorney General

MARK L. GROSS
GREGORY B. FRIEL
Attorneys
Department of Justice
P.O. Box 66078
Washington, D.C. 20035-6078
(202) 514-3876

CERTIFICATE OF SERVICE

I hereby certify that on January 14, 2000, I served a copy of the foregoing APPELLEES' MOTION FOR CLARIFICATION OR, IN THE ALTERNATIVE, TO LIFT THE STAY PENDING APPEAL, AND REQUEST FOR EXPEDITED RULING ON THE MOTION by Federal Express, next business day delivery, on the following counsel of record:

David F. Barton, Esq.
The Gardner Law Firm
745 East Mulberry Avenue
Suite 100
San Antonio, Texas 78212-3149
Telephone: (210) 733-8191

On the same date, I also faxed a courtesy copy of the same motion (without attachments) to Mr. Barton.

I further certify that, on the same date, I served a copy of the same motion by first-class mail, postage prepaid, on each of the following counsel for amici curiae:

John G. Roberts, Jr., Esq.
Hogan & Hartson L.L.P.
555 Thirteenth Street, N.W.
Washington, D.C. 20004
Telephone: (202) 637-5810

Deborah J. Lafetra, Esq.
Pacific Legal Foundation
10360 Old Placerville Road
Suite 100
Sacramento, California 95827
Telephone: (916) 362-2833

GREGORY B. FRIEL
Attorney

1. "X__" refers to the number of the exhibit attached to this motion.

2. This motion cites the versions of 13 C.F.R. Pt. 124 and 48 C.F.R. Pt. 219 in effect at the time of the contract award.

3. "D___" refers to the district court docket entry number.

4. Rothe's contract was originally scheduled to expire on March 31, 1999, but was extended one month during the district court litigation.

5. This Court applies the law of the regional circuit in which the case arose. See Intergraph Corp. v. Intel Corp., 195 F.3d 1346, 1351 (Fed. Cir. 1999).

6. See Delta Data Sys. Corp. v. Webster, 755 F.2d 938, 940 (D.C. Cir. 1985) (bidder for government contract "has no legitimate claim to profit from the unperformed contract itself, even where it has actually received the contract award").