[00:00:00] Speaker 00:
The next argued case is number 2020, 2256, Zalzar FCE against the Director, Chief Executive Officer of the Army and Air Force Exchange Service, Mr. Henderson.

[00:00:14] Speaker 03:
Thank you, Your Honor, and may it please the court.

[00:00:16] Speaker 03:
My name is Paul Henderson for Appellant Zalzar FCE.

[00:00:20] Speaker 03:
I'd like to begin this morning by discussing Zalzar's logistics fees claim, where I think some additional discussion can help illuminate the proper interpretation of the underlying legal contract and correct some reversible errors as to the determinations the board made as to whether Zalzar ceased receiving logistical support from the United States.

[00:00:43] Speaker 03:
In deciding against Zalzar on this claim below, the board adopted an erroneous legal interpretation.

[00:00:50] Speaker 03:
interpreting provisions that are supposed to be in harmony with one another, to be in conflict, one so far as to strike entire paragraphs from the contract itself.

[00:01:00] Speaker 04:
I guess, if you could, Judge Prouse, I'm sorry to interrupt, but if you can conclude in what, if you can include in what you're saying an answer to why the contract language does not plainly state that you're responsible for all logistical costs.

[00:01:17] Speaker 03:
Thank you, Your Honor.

[00:01:18] Speaker 03:
The first, I believe Your Honor is referring to Exhibit D, this is paragraph one, all costs associated with employees to include but not limited to the following of the responsibility of the contractor.

[00:01:32] Speaker 03:
That's certainly the case, Your Honor, but I would direct this Court's attention to, number one, the logistic support paragraph in the solicitation and also that was amended into the contract itself in the Fifth Amendment, and that was in 2009.

[00:01:48] Speaker 03:
plainly states that Zalzar was receiving logistical support.

[00:01:52] Speaker 03:
And it's not just in that logistical support paragraph.

[00:01:56] Speaker 03:
It's also in Exhibit D, paragraph seven, where the contract, again, expressly contemplates.

[00:02:02] Speaker 04:
Would you like to give us an appendix page just so we can follow along right at this moment where we are?

[00:02:08] Speaker 03:
Absolutely, Judge Post.

[00:02:10] Speaker 03:
In the solicitation, which is Appendix 1037,

[00:02:15] Speaker 03:
It says, currently, logistic support is being provided.

[00:02:19] Speaker 03:
In the very next page, Appendix 1038, logistic support, food, housing, and medical.

[00:02:26] Speaker 03:
In the contract itself, Exhibit C, paragraph 7, this is on Appendix 1085, it again expressly contemplates the military may provide food, housing, and emergency medical.

[00:02:40] Speaker 03:
Logistical support provided by the military to the contractors and employees is subject to change.

[00:02:45] Speaker 02:
This is Judge Chen.

[00:02:48] Speaker 02:
The Paragraph 5 of the solicitation, that wasn't included in the contract, right?

[00:02:54] Speaker 02:
That's correct, Judge Chen.

[00:02:56] Speaker 03:
However, the pricing sheets or the wage and fee schedules that Zalzar submitted pursuant to the solicitation were included, and those included line items specifically for logistic support.

[00:03:10] Speaker 03:
Again, turning back to appendix 1037 and 1038, I'll start with 1038.

[00:03:17] Speaker 03:
There's the wage and fee schedule.

[00:03:20] Speaker 03:
And at the bottom, it says, logistic support, food, housing, and medical.

[00:03:24] Speaker 03:
And then there's a fill in the blank for the number of dollars per hour.

[00:03:27] Speaker 03:
And immediately, that raises the question, what is logistic support?

[00:03:31] Speaker 03:
Ah, if you look to the very previous page, the very last paragraph, there it is, bold and underlined, logistic support.

[00:03:38] Speaker 03:
And it explains exactly how this surcharge is supposed to operate.

[00:03:42] Speaker 03:
Well, but, Castle, this is Judge Prost again.

[00:03:46] Speaker 04:
Sorry to interrupt, but even if there's some ambiguity in this, I guess, thing that was left out of the contract and later somehow put in, the board dealt with that question, did it not?

[00:03:58] Speaker 04:
And it said it's ambiguous, so we look to extrinsic evidence.

[00:04:02] Speaker 04:
And why did their conclusions with respect to extrinsic evidence not deserve substantial evidence support when you look at the record?

