[00:00:00] Speaker 03:
Our next case is number 20-2341, the Tolliver Group, Inc., versus United States.

[00:01:04] Speaker 01:
May it please the court?

[00:01:05] Speaker 01:
Good morning, Your Honors.

[00:01:06] Speaker 01:
The trial court's judgment should be reversed for three reasons.

[00:01:10] Speaker 01:
First, the trial court lacked jurisdiction to find the government liable for breach of implied warranty of performance.

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It's a bedrock principle of contract law that a claim must first be submitted to a contracting officer before the trial court enters judgment or hears the claim.

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Here, Tolliver never submitted a certified claim to the contracting officer that pledged the operative facts for breach of implied warranty of performance

[00:01:40] Speaker 01:
or that provided the legal theory to the contracting officer.

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So there was no clear and unequivocal statement that could have ever alerted the contracting officer that Tolliver was raising this claim.

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In fact, the only operative facts that Tolliver asserted in its certified claim to the contracting officer was that it entered a contract with the United States government, that it performed under the contract, and that it was sued in a key time action.

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But none of the operative facts that are necessary to render a determination for breach of implied warranty performance, such as whether the contractor was misled by the specifications, whether the specifications were defective,

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Whether there was reliance on the specifications, none of those operative facts were ever presented to the contracting officer.

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Similarly, Oliver's certified claim never put forth the legal basis.

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There's nothing in the claim that asserted breach, reliance, that it was misled.

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or that its attorney's fees were proximately caused by the government's breach.

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And because the contracting officer never first issued a contracting officer final decision on that claim, the trial court inappropriately and impermissibly rendered judgment on that theory.

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And to be clear, this was not without great prejudice to the United States.

[00:02:58] Speaker 01:
We were never given an opportunity to brief these issues at the trial court.

[00:03:03] Speaker 00:
What about on reconsideration?

[00:03:05] Speaker 01:
Your honor, on reconsideration, our arguments are limited by the trial court's rule 59 to new evidence or to things that the trial court missed, for example, based on evidence.

[00:03:19] Speaker 00:
But I thought your point about the procedural impropriety, let's call it, is that the trial court in ruling on the summary judgment motion

[00:03:29] Speaker 00:
ruled on a ground that was not really part of it isn't I mean I would think that that would be a perfectly wonderful ground for saying reconsider it and because it's new we need new procedures.

[00:03:42] Speaker 01:
That is what we did on our butt.

[00:03:44] Speaker 00:
Did you say that there's that that there should be more discovery new motion or

[00:03:51] Speaker 01:
No, we didn't, Your Honor, because a breach of implied warranty performance claim was never alleged in the complaint.

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And so we did argue that this was an impermissible insertion of a legal theory that was never raised.

[00:04:03] Speaker 01:
We did argue there was no jurisdiction.

[00:04:05] Speaker 00:
Right, but your middle argument here is that you weren't given a fair process for this.

[00:04:13] Speaker 00:
That seems to me really quite different from saying jurisdictionally it shouldn't have been there and on its merits it was meritless because things were not proven.

[00:04:25] Speaker 00:
But just on this fair process point, I guess I don't really understand why you couldn't have said in seeking reconsideration.

[00:04:33] Speaker 00:
We don't think you should be considering this, but if you do, then there's a whole process that hasn't taken place yet that we're entitled to.

[00:04:41] Speaker 01:
We did note in our motion for reconsideration, Your Honor, that we were not given any opportunity for discovery on this issue.

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We also noted we were not given opportunity to brief the issue.

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And we asked that the court vacate its prior opinion.

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So the court could have, I suppose, allowed discovery, but it just simply denied our motion for reconsideration with very little explanation.

[00:05:03] Speaker 03:
How would discovery have helped you?

[00:05:05] Speaker 01:
Well, Your Honor, had we known that there was a breach of implied warranty of performance claim at issue in this case, we could have elicited discovery that Tolliver was aware of the lack of a technical data package, that Tolliver was never misled by that.

[00:05:20] Speaker 01:
We could have developed discovery showing that Tolliver successfully performed, which would have rendered a breach of implied warranty of performance claim defective.

[00:05:30] Speaker 01:
So we could have developed facts to our defense.

[00:05:35] Speaker 00:
The pitch on the other side has a certain appeal.

[00:05:42] Speaker 00:
You all promised in the original contract to provide some information that would make the completion of the job easier.

[00:05:50] Speaker 00:
Undisputedly, you didn't provide that information.

[00:05:53] Speaker 00:
The job got a lot more expensive.

[00:05:56] Speaker 00:
You said, you directed them, continue on the job.

[00:06:00] Speaker 00:
You then negotiated an additional dollar figure

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much larger dollar figure.

