[00:00:00] Speaker 03:
Our next case is at number 2412, 51, Secretary of the Army.

[00:00:14] Speaker 00:
According to the ASPCA's own findings, the Sovereign Act prevented structure from accessing the work site, which delayed structure's completion of the renovation of the medical center, which in turn caused structure to incur increased costs for its temporary medical facilities that it provided under its term of express pass order.

[00:00:30] Speaker 00:
These findings demonstrate that the Sovereign Act's doctrine precludes structure from recovering increased costs for its temporary facilities.

[00:00:38] Speaker 03:
How does the base closure affect their ability and obligation to provide temporary structure?

[00:00:49] Speaker 00:
Well, the base closure delayed the completion of the project.

[00:00:53] Speaker 03:
Well, the overall project, but it didn't have any effect on the temporary structure other than it extended the time that the government was going to use that, right?

[00:01:02] Speaker 00:
Right, it extended the time that the government was going to use that because it delayed structures completion of the project.

[00:01:09] Speaker 00:
And so the delay in the completion of the project was caused by a sovereign act.

[00:01:14] Speaker 00:
That's on dispute.

[00:01:15] Speaker 00:
And so that's why the sovereign act, these increased costs are due to a sovereign act here.

[00:01:21] Speaker 00:
The delay in the completion of the project that is caused by the COVID-19 shutdown.

[00:01:29] Speaker 03:
Well, I mean, if you had a situation where they'd rented a piece of equipment that lay idle, you'd probably be right that the base closure created a situation where that equipment couldn't be used and they had to pay additional rental fees on it and they wouldn't be able to recover that.

[00:01:47] Speaker 03:
But this is a different situation.

[00:01:49] Speaker 03:
where the government is taking advantage of the temporary housing during the extended period.

[00:01:54] Speaker 03:
In other words, there's performance there by the contractor.

[00:01:58] Speaker 03:
There's not performance that's prevented, it's performance that's extended.

[00:02:03] Speaker 00:
The structure was required to provide temporary facilities while the David Grant Medical Center was unusable due to the renovation.

[00:02:14] Speaker 00:
And so that's what structure did.

[00:02:17] Speaker 00:
Now, they ended up having to provide those facilities for about three months longer than they were anticipating.

[00:02:23] Speaker 00:
due to a sovereign act, due to the delay in the completion of the medical center.

[00:02:30] Speaker 00:
That's what caused structure to have to provide the temporary medical facilities for longer than it anticipated.

[00:02:40] Speaker 00:
It fulfilled its duty under the contract.

[00:02:43] Speaker 00:
to provide the temporary medical facilities while the renovation rendered the portions of the medical center unusable.

[00:02:50] Speaker 04:
What is your best case law or regulation for the prospect that we should be looking at completion of the rest of the project versus completion of the line item providing the temporary facility?

[00:03:07] Speaker 04:
And that seems to be this case seems to come down to,

[00:03:10] Speaker 04:
How do you look at it?

[00:03:12] Speaker 04:
Is it that they were delayed in completing the rest of the project, and therefore the government had to use the temporary facility for longer?

[00:03:21] Speaker 04:
Or is it that they provided the temporary facility, they fulfilled their obligation, and the government had the benefit of using that facility?

[00:03:32] Speaker 00:
They fulfilled their obligation, exactly.

[00:03:34] Speaker 00:
And so because they fulfilled their obligation, and this is a firm fixed price contract, Structure's entitled to be paid the agreed upon amount for the agreed upon firm fixed price that's in its contract, but nothing more than that.

[00:03:47] Speaker 00:
Structure did what it was supposed to do here, but the increased costs that are above and beyond what they anticipated are due to a sovereign act.

[00:03:57] Speaker 03:
So suppose that there were two separate contracts here.

[00:04:00] Speaker 03:
There was a contract.

[00:04:01] Speaker 03:
to renovate the facility and there was a separate contract to provide the temporary facility during the other construction.

[00:04:11] Speaker 03:
When the Sovereign Acts doctrine, under those circumstances, excused the government from liability under the second contract for the extended period that the temporary facility was used.

[00:04:23] Speaker 00:
If the second contract also provided that the contractor was to provide the temporary medical facilities while the renovation was ongoing, then yes, if it was just a firm contract for

[00:04:37] Speaker 00:
for you to say a rental contract for 12 months or something, and the government needed additional time, perhaps not in that situation.

