[00:00:00] Speaker 03:
Okay, the next argued case is number 21, 1547, the Zaffer Construction Company against the United States.

[00:00:09] Speaker 03:
Mr. Gadansky.

[00:00:13] Speaker 03:
Are you arguing?

[00:00:15] Speaker 02:
Yes, I'm arguing.

[00:00:21] Speaker 02:
May I please support Abraham Gadansky on behalf of the Appellant Plaintiff, Zaffer Construction Company.

[00:00:27] Speaker 02:
If it's okay, we'd like to reserve five minutes of time for rebuttal.

[00:00:36] Speaker 02:
We're here before the court today to discuss the issue of Zephyr's December 2014 claim.

[00:00:45] Speaker 02:
whether that claim is considered a claim under the FAR and the sports case law.

[00:00:49] Speaker 04:
Can I just ask you one kind of factual question here before we get to the debate?

[00:00:54] Speaker 04:
If you thought that was a claim, why did you, however many years later, submit another document that you called a claim and ask for a final decision?

[00:01:05] Speaker 02:
Right, Your Honor.

[00:01:08] Speaker 02:
The second claim that you're referring to was in 2018.

[00:01:12] Speaker 02:
And the history of this case and situation was that,

[00:01:15] Speaker 02:
We, Zephyr, first submitted his claim in December 2014.

[00:01:18] Speaker 02:
During that time, the parties went back and forth as to the amounts.

[00:01:22] Speaker 02:
Sure.

[00:01:22] Speaker 04:
That's not what I'm asking, though.

[00:01:23] Speaker 04:
If you thought the 2014 document was a claim, why did you need to submit a second claim?

[00:01:30] Speaker 04:
If you thought the contracting officer wasn't giving you the resolution you wanted, couldn't it be already considered a deemed denial that would allow you to sue?

[00:01:44] Speaker 02:
Correct, Your Honor.

[00:01:45] Speaker 02:
But what happened was in 2018, the contracting officer told us that he will no longer be considering our claim and he's going to issue a decision.

[00:01:55] Speaker 02:
At that point, we decided internally what kind of decision can there be and how can they deny this when the negotiations have been on the merits, which they've been working out.

[00:02:07] Speaker 02:
There was an audit.

[00:02:08] Speaker 02:
They were working out the finer details on the amounts.

[00:02:11] Speaker 02:
So we internally said,

[00:02:13] Speaker 02:
the only way they could try to deny this is if it's based off of statute of limitations.

[00:02:17] Speaker 02:
We went back, we said maybe they're going to do this based off of an argument that we didn't submit a claim.

[00:02:24] Speaker 02:
So as a precaution, we submitted the 2018 claim and we put in detailed language requesting the contracting officer's final decision, even though throughout we always believe that our 2014 claim satisfied the elements of the claim.

[00:02:38] Speaker 04:
So this is prophylactic.

[00:02:39] Speaker 04:
But you agreed, well, maybe you don't.

[00:02:41] Speaker 04:
The 2018 document does seem to be, if it's the only claim, seem to be untimely.

[00:02:47] Speaker 02:
If it's the... If the 2014 REA is the... Yeah, for the statute of limitations issues that was within six years.

[00:02:55] Speaker 02:
Correct.

[00:02:56] Speaker 01:
So your 2014 claim was for a sum certain.

[00:03:00] Speaker 01:
Correct.

[00:03:00] Speaker 01:
So basically you're saying to the government, you owe me this amount of money.

[00:03:05] Speaker 01:
Correct.

[00:03:05] Speaker 01:
But then later on you write,

[00:03:07] Speaker 01:
that Zephyr spins or will continue to spin considerable man hours until the final settlement of the REA.

[00:03:14] Speaker 01:
Such costs are not included in the REA proposal.

[00:03:17] Speaker 01:
It seems to me that that statement implies or maybe even establishes that you were negotiating at that point in time, that you didn't have a claim, that you were simply negotiating.

[00:03:32] Speaker 01:
And maybe that's why you came out with a 218th claim.

[00:03:36] Speaker 02:
The document we submitted in 2014, it was a 167 page detailed claim for some certain specific amounts for each item which we alleged we were holding based on a change order.

[00:03:51] Speaker 02:
When we submitted that to the government,

[00:03:54] Speaker 02:
We said, this is based on the government's breach.

[00:03:56] Speaker 02:
And because of the government's breach, we're entitled to all costs related to this breach as we go forward.

[00:04:01] Speaker 01:
Is there any substantive differences between the 2014 and the 2018 claims?

[00:04:11] Speaker 02:
The document itself is the same.

[00:04:13] Speaker 02:
It's the same, yeah.

[00:04:14] Speaker 02:
Yeah, correct.

[00:04:15] Speaker 02:
We filed it because in all honesty, in somewhat of shock, we thought that

[00:04:21] Speaker 02:
We were taken by surprise that they would try to allege a statute of limitations issue here.

[00:04:26] Speaker 02:
So just as a precaution, we added the one language which we know the case law doesn't specifically require, but we added it anyway to show that we at least have it in 2018.

[00:04:36] Speaker 01:
Now, that may have been a good move on your part.

[00:04:41] Speaker 02:
Right.