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But meanwhile, the United States, represented by Mr. Searle, imposes $200,000 of litigation costs on them.

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I attribute that, in their theory, to the government.

[00:06:21] Speaker 00:
So the government sues, however, imposes $200,000 of costs for doing what the government said.

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Now this seems something

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that cries out for the government should pay for that extra $200,000.

[00:06:38] Speaker 00:
How should that have happened?

[00:06:41] Speaker 01:
Well, Your Honor, first, I think to your factual predicates, your question is a little bit inaccurate.

[00:06:48] Speaker 01:
It is true that there was a modification that increased the contract value and increased the amount of work that was unrelated to the technical data package.

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And there is nothing in the record

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I'm not sure that helps your case, because then there wasn't even actually a chance that that was an extra payment that would encompass the damage that was about to occur when, through Mr. Searle, the government turns around and sues them.

[00:07:15] Speaker 03:
Was there anything in that modification where they surrendered rights to an equitable adjustment or a breach claim?

[00:07:26] Speaker 01:
No, Your Honor.

[00:07:28] Speaker 01:
Tulliver is entitled to seeking equitable judgment if it has performed additional work.

[00:07:33] Speaker 01:
Tulliver did not perform additional work.

[00:07:35] Speaker 03:
In fact, it doesn't ever allege a claim for... But there's nothing about mod 10 that prevents them from pursuing this theory.

[00:07:42] Speaker 03:
There's nothing in Mon-10 that prevents them from pursuing this theory.

[00:07:48] Speaker 01:
That's correct, Your Honor.

[00:07:49] Speaker 01:
That's correct, Your Honor.

[00:07:50] Speaker 01:
And Judge Sorrento, to your question, the reason I raised that the additional money and additional hours weren't related to the technical data package was because the government's failure to originally provide the technical data package

[00:08:02] Speaker 01:
had no impact whatsoever on Tolliver's ability to perform.

[00:08:05] Speaker 00:
Except that the United States, through Mr. Searle, thought it was worth accusing them of fraud for and imposing $200,000 in litigation costs.

[00:08:15] Speaker 00:
That's an impact.

[00:08:16] Speaker 01:
Well, Your Honor, first off, the relator's lawsuit alleged nine independent claims.

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So that was one aspect of the claim.

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And it was simply a misunderstanding by the relator.

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That's what Tolliver argued.

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A $200,000 costly misunderstanding.

[00:08:33] Speaker 01:
Yes, Your Honor.

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Those were the attorney's fees that were incurred by Tolliver because the relator misunderstood several aspects of the contract.

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And it's not the government's breach of an implied warranty of performance that caused that.

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It's the relator's misunderstanding of contract specifications.

[00:08:50] Speaker 00:
So you're saying part of what I couldn't quite tell from your brief is whether you're saying they're just out of luck.

[00:09:01] Speaker 00:
They actually had no legal claim they could have brought, or there might have been a legal claim, but they didn't bring the right one.

[00:09:08] Speaker 00:
So is there a legal claim that Tolliver could have brought?

[00:09:12] Speaker 01:
Well, the claim that Tolliver did assert in its second amended complaint for an allowable cost under the FAR, Tolliver did bring that claim.

[00:09:20] Speaker 01:
And of course, we were trying to litigate that claim.

[00:09:22] Speaker 03:
And the trial for- At that time, that wasn't a viable claim because it was relying on a

[00:09:27] Speaker 03:
provision of the far that only applied to cost plus contracts, right?

[00:09:31] Speaker 01:
That was our argument, Your Honor, but the trial court never rendered any judgment on that.

[00:09:35] Speaker 00:
So let me clarify.

[00:09:36] Speaker 00:
Is there a claim, a meritorious claim, for the $200,000 that the United States, the counter-contracting party, through Mr. Searle, imposed on Tolliver?

[00:09:47] Speaker 01:
Our position, Your Honor, is no.

[00:09:49] Speaker 01:
And the Supreme Court recognized that in the Hercules case.

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This court recognized that in the Rick's Mushroom case.

[00:09:54] Speaker 01:
It is unlikely that the government, the contracting officer, would ever agree, let alone implicitly warrant or provide an open-ended indemnification for attorney's fees for lawsuits for which we have no idea how much money

[00:10:10] Speaker 01:
the attorney's fees are going to be.

[00:10:12] Speaker 01:
We have no idea who's going to bring the lawsuits.

[00:10:14] Speaker 01:
So it's not good.

[00:10:16] Speaker 03:
But that's an argument.

[00:10:17] Speaker 03:
It seems to me a good argument for a lack of proximate cause here if the government weren't involved as the plaintiff itself in the Ketam suit.