[00:04:11] Speaker 04:
They're entitled to substantial evidence, right, review on the extrinsic evidence question?

[00:04:17] Speaker 03:
That's correct, Your Honor.

[00:04:19] Speaker 03:
We have three responses.

[00:04:21] Speaker 03:
Number one, the course of the conduct of the parties.

[00:04:26] Speaker 03:
The board focuses in on the fact that

[00:04:29] Speaker 03:
Zalzar did not submit this logistic fee surcharge for the fees that issue here until 2014.

[00:04:37] Speaker 03:
We know, however, that the government paid them.

[00:04:39] Speaker 03:
But number two, the board didn't wrestle with or even discuss a point that we raised in a reply below and again here on appeal, which is that all along, I believe it was in 2010 in the Ninth Amendment to the contract, the parties agreed to add workers in OMOT.

[00:04:56] Speaker 03:
where there was also a logistic support surcharge, a $5 per hour added.

[00:05:01] Speaker 03:
And as the government's own witness conceded shortly after trying to wave away the 2014 payments of the logistic fee surcharge, the witness quickly had to correct the record and explained, well, actually all along we were also paying this $5 per hour surcharge that Zalzar was invoicing us.

[00:05:19] Speaker 03:
And that had been present since 2010.

[00:05:22] Speaker 03:
So this is, this is,

[00:05:24] Speaker 03:
entirely consistent.

[00:05:25] Speaker 03:
It's unmistakably consistent with the conduct of the party.

[00:05:29] Speaker 03:
I'm sorry.

[00:05:30] Speaker 02:
I'm lost in your story.

[00:05:32] Speaker 02:
What's the $5 an hour you're referring to?

[00:05:35] Speaker 03:
Yes, Judge Ten.

[00:05:36] Speaker 03:
This is on Appendix 1338.

[00:05:44] Speaker 03:
It's, I guess, 1336 to 1338.

[00:05:52] Speaker 03:
This is the ninth amendment to the contract signed in 2010.

[00:05:57] Speaker 03:
It has workers in Oman.

[00:05:58] Speaker 03:
And as you can see in Appendix 1338, you see this $5 per hour logistics support surcharge listed for workers in Oman.

[00:06:08] Speaker 03:
And again, the government's own witness can see it.

[00:06:12] Speaker 03:
In that case, there was never any logistical support provided in Oman.

[00:06:17] Speaker 02:
Is that right?

[00:06:19] Speaker 03:
That's right.

[00:06:20] Speaker 03:
This is on Appendix 644.

[00:06:22] Speaker 03:
Right.

[00:06:23] Speaker 02:
It was just always baked in from the beginning that you would be able to collect fees for that logistical support.

[00:06:36] Speaker 02:
Well, but the way, Your Honor, the way... Here you are not collecting any fees for logistical support from the beginning of your contract in 2008, right?

[00:06:50] Speaker 02:
Your theory has always been that there was a change in the amount of logistical support being provided to your workers.

[00:07:02] Speaker 03:
Allow me to make sure that I'm following your question correctly.

[00:07:07] Speaker 03:
Allow me to state the following.

[00:07:10] Speaker 03:
The testimony was that there was a baseline price per hour wage that was included for the workers in Oman.

[00:07:20] Speaker 03:
And that also included a $5 logistic fee surcharge.

[00:07:24] Speaker 03:
But by the time they started billing, the logistic support had changed.

[00:07:28] Speaker 03:
The housing fell through.

[00:07:30] Speaker 03:
And so that $5 per hour was being added on top of the number that was provided as the baseline.

[00:07:37] Speaker 03:
So it's exactly what we contend how the contract should operate.

[00:07:42] Speaker 03:
The parties were clearly following this course of conduct as to those workers in Omaha.

[00:07:50] Speaker 02:
Right, but that OMON is not part of this appeal.

[00:07:54] Speaker 02:
Now we have to wrestle with the facts of your case, which, as I understand it, you're saying there was a change in logistical support being provided somewhere during the course of the performance of the contract.

[00:08:08] Speaker 02:
That's correct, Judge Chen.

[00:08:10] Speaker 02:
And then we have to look at the contract, and you were looking at it before, at A1085, and it plainly states

[00:08:19] Speaker 02:
at 1085, should the logistical support change during the contract, the contractor should submit a price revision in accordance with paragraph five of exhibit A. And that, of course, is at 1077, which is all about modifying contracts.

