[00:00:00] Speaker 04:
The next case is Beacon Point Associates versus the Department of Veterans Affairs, number 24-1076.

[00:00:09] Speaker 04:
Mr. Hyland, when you're ready.

[00:00:13] Speaker 03:
And good morning, and may it please the court.

[00:00:15] Speaker 03:
My name is Tim Hyland.

[00:00:16] Speaker 03:
I represent Beacon Point Associates.

[00:00:19] Speaker 03:
The issue here sort of crystallized to its essence.

[00:00:22] Speaker 03:
is a fairly narrow one.

[00:00:23] Speaker 03:
It's whether the contract here incorporated or included extrinsic matter.

[00:00:29] Speaker 03:
And that is specifically whether the terms of Beacon Point's quotation were included or incorporated into the government contract.

[00:00:40] Speaker 03:
We would submit that the Board of Contract Appeals erred in holding that they were not, as a matter of law,

[00:00:48] Speaker 03:
That's based on the two-part test that this court has enunciated in, first in Northrop, and then again in the CSI aviation case a couple years back.

[00:00:59] Speaker 03:
And that test is, again, very clean, very easy.

[00:01:03] Speaker 03:
First, the extrinsic material has to be expressly incorporated, or precisely identified.

[00:01:10] Speaker 03:
Number one, that's not an issue here.

[00:01:12] Speaker 03:
Clearly, it was precisely identified.

[00:01:14] Speaker 03:
No one's claimed it wasn't.

[00:01:17] Speaker 03:
It was done by a very long string of numbers and what have you.

[00:01:22] Speaker 03:
Part two is what's at issue here, and that is the purpose to make it part of the contract must be clear.

[00:01:27] Speaker 03:
We would submit that the purpose to incorporate it and to make it part of the contract was, in fact, clear, and that the board erred in holding it otherwise.

[00:01:41] Speaker 00:
So do I remember correctly that the board found otherwise, partly because there is an inconsistency between the terms in the quote and the terms in the contract, and also because there's a FAR provision that says that a quotation is not an offer and it can't be accepted by the government?

[00:02:02] Speaker 00:
I mean, I think those are the two kind of underlying reasons that we're focused on.

[00:02:07] Speaker 03:
It's a little hard to tell from the board's ruling, but I mean, I can respond to both of those items.

[00:02:16] Speaker 03:
Firstly, the fact that there would be ultimately conflicting terms is, I would suggest, a bit of a red herring.

[00:02:25] Speaker 03:
Contracts oftentimes, I shouldn't say oftentimes, it is not uncommon for contracts to have terms that might conflict with one another and might even collide with one another.

[00:02:38] Speaker 03:
And the chore of the court then is to determine, using the canons of construction and what have you, how to make all of those things work together.

[00:02:53] Speaker 03:
As to the 13-004 issue, we would suggest that that's a little bit also of a red herring.

[00:03:06] Speaker 03:
Here's why.

[00:03:08] Speaker 03:
13.004 says a quotation is not an offer, and merely the government saying we're going to go with it isn't an acceptance of that.

[00:03:19] Speaker 03:
True enough.

[00:03:21] Speaker 03:
But there's two points in this case.

[00:03:25] Speaker 03:
And these are the two points that underscore the incorporation issue also here that undermine that.

[00:03:33] Speaker 03:
First.

[00:03:35] Speaker 03:
Box 29 on the order form, the standard form 1449, oddly conflicts, at least on its face, with the FAR section.

[00:03:52] Speaker 03:
It refers to the quote, and by number and date, as an offer.

[00:04:00] Speaker 03:
And it says it's accepted as to items, what have you.

[00:04:06] Speaker 03:
is an ambiguity at best and would seem to suggest that the government doesn't want 13.004 to apply.

[00:04:14] Speaker 03:
But more to the point, and this is what the oddity of this case and why we believe this case is different.

[00:04:27] Speaker 03:
Recall from the record, if you will, that originally the government sent the standard form 1449.

[00:04:34] Speaker 03:
It had errors in it.

[00:04:36] Speaker 03:
It had some oddities to it.

[00:04:39] Speaker 03:
And it was sent to Beacon Point.