[00:10:28] Speaker 03:
I mean, back up a moment.

[00:10:31] Speaker 03:
Help us understand what happens in these Ketam suits.

[00:10:34] Speaker 03:
I mean, it's clear that the government helped defeat the Ketam suit in the sense that the

[00:10:40] Speaker 03:
Contracting officer I guess gave an affidavit or maybe testified also, but what?

[00:10:47] Speaker 03:
How many of these key time suits are there?

[00:10:50] Speaker 03:
What is the government policy about?

[00:10:53] Speaker 01:
intervening and dismissing I can't answer that your honor, but I will note that the government your honor is correct didn't intervene or dismiss this key time action, but provided substantial assistance to Oliver and

[00:11:08] Speaker 01:
And this court has held, and I would point your honor to the Woods case that I believe is cited in our papers, there's no lawsuit or cause of action for the government failing to intervene or dismiss a key time action.

[00:11:22] Speaker 01:
It's a discretionary matter left to the fraud section of the Department of Justice.

[00:11:27] Speaker 01:
And so just because the government didn't intervene or dismiss this lawsuit really is besides the point of what this court has to decide, which is- Well, it looks as though the government,

[00:11:39] Speaker 03:
allowing us to proceed is imposing costs on the contractor that the contractor couldn't possibly have anticipated.

[00:11:48] Speaker 03:
So I guess the theory is, in a sense, these costs are being imposed by the government on the contractor, which is a cost resulting from, in some way, from the breach of the obligation to provide the technical data.

[00:12:08] Speaker 01:
That is the theory, Your Honor, but for this court's purpose, the trial court awarded costs, those attorney's fees, under a theory that is completely untenable on the facts.

[00:12:18] Speaker 00:
Could there have been a cause of action for breach of the duty of good faith and fair dealing at whose core is the obligation of the other side of the contract not to take affirmative action to interfere

[00:12:35] Speaker 00:
with the other side's receipt of the contemplated benefits.

[00:12:40] Speaker 00:
That seems like a fairly apt description here of the government suing and imposing costs that could not have been contemplated.

[00:12:54] Speaker 01:
I think, Your Honor, that would go back to the government's determination whether to dismiss the Ketam action, which is not an

[00:13:02] Speaker 01:
not actionable by a party.

[00:13:04] Speaker 01:
They can't sue the government for failing to intervene or for failing to dismiss a key time action.

[00:13:09] Speaker 01:
And that's well established.

[00:13:12] Speaker 04:
Even if they breach the duty of good faith and fair dealing?

[00:13:17] Speaker 04:
Even if the government were to breach the duty of good faith and fair dealing in its contract with it?

[00:13:26] Speaker 01:
I imagine, Your Honor, that could be a separate issue.

[00:13:29] Speaker 01:
I'm not actually familiar with

[00:13:31] Speaker 01:
that line of cases and the fraud section's ability or decisions to intervene or dismiss.

[00:13:38] Speaker 03:
I'm just puzzled about why the government approaches it this way.

[00:13:43] Speaker 03:
I mean, they had the contract in order to supply an affidavit.

[00:13:46] Speaker 03:
It must have been authorized to do that and to help defeat the action.

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But the easier way to do that would have been just to intervene and dismiss.

[00:13:55] Speaker 03:
I just don't understand what the government policy is in this area.

[00:14:00] Speaker 01:
Yeah, Your Honor, and I'm sorry, but I don't know either, and I imagine that it's a fact by fact, case by case basis, and that goes to the internal deliberative process of the government.

[00:14:11] Speaker 01:
I'm not familiar with that in this case.

[00:14:12] Speaker 01:
There's no facts on the record to help, Your Honor, on that.

[00:14:15] Speaker 01:
But the trial court here imposed damages or

[00:14:20] Speaker 01:
liability on the government for these attorneys fees on a breach of implied warranty performance.

[00:14:25] Speaker 01:
And I think that it's worth noting quickly that the trial court never made any of the factual findings

[00:14:32] Speaker 01:
to support that theory, nor did it apply to elements that both the Supreme Court and this court have set forth for breach of implied warranty performance.

[00:14:42] Speaker 01:
It is well established that to be found liable for that breach, the government must provide a defective specification.

[00:14:50] Speaker 01:
The contractor must have relied on and been misled by the specification.

[00:14:56] Speaker 01:
The contractor must not have successfully performed under the contract.

[00:15:00] Speaker 01:
And none of those elements here are supported by the factual record, nor did the trial court ever make findings to apply the facts to these elements.

[00:15:10] Speaker 01:
So the trial court fundamentally misapplied this breach of implied warranty performance.

