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Case number 20-1520, Archer Western Contractors LLC petitioner versus United States Department of Transportation and Federal Aviation Administration.

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Mr. Straw for the petitioner, proposed contract change and inefficiencies.

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Mr. Macon for the petitioner, the work issues.

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Ms.

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Nyose for the respondents.

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Good morning, council.

[00:00:24] Speaker 00:
Good morning, your honor.

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You may proceed.

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Thank you, your honor.

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Good morning again, and may it please the court.

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My name is John Straw for Petitioner Archer-Western.

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I and my co-counsel, Mr. Meekin, will be addressing the three main issues in this appeal.

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I will take care of the two timeliness issues of proposed Change 16 and disruptions, and Mr. Meekin will then address the duck work issue.

[00:00:46] Speaker 04:
So let's talk about your definition of accrue.

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Thank you, your honor.

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A claim accrual requires that all events that fix liability must have occurred

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and permit assertion of a claim.

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That's under 14 CFR 17.27.

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Here, those events didn't occur until at the earliest there was a duty to perform the changed work, which happened April 3rd, 2013.

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At the latest, they accrued when the FAA failed to agree to the request for equitable adjustment.

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That was December of 2014.

[00:01:21] Speaker 04:
So what about on February 7th?

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when your client submitted to the administration an estimate of costs and delays stemming from proposed contract change 16?

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Thank you, Your Honor.

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So as of February 7th, the damages were capable of reasonable estimation, but not all of the events had yet occurred.

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The event that had yet to occur was an actual direction to do that work.

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What I'm trying to understand is your client knew what he or at least he told the administration what the estimate of costs was going to be and the delay to completion of the contract.

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Why didn't he have full knowledge at that point?

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He didn't, your honor, because there was no written directive to do the work yet.

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And that's similar to an Odra case in 2013 of LNN MKB joint venture.

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There, the Odra said that no claim accrued until there was a written order to actually do the work.

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In fact, they denied the contractor's motion for summary judgment in that case, because even though there was forward pricing like there was here, there was yet to be a written directive to do that work.

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Similarly, the case of Jensen, which is a General Services Board of Contract Appeals decision.

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In that case, before there was a written order to apply a third coat of paint, the court said that it was as if there was no agreement, there was no contract to actually perform that extra work.

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The written order was required and here it didn't happen until the earliest on April 3rd.

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In fact, the FAA knew that it hadn't happened yet because a couple of days before that,

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The FAA chief engineer, Mr. Brinker, emailed the contracting officer and said, we know Archer Western is waiting on this order to do this work.

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Please tell them to do it.

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That order came then on April 3rd.

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There are a couple of cases that the FAA has asserted in its briefing that I'd like to address, one of which is the case of electric boat decided by the federal circuit just last year.

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In that case, the claim accrued when OSHA

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changed the regulation.

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But in that case, the parties had agreed that all it took was that one event to create the liability.

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It was a pre-agreed condition, kind of like the ASFA case, which is an ASPCA case where when the deadline passed to complete the project on time, liquidated damages immediately accrued.

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The parties agreed that all it took was passing that deadline in ASFA.

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In Zaffer, upon which the FAA also relies, the Court of Federal Claims held that at the point at which the delays began, the claim did accrue.

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But at that same time, there was already an obligation to perform the delayed work.

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Here, there was no obligation to perform the proposed change 16, item 10, until there was a written order.

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And that didn't happen, or that happened within two years of archi-western filing its notice of contract dispute.

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It's your honors, if I may.

[00:04:36] Speaker 07:
Mr. Strahl, what about the equitable adjustment argument?

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I actually thought of your two arguments with regard to claim number one.

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I thought that was the stronger of the two.

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Can you kind of spell that out a little bit?

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Certainly, your honor.

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Thank you.

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And under the terms of the contract, when there was a quote failure to agree, end of quote, then a contract dispute could be filed.

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It had arisen at that point.

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That didn't happen until December 2014 when the FAA finally rejected the REA and issued the unilateral contract change.

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The FAA has now argued that the request for equitable adjustment process simply lengthens the negotiation period, and they have cited to a few cases to support that, one of which is CEMS, which is a court of federal claims decision.

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In that case,

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The court said, quote, contractors performance requirements must be enlarged.

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And the additional work results from a direction of the contracting officer.

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A dispute didn't arise until there was a failure to agree.

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In fact, do you think that you could have gone to the ODRA with regard to the delay at issue and claim number one?

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Do you think you could have gone to the ODRA before

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the equitable adjustment was denied?

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I think we could have, but I don't think we had to at that point.

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Although we had a written order, the contract directed Archer Western to follow the changes process.

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In other words, why would you escalate it to the order before you had to?

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In fact, when there was a direction on April 3rd, 2013 to do the work, the contracting officer in that same letter said, if you disagree,

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go follow the changes process and file a request for equitable adjustment.

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With some of the time that I have remaining, if I could turn to the disruptions argument, unless there's any other questions with respect to the first claim cruel argument.

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So with respect to disruptions, the ODRA arbitrarily

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ignored some of the additional supplemental information that was provided with the Notice of Contract dispute, which spells out the disruption claims in significant detail over several thousand pages.