[00:08:35] Speaker 02:
And you have to modify any contract in writing and signed by both parties.

[00:08:40] Speaker 02:
And we don't have that here.

[00:08:43] Speaker 02:
So why is the board wrong when it said,

[00:08:49] Speaker 02:
these kinds of logistical support claims that you have needed to go through a price revision.

[00:08:58] Speaker 03:
Your Honor, two points that dovetail together.

[00:09:02] Speaker 03:
To begin, I want to slightly resist the suggestion that OMON has no bearing on the present appeal.

[00:09:09] Speaker 03:
It was part of the same contract, and the conduct of the parties in paying the surcharge fee for workers in OMON and invoicing and paying that surcharge fee

[00:09:17] Speaker 03:
bears on the interpretation of the contract.

[00:09:20] Speaker 03:
And so to that degree, the workers in Oman are very relevant to the proper interpretation.

[00:09:27] Speaker 03:
And again, if the interpretation that you just set forth, that there needed to be a price revision negotiation whenever logistical support changed, was the correct between the contract

[00:09:41] Speaker 03:
then what the parties were doing with the workers in Oman doesn't make any sense.

[00:09:45] Speaker 03:
As the government's witness seems to kind of uncomfortably concede, oh, well, you know, if we can explain away what happened in 2014, that was just a mistake by somebody lower on the chain of command.

[00:09:58] Speaker 03:
But I do have to admit on the record that in fact all along we were operating this agreement by just having invoices automatically apply to $5 logistics and surcharge.

[00:10:10] Speaker 03:
and paying them without requiring this price revision process that Your Honor just laid out.

[00:10:19] Speaker 03:
And if I could, just to answer the second part of your question, very briefly, knowing that I've fallen into rebuttal time, paragraph, excuse me, Exhibit C, paragraph seven, as you pointed out, should the logistical support change?

[00:10:34] Speaker 03:
contractor should submit a price revision in accordance with paragraph five of exhibit A. I just want to provide three key responses that I think will really get to the heart of the appeal here.

[00:10:43] Speaker 03:
Number one, there's no number five, as we point out in our reply brief.

[00:10:50] Speaker 03:
But even if this court is not convinced and thinks that, well, that provision on, I believe it was appendix

[00:10:57] Speaker 03:
1077 fills in the gap there.

[00:11:00] Speaker 03:
Even if that were true, the number two, this is talking about changes, modifications, additions, or deletions to the contract.

[00:11:08] Speaker 03:
But the logistics fee surcharge was already included in the pricing all along.

[00:11:12] Speaker 03:
Nothing was changing.

[00:11:13] Speaker 03:
The base fees and the surcharge itself were always there.

[00:11:17] Speaker 03:
There was no need to modify, in other words, anything that was included in the wage and fee schedule.

[00:11:22] Speaker 03:
And then finally, number three, even if that were not convincing,

[00:11:25] Speaker 03:
I note, at the top of 1077, there's a caveat, except as otherwise specifically provided in this contract, all changes, modifications, additions, et cetera, are subject to this process.

[00:11:38] Speaker 03:
We submit that the logistics fee paragraph number five in the solicitation, and then what's later added back into the amendment later on, is just such a specific exception to this general rule.

[00:11:49] Speaker 03:
And with that answer for the questions, I'll reserve the remainder of my time for rebuttal.

[00:11:54] Speaker 00:
Okay, Mr. Anderson, is there anything else you feel you want to tell us in your argument in chief?

[00:12:01] Speaker 03:
Yes, as to the factual determinations, I would like to quickly hit on, okay, so number one, there's the question of interpreting the contract itself, but then number two, there's the factual determination of whether or not this logistical support ever changed.

[00:12:16] Speaker 03:
I'd like to begin with medical.

[00:12:18] Speaker 03:
Here, the board's decision is barren, we submit.

[00:12:22] Speaker 03:
On appendix seven through eight, you see the board march through evidence that we submit doesn't make out the board and doesn't support the board's decision, but at least it can point to items in the record in DISA that medical support didn't change.

[00:12:36] Speaker 03:
Again, I can address that during my rebuttal time.

[00:12:39] Speaker 03:
But at least to the meal provision, the board doesn't point to any sort of contrary evidence whatsoever.