[00:04:43] Speaker 03:
I'm not understanding what your answer is.

[00:04:45] Speaker 03:
It's two separate contracts.

[00:04:47] Speaker 03:
The two line items here are separated into two contracts.

[00:04:51] Speaker 03:
The second contract for the temporary facility, the period that the temporary facility is needed is extended.

[00:04:57] Speaker 03:
Do they get an equitable investment?

[00:04:59] Speaker 00:
If the period, it depends on how the second contract is made.

[00:05:04] Speaker 00:
If the other contract requires the contractor to provide the temporary facility, temporary medical facilities during the period of the renovation.

[00:05:13] Speaker 00:
Two separate contracts.

[00:05:15] Speaker 00:
Right, yes, that's what I'm saying.

[00:05:17] Speaker 00:
The second contract about the temporary medical facilities, if it requires the contractor to provide those facilities simply during the time of the renovation,

[00:05:26] Speaker 00:
while the renovation is rendering the medical center unusable, then yes, the Sovereign Acts doctrine would apply.

[00:05:33] Speaker 03:
It would apply to the second contract.

[00:05:34] Speaker 00:
Yes, in that situation like we have the situation that we have here.

[00:05:45] Speaker 04:
I'm not sure you answered my question.

[00:05:47] Speaker 04:
I think you did.

[00:05:48] Speaker 04:
But the question I had was, what case law or regulation do you think best supports your position for explaining why it is that we should be focusing on delayed completion of the project?

[00:06:04] Speaker 04:
And I know you said firm fixed price, so maybe that's what you're referring to, but could you elaborate for me, please?

[00:06:10] Speaker 00:
Yes, I think that's the main answer, that this is a firm fixed price contract, FAR 16202-1, I believe is the site in our briefs that provides the maximum risk for costs are on the contractor, and the contractor is responsible for

[00:06:26] Speaker 00:
for profit and loss under that case.

[00:06:29] Speaker 02:
So the claim for the temporary facilities had a set price.

[00:06:35] Speaker 02:
Yes.

[00:06:35] Speaker 02:
It didn't have a specific term of months.

[00:06:39] Speaker 02:
It was just tied to completion of the project.

[00:06:42] Speaker 00:
Correct.

[00:06:42] Speaker 00:
There was an end term for the project, and that got extended due to the subject.

[00:06:49] Speaker 02:
But if there had been government-caused delay to the project, that's compensable.

[00:06:56] Speaker 00:
The government is a contractor, yes.

[00:06:58] Speaker 02:
Right.

[00:06:58] Speaker 02:
Then they could have gotten, under the changes clause, increased compensation.

[00:07:05] Speaker 00:
Correct.

[00:07:06] Speaker 00:
If the government is a contractor, caused delay.

[00:07:08] Speaker 02:
Because even under a firm fixed price contract, they don't bear the risk of government caused delay.

[00:07:14] Speaker 02:
They bear the risk of their own delay.

[00:07:16] Speaker 02:
And under the sovereign acts doctrine, sovereign acts.

[00:07:19] Speaker 00:
Correct.

[00:07:20] Speaker 00:
Yes.

[00:07:21] Speaker 02:
I mean, it's a little confusing in this case because of the separate claim.

[00:07:25] Speaker 02:
And I'm a little confused about some of our case on this and how the possibility doctrine comes into play here, which is where I think the board also found that the performance of this claim wasn't rendered impossible by the sovereign acts.

[00:07:39] Speaker 02:
And I take it your argument is it actually was rendered impossible within the time frame covered by the contract.

[00:07:48] Speaker 02:
because of the Sovereign Act.

[00:07:50] Speaker 02:
I didn't see a clear articulation of that argument anywhere to the board.

[00:07:54] Speaker 00:
Well, that's where it gets a little confusing with the impossibility here, because to the extent the impossibility doctrine would apply, as in reach cases, which this is not.

[00:08:07] Speaker 00:
But in a reach case, when it would apply, it's about whether the government's performance is impossible, not about whether the contractor's performance is impossible.

[00:08:18] Speaker 00:
There's been no allegation that the government breached the contract in this case.