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But even before all of that, the Notice of Contract dispute itself, especially with respect to Proposed Change 16, referenced specific impacts there, and in Exhibit 13 attached there, too, talks about cumulative impacts.

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So

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The ODRA arbitrarily did not pay sufficient attention to both the substance and the same operative facts in the notices of contract dispute and relied more upon form.

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They didn't look at the exhibits attached there too as well with sufficient detail, which is similar to the Martin Resnick case, another ODRA case.

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Mr. Strull, under which count of the initial notices do you say

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that you intended to bring the cumulative impact claim?

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The cumulative impact claim arises from all the facts from all the counts.

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The very nature of that claim is retrospective and comprised of all the various changes and issues that arose on the project.

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I thought there's something in the rules that says you have to specify each legal claim.

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Now, you don't have to use magic words.

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I agree with you about that.

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But to say that

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the cumulative impact was kind of emanating from all of the counts seems very inconsistent with the requirement that when you go to the ODRA, you list each individual claim.

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So thank you for that question, Your Honor.

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I would like to address it.

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However, I'm into my rebuttal time.

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If I may, may I address this and still keep my three minutes for rebuttal?

[00:08:42] Speaker 04:
Well, let's see how it goes.

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Why don't you answer the judge's question?

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Thank you, Your Honor.

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So with respect to your honor's question, the case of Alvarici, which is an ASBCA case, said that you can decide an appeal and have jurisdiction to do so under a different legal theory, even if that specific legal theory isn't articulated, as long as the same operative facts supporting that theory are pled throughout the complaint or throughout the notice of appeal.

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It's also similar to the case of placeway construction, which is a federal circuit decision.

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But I didn't read either of those cases to say that on appeal, you can argue a new theory based on an analysis of facts that you didn't offer.

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In other words, just saying, you know, one, two, three, four, five, these are separate claims.

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That was disruption.

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That's not enough.

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So your honor, I believe it is and I believe under the under these cases, it is to the extent that you have to consider all the same operative facts.

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The place way case said that where form was given more weight over the substantive facts, the lower court was actually reversed because they were focusing too much on form here.

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not only were there specific impacts alleged in the notice of contract dispute, but the supplemental information that was provided as a part of the dispute file laid out all cumulative impacts, which is similar to the resonant case and odor case.

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And with that, your honors, I'm approaching my time.

[00:10:21] Speaker 04:
All right.

[00:10:21] Speaker 04:
Thank you, counsel.

[00:10:22] Speaker 04:
We're here from co-counsel.

[00:10:25] Speaker 06:
Yes, Your Honor.

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Thank you for your time today.

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My name again is Stephen Mecham and I'm addressing the duct issue.

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As set forth in our briefs, the government has the burden of proof to show that the contractor did not comply with the specifications.

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Odrin did not find that

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The ductwork did not comply with the specification.

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Rather, the ODRA found that the risk of future delamination was reasonable.

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In other words, at the time that it was rejected, there was no delamination.

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The ductwork complied with the specifications.

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The specification admittedly had a very low threshold, but the specifications indicated that all that it had to do was line the duct.

[00:11:13] Speaker 04:
Well, let me just

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be clear about that.

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I thought your argument was more, and let me be clear, you didn't say it this way.

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But there has to be some expert evidence on this, doesn't there?

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For the government to need its proof, burden of proof.

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I mean, the government brief reads like, well, everybody knows it's the same manufacturer, etc.

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But that's not what the requirement is.

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Isn't

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The requirement is solely that it adhere to the liner of the duct.

[00:11:47] Speaker 04:
Right.

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But my point is how do you prove that?

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How do you prove it?

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Well.

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Doesn't the agency need to proffer some expert testimony that a reasonable interpretation of the contract term is that this is what was contemplated and it wasn't done here?

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I don't believe that that's what the expert testified about.

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Do you agree expert testimony is necessary?

[00:12:18] Speaker 06:
I do not agree that expert testimony is necessary.

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If the agency says well you know we've been around here for a long time we've seen a lot of cases and it's our view that there's a problem here that's enough

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I do not believe that is enough, Your Honor.

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If you don't need expert testimony, I believe what you have is the standard that set forth and specifications and what the Gallagher Kaiser and what Archer Western did is they put the system to work.

[00:12:49] Speaker 06:
They double the speeds of the fans.

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So the velocities within the ductwork were twice what was the design specification.

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They ran that ductwork, or excuse me, they ran those velocities, that high velocity purge for over three months and not a single square inch of ductwork delaminated.

[00:13:12] Speaker 04:
So these are friendly questions, although you're treating them as hostile questions.

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But in any event,

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Have the courts held that Oprah itself is an expert as far as determining contract compliance?

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And you don't need expert testimony?

[00:13:35] Speaker 04:
If that's true, then I wondered why the agency as well as the contractor offered expert testimony if they didn't need it.

[00:13:44] Speaker 06:
Well, because we were offering testimony to say that it can fight.

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In fact, our experts specifically said that there was no standard set forth in the specifications.

[00:13:54] Speaker 04:
The first part of my question, have courts held that OBRA itself is an expert?

[00:14:01] Speaker 06:
Not that I'm aware of, no.