[00:12:44] Speaker 03:
Zalzar put forward two witnesses.

[00:12:46] Speaker 03:
The board did not make an adverse credibility determination as to either of those two witnesses

[00:12:51] Speaker 03:
And the government has not pointed to any contrary evidence in the record that would otherwise point in a different direction.

[00:12:58] Speaker 03:
For that reason, there's not a scintilla of evidence, we submit, upon which the board was able to reach its conclusion that these free meals weren't being provided.

[00:13:08] Speaker 03:
That fails the substantial evidence standard.

[00:13:11] Speaker 03:
And furthermore, when the government tries to backfill with some reasoning, like, well, why it might have been insufficient, none of that reasoning appeared in the board's decision.

[00:13:20] Speaker 03:
You know, this is an agency determination, the decision and reasoning that the board must be taking on its own.

[00:13:25] Speaker 03:
It can't be backfilled on appeal.

[00:13:28] Speaker 03:
For these reasons, we submit that at a minimum, the board's determination lacks substantial evidence as to whether the meal provision ever sees.

[00:13:38] Speaker 00:
Okay.

[00:13:38] Speaker 00:
Thank you.

[00:13:39] Speaker 00:
And we'll save you rebuttal time, Mr. Henderson.

[00:13:42] Speaker 00:
Let's hear from the government.

[00:13:45] Speaker 00:
Mr. Volk.

[00:13:47] Speaker 01:
Thank you, your honor.

[00:13:48] Speaker 01:
May it please the court.

[00:13:49] Speaker 01:
Zelsar is asking the court to retroactively reprice its contract to grant it millions of dollars that the government never agreed to pay.

[00:13:59] Speaker 01:
This contract allowed Zelsar plenty of flexibility to renegotiate pricing during performance, and it was free to walk away from the contract if the government wouldn't agree.

[00:14:10] Speaker 01:
But the terms of the contract don't afford any basis for Zelsar to recover through litigation

[00:14:17] Speaker 01:
price increases that were not agreed to by the parties.

[00:14:22] Speaker 01:
Regarding Zelzar's first claim, its logistics fee claim, the board correctly rejected this, both on the facts and on the law.

[00:14:32] Speaker 01:
Zelzar did not prove to the board that the military ever changed its policies with respect to logistics support in the locations at issue.

[00:14:42] Speaker 01:
And even if it had, Zelzar's interpretation of the contract

[00:14:47] Speaker 01:
was unreasonable, as the board recognized.

[00:14:51] Speaker 01:
The contract specifically stated in Exhibit C, Paragraph 7, should the logistical support change during the contract, the contractor should submit a price revision request.

[00:15:02] Speaker 01:
And that's on Appendix 1085.

[00:15:04] Speaker 01:
And there's no dispute that that was in the contract all along.

[00:15:09] Speaker 01:
So the best Velzer can hope to do with the other things it points to is create an ambiguity on the face of the contract.

[00:15:16] Speaker 01:
But as the board recognized, if a resort to extrinsic evidence is necessary, it doesn't help Zalzar.

[00:15:23] Speaker 01:
Because for about six years, Zalzar invoiced the government for exactly what was agreed to by the parties and no more.

[00:15:31] Speaker 01:
And it only started asserting that it should get about what amounts to $4.2 million going back to near the beginning of the contract once it was notified that the government was terminating the contract.

[00:15:47] Speaker 01:
With respect to Zalzar's appeal regarding its bad faith claim, the board also correctly rejected that claim.

[00:15:56] Speaker 01:
Zalzar never provided any evidence that the government had any intent to harm Zalzar as opposed to doing what was best for the government, or that it was doing anything that took away or deprived Zalzar of the fruits of its bargain.

[00:16:14] Speaker 01:
Those are the things that Zalzar would have had to demonstrate

[00:16:17] Speaker 01:
to establish bad faith or a violation of the implied covenant of good faith and fair dealing.

[00:16:24] Speaker 01:
And none of the allegations that Salazar made came close to doing that.

[00:16:29] Speaker 01:
Finally, with respect to the last appeal number, this is the board docket number ending in 5-3, what Salazar refers to as its price increase claim.

[00:16:41] Speaker 01:
That decision in our view is not final because the board expressly stated

[00:16:47] Speaker 01:
that both liability and quantum were before it, but that it was not resolving quantum.