[00:08:22] Speaker 00:
That's why the impossibility doctrine has no relevance to the sovereign acts doctrine in this particular case as shown by cases like Zephyr and amino brothers that we cited in our

[00:08:33] Speaker 00:
you know, a breach to the extent that it was considered a breach that the government didn't provide access to the worksite for 40 days, then we have demonstrated the impossibility, doctrine applies, because the government, it was impossible for the government as contractor to provide that access for 40 days due to the solid act.

[00:08:52] Speaker 03:
So there's no breach and no impossibility with respect to this aspect of the contract to provide the temporary facility?

[00:09:02] Speaker 00:
contract at all in this case.

[00:09:05] Speaker 00:
The allegation is that the structure is entitled to inequitable adjustment under a change of law.

[00:09:12] Speaker 03:
I mean, if you view the sovereign act doctrine as excusing government breaches, which is the way it's been described, that doesn't apply here, right?

[00:09:26] Speaker 00:
Well, it's been described in cases that involve breach like that.

[00:09:29] Speaker 00:
But in a case like Zafer, there was no mention of impossibility in that case.

[00:09:33] Speaker 00:
And that was a case where the sovereign act's defense was applied in a changes case and an equitable adjustment case.

[00:09:41] Speaker 00:
There are cases out there where the impossibility doctrine is not applied if it's a situation where it's a changes clause and not a breach.

[00:09:50] Speaker 00:
The impossibility problem only really makes sense in a breach case, because if the plaintiff's not alleging that the government failed in any performance, then how can the government demonstrate that it was impossible to perform?

[00:10:02] Speaker 00:
The government shouldn't have to demonstrate that it breached a contract.

[00:10:05] Speaker 03:
What's the scope of the doctrine if you say it's not limited to breach situations?

[00:10:09] Speaker 00:
Well, it has to be a public in general act.

[00:10:13] Speaker 00:
It's not directed at nullifying contract rights.

[00:10:16] Speaker 00:
And the contracts can't otherwise provide the payment of a side act.

[00:10:20] Speaker 03:
How does it function?

[00:10:21] Speaker 03:
What does it do?

[00:10:22] Speaker 03:
If it's not excusing a government breach, what's it doing?

[00:10:25] Speaker 00:
It precludes the contractor from recovering for government-caused delay, government-caused damages, because it was caused by the government as sovereign, not by the government as a contractor.

[00:10:41] Speaker 00:
See, I'm into my rebuttal time.

[00:10:43] Speaker 00:
All right.

[00:10:45] Speaker 03:
You can reserve it.

[00:10:48] Speaker 03:
All right.

[00:10:49] Speaker 03:
Mr. Stick.

[00:10:54] Speaker 01:
Okay, please record.

[00:10:59] Speaker 01:
Mike Tyson once said everybody's got a plan until they get hit in the mouth.

[00:11:05] Speaker 01:
I have a plan.

[00:11:06] Speaker 01:
I have all my notes written.

[00:11:11] Speaker 01:
And I'm going to leave them alone.

[00:11:14] Speaker 01:
Judges, this is,

[00:11:17] Speaker 01:
This is not complicated.

[00:11:19] Speaker 01:
And I think the court understands that.

[00:11:21] Speaker 01:
This is an issue of whether or not the government breached its agreement with my client.

[00:11:28] Speaker 01:
And they did.

[00:11:28] Speaker 01:
And whether or not that breach is excusable because of impossibility.

[00:11:35] Speaker 01:
And it's not.

[00:11:36] Speaker 01:
And we know that because.

[00:11:38] Speaker 02:
What was the contract that was breached?

[00:11:41] Speaker 02:
What were the terms?

[00:11:42] Speaker 02:
And why was it impossible to fill those terms?

[00:11:47] Speaker 01:
Well, the original contract was to have the TPF to two TPFs located there on the base.

[00:11:58] Speaker 04:
For the benefit of the students in the room, TPF, could you say what that is?

[00:12:03] Speaker 01:
Temporary phasing facilities.

[00:12:05] Speaker 01:
They're modular buildings.

[00:12:07] Speaker 01:
In this case, they were used for an oncology ward at a pediatric ward.

[00:12:15] Speaker 01:
There was a fixed price for 13 months.

[00:12:19] Speaker 01:
The government... And that part of the performance wasn't stopped.

[00:12:22] Speaker 01:
It was not.

[00:12:24] Speaker 01:
They delivered the TPF.

[00:12:25] Speaker 01:
The TPFs were there.

[00:12:27] Speaker 01:
They were in full use even during the additional three to six months that the Army continued to use them.

