[00:00:00] Speaker 04:
Good morning.

[00:00:00] Speaker 04:
We have four R8 cases this morning.

[00:00:02] Speaker 04:
The first is number 23, 1909, Hawaiian Dredging Construction Company versus United States, Mr. Ziesa.

[00:00:12] Speaker 04:
Go ahead.

[00:00:15] Speaker 00:
Again, good morning.

[00:00:16] Speaker 00:
May it please the Court.

[00:00:18] Speaker 00:
My name is Michael C. Ziesa.

[00:00:20] Speaker 00:
I'm counsel for Hawaiian Dredging Construction Company.

[00:00:25] Speaker 00:
Your Honors, this case involves the question of whether the Court of Federal Claims erred in dismissing Hawaiian Dredging's complaint on a 12b6 motion to dismiss when the complaint contained well-plead facts sufficient to support Hawaiian Dredging's claims and without giving Hawaiian Dredging the opportunity to amend its complaint.

[00:00:45] Speaker 00:
Hawaiian dredging submits that the Court of Federal Claims did error for four reasons.

[00:00:50] Speaker 00:
First, the court erred by effectively finding that Hawaiian dredging assumed all risks under a firm fixed price contract.

[00:00:58] Speaker 00:
This finding ignored well-settled law that under a fixed price contract, a contractor is entitled to increase costs and delays resulting from the government's directed or constructive changes.

[00:01:10] Speaker 00:
Second,

[00:01:11] Speaker 00:
The court erred because it did not accept Hawaiian dredging's well-pled allegations as true or construe the allegations in the light most favorable to Hawaiian dredging.

[00:01:22] Speaker 00:
In its complaint and the attachments to the complaint, Hawaiian dredging alleged facts sufficient to support its claims for changes to the contract, which caused delays and increased losses.

[00:01:33] Speaker 01:
You're going along.

[00:01:33] Speaker 01:
I want to hear your fourth point, but I want to start asking questions.

[00:01:37] Speaker 00:
OK.

[00:01:39] Speaker 01:
Please.

[00:01:40] Speaker 00:
What's your fourth point?

[00:01:40] Speaker 00:
Um...

[00:01:42] Speaker 00:
The fourth point, or the third, is that the court federal claims erred in dismissing portions of Hawaiian dredging's claims that weren't subject to the motion to dismiss and weren't addressed in the opinions or the briefings.

[00:01:56] Speaker 00:
And finally, Your Honors, the court federal claims abused its discretion.

[00:02:01] Speaker 00:
What were the claims that weren't addressed?

[00:02:03] Speaker 00:
Sure, Your Honor.

[00:02:05] Speaker 00:
There were two claims.

[00:02:07] Speaker 00:
So in the contracting officer's final decision,

[00:02:12] Speaker 00:
the decision determined or made a decision that there were several line items in the final payment application that was submitted that were constituted in overpayment, totaling about $892,000.

[00:02:27] Speaker 00:
And so in the final decision, the contracting officer, Hawaiian Judging, had to reimburse that money.

[00:02:34] Speaker 00:
In the complaint, Hawaiian Judging challenged that decision.

[00:02:37] Speaker 04:
OK, but what's the underlying issue about the overpayment?

[00:02:41] Speaker 00:
They were saying that it was work that had already been paid for.

[00:02:45] Speaker 00:
And so that decision was challenged by Hawaiian dredging.

[00:02:50] Speaker 00:
But it wasn't addressed in any of the briefings.

[00:02:53] Speaker 00:
It wasn't addressed in the order.

[00:02:55] Speaker 00:
But it was dismissed, which left Hawaiian dredging now with no recourse.

[00:02:59] Speaker 00:
That claim has disappeared as a result of the decision.

[00:03:04] Speaker 00:
And again, it wasn't addressed.

[00:03:11] Speaker 00:
One of the Hawaiian Dredging's claims was for 12 days of additional time.

[00:03:14] Speaker 04:
Well, that's not an issue anymore, right?

[00:03:16] Speaker 00:
Well, that issue has been resolved, but we don't have a modification.

[00:03:20] Speaker 00:
We don't have anything.

[00:03:21] Speaker 00:
It was resolved in the final decision, but it is no longer.

[00:03:27] Speaker 00:
It's not been resolved as a matter of a contract modification.

[00:03:32] Speaker 03:
That's the overpayment item.

[00:03:34] Speaker 00:
There was a 12-day extension of time.

[00:03:37] Speaker 00:
The overpayment item.

[00:03:40] Speaker 00:
Again, that remains unresolved.

[00:03:44] Speaker 03:
Is the 12-year extension different?

[00:03:46] Speaker 00:
Yes.

[00:03:47] Speaker 03:
Is that a different argument from the two overpayment issues?

[00:03:50] Speaker 00:
That's correct.

[00:03:50] Speaker 00:
That's correct.

[00:03:51] Speaker 01:
Well, the government says you didn't raise the issue of the government's claim for repayment of the $892,000.

[00:04:00] Speaker 01:
You didn't address this claim when it filed with leave of the court.

[00:04:03] Speaker 01:
It's a reply.

[00:04:04] Speaker 01:
And the government has all these reasons why you didn't raise it.

[00:04:07] Speaker 01:
You didn't preserve it.

[00:04:08] Speaker 00:
Well, it was raised, Your Honor, in the complaint that was filed by Hawaiian dredging.

[00:04:14] Speaker 00:
Part of our claim was that that was an improper.

[00:04:17] Speaker 04:
You read the motion to dismiss as not covering that, because it didn't mention it.

[00:04:21] Speaker 00:
That's correct, Your Honor.