[00:04:41] Speaker 02:
We were proceeding this whole time assuming the claim.

[00:04:44] Speaker 02:
Again, this contract was finished in, I believe, 2012.

[00:04:49] Speaker 02:
It was for a sum certain.

[00:04:50] Speaker 02:
It was based off change orders that came from the government.

[00:04:53] Speaker 02:
The government at points agreed that they were change orders.

[00:04:55] Speaker 02:
It was just a matter of the overhead costs relating to the claim.

[00:05:00] Speaker 02:
At no point was it ever, could it have ever been a routine invoice or something of the sort that was previously submitted during the course of the job through requisitions.

[00:05:13] Speaker 02:
This was clearly a claim for a sum certain.

[00:05:16] Speaker 04:
And the government's objection seems to be that because you said you were willing to negotiate this, this didn't evidence an intent that the contracting officer issue a final decision on that.

[00:05:30] Speaker 04:
And I think that's what they got the court of federal claims to sign up on, right?

[00:05:34] Speaker 04:
Correct.

[00:05:34] Speaker 04:
Where is that in the statute, that your claim has to include a request for a final decision?

[00:05:41] Speaker 04:
I know that it's in our case law in some places.

[00:05:44] Speaker 04:
But I went back and looked at the statute and the regulations, and I don't see that any requirement that you have to formally say, I want a final decision on this.

[00:05:55] Speaker 04:
It just has to include the requirements you've been reciting, which is some certain, the evidence supporting it, the amount requested, and a certification if it's over a certain amount.

[00:06:06] Speaker 02:
Correct, Your Honor.

[00:06:06] Speaker 02:
It's nowhere in the statute that it requires a request for a final decision.

[00:06:11] Speaker 04:
What it does require under... What's the point of that final decision line of cases?

[00:06:16] Speaker 02:
I think it has to do with the fact that they want... If it really is for some certain, outside of the ordinary course of routine payments, you'd be asking for a decision on the matter, meaning it's not... And that's why in some cases where they... And for example, Maripakis, where the court said that it was not considered a claim, it was because it was through an email.

[00:06:37] Speaker 02:
And in that email they're saying,

[00:06:39] Speaker 02:
Practically, this email is something that was done during the ordinate.

[00:06:42] Speaker 02:
It was a routine type of request for payment.

[00:06:44] Speaker 02:
But in cases like Hedron, in cases like Reflectone, when you have a document that requests to some certain over 100 pages and asks for a specific amount, and specifically here, just like Hedron, where because it was over $100,000, it had the certification under the penalty of perjury,

[00:07:05] Speaker 02:
It is not a typical request for an ordinary payment.

[00:07:15] Speaker 04:
I mean, I've read these cases, and a lot of them seem to be trying to figure out what are invoices and normal requests for payment under the contract or claims under the CDA.

[00:07:28] Speaker 04:
Is that the point of the final decision?

[00:07:31] Speaker 04:
Because sometimes, I guess, an invoice can turn into a claim.

[00:07:35] Speaker 04:
if it's disputed and you ask for a final decision.

[00:07:39] Speaker 04:
Is that what Reflectona and all those cases talking about the need to request a final decision are for?

[00:07:46] Speaker 02:
Exactly.

[00:07:47] Speaker 02:
They're trying to differentiate from a typical invoice and what would be a claim that's not a typical invoice.

[00:07:54] Speaker 02:
And what they say is if you were to request a final decision, that would differentiate you from an invoice.

[00:08:02] Speaker 02:
However, there is no, and I'm quoting, no magic language required.

[00:08:05] Speaker 02:
And even without requests for a final decision, you can see from, specifically as in Hedron, when you have a full lengthy document requesting this type of payment, especially after the contract is finished, and especially with the certification, it's not that typical.

[00:08:19] Speaker 01:
If there's no magic words, as our case law says, how do we determine that the words that you do use establishes a claim under the law?

[00:08:34] Speaker 02:
I think when you satisfy the obligation for the definition of a claim, which is under FAR 52.233-1C, which are the three

[00:08:44] Speaker 02:
requirements of a written demand, payment of money, and the sum certain.

[00:08:48] Speaker 02:
When you have those three items, that's usually not done in a typical form of an invoice.

[00:08:56] Speaker 02:
An invoice won't be done through a 100 page document that's certified and refers to breaches as well.

[00:09:02] Speaker 02:
Our document referred to breaches of the contract from the government and change orders.

[00:09:06] Speaker 02:
That's not how an invoice is submitted, especially after the contract is complete.

[00:09:10] Speaker 04:
Can you think of instances where a formal request for an equitable adjustment would fall under the kind of routine request for a money that doesn't rise to the level of a claim?

[00:09:24] Speaker 02:
No.

[00:09:26] Speaker 02:
No.

[00:09:27] Speaker 02:
I mean, thinking out loud, no.

[00:09:28] Speaker 02:
I mean, I know what a typical invoice looks like.

[00:09:31] Speaker 02:
I know what a requisition would look like.

[00:09:33] Speaker 02:
or might detail progress of payment based on percentages of work complete.

[00:09:38] Speaker 02:
But when you have something outside of that in a lengthy document explaining why you're owed money based on a disputed amount after the contract is finished, I don't see how any document like that can not be a claim.

