[00:00:48] Speaker 02:
Okay, our next case this morning is number 191692, Cooper Ports America LLC versus Secretary of Defense, Mr. Grossman.

[00:01:00] Speaker 01:
Good morning, Andrew Grossman for Appellant, Cooper Ports America or CPA.

[00:01:05] Speaker 01:
May it please the court?

[00:01:07] Speaker 01:
When the government commits itself to provide preliminary notice before it exercises an option, the contractor has the right to rely upon that commitment.

[00:01:15] Speaker 01:
The contractor is entitled to a preliminary notice that is timely, that is unambiguous, that actually identifies the option at issue so that the contractor can act on that notice.

[00:01:25] Speaker 01:
In this case, the gov- Has to identify the option at issue.

[00:01:27] Speaker 02:
You're reading the four provision dealing with options as applying to preliminary notices.

[00:01:33] Speaker 01:
I think that identifying the option really fits into two of our arguments.

[00:01:38] Speaker 01:
Yes, it does certainly apply to the FAR provision that applies to notices.

[00:01:43] Speaker 01:
But I think it also goes to the ambiguity point.

[00:01:45] Speaker 01:
I think the government doesn't dispute it.

[00:01:47] Speaker 02:
Well, why?

[00:01:47] Speaker 02:
I mean, the FAR doesn't deal with preliminary notice at all, right?

[00:01:51] Speaker 01:
The FAR provision at issue speaks.

[00:01:53] Speaker 02:
No, no, no.

[00:01:53] Speaker 02:
Answer the question.

[00:01:54] Speaker 01:
The FAR doesn't deal with preliminary notice.

[00:01:57] Speaker 01:
Your Honor, it does not use that language.

[00:01:59] Speaker 01:
But I think in this case, it would apply to the preliminary notice, because for the government to provide notice of the exercise of an option, the contract here breaks that into two steps.

[00:02:08] Speaker 01:
The government has to provide the preliminary notice and then the final notice.

[00:02:11] Speaker 01:
If it provides one or the other, then the government has not provided the notice of the exercise of the option.

[00:02:16] Speaker 01:
In other words, it's not effective.

[00:02:18] Speaker 02:
In terms of whether it's an obligation to refer to the option clause, you're relying on the FAR provision.

[00:02:23] Speaker 02:
I guess it's 17207G, right?

[00:02:27] Speaker 02:
Yes, for that particular argument.

[00:02:29] Speaker 02:
But on the face of it, that provision doesn't seem to apply to this preliminary notice issue, which isn't covered by the FAR at all.

[00:02:38] Speaker 01:
Well, rather as I said,

[00:02:39] Speaker 01:
I think that there are two ways of looking at it.

[00:02:41] Speaker 01:
If you look at the text of it, the text says, notice of the exercise of the option.

[00:02:46] Speaker 01:
This contract splits that required notice into two pieces.

[00:02:50] Speaker 01:
And the regulation doesn't provide any basis to distinguish between those two pieces.

[00:02:54] Speaker 01:
The regulation doesn't say, for example, final notice.

[00:02:57] Speaker 01:
It just says notice of the exercise.

[00:02:59] Speaker 01:
And here, that's two pieces.

[00:03:00] Speaker 01:
They're both required.

[00:03:01] Speaker 01:
But if there are any doubt on that, I think you can look at the purpose of the regulation.

[00:03:05] Speaker 01:
which is to provide the contractor actual knowledge of what it is that the government is seeking to do so that the contractor can act appropriately on that.

[00:03:14] Speaker 01:
In other words, can rely on it and understand what it is the government is talking about.

[00:03:18] Speaker 01:
And so I don't see, with respect to the regulatory purpose, there's any reason either to distinguish between a final notice and a preliminary notice.

[00:03:26] Speaker 04:
Your ambiguity argument is separate and apart from the 17207G argument, right?

[00:03:31] Speaker 01:
That is correct, Your Honor.

[00:03:33] Speaker 01:
And I don't understand the government to dispute that if it is ambiguous as to which option a preliminary notice addresses, then that option is therefore ambiguous such that it is not legally effective as notice.

[00:03:47] Speaker 01:
What's ambiguous about?

[00:03:49] Speaker 01:
Pardon?

[00:03:49] Speaker 01:
What's ambiguous?

[00:03:51] Speaker 01:
about the notice here?

[00:03:52] Speaker 01:
I think there are two central ambiguities, and really they're the only, they concern the two elements of what a preliminary notice has to do.

[00:04:00] Speaker 01:
The first is simply, was the government providing preliminary notice at all?

[00:04:04] Speaker 01:
Is that what it was doing?

[00:04:05] Speaker 01:
Is that how this communication should be understood?

[00:04:08] Speaker 01:
And then the second is, fine, let's say it was perhaps providing some kind of notice, does it identify the option for which it is providing notice?

[00:04:17] Speaker 01:
And I think on both of those, you have really just a central ambiguity here.

[00:04:20] Speaker 01:
You have what was an informal communication.

[00:04:23] Speaker 02:
Why would you provide notice with respect to the other option when the contract didn't require notice, preliminary notice?

[00:04:30] Speaker 01:
Well, again, I think that that assumes, in this instance, that the email at issue was preliminary notice.

[00:04:35] Speaker 01:
The so-called six-month option here does actually require notice, requires notice for the government to exercise it.

[00:04:43] Speaker 01:
And the email here, if the email said, this is preliminary notice, then sure, I guess we would all know that it's not referring to the six-month option.

[00:04:50] Speaker 01:
But the email actually doesn't say that.

[00:04:51] Speaker 01:
It is a point of dispute between the parties as to whether the email can be understood as providing notice at all.

[00:04:58] Speaker 01:
And I would note that the contracting officers.

[00:05:01] Speaker 01:
I'm not understanding the argument.

[00:05:03] Speaker 01:
The notice on its face talks about a preliminary notice, right?

[00:05:07] Speaker 01:
No, it does not, Your Honor.

[00:05:09] Speaker 01:
It does not use the word notice.

[00:05:10] Speaker 01:
It does not say preliminary notice.

[00:05:12] Speaker 01:
It does not say notify.

[00:05:13] Speaker 01:
It doesn't use any of the language that one might expect to see.

[00:05:17] Speaker 01:
The email at issue is available on page 117 of the appendix.

[00:05:24] Speaker 01:
And it certainly states that the government intends to exercise options, but it continues and says at awarded rates on contracts.

[00:05:31] Speaker 01:
And what the dispute was, I think the context in which this email arose is very important.

[00:05:36] Speaker 04:
I just want to, I guess, clarify things.

[00:05:40] Speaker 04:
Put aside your contention that this could not constitute a preliminary notice.