[00:04:22] Speaker 00:
In other words, we didn't

[00:04:23] Speaker 00:
We didn't address it in the motion to dismiss because it wasn't even raised.

[00:04:27] Speaker 00:
It wasn't part of the motion to dismiss.

[00:04:31] Speaker 00:
And so it wasn't at issue.

[00:04:32] Speaker 00:
And in other words, we didn't even expect, worst case, that that claim was going to be dismissed as well.

[00:04:40] Speaker 03:
Well, you want to focus on the big money issues, which are the right-of-way issues and the utility polls?

[00:04:48] Speaker 00:
Yes, Your Honor.

[00:04:50] Speaker 03:
I mean, the Court of Federal Claims dismissed that on the grounds that there's

[00:04:54] Speaker 03:
There's no limit on the amount of time the government can take to produce the final right of way.

[00:05:00] Speaker 00:
Yes, Your Honor, and quickly I'll take a step back.

[00:05:03] Speaker 00:
So this project is called the Lahaina Bypass Project.

[00:05:07] Speaker 00:
It was a design-build project of a new bypass highway and the widening of the Hana-Palani Highway in Maui.

[00:05:14] Speaker 01:
In addition to utilizing portions of state-owned land the proposed new roadways would It seems like appendix page 9 So here's what she said she says well the contractor signs the government responsibility to obtain those it does not specify a date.

[00:05:37] Speaker 01:
We all know that

[00:05:42] Speaker 01:
caused unforeseeable and therefore excusable delays in contravention of an express duty.

[00:05:47] Speaker 01:
So there's no express time frame in the contract that the government has to perform this, right?

[00:05:52] Speaker 00:
That is correct, Your Honor.

[00:05:53] Speaker 00:
Okay.

[00:05:53] Speaker 01:
And then she goes on to say, because the contract required HDCC's participation in securing grows, it was entirely foreseeable that the government would not have finalized

[00:06:04] Speaker 01:
rose prior to awarding the contract.

[00:06:06] Speaker 01:
So I have two questions.

[00:06:08] Speaker 01:
Your allegation isn't necessarily just that they didn't finalize it prior to the award.

[00:06:14] Speaker 01:
Your allegation is broader than that.

[00:06:17] Speaker 00:
That is correct, Your Honor.

[00:06:18] Speaker 01:
And then did the contract require your participation in securing the ROWs?

[00:06:24] Speaker 00:
It did require that Wyandredging assist the government by preparing the surveys and the paperwork, so to speak.

[00:06:34] Speaker 00:
And did you do that?

[00:06:35] Speaker 00:
We did do that.

[00:06:36] Speaker 01:
In a timely way?

[00:06:37] Speaker 00:
We did it in a timely way.

[00:06:38] Speaker 00:
Well, that's your allegation.

[00:06:40] Speaker 03:
And that's our allegation.

[00:06:41] Speaker 03:
And no, that's been proven.

[00:06:42] Speaker 03:
You're alleging you did that in a timely period.

[00:06:45] Speaker 03:
And you're also arguing that in the circumstance where there was no stated limit of time in which the government was supposed to produce the ROW, there should be a reasonable time.

[00:06:56] Speaker 03:
And you're entitled to an adjudication of that question.

[00:06:59] Speaker 00:
You have just summarized it very concisely, Your Honor.

[00:07:03] Speaker 03:
And surprisingly, the government didn't respond to that argument in its brief at all.

[00:07:08] Speaker 00:
And we agree.

[00:07:09] Speaker 03:
It makes no mention of the case law that you argue.

[00:07:13] Speaker 03:
that specialty products that supports this theory.

[00:07:16] Speaker 00:
That's correct, Your Honor.

[00:07:17] Speaker 00:
And if you take this... Well, then that's tried to what?

[00:07:22] Speaker 00:
Yes.

[00:07:22] Speaker 03:
I mean, that goes to the core of this, is that we've alleged that the four months it took... Well, also, the Court of Federal Claims didn't refer to that body of law because you didn't present it to her.

[00:07:37] Speaker 03:
There's no reference in the brief below to the case law that you see as support here or to the notion that where there is an absence of any provision in the contract with time, you read in a reasonable time requirement.

[00:07:50] Speaker 03:
then there has to be a showing to that effect.

[00:07:52] Speaker 00:
Well, and Your Honor, I think the allegation that we made in our complaint and then in the briefings at the Court of Federal Claims was that we alleged it was not foreseeable that it was going to take four months after the notice of proceed for the government to obtain this final right of way, which, again, then would allow us to complete the survey work that was necessary to design the full roadway and then

[00:08:20] Speaker 03:
Well, not foreseeable is not the same issue as reasonable time.

[00:08:24] Speaker 00:
Well, we said it's not foreseeable.

[00:08:25] Speaker 00:
The government's response is, well, and the court said, hey, it couldn't have been unforeseeable because there's no amount of time.

[00:08:34] Speaker 00:
And if there's no amount of time, then it would be a term.

[00:08:38] Speaker 03:
Rather than argue in a vague way as to whether or not there's been a waiver or a forfeiture here because it wasn't presented below,

[00:08:46] Speaker 03:
your primary argument on appeal, as I understand it, is that the law requires for, for example, the page of the opinion that Judge Crost pointed to as the finding that the court below said the contract doesn't specify a date by which the contract government had to produce their OW.

[00:09:07] Speaker 03:
Therefore, it could take as long as it wanted.

[00:09:10] Speaker 03:
Therefore, there's no delay.

[00:09:12] Speaker 00:
That's the argument.

[00:09:13] Speaker 03:
And you're challenging that here on the basis of the law, right?

[00:09:16] Speaker 00:
That's correct.