[00:09:56] Speaker 02:
And in terms of the government response,

[00:10:03] Speaker 02:
reference the fact that there's negotiation.

[00:10:05] Speaker 02:
The case law is clear that you're allowed to negotiate.

[00:10:08] Speaker 02:
And in fact, they prefer you to negotiate disputes prior to a conclusion.

[00:10:14] Speaker 02:
And I think that just goes along with business common sense, where if there's a claim, you always want to negotiate it rather than go to court.

[00:10:22] Speaker 02:
So writing that we're going to negotiate does not prevent it from being claimed, nor does the case law say so.

[00:10:27] Speaker 04:
Can you find quickly for me the last page of your claim?

[00:10:31] Speaker 02:
Sure.

[00:10:31] Speaker 04:
I was reading it the other day.

[00:10:32] Speaker 04:
I had meant a tablet, but I forgot.

[00:10:38] Speaker 04:
Sure.

[00:10:39] Speaker 04:
As you say, it's long, so.

[00:10:43] Speaker 02:
It's on page.

[00:10:47] Speaker 01:
What page are you on?

[00:10:50] Speaker 02:
It's in the appendix on page.

[00:10:56] Speaker 02:
It has the certification there.

[00:11:27] Speaker 02:
Apologies.

[00:11:33] Speaker 02:
Appendix 204 is the last page of the claim.

[00:11:40] Speaker 02:
And it's under section H of the claim, conclusion and certification amount.

[00:11:45] Speaker 04:
Right.

[00:11:45] Speaker 04:
This was what I was looking at.

[00:11:47] Speaker 04:
And this probably is better addressed to your friend on the other side.

[00:11:51] Speaker 04:
But I'm just a little confused as to why this can't be read as a claim when it

[00:11:57] Speaker 04:
has a discussion about how contracting officers are required to deal with claims fairly and just notes the Corps of Engineers commitment to dispute resolution.

[00:12:09] Speaker 04:
I mean, I don't see how you categorically rule out a claim just because you want to go to ADR or some other form of resolution short of litigation.

[00:12:26] Speaker 02:
I agree, Your Honor.

[00:12:28] Speaker 02:
We're in agreement, and that's why it's there.

[00:12:32] Speaker 04:
So the government's position would essentially be that if you file something like this and ask for resolution, then you have to at some point file another claim demanding a decision if you're not satisfied with that before you can get to court.

[00:12:50] Speaker 02:
I suppose they would say maybe you should file another document without this language in it.

[00:12:55] Speaker 02:
However, these are, you know,

[00:12:58] Speaker 02:
In the real world, with the government, the Army Corps, the Corps of Engineers, and a contractor, things are happening in real time.

[00:13:07] Speaker 02:
And when a contractor submits its claim, it also wants to get paid.

[00:13:10] Speaker 02:
So it's definitely open to some sort of resolution without a finalization, which is why they always include this type of language.

[00:13:18] Speaker 03:
Let's take this up with the other side, and we'll save your rebuttal time.

[00:13:22] Speaker 02:
OK, thank you.

[00:13:23] Speaker 02:
Thank you, Your Honor.

[00:13:27] Speaker 03:
And it's okay to remove your mask while speaking.

[00:13:31] Speaker 00:
Thank you, Your Honor.

[00:13:33] Speaker 00:
Good morning, Your Honors, and may it please the Court.

[00:13:37] Speaker 00:
The question before this Court is straightforward.

[00:13:40] Speaker 00:
Did Zephyr submit a claim prior to the one it submitted in February 2018?

[00:13:46] Speaker 00:
The Court of Federal Claims determined that it did not, and that Court was correct.

[00:13:53] Speaker 00:
Now, I'd like to

[00:13:55] Speaker 01:
uh... if if the claims are identical then what's the differential what what are you looking for you seems to me that your your argument board not crosses a line that what what what you're looking for the government's looking for a magic word to some kind and yet what are the magic words well your honor we are specifically not looking for magic words what's uh... this court's case law has demonstrated

[00:14:24] Speaker 00:
is that the contractor must evince some type of intent to seek a contracting officer's final decision.

[00:14:34] Speaker 00:
As came up in the prior discussion, there is no difference.

[00:14:37] Speaker 04:
Where is that requirement located in the statute or the regulations?

[00:14:42] Speaker 00:
The explicit requirement stating

[00:14:46] Speaker 00:
you must ask for a contracting officer's final decision is not in the statute.

[00:14:51] Speaker 00:
It comes from this court's case law.

[00:14:53] Speaker 04:
What's the point of that case law?

[00:14:55] Speaker 00:
The point of that case law is to put the government on notice that what the contractor is seeking is that final determination, that we've crossed the line from a case like this one

[00:15:11] Speaker 00:
where the contractor was seeking to negotiate to resolve a request versus the path towards litigation, which the request for the... You're not saying that once there's a claim that's made that all negotiations have to stop, otherwise you don't have a claim.

[00:15:29] Speaker 00:
No, not at all, Your Honor.

[00:15:30] Speaker 00:
And in fact, that's a point that I definitely want to address.

[00:15:34] Speaker 00:
We're not saying that negotiations somehow cut off a claim.