[00:04:42] Speaker 03:
And then on July 14, 2020, so mid-July, Beacon Point sends it back or emails back to the VA.

[00:04:52] Speaker 03:
Instead, I've attached a quote with the terms and conditions.

[00:04:55] Speaker 03:
This needs to be part of the contract.

[00:04:57] Speaker 03:
That's, you can see that at appendix 172.

[00:05:02] Speaker 03:
About three weeks later, two and a half weeks later, VA emails back to Beacon Point.

[00:05:08] Speaker 03:
That's at 174 to 176.

[00:05:09] Speaker 03:
And it says, here you go.

[00:05:15] Speaker 03:
What was attached to the email?

[00:05:17] Speaker 03:
The standard form, 1449, an award letter of some sort.

[00:05:22] Speaker 03:
It's a one page thing.

[00:05:24] Speaker 03:
And oddly enough, they sent back the quote

[00:05:28] Speaker 03:
The VA attached the quote with the standard form 1449.

[00:05:34] Speaker 00:
Can I ask you just to make sure I understand?

[00:05:37] Speaker 00:
I mean, I'm only going to get to this evidence that you're talking about now if I agree that box 29 is ambiguous, right?

[00:05:45] Speaker 03:
It has its warts.

[00:05:48] Speaker 03:
It's ambiguous in that there's a blank there for items, although there's no items to describe here because it was a singular system.

[00:05:59] Speaker 03:
But it does say the award of contract, your offer on solicitation, including any additions or changes, is accepted.

[00:06:12] Speaker 03:
It is ambiguous if you look at it broadly.

[00:06:17] Speaker 03:
We do apply the canons of construction, and we'll apply those canons of construction.

[00:06:21] Speaker 03:
We'll say, well, no language that's put into a contract is intended to be surplusage or useless, that sort of thing, the usual candidate of construction.

[00:06:32] Speaker 03:
And the interpretation of that provision given by the board here renders it, it's as if it doesn't exist.

[00:06:43] Speaker 03:
that the government never put that there, the 529-2020 and the VA-Atlantic language.

[00:06:51] Speaker 03:
They completely disregarded and say, it's just surplusage.

[00:06:56] Speaker 03:
And you can't interpret it as surplusage.

[00:06:59] Speaker 03:
So it has to mean something.

[00:07:02] Speaker 03:
And if it's to mean something, we would suggest it means, at least plausibly, it means the intent to incorporate.

[00:07:10] Speaker 03:
But again, we have something better.

[00:07:13] Speaker 03:
And that is when the government sent back the corrected standard form 1449.

[00:07:19] Speaker 03:
It didn't just send back the corrected 1449 with that language in box 29.

[00:07:24] Speaker 03:
It sent back the quote.

[00:07:30] Speaker 03:
And what else could have been intended by that, particularly because it was in response to an email two and a half weeks prior that said,

[00:07:43] Speaker 03:
quote, this needs to be part of the contract.

[00:07:48] Speaker 03:
So if we look to the formation process, the contract formation process, incidentally, the government talks about, refers to that August 3rd email, the one that included all of the different, the quote and the standard form 1449, quote, as a counteroffer.

[00:08:06] Speaker 03:
That's what they referred to it as in their motion to dismiss before the board.

[00:08:11] Speaker 03:
If we ride that horse,

[00:08:13] Speaker 03:
That would be consistent with 13.004, in a sense, that the government's sending to you as an offer.

[00:08:23] Speaker 03:
But what were the terms of the offer?

[00:08:24] Speaker 03:
The terms of the offer was 1449 and the quote.

[00:08:30] Speaker 03:
That's what was sent in the email.

[00:08:33] Speaker 03:
They weren't physically attached to one another.

[00:08:35] Speaker 03:
There were three different attachments.

[00:08:37] Speaker 03:
But that was what the government sent back in response to a request that it be part of the contract.

[00:08:43] Speaker 03:
It's hard to imagine why that would be done for any reason other than an intention to incorporate, even by the government at the time.

[00:08:57] Speaker 03:
That, coupled with the, again, somewhat ambiguous language of Box 29,

[00:09:07] Speaker 03:
we would suggest fulfills the requirement of the second prong, we'll call it, of the CSI Northrop test.