[00:09:18] Speaker 03:
Absent a specific time specified in the contract, we imply a reasonable time.

[00:09:23] Speaker 00:
And so the question then becomes, what would be a reasonable time?

[00:09:26] Speaker 00:
We allege that.

[00:09:28] Speaker 03:
You don't know.

[00:09:29] Speaker 03:
You want a trial on that.

[00:09:31] Speaker 01:
That's correct.

[00:09:33] Speaker 01:
There's an overlap between foreseeable and reasonable.

[00:09:36] Speaker 01:
So, I mean, you all have done these contracts before.

[00:09:40] Speaker 01:
You're familiar with right-of-ways.

[00:09:43] Speaker 01:
Do we know what your best guess was for what would have been a foreseeable, i.e.

[00:09:50] Speaker 01:
reasonable, time frame with which the government would obtain these?

[00:09:55] Speaker 00:
And, Your Honor, I'd be stepping outside of what was pled in the complaint.

[00:10:00] Speaker 01:
But you're essentially complaining it was not foreseeable slash reasonable.

[00:10:05] Speaker 00:
Exactly right.

[00:10:06] Speaker 00:
It was too long.

[00:10:08] Speaker 00:
How long?

[00:10:10] Speaker 00:
Four months.

[00:10:10] Speaker 00:
Four months, that's correct.

[00:10:12] Speaker 00:
And what's important about it is... And what was the entire time frame?

[00:10:16] Speaker 01:
How much time was left at the back end once they got the ROWs?

[00:10:21] Speaker 00:
there was still a long contract duration to perform the work.

[00:10:27] Speaker 00:
But what's important is the impact of that four-month delay.

[00:10:32] Speaker 00:
It was a design bill.

[00:10:33] Speaker 00:
So Hawaiian Directing was responsible to design this new bypass and expanding the roadway.

[00:10:39] Speaker 00:
And we were working from, there was a contract document that was in the RFP.

[00:10:43] Speaker 00:
It was called All Three.

[00:10:45] Speaker 00:
And it was a depiction of what the right-of-way

[00:10:49] Speaker 00:
they imagined it was going to look like.

[00:10:52] Speaker 00:
And we based our design on that.

[00:10:54] Speaker 00:
And we were 80% complete with the design when we got the final right of way.

[00:10:58] Speaker 00:
And that's another claim we have, is that the final right of way they received, which, A, it allowed us to now go complete the survey work on this land that we couldn't go on earlier, because it wasn't the states.

[00:11:10] Speaker 04:
But then it was different than what all... What does the Court of Federal Claims say about that claim?

[00:11:15] Speaker 00:
They said that we didn't prove that it was a material change.

[00:11:19] Speaker 00:
And that again, Your Honor, that's a fact.

[00:11:21] Speaker 00:
But didn't you allege it was a material change?

[00:11:22] Speaker 00:
Yes, we allege that it was different.

[00:11:25] Speaker 00:
And that's what's significant is the court made a finding of facts saying, you know, we don't find this to be material.

[00:11:31] Speaker 00:
And that's something that, first of all, if you read the claim, we say that, you know,

[00:11:38] Speaker 00:
limits of construction were different.

[00:11:40] Speaker 00:
So we had to adjust the way the road would move, and we had to address other components of the design, change other components.

[00:11:48] Speaker 01:
Can I take it back to Judge Jike's initial question on this?

[00:11:52] Speaker 01:
I mean, they moved to dismiss the complaint, not impart.

[00:11:56] Speaker 01:
They moved to dismiss the entirety of the complaint.

[00:11:59] Speaker 01:
If you don't come back and say anything about a particular provision, that's on you.

[00:12:06] Speaker 01:
not on that.

[00:12:07] Speaker 00:
Well, and we'll say it wasn't drafted that way.

[00:12:12] Speaker 00:
What wasn't drafted?

[00:12:13] Speaker 00:
The motion was dismissed.

[00:12:14] Speaker 00:
The motion was dismissed primarily was arguing the Permits and Responsibilities Clause.

[00:12:19] Speaker 00:
And they indicated that the Permits and Responsibilities Clause said, look, this is all pushed onto you, contractor.

[00:12:26] Speaker 00:
You're responsible for

[00:12:28] Speaker 00:
And frankly, the motion.

[00:12:30] Speaker 01:
Well, that didn't necessarily exclude the claim for repayment.

[00:12:34] Speaker 01:
So isn't it incumbent upon you to say, hey, you've alleged this, but this doesn't go to this claim.

[00:12:40] Speaker 01:
So your motion to dismiss has nothing to do with this particular claim.

[00:12:45] Speaker 00:
And Your Honor, at one point, the judge at the Court of Federal Claims, Judge Lerner, issued an order asking very pointed questions.

[00:12:53] Speaker 00:
And one of the questions was,

[00:12:55] Speaker 00:
Do you believe?

[00:12:56] Speaker 00:
What claims are addressed by this and what claims are not?

[00:13:00] Speaker 00:
And we made very clear that we didn't believe that the claim for repayment was addressed.

[00:13:07] Speaker 00:
We made clear that we didn't believe

[00:13:10] Speaker 00:
that the 12 days- What did the government say?

[00:13:13] Speaker 01:
Wait, are these filings in the appendix?

[00:13:15] Speaker 01:
Because I don't think I came across that.

[00:13:17] Speaker 00:
I believe that they are in the appendix.

[00:13:20] Speaker 00:
I believe that they are in the appendix.

[00:13:22] Speaker 04:
But the point is- Under the government's view of the repayment provision, are they saying that now

[00:13:30] Speaker 04:
They're entitled to the repayment because your claim was dismissed?