[00:05:48] Speaker 04:
There is the separate question, which is what I've been focusing on.

[00:05:52] Speaker 04:
It seems to me that on its face, this is an email that does not make clear whether it's paragraph eight or paragraph nine of the 36 contract that is being referred to.

[00:06:04] Speaker 04:
And as I take it, the government's, maybe only, but anyway, principal response to that is how could it possibly be the paragraph eight?

[00:06:15] Speaker 04:
You don't have to give preliminary notice.

[00:06:17] Speaker 04:
And it doesn't seem to me that that is

[00:06:19] Speaker 04:
a sufficient response in the context of a completely informal communication which was not even intended to be a preliminary notice, though as the board said, it may in fact have been one.

[00:06:32] Speaker 04:
But if it was in fact a preliminary notice, even though it wasn't intended to be, that still leaves the question, what was the writer, Mr. Seaman, referring to when he said, we intend to follow the contract and to, I guess, exercise options without saying which ones?

[00:06:53] Speaker 04:
And the informal context does tell you something about, or doesn't tell you, this is, I thought,

[00:07:00] Speaker 04:
I want you to concentrate on this point.

[00:07:03] Speaker 04:
What does that tell you about the question?

[00:07:07] Speaker 04:
Could anybody really think it was referring to paragraph eight?

[00:07:12] Speaker 01:
So, Your Honor, I think, could anybody think that it was referring to the six-month option, Your Honor?

[00:07:17] Speaker 01:
Yeah, there's eight and nine, right?

[00:07:19] Speaker 01:
So the answer is yes.

[00:07:20] Speaker 01:
Not only could someone think that, the two government employees who are responsible for administering this contract both testified that that was a reasonable interpretation

[00:07:29] Speaker 01:
of the email.

[00:07:30] Speaker 01:
Mr. Seaman who wrote the email and was the contracting officer on the contract testified that it could refer to some combination of the year-long options or it could refer to the six-month option or maybe it refers to all of them.

[00:07:43] Speaker 02:
He indicated... But that's not what we're dealing with.

[00:07:48] Speaker 02:
We're trying to deal with the

[00:07:50] Speaker 02:
interpretation of the notice on its face without regard to what, you know, some testimony about the subjective interpretation might have been by the contracting officer.

[00:08:06] Speaker 02:
On its face, how could this refer to the six-month notice?

[00:08:10] Speaker 02:
Because the six-month notice doesn't seem to require a preliminary notice.

[00:08:16] Speaker 01:
Well, so I'll bookend the issue of extrinsic evidence.

[00:08:21] Speaker 01:
But I will note that we don't think that an informal email sent by the government to a contractor is a contract in and of itself.

[00:08:29] Speaker 01:
It's not produced in the way that a contract is.

[00:08:31] Speaker 01:
And the government hasn't gone through the scrutiny of the government to be a contract.

[00:08:36] Speaker 01:
But putting that aside.

[00:08:37] Speaker 02:
The contemplation of the contract, as we discussed earlier, this is not something that the FAR deals with.

[00:08:44] Speaker 02:
this seems to be particular to this contract.

[00:08:47] Speaker 02:
And it says, give preliminary notice, which it would seem on the face of it as though that could be informal.

[00:08:56] Speaker 01:
Isn't that correct?

[00:08:58] Speaker 01:
Your Honor, to be clear, we're not arguing the government has to use a particular form.

[00:09:02] Speaker 01:
We're not arguing it has to use particular language.

[00:09:05] Speaker 01:
But it's common ground between the parties that what the government does have to do is it has to be unambiguous.

[00:09:11] Speaker 01:
And in this instance, there was at least two ambiguities on the face of this email if you're going to take it as potentially being some kind of notice by the government.

[00:09:21] Speaker 01:
But I think it's important to understand that when the government is providing notice, what it's providing is notice of its intent.

[00:09:26] Speaker 01:
In other words, it has to formalize an intent.

[00:09:28] Speaker 01:
The government has processes that it goes through to determine whether it's going to exercise options, whether it's going to reach out to the contractor.

[00:09:37] Speaker 01:
This isn't something that is just done in an informal fashion on the government's end.

[00:09:42] Speaker 01:
And so for the government to actually do that, for the government to proceed and to send the notice, the government has to have that intent and then to communicate that intent to the contractor.

[00:09:52] Speaker 01:
And I think there's an ambiguity on that.

[00:09:55] Speaker 01:
That is literally what, in other words, it has to have determined that it intends, not that it's committed, but that it intends to exercise the option at issue.

[00:10:03] Speaker 02:
But it doesn't have to have, the contracting officer doesn't have to have the subjective intent to provide notice pursuant to the contractor as long as he does it, right?

[00:10:13] Speaker 04:
Correct, Your Honor.

[00:10:14] Speaker 04:
But you're saying he has to have the intent to exercise the option.

[00:10:18] Speaker 04:
The government has to have the intent.

[00:10:19] Speaker 04:
But then once the CO has that intent,

[00:10:23] Speaker 04:
than a completely accidental communication of that intent would, and I think this is what the board said, communicate.

[00:10:32] Speaker 04:
Right.

[00:10:33] Speaker 04:
As long as it's unambiguous in those other five adjectives.

[00:10:35] Speaker 01:
That is correct, Your Honor.

[00:10:37] Speaker 01:
And if there was some confusion about the intent, we don't think that would make a difference.

[00:10:42] Speaker 01:
I bring up intent for a different reason, which is that the government actually has to arrive at a position itself.

[00:10:49] Speaker 01:
And then that's what causes it to send the notice.

[00:10:51] Speaker 01:
So you wouldn't expect to see this kind of thing in an informal email.

[00:10:54] Speaker 01:
You wouldn't expect to see it.

[00:10:55] Speaker 01:
without some type of language that indicates that the government is actually intending to exercise a particular option.

[00:11:02] Speaker 01:
In other words, as opposed to just options in general in the future.

[00:11:05] Speaker 01:
And you certainly wouldn't expect to see it in an email that is part of a conversation on a different topic where that email is responsive to the email that preceded it and indeed quotes it in its entirety.

[00:11:17] Speaker 01:
This was months before the preliminary notice was due.

[00:11:19] Speaker 01:
Nobody was thinking about preliminary notice.

[00:11:22] Speaker 01:
And CPA had been for several weeks.

[00:11:24] Speaker 01:
They apparently were thinking about exercising the option, right?

[00:11:30] Speaker 01:
They were not thinking, Your Honor, about providing preliminary notice.

[00:11:33] Speaker 01:
And indeed, Mr. Seaman, the contracting officer, testified that when he sent the late, the untimely formal notice letter, that his view was that he had not sent preliminary notice earlier.