[00:12:37] Speaker 02:
And what caused the additional months?

[00:12:41] Speaker 01:
the base closed down because of COVID precautions.

[00:12:47] Speaker 01:
But by that point... That's a sovereign act.

[00:12:49] Speaker 01:
I'm sorry?

[00:12:50] Speaker 02:
That's a sovereign act.

[00:12:51] Speaker 02:
That's not the government... I think the government agreed that if the additional time was due to the government as a contractor, it would be compensable.

[00:13:00] Speaker 02:
But the additional time for these units, even though they were being used, wasn't due to the government's act as a contractor, it was due to the government acting as a sovereign.

[00:13:11] Speaker 01:
Well, Judge, the shutdown was the government acting as the government, as the sovereign.

[00:13:20] Speaker 01:
But that part of the contract had been completed.

[00:13:25] Speaker 02:
But it hadn't.

[00:13:26] Speaker 02:
You just said that the contract was to provide these during the construction period, which was originally anticipated to be what you said, 13 months.

[00:13:35] Speaker 02:
And it turned out that it took longer to complete that contract.

[00:13:40] Speaker 02:
And so it wasn't complete.

[00:13:45] Speaker 02:
I mean, if it was complete at 13 months, you would have gotten your firm fixed price, and that would be it.

[00:13:52] Speaker 01:
That's correct, Judge.

[00:13:53] Speaker 01:
To clarify, I didn't say that these TPS were, that Glen06 was limited to the construction period.

[00:14:04] Speaker 01:
I said that they were contracted to provide them for 13 months, and they did.

[00:14:09] Speaker 01:
They delivered them.

[00:14:10] Speaker 01:
They built them.

[00:14:12] Speaker 01:
They set them up.

[00:14:12] Speaker 01:
They plugged them in.

[00:14:14] Speaker 01:
And they're ready to go for 13 months.

[00:14:16] Speaker 01:
Judge, I guess the analogy that I would give you is to... Well, where did the additional time come from, then?

[00:14:24] Speaker 02:
I'm sorry?

[00:14:24] Speaker 02:
You got paid for 13 months, right?

[00:14:26] Speaker 01:
Correct.

[00:14:27] Speaker 02:
But you want more money.

[00:14:29] Speaker 02:
And what's that due to?

[00:14:31] Speaker 02:
If you say it's a breach, then what was breach?

[00:14:33] Speaker 01:
Will the government continue to use them beyond 13 months?

[00:14:38] Speaker 03:
Well, that's not a breach.

[00:14:40] Speaker 03:
Well, I thought the government, I thought they were agreeing with you that this is not a situation where there was a government breach or impossibility.

[00:14:51] Speaker 03:
They're saying the doctrine goes beyond that.

[00:14:53] Speaker 03:
That seems to be the question.

[00:14:55] Speaker 03:
And now you are talking about breach.

[00:14:57] Speaker 03:
I don't know what the word breach was.

[00:15:01] Speaker 02:
I mean, if you're arguing this as a breach case, then they'd clearly show an impossibility to perform within the 13 months because it was extended due to the COVID shutdown.

[00:15:10] Speaker 02:
I don't think this is the way the board looked at this as an impossibility case.

[00:15:15] Speaker 02:
I mean, the board's decision is a little confusing to me because they talk about impossibility.

[00:15:19] Speaker 02:
But the real question is, does the sovereign acts apply beyond the breach situation to change cases where the change is caused by a sovereign act versus something else?

[00:15:30] Speaker 01:
Right, Your Honor.

[00:15:31] Speaker 02:
What's your position on that?

[00:15:33] Speaker 01:
I think that the change in terms imposed by the government are compensable, Judge.

[00:15:44] Speaker 01:
I mean, they have to be compensable.

[00:15:50] Speaker 01:
Why?

[00:15:50] Speaker 01:
Because the terms and conditions of that claim had been fully met and the government was using them.

[00:15:56] Speaker 01:
There's nothing more for my client to do at that point.

[00:15:59] Speaker 01:
My client did not assume the burden.

[00:16:03] Speaker 01:
of indefinite use.

[00:16:07] Speaker 01:
I guess the analogy is that- Sure, they did.

[00:16:08] Speaker 02:
If it was a sovereign act, that's built into the understanding our president, the Supreme Court's president, built into government contracts the notion that the government as a contractor doesn't bear liability for acts done by the government as a sovereign.