[00:13:34] Speaker 00:
Yes, Your Honor.

[00:13:35] Speaker 00:
In fact, they have a collection company that is sending notices to Hawaiian dredging saying, you owe us $8.92 plus, now we're over a million dollars with interest.

[00:13:44] Speaker 04:
Explain to me again what the underlying issue is with respect to the repayment.

[00:13:48] Speaker 04:
The government is saying you were already paid for that.

[00:13:51] Speaker 04:
It was compassed.

[00:13:52] Speaker 04:
encompassed in what you were paid for?

[00:13:54] Speaker 00:
Yes.

[00:13:55] Speaker 00:
They're saying that line item 26, or I'm sorry, several line items in payment application 26 were already paid, and so this would constitute an overpayment.

[00:14:05] Speaker 00:
It constituted an overpayment.

[00:14:07] Speaker 01:
This amount of money is separate and distinct from the ROW money that you're trying to raise here and the utility money that you're trying to raise here.

[00:14:16] Speaker 01:
So this was kind of a separate thing.

[00:14:18] Speaker 00:
That's correct.

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

[00:14:20] Speaker 00:
The 892, yes, is entirely a separate item that wasn't part of our claim.

[00:14:25] Speaker 00:
It was only part of the contracting officer's final decision.

[00:14:28] Speaker 04:
Before you sit down, I want to ask you a question about the retaining walls claim, which seems to be a claim that the government caused delays by not resolving a change order dispute.

[00:14:42] Speaker 04:
Is that?

[00:14:43] Speaker 00:
That is correct.

[00:14:45] Speaker 04:
Why would that give you an extension of time?

[00:14:46] Speaker 04:
Why is the government

[00:14:48] Speaker 04:
required to resolve a claim order dispute within a particular period of time.

[00:14:52] Speaker 00:
Well, so there are two different walls.

[00:14:59] Speaker 00:
There's the Castleton wall and then the Meadow wall.

[00:15:01] Speaker 00:
The Castleton wall was not part of the contract scope, but the government was negotiating.

[00:15:08] Speaker 04:
You were asking them to make it part of the contract scope, and they delayed in responding to that.

[00:15:12] Speaker 04:
I don't understand how that can lead to

[00:15:14] Speaker 00:
uh... delay climb well because it extended the duration of the project they they they asked us to price it we submitted the pricing we couldn't do the work though until they there was a contract change order issue what's the other routine and then the other retaining wall with the mectowork which wall which part of that the grading portion of it was part of our contract because of the castleton wall it would have expanded that scope and so we

[00:15:41] Speaker 04:
So you're saying, again, that the change order should have resulted in a contract change to include that other work with respect to the other retaining.

[00:15:49] Speaker 00:
That's correct, Your Honor.

[00:15:50] Speaker 00:
We're saying that the delay in issuing the Castleton, ultimately, which they decided not to issue, they said, we're not going to do that anymore.

[00:15:58] Speaker 00:
It delayed the performance of the Metco.

[00:16:01] Speaker 00:
And with regard to that, Your Honor.

[00:16:02] Speaker 04:
I think we're out of time here.

[00:16:05] Speaker 04:
We have two minutes for rebuttal.

[00:16:06] Speaker 04:
OK.

[00:16:08] Speaker 04:
Thank you, Your Honor.

[00:16:08] Speaker 04:
Thank you.

[00:16:23] Speaker 04:
So why didn't you address the reasonable time issue in your brief?

[00:16:31] Speaker 02:
The reason is because, to quote HDCC's counsel, read the claim.

[00:16:38] Speaker 02:
If you read the claim, there's a distinction, and Your Honor brought up the issue of reasonableness.

[00:16:45] Speaker 02:
I don't understand what you're talking about.

[00:16:47] Speaker 02:
What I'm talking about is the claim presented to the contracting officer claimed that the ROWs were not issued before the notice to proceed.

[00:17:00] Speaker 02:
Before the notice to proceed.

[00:17:02] Speaker 02:
That is reiterated multiple times throughout the claim at Appendix 43.

[00:17:06] Speaker 04:
You're not answering my question.

[00:17:07] Speaker 04:
I mean, that's an argument that you could have made in your brief, but you didn't.

[00:17:11] Speaker 04:
Why didn't you address the issue?

[00:17:14] Speaker 02:
To my knowledge, the issue was not raised until the reply brief in this case.

[00:17:18] Speaker 01:
Well, why about they raised?

[00:17:19] Speaker 01:
They cited Franklin Pakov versus Roche.

[00:17:25] Speaker 01:
stand for the proposition that even when the contract is silent, there's still a reasonableness obligation.

[00:17:32] Speaker 01:
Those cases were cited in blue, discussed in blue, and they're nowhere to be found in red.

[00:17:38] Speaker 01:
That's, I think, Judge Dyke's question.

[00:17:40] Speaker 02:
I think, again, I understand the question.

[00:17:43] Speaker 02:
The claim here was about whether the rows were issued

[00:17:47] Speaker 02:
before the notice was received.

[00:17:49] Speaker 04:
That's an argument, but you didn't put it in the brief.

[00:17:52] Speaker 04:
This whole question of reasonable time, maybe you say, well, that doesn't help them because there was no obligation to get the rights of way before the contract signing or whatever it is, but you didn't say anything about it in the brief.

[00:18:07] Speaker 04:
That's not helpful to us.

[00:18:08] Speaker 04:
I apologize, Your Honor.

[00:18:10] Speaker 02:
My understanding, again, was that the claim was tied to the notice proceed.

[00:18:14] Speaker 03:
And this is a matter of- Did you have the blue brief with you?

[00:18:16] Speaker 02:
Say again?