[00:11:44] Speaker 01:
So no, he was not thinking about sending any kind of notice to CPA with respect to the exercise of an option at that point.

[00:11:51] Speaker 03:
As crisply as you can, I'm really focused in on this paragraph eight, paragraph nine potential ambiguity.

[00:12:00] Speaker 03:
I believe Judge Toronto raised it at the very beginning.

[00:12:04] Speaker 03:
Can I just hear your clearest explanation why it's at least somewhat reasonable that Mr. Seaman here could be invoking or referencing the paragraph eight option?

[00:12:20] Speaker 03:
and why it would be unreasonable to think that Mr. Seaman is referring only to the paragraph nine option.

[00:12:28] Speaker 01:
All right.

[00:12:29] Speaker 01:
So the preceding email was requesting to renegotiate rates.

[00:12:33] Speaker 01:
Mr. Seaman responded and he wrote, the government intends to exercise options at awarded rates on contracts.

[00:12:40] Speaker 01:
It didn't say what options.

[00:12:41] Speaker 01:
The focus of the sentence, the focus of what he was saying was the at awarded rates.

[00:12:45] Speaker 01:
He was not distinguishing one way or the other between either of the different types of options that were present in this contract.

[00:12:51] Speaker 01:
And I will note, as I said, that both Mr. Seaman as well as the contract specialist responsible for this contract.

[00:12:58] Speaker 03:
I'm focused just on the email itself.

[00:13:02] Speaker 03:
I mean, assuming that that's what we have to decide, whether it's ambiguous, I don't know if looking back into the subjective intentions of different people or subjective views necessarily answers that question.

[00:13:17] Speaker 01:
Well, I mean, I think that, you know.

[00:13:19] Speaker 03:
So just stick to the email.

[00:13:20] Speaker 03:
Yes, your honor.

[00:13:22] Speaker 03:
So are you done with your answer?

[00:13:25] Speaker 01:
Sticking to the email, the answer is the focus was on the rates.

[00:13:28] Speaker 01:
It spoke generally about options.

[00:13:30] Speaker 01:
It made no attempt to distinguish between the different types of options, as everyone who saw this, I think, recognized and testified.

[00:13:39] Speaker 04:
So can I continue on this point a little bit?

[00:13:43] Speaker 04:
And this is what I've been focusing on.

[00:13:47] Speaker 04:
It does seem to me that the point Judge Dyke mentioned, and I think is, to my mind, the only thing that the government says about it.

[00:13:55] Speaker 04:
It couldn't possibly have been paragraph 8, because no intent needed to be given as to paragraph 8.

[00:14:02] Speaker 04:
And what seems odd to me about that is that for that to have fours, it seems to me one would have to assume that in a completely informal email communication not intended

[00:14:18] Speaker 04:
to be a formal notice that the subject matter of the assertion of intent would be limited to only that which is contractually required.

[00:14:27] Speaker 04:
And I don't see a basis for that in an informal communication.

[00:14:32] Speaker 04:
What I just said is an idea that, to my mind, I want to hear what the government has to say, would be quite helpful to your point of view.

[00:14:41] Speaker 04:
What do you think about it?

[00:14:42] Speaker 01:
Your honor, we agree with that.

[00:14:43] Speaker 01:
We argued that as much in our reply brief in response to the government's argumentation on the distinction between these two different options.

[00:14:50] Speaker 01:
Basically, the government's argument on this point simply assumes the result.

[00:14:54] Speaker 01:
I mean, it just assumes that you would have, as your honor put it, this level of particularity and formality that there's no reason to expect would have appeared in this type of informal communication on a different topic that was addressing options generally

[00:15:08] Speaker 01:
as opposed to any particular option at all.

[00:15:11] Speaker 02:
Well, what about the prior emails that preceded this January 31st email?

[00:15:18] Speaker 02:
I'm looking particularly at the January 24th email, which is from the contracting officers, is the final schedule of rates did not contain such and such and such and such.

[00:15:33] Speaker 02:
It contained the base option periods and summary

[00:15:38] Speaker 02:
tabs as required by the call.

[00:15:40] Speaker 02:
What option periods does that schedule refer to?

[00:15:45] Speaker 01:
Oh, I believe that refers to the four, I guess it would be at that point, it would be the three, the first option already been exercised, the three option periods, the year-long option periods.

[00:15:56] Speaker 01:
Does that shed some light maybe on what's meant by the January 31st event?

[00:16:00] Speaker 01:
I think it does, Your Honor, but I think perhaps not in exactly the way that Your Honor may be anticipating, which is that

[00:16:09] Speaker 01:
CPA was going back and forth with the government, as they had been since before CPA purchased the predecessor business here, about renegotiating the rates.

[00:16:18] Speaker 01:
And CPA was trying to convey to the government, here are the rates, here are the adjustments, here's what we're looking at for the potential life of this contract.

[00:16:29] Speaker 02:
Your client was concerned about having to perform in the future.

[00:16:33] Speaker 02:
based on these rates in the contract, right?

[00:16:36] Speaker 01:
Your Honor, I mean there is evidence on that specifically.

[00:16:39] Speaker 01:
Our client was concerned.

[00:16:41] Speaker 01:
about having to perform at that moment.

[00:16:42] Speaker 01:
Because as it told the government, it was losing a fair amount of money every single month.

[00:16:46] Speaker 01:
It was contemplating defaulting on the contract in the short term.

[00:16:50] Speaker 01:
In other words, immediately before there were any other options that would potentially be exercised.

[00:16:56] Speaker 02:
I'm still not quite following this.

[00:16:58] Speaker 02:
If this January 24th email, one week before the critical email,

[00:17:04] Speaker 02:
refers to a schedule, which refers to the one-year option periods and not the six-month period.

[00:17:12] Speaker 02:
Why isn't it

[00:17:16] Speaker 02:
reasonable to read the January 31 email as referring to those same options.

[00:17:22] Speaker 01:
Oh, that has to do with the difference between the options.

[00:17:24] Speaker 01:
The paragraph 8 option, that is the six month option, actually contains in the option itself a means of setting the rates, whereas the rates for the year long options are provided for in the contract itself.

[00:17:36] Speaker 02:
I don't think you're answering my question.

[00:17:37] Speaker 02:
Maybe I'm not making myself clear.

[00:17:39] Speaker 02:
In this January 24 email,

[00:17:44] Speaker 02:
from the contracting officer to your client.

[00:17:47] Speaker 02:
It says a final schedule of rates, blah, blah, blah, and it says it only contained the base option periods.

[00:17:54] Speaker 02:
That reference to the option periods is to the one year periods, right?

[00:18:00] Speaker 01:
Yes, Your Honor.

[00:18:01] Speaker 01:
And the reason is because those rates, which were among the rates that CPA wished to renegotiate, those rates were contained in the contract itself.