[00:09:19] Speaker 03:
The purpose of that quote, as I had just mentioned, is really documented in the contract formation process.

[00:09:25] Speaker 03:
CSI, in particular, counsels, we don't need magic words of incorporation.

[00:09:31] Speaker 03:
We don't need it to say this is hereby incorporated by reference and all that sort of thing.

[00:09:36] Speaker 03:
Oftentimes, merely attaching it or other

[00:09:42] Speaker 03:
language or actions that would suggest, or not just suggest, but that would make clear that there was an intent to incorporate or sufficient.

[00:09:51] Speaker 04:
Can I just ask you this?

[00:09:53] Speaker 04:
I'm looking at the solicitation, which I think is at pages 105 through about 144 of the appendix.

[00:10:04] Speaker 04:
This is the solicitation they sent out, and then they ultimately accepted

[00:10:11] Speaker 04:
your company's bid.

[00:10:13] Speaker 04:
Did this solicitation say in it that this was for

[00:10:19] Speaker 04:
a base year plus two option years, and that the option years didn't have to be exercised?

[00:10:27] Speaker 03:
Not in so many words.

[00:10:29] Speaker 03:
It did incorporate 57, the standard FAR clause that talks about option years.

[00:10:36] Speaker 04:
So the solicitation, I don't want to get into a dispute over this.

[00:10:41] Speaker 04:
I think it's pretty clear that they were doing their normal thing of

[00:10:44] Speaker 04:
we're offering you a base year plus two option years that we don't have to exercise.

[00:10:48] Speaker 03:
Which they have to do under... Right, right.

[00:10:51] Speaker 04:
And so when you said, oh no, we want our quote accepted, which you think means you added the terms

[00:11:01] Speaker 04:
that they had to be exercised.

[00:11:02] Speaker 04:
Wouldn't they have listed in Box 29 specifically that the option years were to be exercised if that's what they meant?

[00:11:11] Speaker 04:
Well, it wouldn't have fit in Box 29, but... Well, they could have added a page to the attached.

[00:11:16] Speaker 04:
Your point is taken.

[00:11:17] Speaker 04:
They didn't add anything to the solicitation.

[00:11:19] Speaker 04:
They just accepted your offer, which was for prices for

[00:11:26] Speaker 04:
the base plus auctioneers, right?

[00:11:28] Speaker 03:
Well, they say they didn't accept our offer.

[00:11:30] Speaker 03:
They said it was their offer.

[00:11:31] Speaker 03:
But... It is their offer.

[00:11:33] Speaker 03:
It is their offer.

[00:11:34] Speaker 03:
And their offer... And they didn't accept a counter offer.

[00:11:37] Speaker 04:
Is that... I'm just trying to figure out... Can we look at... Am I correct that this is what ultimately became the contract?

[00:11:45] Speaker 04:
Is that 101 through 144?

[00:11:47] Speaker 04:
It may be 145, which has a price cost.

[00:11:52] Speaker 03:
Well, we would suggest actually, and then you would also add in 168 through the

[00:12:01] Speaker 03:
171 as well.

[00:12:03] Speaker 03:
But I've just turned to those particular pages.

[00:12:07] Speaker 04:
Because that's your quote.

[00:12:08] Speaker 04:
Correct.

[00:12:09] Speaker 04:
That they included this by, but I don't see anything that says they incorporated the quote in its entirety by reference.

[00:12:19] Speaker 04:
There's no language that says that.

[00:12:20] Speaker 04:
No, not at all.

[00:12:24] Speaker 04:
We've had some questions, but do you want to save the rest of it?

[00:12:27] Speaker 03:
I'll save the rest of it.

[00:12:28] Speaker 03:
Thank you.

[00:12:31] Speaker 04:
Mr. Kushner, did I say that right?

[00:12:34] Speaker 02:
You did.

[00:12:34] Speaker 02:
Thank you.

[00:12:38] Speaker 04:
Am I right about what the contract is?

[00:12:41] Speaker 04:
It's the solicitation that's in the appendix, like 101 through 144, maybe 145.

[00:12:58] Speaker 02:
So Your Honor, the solicitation itself was actually not part of the appendix.