[00:18:17] Speaker 03:
Did you bring the blue brief with you?

[00:18:19] Speaker 02:
I did, Your Honor.

[00:18:21] Speaker 03:
Look at page 24.

[00:18:33] Speaker 02:
I see it now, Your Honor.

[00:18:34] Speaker ?:
Yes.

[00:18:41] Speaker 04:
Your failure to address it really amounts to a forfeiture of the argument that you have, right?

[00:18:48] Speaker 02:
I don't believe so, Your Honor, because again, this to me is HDCC's counsel expanding what their claim actually was to the contrary.

[00:19:03] Speaker 01:
Because you're right, the CFC does say that, because the government would not have finalized the rows prior to awarding the contractor issuing the notice to proceed.

[00:19:16] Speaker 01:
That's correct, on Appendix 89.

[00:19:19] Speaker 01:
But nowhere did I see where it was limited to the government.

[00:19:25] Speaker 01:
I mean, to me, it was clear that they were alleging

[00:19:28] Speaker 01:
that it was unreasonable for the government to take so long to get the ROWs, not exclusively, because they didn't get them before they were in breach.

[00:19:40] Speaker 02:
To your point, Your Honor, you're referring to the briefing.

[00:19:44] Speaker 02:
But from the claim and the Congress's final decision to the Court of Federal Claims, all track to the issue of the claim, that it was whether the ROWs were issued before the notice to proceed,

[00:19:58] Speaker 02:
The contracting officer addressed it as such.

[00:20:00] Speaker 02:
The court recognized it as such.

[00:20:02] Speaker 02:
Again, I can provide you the appendix sites on that.

[00:20:05] Speaker 02:
And so the reasonable niche issue doesn't come into it, because that was not the claim presented to the contracting officer.

[00:20:12] Speaker 02:
It could, in theory, present the Maripakis issue in terms of presentment.

[00:20:16] Speaker 02:
But the First Amendment complaint does not raise it as reasonable.

[00:20:22] Speaker 04:
The second amended complaint did raise it explicitly, right?

[00:20:26] Speaker 02:
And Your Honor, the second amended complaint is not the operative document here.

[00:20:31] Speaker 04:
Well, but it was, the Carrefour claims refused to allow the second amended complaint because it would be futile.

[00:20:37] Speaker 04:
But under the theory that we're talking about now, it's not futile.

[00:20:41] Speaker 04:
The second amended complaint makes an argument and makes a claim based on unreasonable delay.

[00:20:48] Speaker 04:
Right?

[00:20:49] Speaker 04:
So that wouldn't be futile to add that claim.

[00:20:54] Speaker 02:
Again, it could be a claim that they would present to the contract officers that they chose not to.

[00:21:00] Speaker 02:
And we are beyond the six years of which they could present that claim.

[00:21:04] Speaker 02:
They presented a claim about whether the ROWs were issued prior to notice proceed.

[00:21:10] Speaker 02:
That claim was denied.

[00:21:12] Speaker 02:
That claim was appealed to the Court of Federal Claims and the motion dismissed granted on that claim.

[00:21:18] Speaker 02:
So the reasonableness claim that is now being read in through the briefing was not presented to the court.

[00:21:24] Speaker 04:
Why didn't you forfeit that argument by not making it in the brief?

[00:21:30] Speaker 02:
I can't say, Your Honor.

[00:21:31] Speaker 01:
Well, on page 24 of your brief, you said instead you're talking about HDCC.

[00:21:36] Speaker 01:
And I don't think this is the only site.

[00:21:38] Speaker 01:
When you talk about it's alleged that its delays were the result of the unforeseen agency delay

[00:21:44] Speaker 01:
to timely secure the final ROWs from local landowners, which delayed.

[00:21:49] Speaker 01:
I mean, we're talking about the delay in general.

[00:21:52] Speaker 01:
We're not talking about just not having received, gotten it before the contract went into effect, right?

[00:21:58] Speaker 01:
I mean, you seem to engage in that argument.

[00:22:01] Speaker 01:
So I'm a little perplexed.

[00:22:03] Speaker 01:
I mean, maybe I'm wrong.

[00:22:06] Speaker 01:
But there's nothing in your red brief that says, hey, wait a minute.

[00:22:09] Speaker 01:
The claim is only not released.

[00:22:14] Speaker 01:
but to the fact that we didn't get it done before him.

[00:22:19] Speaker 01:
Right?

[00:22:19] Speaker 01:
I mean, you don't engage in that.

[00:22:21] Speaker 01:
You're engaging in the argument that it's broader.

[00:22:23] Speaker 01:
The claim is broader.

[00:22:25] Speaker 02:
I was engaging in the argument based on the claim that was brought.

[00:22:28] Speaker 02:
And I don't believe I addressed the reasonableness issue, Your Honor.

[00:22:35] Speaker 04:
Where did you argue that the reasonableness issue wasn't properly raised because it wasn't in the claim presented to the contracting officer, right?

[00:22:45] Speaker 02:
It was not addressed by the court.

[00:22:48] Speaker 04:
You didn't make that argument in the brief.

[00:22:50] Speaker 04:
I did not, correct.

[00:22:52] Speaker 04:
Okay, so maybe it's forfeit.

[00:22:54] Speaker 04:
That's a problem.

[00:22:58] Speaker 01:
Just before you sit down, I do want you to touch on this recoupment, or whatever it is it's called, that 895.

[00:23:06] Speaker 02:
Yes, my understanding that there is a, the Congress's final decision assessed 890 odd thousand dollars, but it's reduced by the

[00:23:16] Speaker 02:
The 12-day extension, because that reduces the liquidate damages to bring it down to about $830,000.