[00:14:03] Speaker 04:
All right.

[00:14:03] Speaker 04:
So how do they prove the contract says do X and your client says

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We did X in accordance with the contract terms.

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And the agency offers evidence that there's a problem here.

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Doesn't it have to offer that evidence through expert testimony?

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The evidence that was offered through expert testimony was in relationship to

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There was no expert testimony by either party that said that the duck work was non-compliant.

[00:14:51] Speaker 04:
That's my point, Council.

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That's exactly right.

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We need expert testimony.

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It's not enough for the agency to have a hunch.

[00:15:00] Speaker 06:
Well, arguably so, but still.

[00:15:04] Speaker 04:
Arguably so.

[00:15:05] Speaker 06:
If you look at the information provided by the FAA, during the course of the project, the FAA said they were reviewing the ASTM documents and standards or testing.

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And they said, wait, that's not part of our specification.

[00:15:22] Speaker 06:
The reason for rejection should be the flaking from the ductwork, which was occurring on the round duct.

[00:15:30] Speaker 06:
it was not occurring on the rectangular duct.

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So from our perspective, in order to comply with the specifications, we look at what the specifications say and does it comply with that specification?

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And the agency there was a flaking issue as to the round ductwork.

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It was flaking once they started the system.

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Who told the agency that?

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Was it not through expert analysis and expert testimony?

[00:16:05] Speaker 06:
No, it was not.

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Who are these people who are identified in the record as experts who testified that they tested this and they saw the flaking?

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And this was going to be a problem down the road.

[00:16:20] Speaker 06:
Those weren't experts, your honor.

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Those were they were people within the organization that saw flakes coming out of the ductwork.

[00:16:30] Speaker 04:
I understand that point.

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But who said that's a problem?

[00:16:35] Speaker 04:
Maybe that's the way it's supposed to operate.

[00:16:37] Speaker 06:
Because the specifications say that the ductwork has to be lined with the duct.

[00:16:47] Speaker 04:
I think you missed my point here.

[00:16:49] Speaker 06:
OK.

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Yes, the ductwork has to be lined.

[00:16:55] Speaker 04:
The contract itself, as I read it, doesn't say anything about, and the coating shall not flake.

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Is that correct?

[00:17:06] Speaker 06:
That is correct.

[00:17:07] Speaker 04:
So where is the evidence that flaking means that the coating does not comply with the contract specifications?

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Because when the coating flakes off, there is no longer a lining on the duct.

[00:17:26] Speaker 04:
Where is that evidence coming from?

[00:17:29] Speaker 06:
The evidence is from observation, visual observations.

[00:17:33] Speaker 04:
Yes, but Council, we're in an area where normally it's not enough for a man on the street to come in and say, oh, I see it's flaking.

[00:17:43] Speaker 04:
It must not be operating properly.

[00:17:45] Speaker 06:
Well, Your Honor, if you were to look inside the ductwork and you were to see that there was no liner there because it had flaked off, then you would know.

[00:17:53] Speaker 04:
Hypothetically, it's the type of liner that you put on, it dries.

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And then when it's functioning properly, it flakes.

[00:18:03] Speaker 04:
And then down the road, as time passes, all the flaking occurs and there's no liner left, but that's what's contemplated.

[00:18:15] Speaker 06:
Well, I guess that's an interpretation of the specifications.

[00:18:19] Speaker 04:
No, this is a hypothetical.

[00:18:21] Speaker 06:
I understand that, your honor, but again, my position would be that- Just put the man on the street who says, gee, it's flaky.

[00:18:32] Speaker 04:
That can't be the law.

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And I don't understand the record to even suggest that.

[00:18:36] Speaker 04:
Rather, these experts came in to say, this shouldn't be happening.

[00:18:45] Speaker 08:
Council, do you acknowledge that evidence of delamination doesn't satisfy the contract

[00:18:51] Speaker 08:
requirements, right?

[00:18:53] Speaker 08:
I mean, I thought the evidence was coming from ASTM testing, which was showing that there was a failure of adhesion.

[00:19:02] Speaker 08:
If that is correct, there isn't any doubt that you failed to satisfy the contract.

[00:19:08] Speaker 08:
You can't have a failure of adhesion in this kind of work and say you satisfied the contract, right?

[00:19:16] Speaker 06:
Well, Your Honor, I disagree with that because- No, wait, wait, wait, wait.

[00:19:21] Speaker 08:
Go with my question.

[00:19:22] Speaker 08:
I'm afraid you're about to ask something.

[00:19:23] Speaker 08:
You cannot have a failure of adhesion and say you satisfy the contract, right?

[00:19:31] Speaker 08:
When ASTM testing shows there's a failure of adhesion.

[00:19:34] Speaker 08:
Let's assume that's what the AST testing shows.

[00:19:38] Speaker 08:
That can't satisfy the contract requirements, right?

[00:19:41] Speaker 06:
Yes, it can, your honor, because the ASTM standard, the ASTM 539 test applied

[00:19:48] Speaker 06:
a pressure over 1,000 times greater than what would be in the ductwork.

[00:19:54] Speaker 08:
I forget the ASTM testing.

[00:19:56] Speaker 08:
You can't have a failure of adhesion unsatisfied by the contracting.