[00:16:25] Speaker 02:
So if the delay in the 13-month period was caused by the government as a contractor, then you get money for it.

[00:16:33] Speaker 02:
If it was caused by the government acting as a sovereign, you don't.

[00:16:37] Speaker 02:
Why was it caused by the government acting as a contractor?

[00:16:43] Speaker 02:
Unless your argument is it doesn't apply to changes at all, in which case you need to address what Zapor was doing.

[00:16:51] Speaker 01:
Let me clarify one of my comments earlier that I think got this off track.

[00:16:56] Speaker 01:
I'm not suggesting that the government breached the original contract.

[00:17:01] Speaker 02:
I'm saying that the government- OK, let's stop talking about breach.

[00:17:03] Speaker 02:
Nobody understands this as a breach case.

[00:17:05] Speaker 02:
This is a changes case.

[00:17:07] Speaker 02:
Correct.

[00:17:07] Speaker 02:
Does the Sovereign Axe doctrine apply to changes cases?

[00:17:12] Speaker 02:
If the change in the terms of the contract that incurred additional costs for the contractor were due to a Sovereign Act, does the Sovereign Act doctrine apply in those situations?

[00:17:28] Speaker 01:
Well, no.

[00:17:30] Speaker 02:
So what was ZAPER doing?

[00:17:33] Speaker 02:
I'm sorry?

[00:17:33] Speaker 02:
ZAPER is a changes clause case where we apply the Sovereign Act doctrine.

[00:17:39] Speaker 02:
And why wouldn't it apply?

[00:17:42] Speaker 01:
Judge, I think it doesn't apply because when the government imposes a change, they change the fundamental terms and conditions.

[00:17:48] Speaker 03:
Look, what we have is this is different from other cases in one respect.

[00:17:53] Speaker 03:
Usually, the sovereign act's doctrine prevents contractor performance and thereby increases the government's costs.

[00:18:02] Speaker 03:
I think that was the safer case.

[00:18:04] Speaker 03:
This is a different case in which the government sovereign act requires additional performance from the contractor, which benefited the government.

[00:18:14] Speaker 03:
It's not a situation in which performance is prevented, because this line item for the temporary facility wasn't performance prevented.

[00:18:23] Speaker 03:
It was additional performance that was required.

[00:18:27] Speaker 03:
That has to be the distinction, no?

[00:18:29] Speaker 01:
Yes, sir.

[00:18:31] Speaker 01:
I think that is the fundamental distinction.

[00:18:33] Speaker 01:
It was the original requirement for 13 months.

[00:18:38] Speaker 02:
What's the legal basis for that distinction mattering?

[00:18:41] Speaker 02:
Isn't the Sovereign Act's doctrine designed to alleviate the government from liability as a contractor based on

[00:18:51] Speaker 02:
sovereign acts of the government as sovereign.

[00:18:54] Speaker 02:
What difference does it make that the performance was extended by the sovereign acts versus stopped by the sovereign acts?

[00:19:03] Speaker 02:
Both cause damages to the contractor that were not agreed by the government as a contractor to be borne by the government as a contractor.

[00:19:14] Speaker 01:
Judge, the government doesn't get to impose additional costs

[00:19:21] Speaker 01:
on the contractor.

[00:19:22] Speaker 01:
How long does that go?

[00:19:23] Speaker 01:
If it's another year?

[00:19:25] Speaker 02:
Isn't that exactly the point of the sovereign acts doctrine?

[00:19:29] Speaker 02:
That when the government is acting as a sovereign,

[00:19:34] Speaker 02:
Its entity as a contractor should be treated no different than a private contractor.

[00:19:39] Speaker 02:
And if this had been between two private parties, and this whole construction had shut down, and you'd try to come in and try to get the hospital, the private hospital, to pay for this because you'd given it longer, they would have said, the delay wasn't on us.

[00:19:54] Speaker 02:
It was on the government acting as a sovereign.

[00:19:56] Speaker 02:
It's not attributable to us.

[00:19:58] Speaker 02:
Under your fixed price contract, it's attributable to you because that's built in.

[00:20:03] Speaker 02:
to a fixed price contract.

[00:20:05] Speaker 01:
Well, sure, Judge, but if I contract with HCA to do something similar, HCA doesn't get to say, I'm keeping your TPF from the next

[00:20:18] Speaker 01:
three months, six months, or nine months, and you're just going to have to eat it.