[00:13:02] Speaker 02:
What we're looking at at pages 105.

[00:13:05] Speaker 02:
That's the quote.

[00:13:07] Speaker 02:
Oh, sorry.

[00:13:09] Speaker 02:
So what's the contract in this case?

[00:13:11] Speaker 02:
So the contract is what's at pages 105.

[00:13:15] Speaker 02:
Sorry, maybe that's what I meant.

[00:13:18] Speaker 02:
Yeah.

[00:13:18] Speaker 02:
105 to 143.

[00:13:20] Speaker 02:
Page 105 is the standard form, 1449.

[00:13:25] Speaker 02:
And then there are the table of contents that go with it that goes all the way through page 143.

[00:13:31] Speaker 02:
That's the contract between the parts.

[00:13:33] Speaker 04:
And this incorporates the typical base year plus option year termination.

[00:13:41] Speaker 04:
You don't have to exercise it.

[00:13:43] Speaker 04:
That's your honor.

[00:13:45] Speaker 04:
So in your view, if they had intended to incorporate their deviation from that,

[00:13:53] Speaker 04:
FAR clause, they would have had to put it in box 29.

[00:13:56] Speaker 02:
Yes, and that's our view for a few reasons.

[00:13:59] Speaker 02:
The first reason is because the word accepted, which is the word that's used in box 29, does not mean incorporated.

[00:14:06] Speaker 02:
In fact, we know that accepted is really somewhat of a misnomer in this case because FAR 13.004A tells us

[00:14:15] Speaker 02:
that the quote that Beacon Point submitted is not an offer and therefore is not the kind of thing that the government can accept in order to form a binding contract between the parties.

[00:14:25] Speaker 02:
The second reason is because even that acceptance, whatever that may mean, was itself limited according to Box 29 because Box 29 says that the quote is accepted as two items, but then it proceeds to list no particular items within the quote that were accepted by the governor.

[00:14:44] Speaker 02:
And we agree with you, Judge Hughes, that if the government were to accept any particular items within the quote, it had to say so expressly in Box 29.

[00:14:51] Speaker 04:
So what we see at 105 through, can I just clarify for the record, do you think the price-cost schedule on 145 is, I didn't read the whole thing in detail, is that incorporated by reference?

[00:15:04] Speaker 04:
I know the signatures are on page 144, but does the A1 price-cost schedule go into this, or is that something extraneous?

[00:15:14] Speaker 02:
So it looks to me that that may have been part of an amendment to the contract, which is at page 144.

[00:15:21] Speaker 02:
OK.

[00:15:25] Speaker 02:
Box.

[00:15:27] Speaker 02:
Oh, I see.

[00:15:30] Speaker 02:
I believe there is a reference to the particular price within the original contract as well.

[00:15:35] Speaker 02:
So we don't have to look at that 144, 145.

[00:15:39] Speaker 04:
right I don't know thing in your view let me let me clarify this one more time what we have a 105 through whatever page we're going to is the government's order in response to their offer and that's your offer they don't they don't offer you offer

[00:15:56] Speaker 04:
you order something under the price they gave you, and if they accept it, they sign it.

[00:16:01] Speaker 04:
That's exactly right, Your Honor.

[00:16:02] Speaker 04:
And they're bound by the terms of solicitation unless it says something different in box 29.

[00:16:07] Speaker 02:
That's exactly right.

[00:16:08] Speaker 02:
And according to FAR 13.004A, that's exactly how FAR Part 13 procurements work.

[00:16:15] Speaker 02:
The government does the offering by submitting a order.

[00:16:19] Speaker 02:
In this case, one created under standard form 1449.

[00:16:24] Speaker 02:
And that is the offer that the contractor can then accept, and in fact did accept, because we see them execute it.

[00:16:30] Speaker 04:
What do we do with the fact that it seems like the contractor may have not completely understood what was going on here?

[00:16:36] Speaker 04:
Because they clearly offered this on the assumption that you would pick up the three option years.

[00:16:44] Speaker 04:
That was in their original quotation.

[00:16:46] Speaker 04:
And then when you didn't put it in the offer, they emailed back and said, oh, no, you've got to incorporate this.