[00:18:12] Speaker 01:
Whereas for the six-month option, there is no rate in the contract.

[00:18:17] Speaker 01:
It's set by a mathematical formula if the government exercises that option.

[00:18:21] Speaker 02:
OK, so why would you read the January 31 email as referring to the six-month period when

[00:18:29] Speaker 01:
One week earlier, the contracting officer sent an email referring to the one-year period.

[00:18:33] Speaker 01:
Because, Your Honor, if the parties had renegotiated the rates for the current option that was being exercised, the so-called year one option, that would automatically then affect the rates of the six-month option.

[00:18:46] Speaker 01:
So the reason it wasn't included was because there was simply nothing to renegotiate with respect to that.

[00:18:51] Speaker 01:
I will note, CPA at that time was performing the year one option.

[00:18:55] Speaker 01:
And so had it renegotiated the year one rates,

[00:18:58] Speaker 01:
by mathematics and operation of the contract that would have affected the rates under the six-month option.

[00:19:04] Speaker 04:
Can I ask you one technical clarifying question?

[00:19:07] Speaker 04:
The email we've just been talking about, the January 24th, refers to the 36th Texas Gulf Beaumont Port Arthur Corpus Christi.

[00:19:16] Speaker 04:
I thought 36 was Charleston and 37 was Texas Gulf.

[00:19:21] Speaker 01:
That's correct, Your Honor.

[00:19:22] Speaker 04:
So this is talking about the same contract?

[00:19:24] Speaker 01:
I would be happy to do that prior to rebuttal.

[00:19:30] Speaker 03:
Last question.

[00:19:30] Speaker 03:
This is more a legal question.

[00:19:32] Speaker 03:
Everybody agrees that the preliminary notice of intent to exercise an option has to be unambiguous, unqualified, yada, yada, yada.

[00:19:46] Speaker 03:
Do we only look at the January 31 email to decide on ambiguity or do we look at a lot of surrounding circumstances emails leading up to the January 31 email, maybe emails after the January 31 email and.

[00:20:03] Speaker 03:
any other what I'll call extrinsic evidence?

[00:20:06] Speaker 03:
Or do you look at everything to figure out whether the contents of the January 31 email are unambiguous?

[00:20:15] Speaker 01:
So the legal standard here is that the email has to be capable of communicating, or I'm sorry, to be a notice, it has to be capable of communicating actual notice.

[00:20:25] Speaker 01:
That's a fact question.

[00:20:27] Speaker 01:
And I think at the end of the day, it's totality of the circumstances, whatever might be relevant to that.

[00:20:32] Speaker 01:
Obviously, if you have a notice that is perfectly clear on its face, the other circumstances aren't really going to be all that relevant.

[00:20:39] Speaker 01:
But that's not what we have here.

[00:20:39] Speaker 04:
What about the opposite situation?

[00:20:41] Speaker 04:
Let's assume that there's some uncertainty in this email.

[00:20:47] Speaker 04:
Case over in your favor, or do we look at the additional material to figure out if, in context, it really was tolerably clear?

[00:20:56] Speaker 01:
You know, I think there's a continuum.

[00:20:58] Speaker 01:
So there's a continuum of ambiguity.

[00:21:01] Speaker 01:
Certainly, if there's ambiguity, that increases the weight that one might place on extrinsic evidence to the email.

[00:21:07] Speaker 01:
But when you get to a certain point where you look at it and you say, on its face, this is just, it's hard to tell what it means, at that point, the ambiguity rule kicks in, and the parties agree that if it's ambiguous, it's not effective notice.

[00:21:19] Speaker 01:
And so at that point, I think you could just look at the face of it and say,

[00:21:22] Speaker 01:
This is simply ambiguous, and we think the court could go either way on that, because the email on its face is not clear as to what it was the government was actually providing notice of, if anything.

[00:21:32] Speaker 01:
Thank you, Your Honors.

[00:21:34] Speaker 01:
Okay.

[00:21:34] Speaker 01:
We'll give you two minutes for rebuttal.

[00:21:35] Speaker 00:
Thank you.

[00:21:42] Speaker 02:
Ms.

[00:21:42] Speaker 02:
Krastiniak, is that how you pronounce it?

[00:21:44] Speaker 00:
Yes.

[00:21:45] Speaker 00:
Very good, Your Honor.

[00:21:46] Speaker 03:
Could you start with my legal question that we just ended with your opposing counsel?

[00:21:51] Speaker 03:
Is it your view that the email on January 31 by itself has to be unambiguous and crystal clear, or is it appropriate to determine whether that.

[00:22:03] Speaker 03:
email communicates preliminary notice, you can look at other things, like say emails leading up to January 31, or perhaps emails after January 31 that perhaps suggests that everybody understood that the January 31 email was in fact preliminary notice.

[00:22:23] Speaker 00:
Right.

[00:22:23] Speaker 00:
The requirements of the FAR, of course, just that it's in writing and it's received more than 60 days before

[00:22:28] Speaker 00:
the actual option expires.

[00:22:29] Speaker 00:
And so the question of whether or not you need to look at the context of what the parties were talking about, I think we do agree that the email on its face, it has to be looked at within the context of the actual contract.

[00:22:39] Speaker 00:
As opposing counsel just indicated, the only- I'm sorry, I'm just looking for an answer here.

[00:22:44] Speaker 00:
Right.

[00:22:44] Speaker 03:
Are you saying the answer is yes?

[00:22:46] Speaker 03:
It's totally appropriate to look at a bunch of email exchanges leading up to January 31?

[00:22:53] Speaker 00:
With regard to whether or not a reasonable contractor would have expected the January 31 email to indicate notice of intent to exercise options, I do think it would be proper for the court to look at the full chain of what the parties were talking about.

[00:23:04] Speaker 00:
And also, of course, the contract terms themselves, which as opposing counsel indicated, there are only awarded rates.

[00:23:10] Speaker 03:
So you can look at other things, perhaps other documents, to figure out whether document X is, in fact, unambiguously communicating preliminary notice.

[00:23:22] Speaker 03:
That the government's view?

[00:23:24] Speaker 00:
Whether or not.

[00:23:27] Speaker 00:
Well, obviously we're here.

[00:23:28] Speaker 00:
We're under the Contract Disputes Act, not the Administrative Procedures Act here.

[00:23:32] Speaker 00:
And so to the extent we're getting into the intent of the contracting officer when he sent that email, this court looks at the determinations of the contracting.

[00:23:41] Speaker 02:
I think the question related to these prior emails.

[00:23:45] Speaker 02:
And I had focused on the January 24th email.

[00:23:48] Speaker 02:
which has a reference to options, and I think your opposing counsel agreed that that reference to options was for the one year options.