[00:20:22] Speaker 02:
If the government's going to be... I mean, if you contract with them to provide these facilities for the duration of the renovation project, and the renovation project is extended by Sovereign Act, then sure they do.

[00:20:36] Speaker 01:
But Judge, they weren't contracted to do it for the duration.

[00:20:39] Speaker 01:
They were contracted to do it for 13 months.

[00:20:41] Speaker 02:
which was the duration of the project until the Sovereign Act doctrine came in, or until the Sovereign Act itself came in.

[00:20:48] Speaker 02:
I mean, you don't dispute that the delay here was due to a Sovereign Act.

[00:20:54] Speaker 01:
I don't disagree with that at all, Judge.

[00:20:57] Speaker 02:
Right, if the base hadn't been shut down, then they would have finished the contract within the time period.

[00:21:02] Speaker 01:
I think we could assume that.

[00:21:03] Speaker 01:
But Judge, I think the critical issue is they met their burden.

[00:21:10] Speaker 01:
They were there for 13 months.

[00:21:11] Speaker 01:
They had the TPS there.

[00:21:13] Speaker 01:
That's what they were contracted to do, and that's what they paid to do.

[00:21:15] Speaker 01:
And then additional burdens were placed on them.

[00:21:18] Speaker 01:
There was no breach to counsel.

[00:21:21] Speaker 04:
I have a question.

[00:21:22] Speaker 04:
So you agree that the delay in the completion of the contract was caused by a sovereign act.

[00:21:29] Speaker 04:
That is, you know, almost something we're not going to hold the government as a contractor accountable for.

[00:21:35] Speaker 04:
And so why is it then, if it's something we're not going to hold the contractor accountable for, why is it that in this case we would hold them accountable for?

[00:21:48] Speaker 01:
Two reasons.

[00:21:48] Speaker 01:
The first one is that

[00:21:50] Speaker 01:
If you view the sovereign acts doctrine as a method of treating the government equally in the same position they would be in if they were a private contractor, that's not what that scenario does.

[00:22:04] Speaker 01:
That scenario puts them in a better position than it would if they were a private contractor.

[00:22:09] Speaker 04:
You were saying they're in a better position because they had to use the temporary facilities.

[00:22:13] Speaker 04:
They had the right to use them, right?

[00:22:14] Speaker 04:
Is that what you're saying?

[00:22:17] Speaker 04:
You're saying, what exactly makes it a better position for them?

[00:22:22] Speaker 01:
Because they gain the benefit of using the facilities for an extended period of time.

[00:22:26] Speaker 04:
Don't you think that they would have preferred to have their new completed facilities over the temporary facilities?

[00:22:33] Speaker 01:
Judge, I don't know the answer to that.

[00:22:34] Speaker 01:
What I do know is that there's a value associated with each day of the TPS.

[00:22:41] Speaker 01:
There are two parties.

[00:22:45] Speaker 01:
is better positioned than the other to assume that burden.

[00:22:49] Speaker 01:
And there's no legal requirement for the contractor to share the burden with the government.

[00:22:58] Speaker 04:
So your view is that the burden should be on the government, because the government is the one who got to continue to use the facilities.

[00:23:07] Speaker 04:
I understand that.

[00:23:09] Speaker 04:
But what law do you have to support that?

[00:23:14] Speaker 01:
The doctrine says that we turn if the doctrine applies.

[00:23:20] Speaker 01:
And I don't agree that it does here because I don't think there was a breach.

[00:23:25] Speaker 03:
And if there's no breach, there can be no... The doctrine excuses government breaches and there wasn't a government breach here that affected this performance.

[00:23:36] Speaker 03:
I'm sorry, sir.

[00:23:36] Speaker 03:
The doctrine is designed to excuse government breaches.

[00:23:41] Speaker 03:
Yes, sir.

[00:23:42] Speaker 03:
And there's no breach with respect to the temporary facility.

[00:23:46] Speaker 01:
Yes, sir.

[00:23:48] Speaker 01:
That's exactly correct.

[00:23:50] Speaker 04:
How do you distinguish Zephyr, then?

[00:23:53] Speaker 04:
I'm sorry?

[00:23:53] Speaker 04:
How do you distinguish Zephyr?