[00:16:54] Speaker 04:
And it seems like they cited on the assumption that you did.

[00:16:58] Speaker 02:
Right.

[00:16:58] Speaker 02:
But what they asked the government to do in that email, which I don't think the court needs to look at.

[00:17:03] Speaker 02:
I think Judge Stoll you were exactly correct.

[00:17:06] Speaker 02:
of the kind of extrinsic evidence that the court only looks at if there's an ambiguity.

[00:17:12] Speaker 02:
We don't think there's an ambiguity in box 29.

[00:17:14] Speaker 02:
But even if we look at that email, Beacon Point asked the government to incorporate and use particular language of incorporation.

[00:17:22] Speaker 02:
But the government did not do that.

[00:17:24] Speaker 02:
When the government sent back an SF 1449 that was ultimately executed by the parties, there is no language of incorporation there.

[00:17:32] Speaker 02:
All it says is that the quote was accepted.

[00:17:35] Speaker 02:
Because this is a FAR Part 13 procurement, that accepted word does not mean incorporated.

[00:17:45] Speaker 02:
There are a few other points that I want to make.

[00:17:48] Speaker 02:
My friend on the other side.

[00:17:49] Speaker 04:
The word doesn't mean it's incorporated, but by attaching it to the award and sending it back, is it that action rather than words that means the same thing?

[00:18:01] Speaker 02:
Not necessarily, Your Honor.

[00:18:02] Speaker 02:
We don't think that attaching something to an email that goes to the contractor is the same as express language of incorporation.

[00:18:11] Speaker 02:
Because look, at the end of the day, the reason this court has stringent rules for incorporation, with the court articulated in Northrop Grumman and in virtually every incorporation case since,

[00:18:21] Speaker 02:
is that the court is looking for language that is expressed and clear so as to eliminate any ambiguity about incorporation.

[00:18:28] Speaker 02:
It has to be so expressed and so clear that incorporation becomes unambiguous.

[00:18:33] Speaker 02:
And here, not only do we lack this language, but Box 29 itself is riddled with ambiguity.

[00:18:39] Speaker 02:
What the word accepted means is ambiguous.

[00:18:42] Speaker 02:
Why is the space after items blank?

[00:18:45] Speaker 02:
That's ambiguous.

[00:18:46] Speaker 02:
And that ambiguity is not resolved by simply the function

[00:18:51] Speaker 02:
of attaching the original quote, which is not an offer, to the email that forwarded the contract itself to the contract.

[00:19:06] Speaker 02:
The other point I wanted to make is that my friend on the other side in their briefing argues that this case is just like CSI Aviation.

[00:19:15] Speaker 02:
In fact, that's the primary support that they offer for their argument.

[00:19:21] Speaker 02:
But this case is nothing like CSI Aviation.

[00:19:24] Speaker 02:
The contract in CSI Aviation expressly incorporated the terms and conditions that were proposed by CSI.

[00:19:31] Speaker 02:
It did so with language of incorporation

[00:19:34] Speaker 02:
Because according to the contract, those terms and conditions, quote, will apply to all operations, end quote.

[00:19:41] Speaker 02:
We don't have this kind of express statement of incorporation.

[00:19:44] Speaker 02:
In this case, all we have is the word accepted, which doesn't make much sense in a FAR Part 13 procurement anyway.

[00:19:50] Speaker 00:
And what do you do with the argument about no magic birds or leopards?

[00:19:54] Speaker 02:
Well certainly no magic words are required and we're not arguing that the word incorporated or some variation of it had to be used but there still has to be an express and clear expression of incorporation and that simply is not in the contract.

[00:20:11] Speaker 02:
And then the other reason why CSI doesn't apply is because CSI

[00:20:16] Speaker 02:
was also an SF 1449 contract.

[00:20:20] Speaker 02:
But in that case, box 29 was not checked.

[00:20:23] Speaker 02:
And because it was not checked, the contract there did not have

[00:20:27] Speaker 02:
language making acceptance subject to any additions or changes which are set forth herein, which this case does because that's the language that appears in Box 29.