[00:23:58] Speaker 02:
Can we look at that to interpret the January 31st email?

[00:24:05] Speaker 00:
I think that yes, because the initial analysis for the court is whether the email meets the requirements of the FAR clause, which says intend to exercise options, then to make sure to determine whether or not a reasonable contractor would have read that email.

[00:24:18] Speaker 04:
Just on the question of interpreting the reference to options to figure out, is that a univocal reference to the one-year option, or might it have been referring

[00:24:33] Speaker 04:
in the alternative to the six-month option, put aside the multi-year.

[00:24:38] Speaker 04:
Just on that question, not 17207G, not whether it was intended to be a notice of intent, not anything else, just interpreting the reference to the options, whether it is

[00:24:52] Speaker 04:
clearly referring only to the one-year option, or was ambiguous as to whether it was referring to either the one-year or the six-month?

[00:25:00] Speaker 04:
Do we get to look at the other emails?

[00:25:04] Speaker 04:
If so, what other evidence might we get to look at?

[00:25:07] Speaker 04:
Did the board look at other evidence?

[00:25:09] Speaker 04:
Did you and your brief rely on other evidence?

[00:25:12] Speaker 04:
Just on that question.

[00:25:15] Speaker 00:
Certainly, Your Honor.

[00:25:16] Speaker 00:
So as I said, I think that it is proper for this Court to look at the context of the email based on the communications between the parties.

[00:25:23] Speaker 00:
With regard to whether or not the court should delve into the extrinsic evidence as far as the depositions of the contracting officer and the contracting specialist and getting into the subjective intent that was underlying that email before it was sent.

[00:25:36] Speaker 00:
That's where I think we're getting outside of the Contract to Sputes Act standard of review that this court is employing.

[00:25:42] Speaker 04:
So the testimony of at least Seeman and perhaps Elba also that I guess I would like to hear you talk about is not about their subjective intent, but rather both of them and most clearly, well, one of them particularly clearly.

[00:26:01] Speaker 04:
recognized yes, this language was ambiguous.

[00:26:06] Speaker 04:
That's not subjective intent.

[00:26:07] Speaker 04:
We're contracting people.

[00:26:09] Speaker 04:
When I read this language, yes, it's ambiguous.

[00:26:11] Speaker 04:
Do we get to look at that?

[00:26:13] Speaker 04:
And why not?

[00:26:14] Speaker 04:
That's not subjective intent.

[00:26:16] Speaker 00:
Right.

[00:26:16] Speaker 00:
So the context of those questions, they were essentially being asked to read the email and say whether or not it could have been read a different way.

[00:26:25] Speaker 00:
The subjective intent of the contracting officer in sending that email is really what the opposing counsel is kind of trying to assert is the analysis.

[00:26:32] Speaker 04:
That's not what the Q&A at 221 and 220, 221 of the appendix and 554 are about.

[00:26:39] Speaker 04:
They are about professional contracting officers reading the language and saying, is this clear to you or not?

[00:26:48] Speaker 04:
And they say, no.

[00:26:50] Speaker 00:
Right.

[00:26:51] Speaker 00:
Understood.

[00:26:52] Speaker 00:
But that was within the context of the litigation there.

[00:26:57] Speaker 00:
And I would refer the court to the testimony of the contracting officer at appendix page 258, where he indicates repeatedly that, yes, he did intend to send a more formal preliminary notice at a later point in time.

[00:27:07] Speaker 04:
That's not the question at least I'm focusing on.

[00:27:10] Speaker 04:
I will give you, for purposes of these questions, that this was an intent to give notice of something or other.

[00:27:17] Speaker 04:
Right.

[00:27:17] Speaker 04:
And the only question is, is it ambiguous as to which of two options there was an expression of intent to give notice that the government intended to exercise?

[00:27:30] Speaker 00:
It's not ambiguous, Your Honor, because as the court noted, obviously there's no necessary intent for the dash eight clause, but also only one of- Tell me that.

[00:27:39] Speaker 04:
As you know, I'm quite interested in that.

[00:27:41] Speaker 04:
Why does that matter?

[00:27:42] Speaker 04:
It seems to me, in a completely informal communication,

[00:27:47] Speaker 04:
The communication would not, you would not expect it to be limited to that which the contract required somebody to give notice of.

[00:27:57] Speaker 04:
This is just the contracting officer in the middle of an exchange saying, you ask for more money, we intend to exercise options.

[00:28:06] Speaker 04:
It doesn't even say some options, it says options, but not this is a document limited to the four corners of what we're required to say to you.

[00:28:16] Speaker 00:
So I think relevant there is that the rest of the spreads after that was intended to exercise options at awarded rates.

[00:28:22] Speaker 00:
And again, the option years 1, 2, 3, and 4 have the previously awarded rates that are in the contract already.

[00:28:29] Speaker 00:
They appear at pages 59 to 61 of the appendix.

[00:28:33] Speaker 00:
Those rates have already been negotiated and awarded ahead of time, as opposed to, as Appellant's Council indicated, the dash 8 options leave wiggle room within the clause to maybe negotiate different rates for that.

[00:28:46] Speaker 02:
Bridge contract or six-month type of option that would be what does What does the six-month option say in that respect?

[00:28:53] Speaker 00:
So on page 65 of the appendix is where the clauses as agreed to by the parties appear And it says that the government I'm reading the dash eight clause here the government may require continued performance of any services within the limits and at the rates specified in the contract

[00:29:08] Speaker 00:
These rates may be adjusted only as a result of revisions to prevailing labor rates.

[00:29:12] Speaker 00:
But it does provide that if in the interim, perhaps the contract's been going on for five years, there have been adjustments to the prevailing labor rates, those can be written in and changed within the context of that clause, as opposed to... Right, but why put... Just as a matter of English, put aside the January 24th email.

[00:29:27] Speaker 04:
Um, why doesn't it make perfect sense for Mr. Seaman to be saying, um, let's assume he was talking about six month, the six month extension.

[00:29:35] Speaker 04:
We expect we intend to exercise the option at that rate.

[00:29:40] Speaker 04:
No adjustment as opposed to prevailing labor rate adjustment.

[00:29:46] Speaker 00:
Right.

[00:29:46] Speaker 00:
Well, obviously, there's no requirement for the preliminary intent.

[00:29:49] Speaker 00:
But also, the clause provides for context to ask for an increase based on the additional labor rate.

[00:29:58] Speaker 00:
And I will note that they didn't follow up with emails asking that, saying, OK, well, if you guys are exercising the six-month contract, as we've indicated, we're losing money on this contract.

[00:30:06] Speaker 00:
That's because the prevailing labor rates are too high.