[00:15:15] Speaker 01:
There are no cases that we are aware of that the trial court cited or that Tolliver cited where a contractor has successfully performed the contract, and yet the government has been found liable

[00:15:27] Speaker 01:
for breaching a warranty of performance.

[00:15:30] Speaker 01:
It doesn't make sense.

[00:15:31] Speaker 01:
The warranty is that performance can happen.

[00:15:34] Speaker 01:
Here, performance happened satisfactorily.

[00:15:36] Speaker 01:
There's no allegation that it was misled.

[00:15:39] Speaker 01:
And there's also been no case where attorney's fees have been awarded for the breach of implied warranty of performance.

[00:15:45] Speaker 00:
Can I just ask, is it too late now for Tolliver to file a claim with the contracting officer for breach of the duty of good faith and fair dealing?

[00:15:57] Speaker 01:
I don't believe so, Your Honor.

[00:15:59] Speaker 01:
I believe that they incurred the last attorneyship less than six years ago.

[00:16:04] Speaker 00:
And I believe that we- That would be the relevant limitations period?

[00:16:07] Speaker 01:
Correct.

[00:16:07] Speaker 01:
And I believe we discussed that actually at one of the arguments before the trial court when the breach of implied warranty performance wasn't actually an issue because it was before the trial court had inserted it in its opinion for the first time.

[00:16:20] Speaker 01:
If there are no further questions, we ask the court.

[00:16:22] Speaker 03:
OK, thank you.

[00:16:22] Speaker 03:
We'll give you two minutes.

[00:16:23] Speaker 03:
Thank you.

[00:16:24] Speaker 03:
Mr. English?

[00:16:35] Speaker 02:
Good morning.

[00:16:35] Speaker 02:
You may please the court.

[00:16:36] Speaker 02:
This court should affirm the claims court's judgment for three reasons.

[00:16:40] Speaker 02:
First, the claims court had jurisdiction to enter judgment on a defective specification theory because that theory arose out of the same operative facts and dealt with exactly the same remedy.

[00:16:52] Speaker 03:
Well, the problem is that the letter to the contracting officer making the claim doesn't seem to mention the operative facts.

[00:17:00] Speaker 02:
But there are only, in our view, three or four operative facts, Your Honor.

[00:17:03] Speaker 02:
And they were summed up in the sentence where Tolliver said that it got sued in the government's name for performing Task Order 10 exactly as the government directed.

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And in our view, the operative facts of this case are that the TDP was a part of the government furnished information when Task Order 10 was awarded.

[00:17:23] Speaker 02:
The government didn't provide the TDP to Tolliver.

[00:17:26] Speaker 02:
It told Tolliver to perform without the TDP.

[00:17:29] Speaker 02:
Tolerant performed without the TDP.

[00:17:32] Speaker 03:
But the judgment that we're reviewing from the Court of Federal Claims involved, as I recall, and you can correct me if I'm mistaken about this, a theory that it was the breach of the obligation to provide the technical data package that was the breach rather than a breach of the covenant of good faith and fair dealing.

[00:17:56] Speaker 02:
I think that's certainly true, Your Honor.

[00:17:58] Speaker 03:
The issue... So if that's correct, I'm not sure that I see that in the letter to the contracting officer.

[00:18:07] Speaker 02:
What was in the letter to the contracting officer, in our view, was the theory that one, we want to recover attorney's fees for defending this false claims act case, and two, that we incurred those fees because we performed expressly at the government's direction, i.e.

[00:18:22] Speaker 02:
without the TDP.

[00:18:23] Speaker 02:
And those are the facts that Senior Judge Leto applied when he entered his order.

[00:18:30] Speaker 02:
His view of the specification was the statement in the contract that required the government to provide the TDP.

[00:18:38] Speaker 03:
Where's the language of the letter that you think supports you?

[00:18:50] Speaker 02:
Your Honor, it is the closing paragraph, or second to last paragraph, of the certified claim from Tolliver.

[00:19:01] Speaker 02:
If I can find the page.

[00:19:03] Speaker 00:
110?

[00:19:03] Speaker 00:
110.

[00:19:05] Speaker 00:
That's what I'm looking at.

[00:19:07] Speaker 00:
Maybe I'm looking at the wrong thing.

[00:19:09] Speaker 00:
Yes.

[00:19:09] Speaker 00:
The sentence, that's right.

[00:19:10] Speaker 00:
That begins, however, after the footnote call.

[00:19:14] Speaker 02:
Right.

[00:19:15] Speaker 02:
It is exactly as Judge Toronto pointed out.

[00:19:18] Speaker 02:
Your Honor, are you there?

[00:19:20] Speaker 03:
No, no, no.

[00:19:25] Speaker 03:
Thank you.