[00:15:38] Speaker 00:
You can have negotiations

[00:15:40] Speaker 00:
and you can have a claim and you can have both at the same time.

[00:15:45] Speaker 00:
But the issue here is that Zephyr explicitly requested only one of those things.

[00:15:51] Speaker 00:
It only asked for negotiation.

[00:15:53] Speaker 00:
They use an example in their reply brief at page two as though somehow... They did ask for money though, right?

[00:16:01] Speaker 00:
They did, Your Honor.

[00:16:02] Speaker 01:
Okay, so that's... Go on.

[00:16:05] Speaker 01:
I mean, that's more than just negotiation.

[00:16:08] Speaker 04:
I mean, how are they going to get money on a request for an equitable adjustment without a contracting officer's decision?

[00:16:14] Speaker 00:
Well, they could negotiate for further payment, Your Honor, and this goes to this... It has to be given through a contracting officer's final decision.

[00:16:24] Speaker 04:
We're not talking about routine invoices or anything like that where you might need to determine whether this was an intent to ask for a contracting officer's decision or was just a routine submission for payment under contract.

[00:16:40] Speaker 04:
That's clearly not what's going on here, right?

[00:16:42] Speaker 04:
This is a detailed request for equitable adjustment to adjust the terms of the contract, including allegations of breach by the government and the like.

[00:16:52] Speaker 04:
So that's not an ordinary contract interpretation or ordinary payment under contract, right?

[00:17:02] Speaker 00:
If you're asking is it differentiated from a routine invoice, yes, there may be some distinction there.

[00:17:14] Speaker 00:
However, the fact that there was 167 page request is not that unusual.

[00:17:22] Speaker 00:
for a contractor to be seeking additional payments under the changes clause of a contractor seeking payment for some

[00:17:31] Speaker 00:
alleged delay, any request of that sort is going to require detailed support and justification.

[00:17:38] Speaker 00:
So just the length of the request or the detailed level of it does not make it out of the ordinary for the contracting process.

[00:17:48] Speaker 04:
So you think this document we have here falls on the other line of

[00:17:55] Speaker 04:
ordinary payments under the contract versus claims that would use that final decision language to differentiate.

[00:18:04] Speaker 00:
I would say, Your Honor, it falls short of the request for the final decision.

[00:18:11] Speaker 04:
I think that you all have taken that request for a final decision language way out of context, and the whole point of that seems to be because it's not in the statute anywhere.

[00:18:20] Speaker 04:
You have to look at it in terms of the case law, and the whole point of it seems to be to differentiate between routine requests for payment and other things under the contract and claims to the contracting officer under the CDA.

[00:18:37] Speaker 04:
I don't think you can just isolate and pull out that as a new test.

[00:18:42] Speaker 04:
You have to look at the point of it.

[00:18:43] Speaker 04:
And this document does not seem anywhere close to a routine request for payment.

[00:18:50] Speaker 04:
I mean, you can dispute this if you want, but how is this document in any way similar to the routine request for payment where they use that final decision language to differentiate it from a claim?

[00:19:04] Speaker 00:
Well, Your Honor, if we're talking again about the difference between routine invoices and so forth, and I also would hesitate.

[00:19:14] Speaker 04:
This is not a routine invoice.

[00:19:15] Speaker 00:
No, I don't dispute that.

[00:19:17] Speaker 00:
No.

[00:19:17] Speaker 00:
If we're talking about a routine invoice, no, we're not trying to say that that's the case.

[00:19:22] Speaker 00:
But again, to try to make some distinction between a routine invoice

[00:19:28] Speaker 00:
and what rises to the level of claim we have to have uh... some differentiation between that and i think it's also important to know that throughout this entire process i think that that's a case where you're talking about the routine invoice or something that clearly be considered not a claim

[00:19:50] Speaker 04:
and something that might be considered a claim, and you really have to dive into it.

[00:19:53] Speaker 04:
How is this request for equitable adjustment even remotely something that could be considered routine?

[00:20:00] Speaker 00:
It's not, Your Honor.

[00:20:01] Speaker 00:
And obviously, the government engaged with this request.

[00:20:05] Speaker 00:
So we're not alleging that it was something that just slipped through the cracks or they forgot about, as the record indicates.

[00:20:13] Speaker 00:
There was extensive back and forth.

[00:20:15] Speaker 00:
But the point that I think is critical in this process

[00:20:20] Speaker 00:
is that it's the contractor that holds control over whether or not something progresses forward to the level of a claim and then to litigation.

[00:20:32] Speaker 00:
Otherwise, we'd have a situation where we would be searching for any.

[00:20:38] Speaker 01:
Let's take a look at appendix 204.

[00:20:41] Speaker 01:
This is in regards to what you just stated.

[00:20:45] Speaker 01:
And I think this goes back to your position.

[00:20:48] Speaker 01:
It appears to be a position that I don't think is supported by a precedent that the contractor has to show an intent of some sort of finality.

[00:21:03] Speaker 01:
That's your position.

[00:21:03] Speaker 01:
There's got to be some showing of intent that

[00:21:08] Speaker 01:
for finality.

[00:21:09] Speaker 01:
Anyway, I direct you to almost the very last sentence in the claim that says, we trust the contracting office will take immediate steps to resolve this.