[00:20:00] Speaker 06:
That is correct.

[00:20:01] Speaker 06:
And so the ductwork, the rectangular ductwork, didn't have an adhesion failure.

[00:20:07] Speaker 06:
It was stood double the velocity.

[00:20:11] Speaker 04:
Back to Judge Edwards question.

[00:20:14] Speaker 04:
How do we know that?

[00:20:16] Speaker 06:
How do we know that?

[00:20:17] Speaker 06:
Because it was observed.

[00:20:19] Speaker 04:
If you look at- I gave you a hypothetical counsel that this is the type of coating that you put it on, you leave it there for, I don't know, a month, and then it's supposed to flake and it's supposed to disappear because there's been this chemical reaction that's gone on and that's sufficient.

[00:20:37] Speaker 04:
Because that isn't- I don't know why you're fighting

[00:20:40] Speaker 06:
Well, it's just that it's not what we call down the specifications, Your Honor.

[00:20:44] Speaker 06:
That's all I'm saying.

[00:20:46] Speaker 06:
That's not what's called.

[00:20:47] Speaker 04:
Well, the specifications say we want a coding.

[00:20:50] Speaker 06:
That's correct.

[00:20:51] Speaker 04:
Period.

[00:20:52] Speaker 06:
Period.

[00:20:52] Speaker 06:
And that's what we're talking about.

[00:20:53] Speaker 04:
It doesn't tell you what kind of coding.

[00:20:56] Speaker 04:
It doesn't tell you whether it's supposed to flake or not.

[00:21:00] Speaker 04:
Is it a coding that disappears after six months because it's supposed to?

[00:21:07] Speaker 06:
It says this is coding that's supposed to align the ductwork.

[00:21:12] Speaker 04:
For what time?

[00:21:13] Speaker 04:
It depends on the nature of the coding, doesn't it?

[00:21:16] Speaker 04:
And what its properties are and how those properties are supposed to exist.

[00:21:26] Speaker 04:
And doesn't somebody have to tell the agency, if the agency itself is not the expert, that having flaking coding is not

[00:21:38] Speaker 04:
consistent with the contract specification given the nature of the coding, the nature of events, and what the contract specification must have intended.

[00:21:55] Speaker 03:
Doesn't somebody have to say that to the agency?

[00:21:58] Speaker 06:
I think that certainly that would bolster the argument of either the agency or the contractor.

[00:22:06] Speaker 04:
All right.

[00:22:06] Speaker 04:
So you think it's enough that it was flaking, period.

[00:22:09] Speaker 04:
And that's the end of the story.

[00:22:11] Speaker 06:
Again, the rectangular duct was not flaking.

[00:22:14] Speaker 06:
And to me, that's the end of the story.

[00:22:15] Speaker 04:
I'm just saying you're saying that evidence of flaking showed failure.

[00:22:21] Speaker 04:
And that's what the agency found as to the round.

[00:22:24] Speaker 06:
Yes.

[00:22:25] Speaker 04:
All right, and now the agency argues, well, manufactured by the same party, you know, we didn't expect this, blah, blah, blah.

[00:22:33] Speaker 04:
Is that enough?

[00:22:35] Speaker 06:
Absolutely not.

[00:22:37] Speaker 04:
Because?

[00:22:38] Speaker 06:
It wasn't flaking.

[00:22:39] Speaker 06:
It was complying with the specifications.

[00:22:42] Speaker 04:
How do we know that flaking is inconsistent with the specifications?

[00:22:46] Speaker 04:
We need expert testimony.

[00:22:49] Speaker 04:
Well.

[00:22:49] Speaker 04:
And as Judge Edwards questioned, was promised on there was testing.

[00:22:55] Speaker 04:
All right, you had these people who were familiar with the nature of the coding and what was required by the specification.

[00:23:05] Speaker 06:
Yes, and those experts testified that it was compliant with.

[00:23:09] Speaker 06:
And even the government's expert, after looking at all the evidence at the trial during the hearing, agreed that their initial assessment was indirect and that it was premature and wrong to reject the rectangular duct.

[00:23:25] Speaker 04:
So bottom line, they needed expert testimony.

[00:23:28] Speaker 04:
They didn't have it as to the rectangular ducts.

[00:23:33] Speaker 07:
I would agree with that.

[00:23:35] Speaker 07:
Mr. Meacham, can I ask one hypothetical and one fact question?

[00:23:41] Speaker 07:
The hypothetical is this.

[00:23:42] Speaker 07:
If the rectangular ducks had been flaking, would you agree that you failed to satisfy the contract?

[00:23:53] Speaker 06:
I believe that if in those locations where it had failed, then it should have been replaced.

[00:24:02] Speaker 07:
Given the minimal amount of that.

[00:24:04] Speaker 07:
Mr. Meacham, you said failed, but you might have meant flaked.

[00:24:07] Speaker 07:
Okay, so in the locations where, if there had been places where the rectangular ducts had been flaking, you would acknowledge that that was a failure of the contract, correct?

[00:24:19] Speaker 06:
At those locations, not a wholesale replacement.

[00:24:23] Speaker 07:
Okay, yes, at those locations, right?

[00:24:25] Speaker 07:
Yes.