[00:19:27] Speaker 03:
A 110.

[00:19:28] Speaker 03:
I had the wrong page.

[00:19:30] Speaker 02:
Yes, Your Honor.

[00:19:30] Speaker 02:
So it's 110.

[00:19:33] Speaker 02:
It is the last real paragraph before the closing paragraph above Mr. Wood's signature, about four lines from the bottom.

[00:19:41] Speaker 02:
However, this was not until after TTGI, which is the acronym we used for Tulliver, was forced to incur significant costs to defend itself for performing under the contract exactly how it was instructed to by the government.

[00:19:56] Speaker 02:
And so that's the sentence that we think encapsulates those four or five operative facts that I just went through that was at the heart of Mr. Searle's claim.

[00:20:05] Speaker 02:
As Judge Hilton in the Eastern District of Virginia found, and also the Fourth District, the gravamen of the claim was that Mr. Searle believed Tolliver couldn't certify these manuals unless it had the TDP.

[00:20:20] Speaker 03:
And so as originally prepared... But where does this suggest there was a breach by the government?

[00:20:26] Speaker 03:
That's what's missing, it seems to me.

[00:20:29] Speaker 04:
Yeah, there's a way to read this sentence as saying simply, in summary, we were successful in defense against this False Claims Act case, but by the time we finally, by the time the litigation was completed, we had incurred significant costs.

[00:20:50] Speaker 02:
Right, so to be clear, we did not allege breach.

[00:20:54] Speaker 02:
in this certified client.

[00:20:56] Speaker 02:
This was a request for equitable adjustment.

[00:20:58] Speaker 02:
And there are some theories of recovery that can be supported.

[00:21:01] Speaker 03:
But not for equitable adjustment as related to the government's failure to provide the technical data package.

[00:21:07] Speaker 02:
That is what was intended by that sentence, Your Honor.

[00:21:10] Speaker 02:
And it is the fact of the underlying litigation.

[00:21:14] Speaker 02:
Both Judge Hilton and the Fourth Circuit specifically found that the grabbment of the case was the failure of the government to provide the TDP.

[00:21:23] Speaker 03:
And so when Mr. Seale first filed his complaint, we moved to dismiss it, and we specifically... On the face of it, this seems to be a claim under the cost aspects of the FAR, where you can, if successful in a key TAM action, recover 80% of the fees, and you're not

[00:21:45] Speaker 03:
That's not the theory that you prevailed on in the Court of Federal Claims.

[00:21:49] Speaker 03:
It's not a theory that you're articulating now, right?

[00:21:52] Speaker 02:
But the first time, to be absolutely fair, the first time anybody saw the theory that we prevailed on was when we read Senior Judge Leto's order.

[00:22:01] Speaker 02:
I just don't think I can dispute that.

[00:22:03] Speaker 02:
And so, but my point would still be that there are only four operative facts.

[00:22:09] Speaker 02:
And it's the ones, as we see it, that I articulated a moment ago.

[00:22:13] Speaker 02:
And any claim that can be supported by equitable adjustment, and we've cited the cases that show that effective specification can be redressable with an equitable adjustment, and it can be redressable with a breach.

[00:22:23] Speaker 02:
It can be either.

[00:22:25] Speaker 02:
Any claim that can be redressable by equitable adjustment that arose out of those facts is one that was within the court's jurisdiction, as we see.

[00:22:34] Speaker 02:
And again, I would say that at the trial court level, the Eastern District of Virginia, Judge Hilton dismissed Mr. Searle's complaint because we argued that Mod 8 removed the TDP from the list of items that the government had to provide.

[00:22:50] Speaker 02:
And then Mr. Searle amended his complaint and focused on that eight-month period.

[00:22:55] Speaker 02:
where we performed without the TDP at the government's express direction before mod 8.

[00:23:02] Speaker 02:
And so that was the grabbment of the lawsuit.

[00:23:06] Speaker 02:
As your honors have noted, the government was a party by virtue of the False Claims Act's procedures, just through Mr. Searle.

[00:23:13] Speaker 02:
But they were also a participant.

[00:23:16] Speaker 02:
The COR, Mr. Travis Christner, provided an extensive declaration.

[00:23:22] Speaker 02:
contracting officers representative help to help to help you they did help us John I mean there's no question about that either but they put us in that position did you did you ask them to intervene and dismiss the case we did we did and do we have their response to that there are no written responses my understanding and this is just what I understood was that there was a request made at the agency level the agency agreed with it

[00:23:50] Speaker 02:
It went to the Eastern District of Virginia.

[00:23:52] Speaker 02:
At the time, I think Dana Bente was the U.S.