[00:23:20] Speaker 01:
And why are you saying that that was included in the complaint under the motion to dismiss?

[00:23:28] Speaker 02:
Because it's fundamentally tied to the utilities argument.

[00:23:32] Speaker 02:
And so it is money associated.

[00:23:35] Speaker 03:
The 12-day extension, there are two things here.

[00:23:37] Speaker 03:
There is the overpayment.

[00:23:38] Speaker 02:
Correct, Your Honor.

[00:23:39] Speaker 03:
Those were the two when the contracting officer said, well, here's some extra money.

[00:23:44] Speaker 03:
And now they recoup it at the end on the grounds that it's in the scope of work, and therefore we shouldn't have given you the money back.

[00:23:51] Speaker 03:
That's separate from the so-called 12-day extension issue?

[00:23:56] Speaker 02:
The 12-day extension issue.

[00:23:57] Speaker 02:
was the one piece of the contractor's final decision that was granted.

[00:24:03] Speaker 02:
That's resolved and that's not an issue.

[00:24:06] Speaker 02:
But it has the impact of reducing liquidated damages to reduce the dollar amount of recruitment.

[00:24:13] Speaker 02:
The dollar amount of recruitment is tied to the utilities issue.

[00:24:17] Speaker 02:
If there's the

[00:24:18] Speaker 02:
uh... right-of-ways utilities uh... the wall works in the permits if those are the four alleged delays.

[00:24:25] Speaker 03:
We don't know that for sure.

[00:24:26] Speaker 03:
That's arguably a factual question.

[00:24:32] Speaker 03:
I didn't understand the overpayment issue to go directly to the argument about the delay and not being able to say where the utility poles were going to be moved to.

[00:24:42] Speaker 02:
That is my understanding from the briefing and also

[00:24:45] Speaker 02:
as your honor noted, it is an issue that was not raised in the opposition to the motion dismissed or in the brief.

[00:24:52] Speaker 01:
Let me ask you this, surely hypothetically, if we were to conclude that the dismissal under 12b6 was improper for the row stuff and for the utility stuff,

[00:25:02] Speaker 01:
Does that reopen and revisit the $892,000, or is that a separate and distinct claim that you would say, no, that was dismissed, that has no relevance to the calculations we do with respect to the rose or the utilities?

[00:25:17] Speaker 02:
Because HDCC failed to appeal that specific issue to this court, I would say it's waived.

[00:25:28] Speaker 03:
Which issue?

[00:25:29] Speaker 02:
The recoupment.

[00:25:31] Speaker 01:
How does that relate the amount and the allegations to the allegations regarding the unreasonableness of the ROWs and the utility staff?

[00:25:47] Speaker 01:
Is it all part of the same bucket of money or are they separate and distinct?

[00:25:51] Speaker 02:
My understanding is that the recruitment is tied to the utilities issue.

[00:25:55] Speaker 02:
To your point, Your Honor, while it is raised for the first time in the briefing at this Court, it was not raised in the Motion to Dismiss briefing.

[00:26:08] Speaker 04:
It wasn't raised in the Motion to Dismiss either, right?

[00:26:11] Speaker 02:
It wasn't raised in your Motion to Dismiss.

[00:26:17] Speaker 02:
Judge Prost noted we moved to dismiss the whole complaint.

[00:26:21] Speaker 04:
But you never mentioned the recoupment issue.

[00:26:24] Speaker 02:
No specific mention?

[00:26:25] Speaker 02:
I think that's correct, Your Honor.

[00:26:28] Speaker 03:
And when you argue that somehow these overpayment claims are related to the utility poll issue, then aren't you just arguing yourself right into saying if we remand on the utility poll issue, this should go back as well?

[00:26:42] Speaker 02:
Again, on the utility poll issue, the contract's clear.

[00:26:44] Speaker 03:
And that's on all of these issues.

[00:26:46] Speaker 03:
The hypothetical that Judge Prost raised was if we were to decide that there was error on the right-of-way and the utility poll issue sufficient to require remand for trial.

[00:26:55] Speaker 03:
And when you tell me right here a few minutes ago that the overpayment issues are related to the utility poll issue, then I don't see why we wouldn't.

[00:27:04] Speaker 03:
send the overpayment issue back as well.

[00:27:08] Speaker 02:
I don't disagree with that, Your Honor, but I do.

[00:27:10] Speaker 03:
You don't get the room of sending it back?

[00:27:13] Speaker 02:
I don't disagree that the repayment and the utilities issues are connected.

[00:27:18] Speaker 02:
And if one is to go back in your hypothetical, then the other is connected to it.

[00:27:22] Speaker 02:
However,

[00:27:23] Speaker 02:
The contract was clear and this this motion dismissed was decided.

[00:27:28] Speaker 03:
Am I hearing this correctly that you don't disagree that we should send the overpayment issue back if we're sending the utility.

[00:27:35] Speaker 02:
If they're connected.

[00:27:36] Speaker 03:
I don't know whether they are or not.

[00:27:39] Speaker 03:
I mean isn't that a fact question?

[00:27:41] Speaker 02:
If you are sending one back, I would imagine you would send the other back in that hypothetical.

[00:27:46] Speaker 02:
However,

[00:27:47] Speaker 02:
the utilities claim is based, the way it was presented to the Court of Federal Claims and the way we addressed it in the motion of the space and the way the court ruled was that the contract was clear, that dealing with utility companies, preparing utility agreements, all of which was solely the responsibility of the contractor.

[00:28:04] Speaker 04:
Okay, but their argument here is that the government delayed in signing off on the utility agreements.

[00:28:11] Speaker 02:
Again, this is

[00:28:13] Speaker 02:
that this to me is another mischaracterization of the underlying claim.