[00:24:26] Speaker 07:
Okay.

[00:24:27] Speaker 07:
And this is the fact question.

[00:24:28] Speaker 07:
Are the turning veins?

[00:24:31] Speaker 07:
part of the rectangular ducts?

[00:24:33] Speaker 06:
They are a an appurtenance that are located inside the inside the rectangular duct, but it's like a filter, you know, like at your house, whatever the the turning veins can be removed and replaced.

[00:24:46] Speaker 07:
And so we offer flaking.

[00:24:48] Speaker 07:
Was there flaking on the turning veins on a few of them?

[00:24:52] Speaker 06:
There was.

[00:24:52] Speaker 06:
And so we offered to remove and replace those.

[00:24:56] Speaker 07:
OK, those are all of my questions.

[00:24:57] Speaker 07:
And I'm sorry if I interrupted Judge Rogers.

[00:25:02] Speaker 03:
Okay, thank you, Council.

[00:25:06] Speaker 06:
Thank you.

[00:25:08] Speaker 03:
All right, Council for petitioner.

[00:25:11] Speaker 04:
I'm sorry, Council for respondent, sorry.

[00:25:25] Speaker 02:
Good morning, may it please the court?

[00:25:27] Speaker 02:
This appeal arises from a contract dispute between Archer and the FAA relating to the construction of the McCarran International Airport in Las Vegas, Nevada.

[00:25:37] Speaker 02:
Archer seeks review of three of the FAA's Office of Dispute Resolution for Acquisition rulings that were issued in the course of ODRA's adjudicating many claims that Archer asserted against the FAA and the court.

[00:25:51] Speaker 04:
So you heard the argument this morning as to the first issue.

[00:25:55] Speaker 04:
What's the basis for the agency's disagreement.

[00:26:01] Speaker 02:
Your Honor, on the first issue on the timeliness or when the delay claim accrued.

[00:26:08] Speaker 02:
Petitioners have asserted a theory of accrual that assumes that they have a direct cost claim, and they don't.

[00:26:17] Speaker 02:
What they have is a delay claim.

[00:26:19] Speaker 02:
And I think the Court of Federal Claims case in Zephyr is instructive in that it reminds us that we need to focus on the events that triggered the delay that are causing the injury

[00:26:35] Speaker 02:
that Archer is complaining about here.

[00:26:38] Speaker 02:
And the events that caused the injury, the delay, was when Archer realized in October of 2012 that there was a specification, there was an issue with the specification.

[00:26:50] Speaker 02:
And then following Archer raising that issue with the FAA,

[00:26:55] Speaker 02:
The FAA issued a proposed contract change, 16.

[00:26:59] Speaker 02:
And we know from Archer's own statements that it is the combination of those two events that caused its injury, which therefore gives rise to the cruel of its claim.

[00:27:12] Speaker 02:
And we know that because on January 4th,

[00:27:16] Speaker 02:
2013, Archer wrote a letter, this is an A582 of the record, telling its subcontractors to stop work pending, quote, clear design and direction from the FAA.

[00:27:29] Speaker 04:
And then February 7, 2013, Archer- So what is your strongest case for the proposition that the definition of accrual under the regulation

[00:27:44] Speaker 04:
that applies in direct cost claims does not apply in delay claims.

[00:27:55] Speaker 02:
Your Honor, that would either be the ASBCA decision in Robinson, which explains that once you know that there is a delay, the length of delay is then just the quantification.

[00:28:15] Speaker 04:
You had no obligation to do anything, all right, until the agency told you to do something.

[00:28:24] Speaker 04:
Here the contractor finds a problem, notifies the agency, and meanwhile tells his employees and subcontractors to stop work.

[00:28:38] Speaker 04:
And we're waiting to see whether the agency is going to say this work must be done according to item 10.

[00:28:50] Speaker 04:
Why isn't this case different from what you're describing?

[00:28:55] Speaker 02:
Because the injury that Archer suffers is a delay.

[00:29:01] Speaker 04:
It doesn't suffer any injury until it's instructed to do the work.

[00:29:11] Speaker 04:
Is that not its argument?

[00:29:13] Speaker 04:
That is Archer's argument.

[00:29:15] Speaker 04:
On the direct cost claims?

[00:29:19] Speaker 02:
Archer doesn't have direct cost claims any longer.

[00:29:21] Speaker 04:
I understand that, but it's applying the standard there interpreting the regulation and what it requires.

[00:29:28] Speaker 04:
And I'm trying to find out where you find authority that that interpretation of the regulation does not apply in a delay claim where there has been no instruction to the contractor to do the work in accordance with this

[00:29:48] Speaker 04:
contract change proposal.

[00:29:53] Speaker 02:
Your Honor, if we, for example, look at Archer's time impact analysis number six, that's at A611 and 617.

[00:30:04] Speaker 02:
ARCHER directly ties its delay damages to the suspension of its activities due to the issues identified in RFI 804.

[00:30:18] Speaker 02:
And then explains further, this is at A617, that due to the time required for the FAA to correct the defective specification,

[00:30:27] Speaker 02:
and layout, Archer is continuing to suffer delay damages.