[00:21:18] Speaker 01:
They're asking you for money, and then they say, pay it now.

[00:21:22] Speaker 01:
Why isn't that?

[00:21:24] Speaker 01:
Though I disagree that our law requires this showing of intent to finality, but why is that not that showing?

[00:21:33] Speaker 00:
Well, because, Your Honor, both on this page and at multiple other points within the document, Zephyr has requested not for a final decision, but to enter into negotiations.

[00:21:47] Speaker 00:
And there are other ways that payment can be affected.

[00:21:49] Speaker 04:
Again, you're elevating this final decision requirement into its own specific technical step that has to be met that is nowhere in the statute, nowhere in the regulations, and is used by this court to distinguish between routine invoices and routine requests for payment and claims.

[00:22:08] Speaker 04:
and so i don't when we have something that is clearly not a routine request for payment why are we even looking at that this is a claim it says it's a claim it finishes the certification and says unauthorized to certify the claim we don't need that line of cases to resolve whether this is a claim or not respectfully your honor seems like you're you're now imposing

[00:22:34] Speaker 04:
a requirement that we've rejected over and over again, and also creating a new class of something that's between a routine request for payment and a claim that is a settlement proposal that is somehow not a claim because it allows for negotiation.

[00:22:52] Speaker 04:
But let me ask you this.

[00:22:54] Speaker 04:
If you have the same document and had everything in here and said, we wish to resolve this short of litigation and hope to negotiate this, but request a final decision.

[00:23:04] Speaker 04:
That would be claimed, right?

[00:23:06] Speaker 00:
Yes, Your Honor.

[00:23:08] Speaker 00:
And in fact, that's what's safe.

[00:23:09] Speaker 04:
But doesn't that, given that the content of everything else here, suggest that you're elevating this into a formalistic technical requirement?

[00:23:18] Speaker 04:
Because everything else that they've asked for is the same thing.

[00:23:22] Speaker 04:
They've laid out what they want, the supporting evidence, they want to resolve it, and they want the contracting officer to give them a decision.

[00:23:30] Speaker 04:
They didn't say technically they want a final decision, but they want this resolved.

[00:23:35] Speaker 00:
Or respectfully, Your Honor, we're not asking for a change in the law at all.

[00:23:39] Speaker 00:
There is an analog to this case.

[00:23:41] Speaker 04:
No, I think you're not asking for a change in the law.

[00:23:44] Speaker 04:
You're elevating a line of cases to a hyper-technical requirement that we've rejected over and over again.

[00:23:51] Speaker 00:
We're not asking for a hyper-technical reading.

[00:23:54] Speaker 00:
And to answer your question, there is a distinction between a routine invoice and a claim.

[00:24:00] Speaker 00:
And it's the entire regulatory scheme behind a request for equitable adjustment.

[00:24:05] Speaker 04:
But you've already said this isn't a routine request for.

[00:24:07] Speaker 04:
This isn't an invoice.

[00:24:09] Speaker 00:
It's not an invoice, Your Honor.

[00:24:10] Speaker 00:
It's a request for equitable adjustment, which has its own requirements under the FAR.

[00:24:15] Speaker 00:
A request for equitable adjustment also has certification language that is required.

[00:24:21] Speaker 00:
But the regulation still distinguishes between those two things.

[00:24:26] Speaker 00:
It has this entire scheme there for a request for equitable adjustment, which is distinct from a claim, and has those requirements in it.

[00:24:36] Speaker 01:
And as the court asked appellants... So is it a position that a request for equitable adjustment can never be a claim?

[00:24:46] Speaker 00:
No, Your Honor, because we're not arguing for the magic words test.

[00:24:51] Speaker 00:
We're not saying that someone who puts the title of request for equitable adjustment on a document automatically cuts it short of being a claim.

[00:25:01] Speaker 00:
What we are asking for is for this court to apply the cases which we cite to our brief, concluding in Hedron, where when you have an appellant

[00:25:12] Speaker 00:
who did exactly what Zephyr did in this case.

[00:25:15] Speaker 04:
How do you transform a request for equitable adjustment into a claim if it's not always a claim?

[00:25:21] Speaker 00:
Exactly the way Zephyr did in this case in February 2018, Your Honor.

[00:25:24] Speaker 00:
They asked for the final decision.

[00:25:27] Speaker 04:
They used the magic words.

[00:25:30] Speaker 00:
They evinced an intent to have the contracting officer issue that decision.

[00:25:35] Speaker 01:
At no point throughout this... How do you evince an intent

[00:25:39] Speaker 01:
without resort to some sort of verbiage we have to ask for your honor but i don't think the do you have to ask using certain words you obviously it's not a physical posture you're looking for it's a verbal posture sure whatever the magic word you're looking for again i i don't have any only difference between these i'm sorry for interrupt i know you're frustrated with me the only

[00:26:10] Speaker 04:
It's OK.

[00:26:11] Speaker 04:
I used to be on your side.

[00:26:13] Speaker 04:
The only difference between these two things, though, is they ask for a final written decision, isn't it?

[00:26:18] Speaker 04:
I mean, basically, that's the difference between the 2014 document and the 2018 document.

[00:26:23] Speaker 00:
Yes, it is, Your Honor.