[00:30:07] Speaker 00:
Therefore, within the confines of that clause, we would like you to negotiate on the rates with us.

[00:30:12] Speaker 00:
The tone of the emails between the parties and then sent internally after the fact, which are on the record, is that this was them shutting down negotiations on changing the contract rates.

[00:30:23] Speaker 00:
This was the contracting officer saying, we are not going to negotiate with you on contract rates.

[00:30:29] Speaker 00:
We are going to exercise options at negotiated rates.

[00:30:31] Speaker 00:
And I do think it's relevant to note that the negotiations on rates have been going on since

[00:30:36] Speaker 00:
I think at least October 1st, it appears, for the first time in the record, which is a full six months or six weeks, excuse me, before the Novation Agreement was ever signed.

[00:30:44] Speaker 00:
And Cooper Ports actually assumed this contract.

[00:30:47] Speaker 00:
I think that timeline is relevant because here we have four to five, four months of negotiations by the time we get to the end of January email from the contracting officer.

[00:30:56] Speaker 00:
And as our brief indicated, the internal communications indicate that Cooper Ports was considering whether or not to default on the contract at that point in time.

[00:31:05] Speaker 00:
As this court is aware, defaulting on a contract is a very serious decision for a company to undertake, would impact their ability to be able to win more government contracts in the future.

[00:31:16] Speaker 00:
And so the context of the long scope of negotiations, and then the fact that the negotiations were essentially stopped after this email was sent, does indicate that the parties understood that he was talking about the four option year periods.

[00:31:30] Speaker 02:
Do we have this final schedule of rates, which is referred to in these two January 24th emails?

[00:31:38] Speaker 00:
Yes, Your Honor.

[00:31:39] Speaker 00:
So if you look at page 58, 59, and 60 of the appendix.

[00:31:43] Speaker 02:
58.

[00:31:50] Speaker ?:
OK.

[00:31:51] Speaker 00:
And so you see at the middle of the page there, it says on the left-hand side, 01-001 option, and then the unit price is $3.4 million or so.

[00:32:00] Speaker 00:
And then the next page over, you see the 02-001 option, and then below that, the 03-001 option, each with a different price.

[00:32:09] Speaker 00:
And so these are specific option year prices that were negotiated and agreed to by the party before this contract was signed.

[00:32:17] Speaker 04:
By the way, what should I make, if anything, to the reference to Texas Gulf and Beaumont?

[00:32:24] Speaker 00:
I believe that must have been a typo, Your Honor, because you're correct that the Dash 37 contract is the... What's the mistake?

[00:32:33] Speaker 04:
Is the mistake 36 instead of 37, or is it to the whole Texas Gulf?

[00:32:38] Speaker 04:
Were they trying to renegotiate both of the contracts?

[00:32:41] Speaker 00:
Yes, Your Honor.

[00:32:42] Speaker 04:
So maybe this email isn't even about the contract we're talking about.

[00:32:46] Speaker 00:
So they were trying to negotiate both options, and in fact the

[00:32:50] Speaker 00:
The second option year on the Beaumont contract was exercised just a few days after this email.

[00:32:55] Speaker 04:
And so that's not an issue at litigation, but there are similar contracts for... Does that suggest that this email is actually... The typo correction should have been R37, not R36, in which case it would not be even about the one we're talking about.

[00:33:13] Speaker 00:
Yes, Your Honor.

[00:33:14] Speaker 00:
It's talking about the Beaumont contract, and so R37 was the Beaumont contract.

[00:33:19] Speaker 00:
But that's in the context of the rates on both of these contracts.

[00:33:21] Speaker 00:
And then the contracting officer's email later does refer to both contracts.

[00:33:26] Speaker 00:
both contract numbers saying we intend to exercise the options at the awarded rates on these two contract numbers.

[00:33:32] Speaker 00:
And as I noted, I believe it is in the record, the Beaumont contract option was exercised actually just a few days later by the more formal preliminary notice that it is the practice of the government to issue.

[00:33:42] Speaker 04:
And on the previous page, there's a next day email referred to.

[00:33:46] Speaker 04:
I have the Texas Gulf R37 attached.

[00:33:49] Speaker 04:
That's what led then to the

[00:33:55] Speaker 04:
a settling of the Texas Gulf contract?

[00:33:58] Speaker 00:
Well, no, Your Honor, because, again, the January 31 email refers to both, by contract number, both the Charleston contract, which is the one that's issued before this court, and the Texas contract, the 30-37 and 30-36.

[00:34:10] Speaker 04:
Can you remind me what, if anything, in either the board opinion or your brief, makes something of, in particular, this January 24 email?

[00:34:20] Speaker 00:
Believe we did not specifically address it in our brief nor did the board decision your honor Where does the record?

[00:34:30] Speaker 02:
Include the full email exchange leading up to this January 31st email I believe it is not well the full chain is not in there your honor.

[00:34:40] Speaker 00:
I did refer to

[00:34:43] Speaker 00:
Earlier to the October 1st.

[00:34:45] Speaker 02:
Was it in the record?

[00:34:46] Speaker 00:
In the record that was before the board?

[00:34:49] Speaker 00:
I believe it was.

[00:34:49] Speaker 00:
The full email was in the record before the board, Your Honor.

[00:34:51] Speaker 02:
Full email chain.

[00:34:53] Speaker 00:
I believe it is, although I obviously do not make it into the record before this court.

[00:34:58] Speaker 00:
But as I noted earlier, the discussion about talking about the rates on October 1st, that email appears in appendix page 113.

[00:35:07] Speaker 02:
OK.

[00:35:07] Speaker 02:
That would be helpful to me.

[00:35:09] Speaker 02:
I don't know how my colleagues feel about this,

[00:35:12] Speaker 02:
the full email chain.

[00:35:14] Speaker 02:
Certainly.

[00:35:18] Speaker 02:
Could the parties get together and supply us with a supplemental appendix which has chronologically the full email chain?

[00:35:27] Speaker 02:
Was this negotiation or attempted negotiation all

[00:35:31] Speaker 02:
in emails or were there meetings also?

[00:35:33] Speaker 00:
There is reference in the emails to phone calls, so I do believe it took place over a phone as well.

[00:35:38] Speaker 00:
But obviously, the emails were before the board.

[00:35:41] Speaker 02:
Transcript of the phone calls, right?

[00:35:43] Speaker 00:
I would not expect that there would be.

[00:35:46] Speaker 02:
I had experience.

[00:35:47] Speaker 02:
Recordings, maybe?

[00:35:48] Speaker 00:
Not in my understanding, Your Honor.

[00:35:51] Speaker 02:
OK, so if you could do that and give us a supplemental appendix with the chronological email chain.

[00:35:55] Speaker 00:
Certainly.