[00:16:54] Speaker 01:
In that situation, although this court has acknowledged that there is some flexibility with respect to when board decisions are final, in that situation, under our view of the court's precedent, that decision is not final and not appealable.

[00:17:09] Speaker 01:
And therefore, Zalzar's appeal of that

[00:17:15] Speaker 01:
ASPCA.1.3.

[00:17:18] Speaker 04:
Council, this is Judge Proz.

[00:17:19] Speaker 04:
But I think you recognize that our case law, our experience, is not to necessarily apply a strict finality requirement to board appeals in these circumstances, right?

[00:17:32] Speaker 04:
So you don't dispute that we would have the ability to do this, particularly if we think judicial efficiency, et cetera, weighs on that side, right?

[00:17:44] Speaker 01:
Well, actually, your honor, I think it's true.

[00:17:47] Speaker 01:
The first part, uh, for sure.

[00:17:49] Speaker 01:
Several cases from this court say that, that, uh, that there's a flexible concept of what's final.

[00:17:56] Speaker 01:
However, uh, as we interpret the court's decisions, uh, if it finds that it is not a final decision, of course, that language is used in the statute providing this court's appellate jurisdiction, a final decision of the board.

[00:18:10] Speaker 01:
Uh, if the court finds it's not final.

[00:18:13] Speaker 01:
then it would not have jurisdiction.

[00:18:15] Speaker 01:
So there's no flexibility if it finds that the decision is not final.

[00:18:20] Speaker 01:
The flexibility, as I understand it, is in deciding whether it is or is not a final decision.

[00:18:28] Speaker 01:
And in the court's precedent, such as the Teledyne case that we cite and others, we see the court making clear that for this court to conclude that the board has rendered a final decision,

[00:18:41] Speaker 01:
it needs to have disposed of everything that was before it.

[00:18:46] Speaker 01:
And so there are plenty of cases in which this court explains that we can figure that out by looking at the scope of the- Well, this is Judge Prost again, counsel.

[00:18:55] Speaker 04:
I appreciate your response, but there are other cases, are they not, like Garrett and HTC, where we said where the board has nothing more to do as to the issues presented on appeal, we have jurisdiction to hear the appeal.

[00:19:10] Speaker 04:
Is that not applicable to this case?

[00:19:14] Speaker 01:
Right.

[00:19:14] Speaker 01:
Again, I think that's absolutely a correct statement and we feel that in our view applying that standard and would say that standard is applicable to this case as any other.

[00:19:28] Speaker 01:
applying that standard, we feel that the board said expressly in this opinion that with respect to this, this appeal, it does have more to do because it's sent the matter back to the parties.

[00:19:38] Speaker 04:
Well, of course it has more to do.

[00:19:40] Speaker 04:
We're not, I'm not debating that, but what more does it have to do as to the issues presented on appeal?

[00:19:48] Speaker 04:
The question presented on appeal is not going to be up before the board again, right?

[00:19:55] Speaker 01:
That's right in that Zalzar does not challenge the board's two seven cents per hour rulings in its favor.

[00:20:05] Speaker 01:
So if that's split out, if the court does see that as separate

[00:20:10] Speaker 01:
and severable from the three categories within that same claim that Zelsar is appealing to this court, then we would agree that the court would have jurisdiction if it sees those as separate matters.

[00:20:30] Speaker 01:
We don't see them as separate matters because we see them as part of the same case, as part of the same claim.

[00:20:35] Speaker 01:
And so from that perspective, we see that as no different than if you had one case from a court of federal claims or district court in which partial relief is granted on some arguments but not others and the case is not final until quantum is resolved as to the whole case.

[00:20:54] Speaker 01:
But even if the court finds that there is jurisdiction,

[00:21:00] Speaker 01:
for this appeal, it should be affirmed.

[00:21:03] Speaker 01:
The language in the contract made clear that there was no unilateral right to a price increase, that the government had to agree.

[00:21:12] Speaker 01:
And the Delver's only remedy if they couldn't get the government to agree would be to terminate the contract.

[00:21:19] Speaker 01:
But this is an unusual situation where both parties had the right with 30 days notice, no assertion of cause, and no basis for

[00:21:27] Speaker 01:
saying the other party breached or anything like that, both parties could terminate.