[00:26:24] Speaker 04:
But it's also significant that... But again, I mean, since I cut you off from answering Judge Raina's question, what is it?

[00:26:31] Speaker 04:
How could they evidence an intent to seek a final decision without using magic words?

[00:26:37] Speaker 00:
I think the magic words discussion here has taken it to a level where we're saying, okay, we don't need a specific set of words.

[00:26:47] Speaker 00:
They don't have to pull the precise language from the regulation, but they still have to ask.

[00:26:53] Speaker 03:
At no point in... Why, are you saying it was reasonable for the contracting officer to understand that he didn't have to decide this request?

[00:27:04] Speaker 00:
Yes, Your Honor.

[00:27:05] Speaker 03:
Yes, because... What were they negotiating for four years?

[00:27:11] Speaker 00:
They were negotiating for the additional payment, but at no point during that four years... They were negotiating what, for fund, for exercise?

[00:27:19] Speaker 03:
That this was not a request for payment?

[00:27:25] Speaker 00:
Yes, they were asking for payment, but at no point in that extensive back and forth, which is detailed in the record,

[00:27:33] Speaker 00:
There's not an email.

[00:27:34] Speaker 00:
There's not a request that says, where is our final decision over this entire period of time?

[00:27:39] Speaker 03:
You're saying that this contractor was required to interrupt negotiations and stop them and say, I want a final decision.

[00:27:50] Speaker 03:
I want it now because six years are running.

[00:27:55] Speaker 00:
They didn't have to interrupt the negotiations, Your Honor.

[00:27:58] Speaker 03:
The claim itself would not... A file of a request for final decision?

[00:28:02] Speaker 03:
That doesn't interrupt?

[00:28:05] Speaker 00:
It doesn't need to, Your Honor, if the contractor continues to negotiate.

[00:28:08] Speaker 00:
And that's, again, the point that I was making earlier.

[00:28:12] Speaker 03:
The government would need to continue to negotiate.

[00:28:15] Speaker 03:
What's to stop the contracting officer from saying, all right, I'll give you my final decision?

[00:28:21] Speaker 03:
You lose.

[00:28:23] Speaker 00:
The contracting officer could do that, Your Honor, but, and this is a key point, the contracting officer doesn't have that opportunity until the contractor makes clear that they're asking for that final decision.

[00:28:36] Speaker 03:
You're saying then the contracting officer could not have issued a final decision?

[00:28:42] Speaker 00:
uh... i see my time to expire if i may answer the court's question yes the that is the the overarching point that we're making your honor is that as counsel indicated uh... in in his portion of the argument zephyrs arguing for no distinction between an aria and a claim ever

[00:29:03] Speaker 03:
which would mean that a contracting officer would be talking about ever they're talking about this case there's a hundred and sixty seven pages of detailed billing a courteous request let's talk about it yes and that was fatal you're telling us because once in six years ran the government enough to talk anymore

[00:29:29] Speaker 00:
Well, Your Honor, they did not ask for the decision.

[00:29:32] Speaker 00:
They specifically asked for something else.

[00:29:35] Speaker 00:
Again, you can have both a claim and negotiation at the same time.

[00:29:41] Speaker 00:
But in this case, they only asked for one of those things and then proceeded to engage in it.

[00:29:46] Speaker 04:
I'm a little baffled by this notion that there's some kind of third avenue out there that negotiations, to ask for negotiations, is not a routine payment nor a claim.

[00:29:59] Speaker 04:
There's nothing, I mean, this is nowhere in the case law, it's nowhere in the statutory regulations, but that's what you seem to get Judge Brugin to buy off on the notion that a request for negotiation somehow falls short of a claim, even though it's clearly more than just a routine request for payment.

[00:30:15] Speaker 00:
Yes, Your Honor, it's a request for equitable adjustment that stops short of a claim, and there is that distinction within the regulations.

[00:30:25] Speaker 04:
But you agree that a request for equitable adjustment that meets all the requirements for a claim is a claim.

[00:30:34] Speaker 00:
Yes, this court's case law has that.

[00:30:36] Speaker 00:
But it has those specific statements that say the contractor requested a final decision.

[00:30:43] Speaker 00:
And the decision in Hedgeron specifically looked to the behavior of the parties.

[00:30:49] Speaker 04:
Can you give me an example of an equitable adjustment that doesn't rely on this request for negotiations language, but has here are differing site conditions.

[00:31:01] Speaker 04:
Because of that, we had to work extra hours or do all this extra stuff.

[00:31:06] Speaker 04:
And it required us to expend an additional $5 million

[00:31:10] Speaker 04:
you know, we request resolution of that.

[00:31:15] Speaker 00:
Well, in fact, that's exactly what they asked for here in the September 2013 and December 2014 REAs, where they said, we have all of these amounts that we would like paid to us, and we would like to negotiate it.

[00:31:29] Speaker 04:
And again, there is that language that says we would like to... So I want to get away from the negotiation language, because I think it's not

[00:31:37] Speaker 04:
particularly compelling to me.

[00:31:41] Speaker 04:
What other class of requests for equitable adjustments do you see that don't rise to the level of a claim?

[00:31:48] Speaker 00:
I'm sorry, what other class?

[00:31:50] Speaker 04:
Yes.