[00:23:57] Speaker 01:
Well, I think... What was the breach in Zephyr?

[00:24:08] Speaker 01:
I don't know, Judge.

[00:24:11] Speaker 02:
Was there a breach in Zephyr?

[00:24:14] Speaker 01:
I think the holding in this court was that there was a... I think the court said that there was a breach.

[00:24:25] Speaker 01:
If I contract with you to fix my home... The breach was the closure of the roof, right?

[00:24:35] Speaker 03:
They couldn't transport the materials.

[00:24:39] Speaker 01:
I believe that is correct, Judge.

[00:24:42] Speaker 01:
If I contract with you to fix my home, and part of that is to redo my closet, you could then contract with me as a side agreement to rent me a U-Haul to put my clothes in.

[00:25:00] Speaker 01:
If in the course of remedying my home or repairing my home, there's a gas explosion and it's not your fault and it's not my fault,

[00:25:09] Speaker 01:
And I want to continue using the U-Haul that you have made available to me.

[00:25:17] Speaker 01:
If it's a fixed price for 12 months... The problem with this example you're giving is it doesn't involve a sovereign act at all.

[00:25:26] Speaker 02:
So it's not analogous to this situation.

[00:25:31] Speaker 02:
The situation you need to be talking about is if you're renovating your closet and the government sends out a stop work order as the sovereign saying, because of this dangerous situation, nobody is allowed to go into anybody else's homes to work.

[00:25:48] Speaker 02:
And that causes additional costs for the U-Haul.

[00:25:52] Speaker 02:
Who bears the cost then?

[00:25:54] Speaker 02:
Is it the homeowner?

[00:25:55] Speaker 02:
They didn't cause the delay.

[00:25:58] Speaker 02:
The government caused the delay.

[00:26:00] Speaker 01:
Yeah, but the contractor didn't cause the delay either.

[00:26:03] Speaker 02:
That's the entire point of the Sovereign Acts Doctrine, that the contractor may not have caused the delay.

[00:26:09] Speaker 02:
The government caused it as a sovereign, not as a contractor.

[00:26:14] Speaker 02:
You agree that the government didn't cause the damage here as the contractor.

[00:26:19] Speaker 01:
Judge, I agree with that, but there is no breach.

[00:26:23] Speaker 02:
So your view is fundamentally that the sovereign act doctrine only applies when there's a breach.

[00:26:29] Speaker 01:
Yes.

[00:26:29] Speaker 02:
OK.

[00:26:31] Speaker 01:
That's exactly right.

[00:26:32] Speaker 01:
They contracted under CLIN 06 to do a thing.

[00:26:38] Speaker 01:
They did the thing.

[00:26:40] Speaker 01:
They delivered the TPS.

[00:26:42] Speaker 01:
The fact that the government could use them for 90 or however many additional days as it's calculated

[00:26:50] Speaker 01:
Doesn't matter.

[00:26:52] Speaker 01:
What matters is they were contracted to do a thing and they did it.

[00:26:56] Speaker 03:
Okay.

[00:26:57] Speaker 03:
I think unless there are other questions, we're out of time.

[00:27:01] Speaker 03:
Thank you.

[00:27:05] Speaker 03:
Thank you, Mr. State.

[00:27:06] Speaker 03:
Mr. Rayl?

[00:27:06] Speaker 03:
Suppose here the contractor had said, well, by shutting the base down, you're preventing our performance and we're going to stop providing the temporary facility.

[00:27:17] Speaker 03:
Did they hit on that?

[00:27:19] Speaker 00:
The contract required them to provide the temporary facilities during the course of renovation.

[00:27:25] Speaker 03:
The contract is stopped.

[00:27:27] Speaker 03:
And the temporary facility, as you say, is part of the contract.

[00:27:30] Speaker 03:
We're not going to provide the temporary facility anymore until the government shutdown of the base is over.

[00:27:37] Speaker 03:
Could they have done that?

[00:27:38] Speaker 00:
That would not have been consistent with the contract in this case.

[00:27:42] Speaker 03:
So they had to provide the temporary facility.

[00:27:45] Speaker 03:
They had to continue the performance, right?

[00:27:48] Speaker 00:
They had to continue that aspect of the performance, again, because that's what the contract required.

[00:27:55] Speaker 00:
I see nothing in the contract requiring the requirement structure to have the temporary facilities.