[00:28:17] Speaker 02:
Just like with the notice of receipt issue I mentioned before, on the utility issue, in the briefing here, the plaintiffs are characterizing it as a delay in signing the utility agreements.

[00:28:28] Speaker 02:
If you read the claim itself and the contractor's final decision, the issue is the delay by non-party utility companies in performing utility work.

[00:28:40] Speaker 02:
And so they are distinct and separate

[00:28:42] Speaker 02:
factual bases.

[00:28:43] Speaker 02:
And the court below was proper to make that argument in your red brief.

[00:28:48] Speaker 04:
Did you make that argument in your red brief here?

[00:28:53] Speaker 02:
That they are different?

[00:28:55] Speaker 02:
I did not, Your Honor.

[00:28:58] Speaker 01:
Assuming they had made the allegations that you engaged with in the rent brief, as if they had, where are we left with our case law?

[00:29:08] Speaker 01:
Would you agree that our case law, like the Franklin versus Roche case, say that in this view of silence, there is an obligation to act reasonably?

[00:29:19] Speaker 02:
I don't disagree with that case law, but the case that's most on point here is Bell-Heary, a Fed Circuit case from 2014.

[00:29:26] Speaker 02:
that plainly lays out a largely identical situation with a contractor in a firm fixed price design-build contract where they, in their bid, presumed a certain permit would be issued, and it wasn't, and it changed and caused a lot of additional expense and time to their performance in the contract.

[00:29:47] Speaker 02:
And when that issue, again, when the claim was denied and it made it to the Court of Federal Claims and then ultimately to this court,

[00:29:54] Speaker 02:
The granting of the motion of dismissal was affirmed because the contract in that case was clear.

[00:30:02] Speaker 02:
It included the same FAR provision 52-236-7 on permits and responsibilities.

[00:30:08] Speaker 02:
It was plain that the

[00:30:13] Speaker 02:
that those responsibilities related in that case to the permit issue fell entirely on the contract.

[00:30:18] Speaker 02:
Did you cite that case in your brief?

[00:30:20] Speaker 02:
We did.

[00:30:21] Speaker 02:
We discussed it.

[00:30:22] Speaker 01:
But you also cite page 5 where you cite the provision in the contract and you follow it with, which you never recite again, while you acknowledge while the contract contemplated that the government would execute final roads.

[00:30:36] Speaker 01:
It also required HDCC to do this other stuff.

[00:30:40] Speaker 01:
So you acknowledge that beyond what the contract language says, which is all the responsibility of the contractor, the contract contemplated the government would execute the final ROWs, right?

[00:30:52] Speaker 02:
Again, you're reading that from the reef, and that's correct.

[00:30:54] Speaker 02:
My understanding, looking closely at the language of the contract, the actual signature, the final piece of the rose, is a state agency.

[00:31:03] Speaker 02:
It's the Hawaii Department of Transportation.

[00:31:06] Speaker 01:
Wait, so you're saying the government didn't enter this contract with any obligation to do anything whatsoever with regard to getting the right of way?

[00:31:13] Speaker 02:
They are involved in the right of way plans are submitted, and it

[00:31:22] Speaker 02:
proceeds, but ultimately, the Hawaii Department of Transportation is the one that signs.

[00:31:28] Speaker 01:
But is it correct that the contract contemplated that the government would execute the final ROW?

[00:31:34] Speaker 02:
Your Honor, I'm out of time, but may I answer?

[00:31:38] Speaker 02:
Yes.

[00:31:39] Speaker 02:
Yes, the government has an involvement, but ultimately, the contract assigned the risk to HDCC to deal with the ROW.

[00:31:47] Speaker 04:
Regardless of whether the government acted in a reasonable time or not.

[00:31:52] Speaker 02:
Again, based on Belhiri, yes, that's correct.

[00:31:58] Speaker 02:
The assignment of risk is absolute unless the contractor, again, citing Belhiri, unless the contractor can cite to a different provision of the contract that makes that assignment of risk ambiguous, and they haven't done so.

[00:32:18] Speaker 04:
All right.

[00:32:18] Speaker 04:
I think we're out of time.

[00:32:19] Speaker 04:
Thank you.

[00:32:37] Speaker 01:
difference between whether you were only going after the government because what you said was they should have and they needed to get the ROWs beforehand.

[00:32:46] Speaker 01:
or whether your complaint also covered the unreasonableness of the delay of doing it while the contract was bound to go off.

[00:32:53] Speaker 00:
That was my first point, Your Honor.

[00:32:55] Speaker 00:
And if you look within the appendix, appendix page 31, which is the complaint, and specifically paragraph 21 of the complaint.

[00:33:04] Speaker 03:
What part page is that?

[00:33:05] Speaker 00:
It's appendix page 31.

[00:33:07] Speaker 00:
And it's paragraph 21 of Hawaiian Dredging's complaint.

[00:33:12] Speaker 00:
And it says, in the final decision, CFL ignored its responsibility for causing project delays.

[00:33:19] Speaker 00:
The critical path delay that prevented actual substantial completion of the contract work until July 24, 2018, resulted from the following for which CFL is responsible.

[00:33:31] Speaker 00:
the unforeseen CFL delay to timely secure the final right of ways, ROWs, from local landowners, which in turn delayed the final road design and grading.

[00:33:43] Speaker 00:
So you can see, Your Honor, that's the allegation.

[00:33:47] Speaker 00:
After the notice to proceed was issued, we anticipated that it was going to be provided in a reasonable amount of time.

[00:33:53] Speaker 00:
And we believe that it was not provided in a reasonable amount of time, which constituted a change to the contract.