[00:31:51] Speaker 04:
I mean, you said requests for equitable adjustments are under separate provisions of the FARs.

[00:31:56] Speaker 04:
And I know that.

[00:31:57] Speaker 04:
I can see that.

[00:31:58] Speaker 04:
But when are they not considered claims also?

[00:32:03] Speaker 04:
well the actual requirement that uh... discussing here in the same can be some hypothetical facts where you ask for some things you app set out a detailed legal argument true and you set out a detailed quantum and when that's not a claim

[00:32:19] Speaker 00:
Well, I mean, it could be... Okay, I understand your honor, I apologize.

[00:32:24] Speaker 00:
It could be in any number of classes of claims.

[00:32:26] Speaker 00:
You could have delay, you could have changes.

[00:32:28] Speaker 00:
I think probably changes would be a good example of what we're talking about here and the need to request a final decision because most contracts have that changes clause in there.

[00:32:43] Speaker 00:
and a contractor would be saying under the contract, under the changes clause, I was requested to do something different.

[00:32:51] Speaker 04:
Okay, that makes sense because that's routine request under the contract not to

[00:32:57] Speaker 04:
claim breach of contract and alter the terms of the contract.

[00:33:02] Speaker 04:
So in that you reference delay, same thing.

[00:33:04] Speaker 04:
Maybe you're just asking for days and not monetary compensation on a delay claim.

[00:33:11] Speaker 04:
Those all seem to be routine requests

[00:33:15] Speaker 04:
under the contract, which is the whole point of the written decision language to differentiate between that kind of routine contract administration stuff and requests for additional money and asking a resolution of it under the claims language.

[00:33:32] Speaker 04:
I'm sorry, I've gone on too long.

[00:33:36] Speaker 04:
How is this not on that line, that this is just not anything remotely a request for additional days under a delay clause?

[00:33:44] Speaker 04:
It's not a changes clause request.

[00:33:47] Speaker 04:
It references breach of contract and requests additional monies.

[00:33:51] Speaker 04:
The only thing you can hang your hat on, it seems to me, is that it doesn't have any phrase that requests a final decision.

[00:33:59] Speaker 04:
Is that right?

[00:34:01] Speaker 00:
That is the key point that we're looking at.

[00:34:04] Speaker 00:
address the point that you're making, Your Honor, about calling this routine.

[00:34:08] Speaker 00:
Again, this particular request, in that definition, the way I understand the court to be asking it now, is routine in the sense that we have many situations where you have delay, you have changes, and here they were asking for over $6 million.

[00:34:27] Speaker 00:
A contracting officer is not just going to issue that payment without detailed support and potentially talking or maybe negotiating with the contractor.

[00:34:36] Speaker 04:
Like there is in the 167 pages?

[00:34:39] Speaker 00:
Yes, we're saying that this is a fairly routine request and we have to have some way to differentiate between when a contractor is asking

[00:34:51] Speaker 00:
uh... for additional payments again in a relatively routine way although very detailed uh... but they're they're doing this in a routine manner there has to be some way to differentiate when that is happening versus when the contractor is asking for that final decision which would allow the government to issue the decision

[00:35:15] Speaker 00:
cut off the interest period that is also running, because that's another issue we have here, is that where the CDA interest clock is running, and until the contracting officer is on notice that the contractor is asking for that final decision, they have no opportunity to issue that decision and then start the litigation clock that would fall on the other side of that.

[00:35:42] Speaker 04:
Wait, I just want to, I'm sorry to belabor this, but I heard something in your last answer that bothered me.

[00:35:48] Speaker 04:
You said that contracting officer didn't have any opportunity to issue a final decision.

[00:35:53] Speaker 04:
So are you saying in response to this, the contracting officer couldn't have said claim denied?

[00:36:01] Speaker 00:
I don't think you meant that.

[00:36:03] Speaker 00:
I think that if the court were to rule that

[00:36:08] Speaker 04:
that hasn't entered his question if the contracting officer got this in twenty fourteen and looked at it and said i'm not interested in negotiating this i don't think you have any basis whatsoever denied the contracting officer again in the contracting officer wouldn't have the authority to do that no i'm not saying that he wouldn't have the authority that that would be a final decision with it yes your honor but

[00:36:35] Speaker 00:
the contracting officer engaged in an extensive back and forth, there was a DCAA audit to determine whether or not there was any merit.

[00:36:44] Speaker 00:
And that's the entire point of having a contracting officer's final decision, is to allow the agency to investigate a request, determine whether it has merit, and potentially make the payment without having to engage in litigation.

[00:36:59] Speaker 00:
But if they're not on notice,

[00:37:02] Speaker 00:
that they need to issue that decision because the contractor is seeking to go to litigation, then the contracting officer would essentially have to do that out of hand in every routine request for payment.

[00:37:16] Speaker 01:
This case is a statute of limitations case, right?

[00:37:18] Speaker 01:
So we're talking exactly about notice.

[00:37:22] Speaker 01:
And why is it that your argument seems to be that the contracting officer in this situation had no notice as to the nature of the claim

[00:37:32] Speaker 01:
vis-a-vis the 2014 REA.

[00:37:37] Speaker 00:
Not that he had no notices to the nature of the claim, Your Honor.