[00:23:55] Speaker 02:
Attorney for that district.

[00:23:56] Speaker 02:
And as I understood it, he consented.

[00:23:58] Speaker 02:
And then it went to main justice.

[00:24:00] Speaker 02:
And as I understand it, the main justice without consent.

[00:24:03] Speaker 02:
And I don't know why.

[00:24:04] Speaker 04:
Assuming your reading of your claim, your letter to the contracting officer is correct,

[00:24:12] Speaker 04:
Is it your view that the contracting officer here made a mistake in how she responded to this letter?

[00:24:24] Speaker 04:
She overlooked your theory that there was a breach of the warranty?

[00:24:32] Speaker 02:
Well, again, you know, I see your letter.

[00:24:35] Speaker 04:
I was saying an objectively reasonable contracting officer reading this letter would have been able to identify a breach of implied warranty and then therefore should have addressed that issue.

[00:24:50] Speaker 02:
But specifically, Your Honor, I would say that the cases that have dealt with is it the same claim have generally focused on the underlying facts and the specific type of remedy

[00:25:01] Speaker 02:
when determining whether the claim is the same as the one in the original certified claim.

[00:25:06] Speaker 04:
But overall, the objective is to give the government notice.

[00:25:11] Speaker 02:
Notice is certainly the most important element of the CDA statute as it relates to the requirement to submit the claim.

[00:25:16] Speaker 02:
But what I would say in response to Your Honor's question specifically is that the contracting officer absolutely had noticed that Tyler saw an equitable adjustment as opposed to a breach of contract.

[00:25:26] Speaker 02:
We traveled down the equitable adjustment theory on purpose, and that was the route we took.

[00:25:31] Speaker 02:
And it certainly did, the contracting officer certainly did, that the basis of the claim was the attorney's fees that were incurred for defending the False Claims Act.

[00:25:42] Speaker 03:
But not the fact that the government failed to supply the technical data pack.

[00:25:47] Speaker 02:
I would disagree with that respectfully, Judge Dyke, because the contract, again, we have the statement on page 110.

[00:25:54] Speaker 02:
We also have the underlying cases, which made it clear that we were sued because the government didn't provide the DDT.

[00:26:01] Speaker 02:
That is the finding that both the district court and the Fourth Circuit made.

[00:26:05] Speaker 00:
And I don't think the government... Those were attached to the claim?

[00:26:08] Speaker 02:
They were attached to the claim.

[00:26:09] Speaker 00:
And when you said the contracting officer's representative filed something in the False Claims Act?

[00:26:15] Speaker 00:
That's right, Your Honor.

[00:26:16] Speaker 00:
Does that mean that the contracting officer, Ms.

[00:26:23] Speaker 00:
Kalahub, would have known what her representative was doing in the case?

[00:26:29] Speaker 02:
We certainly would have expected that he couldn't have participated, Mr. Christner, the COR, the representative, without the contracting officer's knowledge and consent.

[00:26:37] Speaker 02:
But the way we had to obtain that, as this court probably knows, is we had to submit a tour request.

[00:26:41] Speaker 02:
to the Army to provide the information we needed for the defense of the case.

[00:26:46] Speaker 02:
And they directed us to speak to Mr. Christner, who was the COR.

[00:26:50] Speaker 02:
Mr. Christner gave us an interview and then an extensive affidavit or declaration.

[00:26:55] Speaker 02:
which was the basis of the district court's findings of fact.

[00:26:59] Speaker 02:
It just laid it out almost verbatim as accepting that statement of fact.

[00:27:05] Speaker 02:
And then, and we cited in the brief, I can't specifically cite it directly to your honors at the moment, but again, both courts, the Fourth Circuit and the district court, found that the basis of the suit was the absence of the TDP.

[00:27:17] Speaker 02:
So I don't think the government can dispute knowing that

[00:27:20] Speaker 02:
again, because they were a party and also because they were participants.

[00:27:23] Speaker 02:
And then we provided the cases, the opinions, as part of the claim.

[00:27:28] Speaker 02:
And so we think the notice element that you were asking about, Judge Chin, has been met as it relates to equitable adjustment for performing exactly as the government directed.

[00:27:38] Speaker 02:
And the amount we sought was exactly the amount that's allowable under the regulation and that Judge Leto awarded to us.

[00:27:46] Speaker 00:
And so we cite the regulation because regardless of the nature of the... What about the other elements that the government... Other elements of the so-called spearing claim that the government relies on?

[00:27:58] Speaker 02:
Well, Senior Judge Leto addressed them generally, number one, as it relates to reliance.

[00:28:03] Speaker 02:
If the court holds that in order to have reliance, it has to be something that was present at the time of a bid, then we couldn't satisfy that element because we took this contract by novation.