[00:21:31] Speaker 01:
So, Zalzar had plenty of opportunity throughout the contract to go to the government and try to renegotiate.

[00:21:39] Speaker 01:
And in fact, when Zalzar relies heavily on that example of Oman, but in our view, that doesn't support Zalzar's argument because it simply provides an example of when there was an agreement.

[00:21:54] Speaker 01:
If you look at Appendix 643, which Zelsar cites for this, it indicates how in that situation there was an agreement to pay those rates.

[00:22:05] Speaker 01:
And so that's really the fundamental point that we feel we're making, is that Zelsar at any point could have asked the government to agree to higher rates.

[00:22:14] Speaker 01:
But having not done that, it can't use the core system.

[00:22:17] Speaker 01:
There's nothing in the contract that allows it to recover through litigation rates that the government never agreed to.

[00:22:24] Speaker 02:
My understanding is the other side, Zalzar, is saying that there was some kind of a baked-in agreement as to what the rates would be should logistic services change.

[00:22:37] Speaker 02:
And it points to some quotes in the record and said, there it is.

[00:22:46] Speaker 02:
So that's why we are just like Oman.

[00:22:53] Speaker 02:
What's your response to that?

[00:22:56] Speaker 01:
Well, we see it as quite different from the facts alone.

[00:23:00] Speaker 01:
We can see that it's undeniably different because in the Oman situation, these things were being paid.

[00:23:07] Speaker 01:
This wasn't a situation where Zalzar came back later and through litigation recovered these Oman fees.

[00:23:16] Speaker 01:
Rather, it was something that was included by agreement and paid.

[00:23:19] Speaker 01:
And so the difference is that

[00:23:22] Speaker 01:
there wasn't any agreement with respect to these costs that are fees that Zalzar is now attempting to recover.

[00:23:30] Speaker 01:
And that's reflected by the basic facts of the case, that one, Zalzar is attempting to recover them because they weren't paid, they weren't invoiced.

[00:23:38] Speaker 01:
And so there just wasn't this agreement.

[00:23:41] Speaker 01:
And so if you look at Appendix 643, the testimony that Zalzar is relying on for this Oman

[00:23:49] Speaker 01:
point at the bottom of that page you see how there's the testimony is that there was communication in the contract folder where the former this is the the later contracting officer testifying about seeing communications from the former contracting officer of the government Mr. McWilliams is speaking to and it continues on to the next page about how there was communication about how this housing was ultimately not provided and so there was an agreement to

[00:24:18] Speaker 01:
to pay this fee.

[00:24:21] Speaker 01:
And so that's why we see that as not supporting Zalzar's arguments at all, but potentially supporting ours, because it shows that if Zalzar had wanted to, it's an example of how Zalzar was free to go negotiate with the government if it wanted to, and all it needed to do was get the government's agreement.

[00:24:39] Speaker 01:
But if it couldn't, there's no basis under the contract for the board or now the court to say that the government has to pay something

[00:24:47] Speaker 01:
that there was never an agreement to pay.

[00:24:51] Speaker 00:
Thank you.

[00:25:03] Speaker 00:
Okay, any more questions for Mr. Volk?

[00:25:06] Speaker 03:
No, no.

[00:25:08] Speaker 00:
Okay, Mr. Henderson.

[00:25:12] Speaker 03:
Thank you, Your Honor.

[00:25:13] Speaker 03:
I'd like to pick up where Judge Chen left off.

[00:25:16] Speaker 03:
Pages 643 to 644, this is the testimony regarding logistics fee surcharge for Oman, clearly and unmistakably establishes that Zalzar's interpretation of this contract is correct.

[00:25:31] Speaker 03:
Under the board's interpretation, there would have needed to be some sort of formal agreement, written amendment process,

[00:25:38] Speaker 03:
That is not the testimony we have for that $5 surcharge in Oman located on pages 643 and 644.

[00:25:46] Speaker 03:
If I could briefly touch on some of the context.

[00:25:49] Speaker 03:
This is 643 line 11.

[00:25:53] Speaker 03:
The question was asked, okay, for the logistics support line item there, did Dalsar ever invoice for that?

[00:26:00] Speaker 03:
They did at the very end of the contract the last two months.

[00:26:03] Speaker 03:
We had, I want to say, a COR assistant to process the invoices.

[00:26:07] Speaker 03:
He approved them, which was not correct.