[00:20:37] Speaker 02:
And that's a particularly salient part of Box 29 because there is a term in this contract, FAR 52.217-9, which expressly gives the government the option, the discretion

[00:20:51] Speaker 02:
to exercise follow-on option years.

[00:20:54] Speaker 02:
That is, even if the court considers acceptance to be incorporation, which we don't think it is, and even if the court decides that that particular term and condition that requires the government to exercise option years was in fact incorporated into the contract, which we don't think it was,

[00:21:18] Speaker 02:
That FAR provision 52.217-9 shows that at the very least there was a change that was put in place by the government.

[00:21:27] Speaker 02:
And because there was that change, the government could not have incorporated that part of Beacon Point's quote.

[00:21:37] Speaker 02:
Thank you.

[00:21:45] Speaker 04:
Mr. Highland, you have a little under three minutes left.

[00:21:48] Speaker 03:
Thank you.

[00:21:48] Speaker 03:
Now, I'll try to be very brief.

[00:21:51] Speaker 03:
We can call it a counteroffer.

[00:21:52] Speaker 03:
Fine.

[00:21:55] Speaker 03:
You know, again, I don't know that it matters who made the offer, who did what have you.

[00:21:59] Speaker 03:
The issue is there's no question that a contract was formed.

[00:22:02] Speaker 03:
So offer acceptance, what have you, it doesn't matter.

[00:22:07] Speaker 03:
What were the terms, but let's call it a counteroffer as the government does.

[00:22:10] Speaker 03:
That's fine.

[00:22:11] Speaker 03:
Or they call it an offer here.

[00:22:13] Speaker 03:
They've called it elsewhere, counteroffer, same thing.

[00:22:16] Speaker 03:
What are the terms of the counteroffer?

[00:22:17] Speaker 03:
What was accepted by Beacon Court?

[00:22:21] Speaker 03:
You go to the appendix of 174 to 176 and it could not be clearer.

[00:22:28] Speaker 03:
That is an email from them sending the new contract and it attaches

[00:22:33] Speaker 04:
But the problem with that is, if we look at the actual order sent out, it said, we're accepting your offer.

[00:22:41] Speaker 04:
And that offer included the regular FAR provision about option years.

[00:22:47] Speaker 04:
And if it had intended to modify that, wouldn't we expect to see that modification in box 29?

[00:22:53] Speaker 03:
Well, you do, in a sense, in that they reference the quote, which has that language.

[00:23:02] Speaker 03:
I mean, that's the whole concept of incorporation.

[00:23:05] Speaker 03:
I wouldn't even say a conflict.

[00:23:10] Speaker 03:
Are there then two provisions that provide for different things?

[00:23:13] Speaker 03:
Yes.

[00:23:14] Speaker 03:
Can the standard option year, FAR, be cabined or otherwise restricted or limited?

[00:23:22] Speaker 03:
Yes.

[00:23:22] Speaker 03:
This court held so in the Kirkjian case a few years ago.

[00:23:27] Speaker 03:
The suggestion has to be that since it was in two different PDFs that were attached to the email, that's not good enough.

[00:23:34] Speaker 03:
If it had been one PDF, that's good enough, but two PDFs isn't.

[00:23:38] Speaker 03:
That seems to be the suggestion, because they would concede that if it was attached to the 1449, the quote that is, were attached, that would be

[00:23:50] Speaker 04:
indicate an indicator that it was that it's that it's uh... that it's important i think is that the the whole point of requiring in box twenty nine tip for the variations be listed to resolve this actual issues so that we don't have to start comparing line for line to see what the solicitation versus quote have in the quotes not binding the government has to figure it out i mean and i don't know that i think the other part of the arch of the quote that might be inconsistent with

[00:24:18] Speaker 01:
the solicitation?

[00:24:20] Speaker 03:
Well, I think box 29 is actually intended for contracts where the supplier is the offeror and things, but that's neither here nor there.

[00:24:32] Speaker 03:
One point that I would like to address that Council bade is that it was ambiguous.

[00:24:36] Speaker 03:
If that is so, then it should be remanded, I would suggest, to the Board to resolve the ambiguity.

[00:24:43] Speaker 03:
That would be the proper

[00:24:46] Speaker 03:
Thank you so much.