[00:30:32] Speaker 02:
So the delay damages are fundamentally different kind of, it's a different kind of claim and a different kind of damage than direct cost claim.

[00:30:45] Speaker 04:
So until the contractor is told to do something, the fact that it must stop work

[00:30:55] Speaker 04:
under the terms of the previous existing contract terms is not a recoverable cost.

[00:31:07] Speaker 02:
Your honor, it may be a recoverable cost, actually.

[00:31:12] Speaker 02:
I mean, Archer's arguing that it wouldn't have any recoverable costs until the notice to proceed is issued, but Archer's actually seeking delayed damages going back to its RFI 804, its request for information 804 in October of 2012.

[00:31:30] Speaker 04:
And I understand what the law is in this situation.

[00:31:35] Speaker 04:
I'm the contractor.

[00:31:36] Speaker 04:
I have a contract.

[00:31:38] Speaker 04:
And I discover that one term of the contract isn't going to work.

[00:31:42] Speaker 04:
So I notify the agency and the agency says, let us look at this.

[00:31:48] Speaker 04:
And so it looks at it and it comes up with a proposal.

[00:31:51] Speaker 04:
Meanwhile, the contractors had to stop work.

[00:32:00] Speaker 04:
I mean, there's no disagreement here that the stopping of the work was appropriate under the circumstances.

[00:32:08] Speaker 04:
Is it?

[00:32:08] Speaker 02:
That's right, Your Honor.

[00:32:10] Speaker 02:
No, there's no dispute that they.

[00:32:13] Speaker 02:
Right.

[00:32:14] Speaker 04:
So does a contractor just have to absorb all the delay costs that it suffers when the agency says go ahead?

[00:32:25] Speaker 04:
And now instead of being able to complete the contract within, let's say hypothetically, 12 months, it's going to take it 16 months.

[00:32:37] Speaker 04:
There's no way for the contractor to recover that.

[00:32:41] Speaker 04:
I'm just asking, I don't know.

[00:32:43] Speaker 02:
Yes, Your Honor, there is a way for the contractor to recover that.

[00:32:48] Speaker 02:
The damage, the events that is causing the damage to the contractor is the uncertainty as to what work to perform.

[00:33:00] Speaker 02:
And so while waiting for an agency to give direction, a contractor may have a delay claim.

[00:33:07] Speaker 02:
Sometimes the delay will not occur until the agency gives a notice to proceed on a different path, but that's not the facts that we have here.

[00:33:16] Speaker 02:
And I don't think it's uncommon for a contractor to say to the government, we've found a problem, we need direction, and we can't perform until you tell us what to do.

[00:33:29] Speaker 02:
The alternative is the contractor proceeds

[00:33:33] Speaker 02:
along the path of the contract, even though it's identified in error, and then has to later on undo all of that work, which could create a claim for damages as well.

[00:33:50] Speaker 02:
So when the contractor identifies that there is a government cause delay, which would

[00:33:57] Speaker 02:
If the specifications are defective, that could be a government-caused delay.

[00:34:02] Speaker 02:
Once the contractor identifies that there's a need to stop working, that's when the claim would accrue.

[00:34:11] Speaker 02:
It accrues when they stopped working because of the uncertainty.

[00:34:16] Speaker 07:
Do you think they should go to Audra at that moment?

[00:34:24] Speaker 02:
Your Honor,

[00:34:25] Speaker 02:
The Odra regulations do allow and actually- I understand that it- Well, they were required to.

[00:34:34] Speaker 02:
They were required to go within two years, yes.

[00:34:37] Speaker 08:
They were required to go to Odra.

[00:34:39] Speaker 08:
Listen to my colleague Ash.

[00:34:40] Speaker 08:
Well, they were required to go to Odra at that point.

[00:34:45] Speaker 02:
They were required to go to Odra within two years of identifying the delay.

[00:34:53] Speaker 07:
Why go to Odra?

[00:34:55] Speaker 07:
rather than seek an equitable adjustment.

[00:35:01] Speaker 07:
First of all, the contract terms contemplate a request for an equitable adjustment.

[00:35:07] Speaker 07:
And it's less adversarial, probably less expensive, probably more efficient to first seek an equitable adjustment.

[00:35:17] Speaker 07:
I've got the contract language here.

[00:35:19] Speaker 07:
It's a JA 136 to 37.

[00:35:22] Speaker 07:
If changes increase,

[00:35:26] Speaker 07:
The time, I'm adding some ellipses here, but I don't think they're material.

[00:35:31] Speaker 07:
If changes increase the time required for performing the work, the contracting officer shall make an equitable adjustment.

[00:35:42] Speaker 07:
And that's at contract 3, 10, 1, 16, C. And then if you go to E, it says failure to agree to any adjustment

[00:35:55] Speaker 07:
shall be a dispute under the disputes clause.

[00:36:00] Speaker 07:
So it seems to me that it's contemplating a pretty efficient relatively informal process where a delay happens.

[00:36:12] Speaker 07:
It's the government's fault and the contractor first before it runs to the arbitrator.

[00:36:18] Speaker 07:
The government seeks an equitable adjustment and then if the

[00:36:22] Speaker 07:
If the government fails to provide the equitable adjustment, then that's a dispute.