[00:28:13] Speaker 02:
Toliver was not even the original bidder.

[00:28:15] Speaker 02:
But what Judge Leto found was that the reliance was obvious because of the change in the amount of the work with mod 8.

[00:28:24] Speaker 02:
It went up $6 million after the government was unable to provide the TDP.

[00:28:28] Speaker 02:
And the period of performance was extended substantially.

[00:28:31] Speaker 00:
I guess my question could have been understood, as I think you just did understand it, to go to the merits of Judge Leto's ruling.

[00:28:40] Speaker 00:
I was actually thinking about the facts that seem relevant to the merits that whatever else one might say about the claim you made on June 15, 2017

[00:28:57] Speaker 00:
It's hard to see those facts presented in that claim.

[00:29:02] Speaker 02:
I think the only evidence we would have to present even in a claim on the merits would be that

[00:29:09] Speaker 02:
exactly as I laid out that the mod had to increase the period of performance and it had to extend or increase the amount of work because we didn't get the DDP and those are findings again that are at least mentioned in the contracting officer's declaration which are part of the cases that were decided in the Eastern District and the Fourth Circuit and it's discussed in those opinions that there was a mod that increased the period of performance and the value of

[00:29:36] Speaker 02:
And the Mod 8 recites as its basis, the government's basis, that they underestimated the amount of work that was going to be required.

[00:29:45] Speaker 02:
And then it's also important to note, I think, that there is a specific finding by Judge Hilton where he found that all of the work Tolliver did was either reverse engineering or 100% hands-on validation.

[00:29:58] Speaker 02:
And so that finding at the district court level is also binding on the government.

[00:30:02] Speaker 02:
And so I think the facts that are binding on the government in a case where the government was the plaintiff and where it was a participant that are reflected in those opinions that were submitted to the contracting officer as part of the certified claim are certainly things that would have put her on notice of what the issue was.

[00:30:19] Speaker 00:
And so... Can I ask you this question?

[00:30:20] Speaker 00:
Suppose, just for purposes of this question, that we think that this was a sufficiently

[00:30:29] Speaker 00:
different claim from what the June 2017 filing with the contracting officer put her on notice of.

[00:30:41] Speaker 00:
What does our judgment here look like?

[00:30:44] Speaker 02:
If Your Honor makes that finding, then I think you would have to determine that the trial court didn't have jurisdiction to enter this judgment.

[00:30:50] Speaker 02:
And so you would remand it, and then there was a number of ways we could potentially address it at the trial court level.

[00:30:55] Speaker 02:
Judge Leto could remand it to the agency

[00:30:58] Speaker 02:
let us make another claim or to rule on the claim as he's presented it.

[00:31:04] Speaker 02:
And potentially, we could just make a new claim.

[00:31:08] Speaker 00:
I think Ms.

[00:31:09] Speaker 00:
Akers said that the six-year period has not run on your making a new claim to the contracting officer.

[00:31:15] Speaker 02:
I think that's right.

[00:31:15] Speaker 02:
The sixth year from the affirmance for the Fourth Circuit was, I believe, in 17.

[00:31:21] Speaker 02:
And so that's when the judgment became final.

[00:31:23] Speaker 02:
So we're certainly within six years of that, Your Honors.

[00:31:27] Speaker 02:
So I would agree that we have not missed the period if the court reaches the conclusion that Judge Leto didn't have jurisdiction.

[00:31:36] Speaker 02:
For the reasons I mentioned, we believe otherwise.

[00:31:39] Speaker 02:
My time has expired.

[00:31:40] Speaker 02:
So if there are no more questions, I'll take my seat.

[00:31:44] Speaker 04:
Thank you.

[00:31:44] Speaker 02:
Thank you.

[00:31:56] Speaker 01:
Thank you, Your Honor.

[00:31:56] Speaker 01:
Two brief points.

[00:31:58] Speaker 01:
First, Mr. English admitted here today that the claim did not involve any legal theory involving breach of implied warranty of performance.

[00:32:06] Speaker 01:
And this defeats the trial court's jurisdiction.

[00:32:10] Speaker 01:
I would point your honors to the case.

[00:32:12] Speaker 04:
I guess he's arguing, though, that it's the same facts.

[00:32:16] Speaker 04:
claiming that the same facts were alleged in his letter to the contracting officer that were relied on for finding a breach of the black warranty.

[00:32:25] Speaker 01:
That's correct, Your Honor, but this court's well-established precedent, for example, the KCON case,

[00:32:30] Speaker 01:
provides that the contractor must provide a clear and unequivocal basis that provides adequate notice to the contracting officer of the remedy sought, and it must not assert claims that are legally or factually different than the ones the trial court hears.