[00:37:41] Speaker 00:
There was not the indication that the case would proceed into litigation.

[00:37:46] Speaker 01:
There is notice.

[00:37:47] Speaker 01:
There is notice of a claim, a sum certain.

[00:37:51] Speaker 01:
It's backed up by 168 detailed reports.

[00:37:57] Speaker 01:
Wouldn't a reasonable contracting officer at that point go, my god, you know what I mean?

[00:38:03] Speaker 01:
These guys are serious now.

[00:38:04] Speaker 01:
They want the money.

[00:38:05] Speaker 01:
They attached this report.

[00:38:07] Speaker 01:
And they want $6 million.

[00:38:11] Speaker 01:
So there's notice.

[00:38:12] Speaker 01:
The notice was there.

[00:38:13] Speaker 00:
I think a reasonable contracting officer would do exactly what the contracting officer did in this case, which was engage with the contractor, call for the audit to see if... But the contracting officer had notice of their claim at that point.

[00:38:28] Speaker 00:
I would dispute that they had notice of the claim, because again,

[00:38:32] Speaker 00:
That is indicating that they wanted the final decision at that time.

[00:38:36] Speaker 04:
It has this final written decision line of cases we have that is not rooted in the statute.

[00:38:43] Speaker 00:
That's correct.

[00:38:44] Speaker 04:
Let's just assume that line of cases didn't exist.

[00:38:47] Speaker 04:
Is this a claim?

[00:38:52] Speaker 00:
I think that if that line of cases didn't exist and this court were to say that all that's required

[00:39:00] Speaker 00:
is a some certain and some type of certification language, then the category of what would be considered a claim would be immeasurably broadened.

[00:39:14] Speaker 04:
To include this?

[00:39:16] Speaker 00:
To include this.

[00:39:17] Speaker 00:
But it would include pretty much literally any time a contractor asks for any amount of money.

[00:39:25] Speaker 00:
at any point in the process.

[00:39:27] Speaker 04:
And says it's authorized to certify the claim on behalf of the contractor.

[00:39:33] Speaker 00:
But again, Your Honor, also asks specifically to engage in something short of litigation.

[00:39:43] Speaker 04:
But that's the final decision stuff.

[00:39:45] Speaker 04:
I mean, if a contractor sends in an invoice and says, pay me, that's not a claim under any definition, because there's no certification.

[00:39:53] Speaker 04:
Sorry, we've taken way too long.

[00:39:55] Speaker 04:
Do you want me to respond?

[00:39:56] Speaker 04:
No, I don't have any more questions.

[00:39:59] Speaker 03:
Okay.

[00:39:59] Speaker 03:
Are you sure?

[00:40:00] Speaker 03:
Yes.

[00:40:01] Speaker 03:
Question?

[00:40:02] Speaker 02:
I don't have anything.

[00:40:02] Speaker 03:
Anything else?

[00:40:04] Speaker 03:
Okay.

[00:40:04] Speaker 03:
Thank you.

[00:40:05] Speaker 02:
Thank you, Your Honor.

[00:40:06] Speaker 03:
Mr. Gudaski.

[00:40:08] Speaker 02:
Thank you, Your Honor.

[00:40:11] Speaker 02:
I just wanted to refer the court to a court from the Hedron case which goes into the specifics of why there is no magic language and why

[00:40:23] Speaker 02:
this claim, like the claim in Hedron, was not a routine request for payment.

[00:40:26] Speaker 02:
And in the case of Hedron, and I'm quoting, it says, this submission bears all the hallmarks of requests for a final decision on a claim.

[00:40:34] Speaker 02:
And this court is loathe to believe that in a case, a reasonable contractor would submit to a contracting officer a letter containing a payment request after a dispute had arisen solely for the contracting officer's information and without, at the very least, an implied request that the contracting officer make a decision as to entitlement

[00:40:53] Speaker 02:
period, any other finding defends logic.

[00:40:57] Speaker 02:
That's the case here.

[00:40:58] Speaker 02:
This was not an invoice.

[00:41:00] Speaker 02:
It was not an email.

[00:41:01] Speaker 02:
It was a very, very well detailed document for a claim due to breaches to the contract.

[00:41:09] Speaker 02:
And I just want to refer the court to another quote relating to the idea that in any way a negotiation can somehow negate a claim.

[00:41:17] Speaker 02:
In Transamerica, this court stated

[00:41:21] Speaker 02:
And I'm quoting, there's no necessary inconsistency between the existence of a valid CDA claim and an expressed desire to continue to mutually work toward a claims resolution.

[00:41:32] Speaker 02:
And it refers to a citation to Congress and states that the purpose of the Contract Disputes Act was to induce resolution of more contract disputes by negotiation prior to litigation.

[00:41:48] Speaker 02:
And that's all we were ever trying to do.

[00:41:50] Speaker 02:
And it was a common business since it was pursuant to the purpose of the CDA to try to resolve this prior to going to litigation, which is costly.

[00:42:01] Speaker 02:
And I have nothing further to add.

[00:42:06] Speaker 03:
Thank you.

[00:42:06] Speaker 03:
Thanks to both counsel.

[00:42:08] Speaker 03:
The case is taken under submission.

[00:42:10] Speaker 02:
Thank you, Your Honor.