[00:36:31] Speaker 07:
Failure to agree to it shall be a dispute.

[00:36:34] Speaker 07:
And the statute of limitations is two years from once the dispute accrues.

[00:36:41] Speaker 07:
Why, why, why go, why is your, why does your theory, I guess,

[00:36:49] Speaker 07:
Why not do that?

[00:36:50] Speaker 07:
Why shouldn't Archer do that?

[00:36:51] Speaker 07:
Let's say this happens 50 times over the course of a multi-year contract.

[00:36:58] Speaker 07:
Your theory would have them go to, to Odra 50 times when in fact they might get an equitable adjustment, 49 out of the 50 times.

[00:37:08] Speaker 07:
Is that right?

[00:37:09] Speaker 02:
Your Honor, the regulations and the contract require the contractor, when it files a notice of contract dispute with ODRA, to also serve it on the contracting officer, on the agency, and to attempt an informal resolution.

[00:37:27] Speaker 02:
ODRA recognized that in

[00:37:31] Speaker 02:
In the opinion on statute of limitations at A17, Note 9, O'Dray recognized that O'Dray gets into the adjudicative process only when the parties can't work it out through an informal process.

[00:37:50] Speaker 02:
And so the regulations do contemplate a double track.

[00:37:56] Speaker 02:
My understanding is that is because the FAA wants a more flexible and informal process than you might have, for example, under the Contract Disputes Act.

[00:38:16] Speaker 02:
And so there is a contemplation that there would be a notice of contract dispute filed to preserve your rights, but that ODRA would not

[00:38:26] Speaker 02:
jump in and start the adjudicative process immediately, that there would be time for the parties to try and work it out.

[00:38:34] Speaker 07:
Is that somewhere in the record?

[00:38:35] Speaker 07:
I mean, that does make more sense than what I thought your argument was.

[00:38:41] Speaker 07:
Is there somewhere in the record that if a contractor goes to the ODRA before the equitable adjustment has been decided,

[00:38:52] Speaker 07:
that it's normal practice for ODRA to just stay that proceeding until the equitable adjustment has either been granted or denied.

[00:39:03] Speaker 02:
Your honor, that would be in the ODRA of regulations dealing with the adjudicative process.

[00:39:14] Speaker 02:
And I'm looking for that citation, your honor.

[00:39:19] Speaker 02:
Let's see, it would be

[00:39:22] Speaker 02:
14 CFR section 17.29, where the ODRA process for contract disputes includes an informal resolution period of 20 days for the parties to attempt to informally resolve the dispute.

[00:39:39] Speaker 02:
And during the informal resolution period, if the parties request it,

[00:39:46] Speaker 02:
ODRA can appoint basically a mediator.

[00:39:51] Speaker 02:
And so it is a very flexible process.

[00:39:54] Speaker 02:
Once you file at ODRA, you've preserved your rights.

[00:39:57] Speaker 02:
But there is an opportunity to work out the dispute informally without ODRA getting into the adjudication and discovery and things like that.

[00:40:13] Speaker 07:
Can the clock?

[00:40:15] Speaker 07:
for bringing a claim that the government failed to make an equitable adjustment.

[00:40:28] Speaker 07:
Begin running before the government fails to make the equitable adjustment.

[00:40:36] Speaker 02:
Yes, Your Honor.

[00:40:37] Speaker 02:
And I think that was the point of the Federal Circuit's analysis in electric boat.

[00:40:42] Speaker 02:
And I recognize it's not binding, but it

[00:40:45] Speaker 02:
is well reasoned.

[00:40:48] Speaker 07:
So in this scenario, Archer would go to the ODRA and say, I am challenging the government's failure to make an equitable adjustment.

[00:41:01] Speaker 07:
And they could do that even before the government has decided whether to make an equitable adjustment.

[00:41:08] Speaker 02:
Your Honor, the claim would really be that Archer is entitled to

[00:41:14] Speaker 02:
delay damages.

[00:41:16] Speaker 02:
And that's why you look at the accrual of the delay claim.

[00:41:21] Speaker 02:
And because there's no requirement to exhaust any kind of administrative remedy, as was the case in Electric Boat, they can go to ODRA and file that claim without seeking an REA, a request for equitable adjustment.

[00:41:37] Speaker 06:
Thank you.

[00:41:43] Speaker 02:
If there's no further.

[00:41:45] Speaker 04:
Yeah.

[00:41:47] Speaker 02:
I was going to move on to the cumulative impact claim.

[00:41:50] Speaker 02:
Okay.

[00:41:54] Speaker 02:
Your honor, the cumulative impact claim is quite a distinct claim.

[00:42:00] Speaker 02:
It is.

[00:42:01] Speaker 02:
It is.

[00:42:03] Speaker 02:
not a delay claim, it is not a direct damages or direct cost claim.

[00:42:09] Speaker 02:
And what Archer filed in its notice of contract disputes was claims that had specific headings that were addressed to specific discrete and independent events.

[00:42:22] Speaker 02:
And what's lacking from Archer's notices of contract dispute was any reference to concern about overall cumulative claims pervading the entire project.

[00:42:37] Speaker 02:
And so ODRA committed no error when it held that ODRA had no record of Archer filing a cumulative impact claim on behalf of its subcontractors.