[00:28:02] Speaker 03:
What case says the Sovereign Act?

[00:28:05] Speaker 03:
can appropriately require additional performance from the contractor.

[00:28:09] Speaker 00:
But that's the thing, it didn't require additional performance in this case.

[00:28:12] Speaker 00:
Again, I see nothing in the contract requiring structure to perform the claim six for 13 months.

[00:28:19] Speaker 03:
Well, you just said they had to.

[00:28:21] Speaker 00:
They could stop.

[00:28:22] Speaker 00:
While the medical center was unusable due to the renovation.

[00:28:28] Speaker 00:
And you can see this.

[00:28:31] Speaker 03:
So they couldn't stop.

[00:28:32] Speaker 03:
They couldn't say, the base is closed, we can't continue with the contract, we're going to stop all performance.

[00:28:40] Speaker 03:
They couldn't do that.

[00:28:42] Speaker 00:
But they had to stop the construction, which caused the delay.

[00:28:45] Speaker 03:
They couldn't stop the performance insofar as the temporary facility was concerned, right?

[00:28:50] Speaker 00:
Right, because the temporary facilities were to be provided until the renovation was complete.

[00:28:54] Speaker 00:
And we see it at Joint Appendix 1401 in their structure's own proposal, or its predecessor company, that occupants of the areas to be renovated will be relocated to the TPF building or temporary swing space.

[00:29:07] Speaker 00:
Once a phase is complete, the construction phase, the occupants will return and occupy their newly renovated space.

[00:29:14] Speaker 00:
Structure was required to provide these phasing facilities

[00:29:17] Speaker 00:
while the renovation was ongoing and the David Graham Medical Center was unusable.

[00:29:22] Speaker 00:
Structure did that.

[00:29:23] Speaker 00:
And so they're entitled to be paid the firm fixed price that is in the contract.

[00:29:28] Speaker 00:
There's nothing in the contract as far as I've seen.

[00:29:31] Speaker 03:
What case says that the government can insist on additional performance from the contractor under circumstances like that?

[00:29:37] Speaker 00:
It didn't.

[00:29:38] Speaker 00:
The government did not insist on additional performance here.

[00:29:40] Speaker 03:
It insisted.

[00:29:42] Speaker 03:
It wanted to continue to use the temporary facility, right?

[00:29:45] Speaker 00:
Pursuant to the contract, yes.

[00:29:49] Speaker 00:
That's what the contract required for however long that renovation took.

[00:29:53] Speaker 00:
Now in this case, there's no dispute that the delay wasn't structure's fault.

[00:29:58] Speaker 00:
The delay was the government's fault.

[00:29:59] Speaker 00:
But it was the government as a sovereign.

[00:30:01] Speaker 03:
I don't think you have an answer to my question.

[00:30:03] Speaker 03:
My question is what case says that as a result of sovereign acts, the government can insist on additional performance from the contractor?

[00:30:15] Speaker 00:
Well, I don't know if there's a case specifically stating that, but the general principle of the Sovereign Act's doctrine is that the government's not going to be responsible for altering, modifying, or violating the contract as a result of the Sovereign Act.

[00:30:32] Speaker 00:
That's the Horowitz case.

[00:30:34] Speaker 00:
We've got cases like Zephyr that apply it to a change.

[00:30:36] Speaker 00:
There was no allegation of a breach.

[00:30:39] Speaker 03:
Yeah, but Zephyr is not a situation where the government was to require additional performance.

[00:30:44] Speaker 03:
It was closing the route so they couldn't perform the contract and they incurred additional costs as a result of the non-performance.

[00:30:52] Speaker 00:
Right, the government said, even though the route is closed, get it done, pursuant to the terms of the contract.

[00:30:57] Speaker 00:
So that's kind of what we would have here.

[00:30:59] Speaker 00:
Structure was required to get claim six done, regardless of the fact that it would be completion of the medical center was delayed.

[00:31:07] Speaker 00:
So increased costs are caused by the delay here, and that was caused by a sovereign act.

[00:31:14] Speaker 00:
And so the government is not liable to that due to the sovereign act.

[00:31:22] Speaker 00:
So unless the court has any further questions, we respectfully request that the court reverse the board's decision.

[00:31:29] Speaker 03:
Okay, thank you.

[00:31:29] Speaker 03:
Thank both counsels.

[00:31:30] Speaker 03:
Please sit down.