[00:35:56] Speaker 02:
Both before and after the January 31 email, that would be helpful.

[00:36:01] Speaker 00:
Certainly your honor and as I mentioned the chain the internal emails among Cooper ports reacting to these emails from the from the contracting officer implying that they.

[00:36:11] Speaker 00:
you know, maybe would have to consider defaulting on the contract, which again is a very serious choice for a contractor to make.

[00:36:16] Speaker 00:
That is in the record at page 118, but I think they are somewhat disjointed the way the parties put them in, so perhaps we could just get the court the full uninterrupted chain for the review.

[00:36:27] Speaker 03:
So we have it 8257, the contracting officer's deposition testimony.

[00:36:31] Speaker 03:
Saying that yes this reference to options in the email quote could be interpreted as either dash nine or dash eight and then the question is and So two different reasonable minds could come to two different reasonable conclusions as to whether it's dash eight or dash nine that's being implemented Is that fair and then the contracting officer responds that is fair right so

[00:36:56] Speaker 03:
What's your clearest, cleanest, I don't know, two-sentence explanation why when there are two different options, provisions in this contract, why when the email just says options he's necessarily referring to Dash 9 and necessarily could not have been referring to Dash 8.

[00:37:24] Speaker 00:
Right.

[00:37:25] Speaker 03:
And all we have to go on is the word options.

[00:37:28] Speaker 00:
Understood, Your Honor.

[00:37:29] Speaker 00:
Just as an initial matter, of course, because we're under the CDA, the subjective intent of the contracting officer is not relevant to this court's analysis.

[00:37:36] Speaker 03:
However... At least just testifying what a reasonable mind would think.

[00:37:40] Speaker 00:
But certainly, Your Honor.

[00:37:41] Speaker 00:
But I mean, again, because there's no deference given to the decisions of the contracting officer under the CDA, the necessary flip side of that is that we can't take into consideration what the contracting officer was thinking when they sent a particular email.

[00:37:53] Speaker 00:
But I think I'll try to- Just answer my question.

[00:37:56] Speaker 00:
Yes.

[00:37:56] Speaker 00:
Yes, of course, Your Honor.

[00:37:58] Speaker 03:
So the- Necessarily dash nine and necessarily not dash eight.

[00:38:05] Speaker 00:
Necessarily dash nine because the parties were talking about exercising options at awarded rates.

[00:38:10] Speaker 00:
there are no awarded rates for the Dash 8 contract.

[00:38:13] Speaker 00:
In addition, because there's no requirement for a preliminary notice under the Dash 8 contract, the clear context of this email is that they're talking about the four option year.

[00:38:24] Speaker 03:
Why couldn't the contracting officer be referring to Dash 8 and saying, and by the way, my position is I want it to be the services option to be at awarded rates?

[00:38:38] Speaker 03:
Why couldn't it mean that?

[00:38:40] Speaker 00:
Again because considering the context of this this email chain the fact that the parties are asking the government to increase its rates Had they understood immediate modification to the contract do a price modification?

[00:38:52] Speaker 00:
Not necessarily a price modification to the immediate contractor honor I don't think that's clear on the face of the email chain again considering this contractors position that they thought they were losing so much money under this contract that they purchased from another

[00:39:04] Speaker 00:
another party, if they had understood the government to be exercising the Dash 8 clause, it makes sense that they would try to say, okay, well, then we're within the clause that has the wiggle room for the prevailing labor rate adjustment.

[00:39:16] Speaker 00:
So, okay, at the very least, can we up the rates given the prevailing labor rate adjustment?

[00:39:21] Speaker 03:
That seems to be relying on

[00:39:24] Speaker 03:
how you would think they would subjectively react to this email as opposed to what is the actual content of this email and why does it necessarily drive to one conclusion over another?

[00:39:37] Speaker 00:
I mean, I think the court needs to look at what a reasonable contractor would have done or thought in that circumstance when we're looking at whether or not the email meets the requirements of the FAR cause.

[00:39:47] Speaker 04:
Why don't we have testimony about exactly that

[00:39:52] Speaker 04:
to twenty to twenty one to fifty seven.

[00:39:57] Speaker 00:
Later why don't we have testimony on which point your honor.

[00:40:02] Speaker 04:
What a reasonable contract.

[00:40:05] Speaker 04:
Or I would think contracting officer would understand from this language.

[00:40:11] Speaker 04:
And we have two professional federal contracting officers saying what they think this could mean.

[00:40:21] Speaker 00:
Right.

[00:40:21] Speaker 00:
Well, obviously, these were depositions taken by Cooper Ports Council.

[00:40:26] Speaker 00:
So the content of the depositions

[00:40:29] Speaker 00:
It is what it is.

[00:40:31] Speaker 00:
Obviously, we're before this court on a summary judgment determination from the board.

[00:40:36] Speaker 00:
And so it was a legal conclusion, only there were no finding of facts at the board.

[00:40:40] Speaker 00:
So obviously, there was no trial or any kind of more factual finding that we might expect coming off of a hearing here.

[00:40:47] Speaker 00:
So again, I think that the confusion in the testimony between Ms.

[00:40:54] Speaker 00:
Elb, who's a contract specialist, and Mr. Seaman, who's a contracting officer,

[00:40:58] Speaker 00:
gets exactly to our point as to why this court cannot get into the subjective intent and impressions of a contracting officer when they're sending an email.

[00:41:06] Speaker 00:
I mean, the natural conclusion of that would be

[00:41:08] Speaker 00:
Say a contracting officer believes that an exercise of an option has to go out on letterhead and it has to be sent by a first-class mail.

[00:41:14] Speaker 00:
So that contracting officer types everything up in an email, sends it to the party, but in his mind does not believe that he has actually exercised the option until he puts something on letterhead.

[00:41:23] Speaker 00:
Are we going to then say, well, the subjective intent of the contracting officer was not to actually exercise that option, therefore the option was not exercised?

[00:41:32] Speaker 02:
construction of the January 31st email is a question of law based on the documentary record rather than an inquiry into what a particular contracting officer or even the run of contracting officers might interpret in this case.

[00:41:51] Speaker 00:
Absolutely, absolutely, Your Honor.

[00:41:53] Speaker 00:
The requirements of the FAR clause are not onerous.

[00:41:56] Speaker 00:
They are that it's in writing and that it's more than 60 days ahead of time.

[00:41:59] Speaker 03:
Is whether a party accepts a contract offer a question of fact or a question of law?

[00:42:07] Speaker 00:
Whether or not a party accepts a contract offer?

[00:42:09] Speaker 00:
Yeah.

[00:42:11] Speaker 00:
I guess, I mean, acceptance within the construct of, you know, like, restatement of contracts, that's the legal determination.