[00:26:09] Speaker 03:
Up until then, they had never submitted anything for that, referring to the logistics fee surcharge line.

[00:26:15] Speaker 03:
And then immediately after, can I make a clarification on that?

[00:26:18] Speaker 03:
Yes, absolutely.

[00:26:19] Speaker 03:
Okay, the only exception to that is OMON.

[00:26:22] Speaker 03:
And OMON, they had $5 listed on their logistical costs, and they may have submitted their pricing for OMON.

[00:26:28] Speaker 03:
skipped to page 644 at the top, line two, but by the time they did provide employees in OMOT, there was no logistical support that was there, so the entire $5 was added to their, at their price per position.

[00:26:40] Speaker 03:
This is exactly what Zalzar is contemplating as far as the proper interpretation of the contract.

[00:26:48] Speaker 03:
I want to split out two questions that I think are important.

[00:26:50] Speaker 03:
One is the course of the conduct of the parties

[00:26:52] Speaker 03:
as it reveals whether or not there was a logistical fee change, and then second, the course of the conduct of the parties as to what was the actual agreement that they intended.

[00:27:03] Speaker 03:
And if there are no further questions... No, please finish your thought.

[00:27:10] Speaker 03:
Thank you, Your Honor.

[00:27:12] Speaker 03:
As to the first question of legal interpretation, we think it's unmistakable and clear when you look at the logistics support line items compared to the logistics support paragraphs that were in the solicitation and later in the contract itself.

[00:27:26] Speaker 03:
And when you look at the course of conduct in Oman, especially the government's own witness describing it,

[00:27:31] Speaker 03:
Our submission is that it's unmistakably clear, as a matter of law, that Zalzar has adopted the correct interpretation here.

[00:27:39] Speaker 03:
And as to the factual determination as to whether or not the support changed, again, we would direct this Court's attention to the Board's very cursory parsing of the evidence.

[00:27:51] Speaker 03:
As to the meal provision, as to the medical provision, we submit just two things very briefly with the court's permission.

[00:27:59] Speaker 03:
Number one, the board made much of the fact that Zalzar had not negotiated new prices or submitted a price revision.

[00:28:07] Speaker 03:
But again, that question is answered once the proper interpretation of the contract is assumed.

[00:28:13] Speaker 03:
The only reason that the board viewed the evidence in the way that it did was because the board had in mind the wrong view of the contract itself.

[00:28:20] Speaker 03:
And then number two, as to the Department of Defense instructions 3020.41, this was the other key moment that upon which the rest of the board's evidentiary findings lay.

[00:28:31] Speaker 03:
This also we submit was a legally incorrect interpretation.

[00:28:35] Speaker 03:
One, because that instruction only made costs reimbursable, which does not foreclose

[00:28:41] Speaker 03:
The government from making a policy or a contract that would allow the government to provide these services free of charge.

[00:28:47] Speaker 03:
That's evident in the contract itself, where over and over it talks about the government providing medical, the government providing medical support throughout the contract.

[00:28:55] Speaker 03:
And indeed, Amendment 10 has to come back and say notwithstanding anything in the contract, this policy has now changed.

[00:29:03] Speaker 03:
And then number three,

[00:29:04] Speaker 03:
It's also this Department of Defense instruction speaks specifically to treatment and transportation to quote,

[00:29:12] Speaker 03:
the selected civilian facility, whereas here, Zalzar's contention is that the treatment was taking place at military treatment facilities, which would make this inapplicable.

[00:29:23] Speaker 03:
Once those legal corrections are made, that is, corrections to the legal interpretation of the instruction and the contract itself, the rest of the board's factual determinations melt away when viewed in a new light.

[00:29:35] Speaker 03:
For these reasons we submit,

[00:29:36] Speaker 03:
that the decisions against Alzar below should be reversed.

[00:29:39] Speaker 03:
We stand in our briefs and submissions as to the other claims.

[00:29:42] Speaker 03:
And if there are no further questions, I yield my time.

[00:29:47] Speaker 00:
Any more questions for Mr. Henderson?

[00:29:49] Speaker 00:
No.

[00:29:50] Speaker 00:
All right.

[00:29:50] Speaker 00:
Thank you.

[00:29:51] Speaker 00:
Our thanks to counsel.

[00:29:53] Speaker 00:
The case is taken under submission.