[00:32:48] Speaker 01:
So the operative facts is an element.

[00:32:51] Speaker 03:
I'm not sure that it's the same nucleus of operative facts that the contractor characterized it.

[00:32:57] Speaker 03:
as an equitable adjustment claim rather than a breach claim that that would be sufficiently different to deprive the Court of Federal Claims of jurisdiction.

[00:33:07] Speaker 03:
So why don't you address the question of whether we're talking about the same nucleus of out-work facts.

[00:33:13] Speaker 01:
Well, Your Honor,

[00:33:15] Speaker 01:
Toliver also admits that the operative facts are not in the claim.

[00:33:19] Speaker 01:
There's no allegation regarding whether Toliver was misled by the defective specification.

[00:33:26] Speaker 01:
That is a crucial element to this breach of implied warranty performance claim.

[00:33:30] Speaker 01:
There is no allegation that it did not successfully perform.

[00:33:34] Speaker 01:
which is another operative fact that's material to make this determination of liability.

[00:33:38] Speaker 01:
And it did not allege that it would.

[00:33:40] Speaker 00:
One thing I'm a little confused about.

[00:33:41] Speaker 00:
So the specification, to borrow that term from Spearin, that is the thing the government said you, the contractor, must do, I'm confused whether it's what was in original task force order 10 or in the

[00:34:03] Speaker 00:
nonwritten, I gather, directive from the contracting officer after the government couldn't get the technical data package or whatever it is.

[00:34:15] Speaker 00:
Go ahead without that.

[00:34:18] Speaker 00:
I guess I sort of increasingly think that the defective specification is that second thing, not the first thing.

[00:34:27] Speaker 00:
And they did rely on it because you said keep up

[00:34:30] Speaker 00:
your work.

[00:34:32] Speaker 00:
And Tolliver did keep up your work.

[00:34:34] Speaker 00:
And what happened was that the government turned around and sued and imposed $200,000.

[00:34:38] Speaker 01:
Well, Your Honor, the trial court found the defect was the lack of the technical data package.

[00:34:44] Speaker 01:
And the technical data package was in that original specification.

[00:34:47] Speaker 01:
It was subsequently modified out.

[00:34:50] Speaker 01:
But that doesn't even matter because Tolliver has admitted time and time again that it never intended to rely on the technical data package.

[00:34:56] Speaker 01:
And it didn't need it for performance.

[00:34:58] Speaker 01:
So if that's true, which is what Tolliver put in its pleadings in the key time action, how then could it have been misled by not receiving the technical death package?

[00:35:05] Speaker 00:
Tolliver said it never intended to rely on it.

[00:35:06] Speaker 01:
Correct.

[00:35:07] Speaker 01:
And we cite that in our brief and cite the appendix pages.

[00:35:11] Speaker 01:
It said it several times.

[00:35:12] Speaker 01:
that it never intended to rely on it, that it didn't need it, and it was merely a list of definitions.

[00:35:18] Speaker 00:
So if that's true, and Tolver never had to- What if the defect was the command, keep up your work, even though we're not going to give you this technical data package?

[00:35:30] Speaker 00:
If that were somehow- That was the basis on which you sued him, right?

[00:35:36] Speaker 01:
On which Mr. Scherl- Still you.

[00:35:39] Speaker 01:
That was one of the nine bases that

[00:35:42] Speaker 01:
Mr. Sherald sued Tolliver.

[00:35:44] Speaker 01:
That's correct, Your Honor.

[00:35:45] Speaker 01:
And so not only does the trial court not have jurisdiction for the different claim reasons, but Mr. English, also here today, admitted that there are not facts sufficient to fulfill the elements of spear and liability.

[00:36:00] Speaker 01:
There is no design specification.

[00:36:02] Speaker 01:
There's not even an allegation that there was, which is a fundamental element of spear and liability.

[00:36:08] Speaker 01:
We've talked about not being misled.

[00:36:10] Speaker 01:
There was successful performance.

[00:36:13] Speaker 01:
And there's never been a case where the court has awarded attorney's fees for breach of implied warranty of performance.

[00:36:20] Speaker 01:
So even if we get over the jurisdictional question, the trial court fundamentally misapplied and expanded spear and liability far beyond what this court, the Supreme Court, or even what the Court of Federal Claims has ever applied.

[00:36:33] Speaker 01:
Thank you.

[00:36:35] Speaker 03:
OK.

[00:36:35] Speaker 03:
Thank you, Ms.

[00:36:35] Speaker 03:
Ayers.

[00:36:35] Speaker 03:
Thank both counsel.

[00:36:36] Speaker 03:
The case is submitted.