[00:33:59] Speaker 00:
Next, Your Honor, the question was raised about the signing, about the utilities.

[00:34:08] Speaker 00:
And as you all pointed out, the allegation is that

[00:34:14] Speaker 00:
Hawaiian dredging, we were responsible for the relocation.

[00:34:17] Speaker 00:
We were responsible to coordinate with utility owners.

[00:34:19] Speaker 00:
But then, once we prepared those agreements, they were for the government to sign.

[00:34:24] Speaker 00:
And our allegation is that the government sat on its hands and it didn't sign those, specifically

[00:34:32] Speaker 00:
We presented them on August 3, 2017, but the government didn't return executed agreements until February 28, 2018, 2009 days later.

[00:34:45] Speaker 00:
Specifically, that allegation is from appendix page 199 to 200.

[00:34:51] Speaker 00:
We specifically state that.

[00:34:53] Speaker 00:
Those are facts.

[00:34:54] Speaker 00:
Those aren't labels.

[00:34:57] Speaker 00:
legal conclusion.

[00:34:58] Speaker 00:
Those are facts that we believe support that claim.

[00:35:02] Speaker 00:
And then the final point that I want to make, and then certainly I'll address any questions, is with regard to Bell-Hurie.

[00:35:09] Speaker 00:
The Bell-Hurie decision dealt with the Permits and Responsibilities Clause.

[00:35:13] Speaker 00:
And undoubtedly, that clause does shift the risk of loss to the contractor.

[00:35:19] Speaker 00:
Unless, and there's a big unless, unless the contractor points to government actions or inactions

[00:35:25] Speaker 00:
that would override that.

[00:35:28] Speaker 01:
Is that unless language in the case itself, or is that your imprint on it?

[00:35:35] Speaker 00:
I can read from the, it says that.

[00:35:37] Speaker 04:
What page of the case?

[00:35:39] Speaker 00:
Of the case, it's page 1334, Your Honor.

[00:35:43] Speaker 00:
And I will tell you when I start quoting.

[00:35:46] Speaker 00:
The Permits and Responsibility Clause allocates risk for obtaining permits to the contractor

[00:35:52] Speaker 00:
The word unless is my word.

[00:35:53] Speaker 00:
Unless the contractor alleges, and this is in quotes, countervailing contractual duty on the government that contradicts or renders ambiguous the express allocation of risk to the contractor.

[00:36:06] Speaker 00:
And that's at page 1334 of Bell and Heary.

[00:36:09] Speaker 00:
And that's what we've alleged.

[00:36:11] Speaker 00:
We have alleged that the government had a responsibility to obtain this final right of way.

[00:36:15] Speaker 03:
And I think- In a reasonable time.

[00:36:17] Speaker 03:
In a reasonable time.

[00:36:18] Speaker 03:
Because it's connected to the same thing.

[00:36:19] Speaker 03:
That's right.

[00:36:20] Speaker 04:
And I want to just point out- Well, the Bell and Heery didn't involve a reasonable time issue.

[00:36:24] Speaker 00:
It did not, Your Honor.

[00:36:25] Speaker 00:
But what's the distinction about Bell and Heery, because in Bell and Heery, the court did say that the permits and responsibility

[00:36:31] Speaker 00:
wiped out the contractor's claim.

[00:36:33] Speaker 00:
But the contractor made no allegation that there was this countervailing or overriding.

[00:36:39] Speaker 00:
That's exactly right.

[00:36:40] Speaker 00:
And I think just one last point.

[00:36:42] Speaker 00:
On page 728 of the appendix, which is from the conditions of the contracts, there's section 107.07.

[00:36:53] Speaker 00:
It's titled, furnishing right of way.

[00:36:56] Speaker 00:
And period.

[00:36:57] Speaker 00:
The government will obtain right of way.

[00:37:00] Speaker 00:
I think that's very important.

[00:37:01] Speaker 00:
This was the government's responsibility.

[00:37:03] Speaker 00:
As a contractor, we can't go out and obtain land from private parties.

[00:37:07] Speaker 00:
We can't do that work.

[00:37:09] Speaker 00:
That was the government's responsibility.

[00:37:11] Speaker 00:
And we relied on the government to do that in a timely manner.

[00:37:14] Speaker 00:
And ultimately, we alleged that they didn't do it, and that it had impacts.

[00:37:18] Speaker 03:
Some land had to be acquired under eminent domain or by consent, right?

[00:37:25] Speaker 00:
That's correct.

[00:37:26] Speaker 03:
And then subdivisions had to be... Some from private people and some from a local government agency, as I recall.

[00:37:31] Speaker 00:
That is correct.

[00:37:32] Speaker 00:
The county of Maui, that was the public, and then there was a private land trust.

[00:37:39] Speaker 03:
You need to know the final meets and bounds, because how are you going to move the utility poles to make sure you don't put them on the wrong land?

[00:37:45] Speaker 00:
That, how are you going to create a roadway and then have the knot pass over onto private lands?

[00:37:53] Speaker 00:
Also, to develop the design, we had to enter the private lands, the land that ultimately became part of the right of way

[00:38:01] Speaker 00:
to do the survey work.

[00:38:02] Speaker 00:
And without the ability to enter on those lands, we couldn't do the survey work.

[00:38:05] Speaker 00:
Without the survey work, we couldn't complete our design.

[00:38:08] Speaker 00:
So it all is tied together.

[00:38:10] Speaker 00:
And it goes back to our allegation that the government didn't provide the final right of way in a reasonable amount of time.

[00:38:18] Speaker 00:
OK.

[00:38:18] Speaker 00:
Thank you.

[00:38:18] Speaker 00:
Thank both councils.