[00:42:17] Speaker 00:
I would imagine

[00:42:20] Speaker 00:
As a matter of practice, parties probably would stipulate to when a contract was signed or when a contract was accepted as a fact.

[00:42:27] Speaker 00:
I'm not quite sure I understand.

[00:42:29] Speaker 03:
Well, we seem to be extending the law here.

[00:42:34] Speaker 03:
acceptance of contracts, exercises of options to the world we're in right now, which is a preliminary notice of an intent to exercise an option.

[00:42:45] Speaker 03:
Right.

[00:42:45] Speaker 03:
And so exercising an option is very much to me, basically saying acceptance of an offer.

[00:42:53] Speaker 03:
And so now we're trying to figure out

[00:42:56] Speaker 03:
whether the government issued a preliminary notice of an intent to exercise an option, accept an offer.

[00:43:06] Speaker 03:
And so the law on exercising an option by the government, it has to be clear, it has to be unambiguous, it has to be unqualified.

[00:43:16] Speaker 03:
And so I'm trying to understand unambiguity, is that a question of fact or a question of law?

[00:43:24] Speaker 00:
Understood, Your Honor.

[00:43:25] Speaker 00:
So this court has not specifically extended that to notices of preliminary intent.

[00:43:30] Speaker 00:
I believe this court has not actually addressed a case.

[00:43:32] Speaker 03:
The government seems to be in agreement that the standard is it has to be unambiguous.

[00:43:38] Speaker 03:
It has to be unqualified.

[00:43:39] Speaker 00:
So the board has extended it to preliminary notices.

[00:43:42] Speaker 00:
And yes, we have not taken issue with the board's approach with regard to that.

[00:43:45] Speaker 00:
But I will note that in the appellant's opening brief,

[00:43:49] Speaker 00:
They state that the intent of the government has to be unambiguous, and that is not the standard.

[00:43:54] Speaker 00:
The standard is whether the notice is unambiguous.

[00:43:56] Speaker 00:
We're not talking about the intent of the government to do something, which is maybe just semantics.

[00:44:00] Speaker 00:
But when we're looking here at just a written email from a contracting officer with the text that we have before the court here, it's not about what the government intended to do, but rather what the reasonable contractor reading the face of the notice would understand it to say.

[00:44:16] Speaker 02:
OK.

[00:44:19] Speaker 00:
Thank you.

[00:44:19] Speaker 00:
There are no further questions.

[00:44:20] Speaker 00:
Thank you, Your Honor.

[00:44:25] Speaker 02:
Mr. Grossman, you have two minutes.

[00:44:27] Speaker 01:
Thank you, Your Honor.

[00:44:29] Speaker 01:
With respect to all this testimony that's been discussed, I mean, the particular testimony regarding which of these various options this email was referring to, that doesn't go to the government's intent.

[00:44:39] Speaker 01:
That's not our argument.

[00:44:40] Speaker 01:
We argued in our opening brief being in page 20 that the email was ambiguous in what it meant in that respect, not what the government intended.

[00:44:49] Speaker 01:
That was a different argument that was presented earlier in our brief.

[00:44:52] Speaker 01:
With respect to that testimony, look, you've got two government contracting officers with lots of experience.

[00:44:58] Speaker 01:
One of them testified that it could refer to any of these various options.

[00:45:03] Speaker 01:
One of them said, this is Ms.

[00:45:04] Speaker 01:
Elbe.

[00:45:05] Speaker 01:
That was the proper understanding of the email, is that it referred to all of the different options.

[00:45:12] Speaker 01:
Mr. Lewis, the vice president for operations at CPA, he testified that he has decades of experience in government contracting.

[00:45:18] Speaker 01:
He knows what this kind of stuff looks like.

[00:45:20] Speaker 01:
It didn't even occur to him that this was any kind of preliminary notice at all.

[00:45:24] Speaker 01:
With respect to the email that we talked about earlier, the January 24th email, I can confirm that that did in fact address the Gulf's contract rather than the Atlantic ports contract that's at issue here.

[00:45:40] Speaker 04:
But why doesn't the point stand if that was referring to full year option

[00:45:50] Speaker 04:
rates, and then the January 31st email refers to both contracts that a reference in the January 31st email to options should share the meaning that apparently the January 24th email about only one of them had.

[00:46:08] Speaker 01:
A couple points.

[00:46:08] Speaker 01:
I mean, one, that was about an exchange of information regarding the renegotiation of rates.

[00:46:13] Speaker 01:
That's what that was about.

[00:46:14] Speaker 01:
It wasn't talking about that the government was going to be providing notice or anything like that.

[00:46:17] Speaker 01:
It was sort of a separate

[00:46:19] Speaker 01:
I mean, really, none of this was concerning notice, at least at the time.

[00:46:23] Speaker 02:
But what about, I mean, we'll get from counsel in a few weeks to do this, the email chain.

[00:46:31] Speaker 02:
But is there anything in the email chain that indicates concern that the government would exercise these additional one-year options and therefore, in the contractor's view, inflict on the contractor an unreasonable obligation?

[00:46:49] Speaker 01:
Your Honor, I don't recall that there's anything one way or the other on the point.

[00:46:53] Speaker 01:
What CPA was concerned about, and this is reflected in the email from Mr. Lewis that I referenced earlier, that they were losing money right then on a month-by-month basis and large amounts of money with respect to the contract.

[00:47:05] Speaker 01:
Four months to go on the original period, right?

[00:47:09] Speaker 01:
I believe it was a no.

[00:47:11] Speaker 01:
I believe it was actually more like six months, Your Honor, at that point.

[00:47:13] Speaker 01:
and not only six months.

[00:47:15] Speaker 01:
January 31st it was six months?

[00:47:16] Speaker 01:
Right, because the contract was five months.

[00:47:18] Speaker 01:
My apologies, that's why I'm an attorney rather than a mathematician.

[00:47:23] Speaker 01:
But there was potentially that, and if you look at the six-month contract, I mean that could bring it out another year that would be by default at the then prevailing rates.

[00:47:31] Speaker 01:
So, I mean, if that's the option that we're thinking about, then that could be another year of performance, losing substantial amounts of money each month.

[00:47:38] Speaker 01:
Finally, I would like to address my friend's representation that Mr. Seaman sent the late, untimely notice with the intention of following up on the earlier email that he said.

[00:47:48] Speaker 01:
He actually testified to the contrary.

[00:47:50] Speaker 01:
That's at page 245 of the appendix.

[00:47:53] Speaker 01:
The government keeps saying this, and I don't really understand why they say that, when he actually testified that he did not send it intending to follow up.

[00:48:00] Speaker 01:
Because he believed at the time that he had not sent any type of notice whatsoever.

[00:48:05] Speaker 01:
Thank you.