[00:42:50] Speaker 02:
What Archer points to are discrete paragraphs in its notices of contract dispute that relate to specific events, the ductwork or

[00:43:01] Speaker 02:
glass panels, PCC 16, but nowhere does Archer suggest either in the labels of its claims or just in its allegations that it has a claim based on all of those events taken together plus some additional ones that give rise to a cumulative impact claim.

[00:43:24] Speaker 02:
And so the court should affirm Odra's finding that Archer did not timely file

[00:43:31] Speaker 02:
its cumulative impact claim.

[00:43:39] Speaker 02:
The last issue that Archer raises is with the odor's conclusion that

[00:43:48] Speaker 02:
that the FAA reasonably rejected the rectangular ducts.

[00:43:53] Speaker 02:
This is an issue that raises a question of whether there's substantial evidence supporting Odra's decision.

[00:44:01] Speaker 02:
And that is, as the court is aware, means more than a scintilla of evidence, but less than a preponderance of evidence.

[00:44:10] Speaker 02:
I think it was undisputed before ODRA that in order for the rectangular duct to be conforming, the antimicrobial coating had to

[00:44:27] Speaker 02:
Form the interior surface of the duct.

[00:44:29] Speaker 02:
That's the specification requirement.

[00:44:31] Speaker 02:
Form the interior surface of the duct.

[00:44:34] Speaker 02:
That's at A125-126 of the record.

[00:44:37] Speaker 02:
And what that means in Archer's own words in its reply brief is that the adhesion requirements on this project, I'm quoting, was for the coding to form the interior surface of the duct and not delaminate.

[00:44:50] Speaker 02:
So forming the interior surface of the duct means that it has to adhere and not delaminate.

[00:44:56] Speaker 02:
And at that point, or at this point, we are now into a factual question about whether the coding for the rectangular duct was adhering.

[00:45:09] Speaker 04:
And I just want to clear.

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

[00:45:11] Speaker 04:
You're saying that as you read the record, there was no dispute about that before the agency.

[00:45:19] Speaker 02:
I don't believe so, Your Honor.

[00:45:21] Speaker 02:
And in Archer's... Everyone agreed.

[00:45:27] Speaker 02:
Right.

[00:45:27] Speaker 02:
Archer's reply brief says that the adhesion requirements on this project was for the coating to form the interior surface of the duct and not delaminate.

[00:45:37] Speaker 02:
And it was the delamination of the round ducts that

[00:45:42] Speaker 02:
triggered a concern about whether the coating was adhering to both the round duct and the rectangular duct.

[00:45:51] Speaker 02:
But, Your Honor, it doesn't have to delaminate in order for it to be nonconforming.

[00:45:57] Speaker 02:
There could be other indications that it is not forming, that's the language in the specification, that it will not form the interior surface.

[00:46:08] Speaker 08:
Just tell us, in your view, what was the substantial evidence supporting the finding with respect to the rectangular ducts?

[00:46:15] Speaker 08:
That there is a significant enough likelihood of these lamination that you should prevail.

[00:46:20] Speaker 08:
What's your evidence?

[00:46:23] Speaker 02:
The evidence would be the almost unanimous reliance on the ASTM D3359 testing, which indicated that there was a wild variation in the level of adherence.

[00:46:36] Speaker 02:
There were 68 examples of a 0B rating on the rectangular duct.

[00:46:42] Speaker 02:
And that coupled with the delamination in the turning veins, coupled with the fact that

[00:46:50] Speaker 02:
The experts were testifying that there was oil present in both the round and the rectangular ducts, albeit less on the rectangular ducts.

[00:46:58] Speaker 02:
And then you had... All right.

[00:47:00] Speaker 08:
So council's going to come back and say the standard, all of that I understand what you just said.

[00:47:07] Speaker 08:
They're going to come back and say, but the standard was more than was required.

[00:47:13] Speaker 08:
The ASTM standard.

[00:47:15] Speaker 08:
What's your answer to that?

[00:47:16] Speaker 02:
My answer to that is that that is fundamentally a factual dispute about what test should be used to assess whether the coding is adhering or, yeah, is adhering to the rectangular does.

[00:47:32] Speaker 08:
No, it's not adhering.

[00:47:33] Speaker 08:
The likely not adhere is really what your argument on rectangular is.

[00:47:39] Speaker 08:
That's correct, Your Honor.

[00:47:41] Speaker 08:
Right, because you didn't have any

[00:47:44] Speaker 08:
any visual evidence with respect to the rectangular.

[00:47:46] Speaker 08:
So you're talking about the likelihood of failure, right?

[00:47:50] Speaker 08:
I just want to make sure I understand.

[00:47:51] Speaker 08:
Okay.

[00:47:52] Speaker 08:
And so tell me now what your answer would be to their argument that will be coming, which is that the standard is more than is required under the contract.

[00:48:04] Speaker 02:
That is, my response to that, Your Honor, is that the Odra fact finder had listened to the expert testimony of Archer's expert, Mr. Rudd, found that his, listened to him, heard him say that he thought it was too rigorous of a test.

[00:48:22] Speaker 02:
And she, as the fact finder, Odra as the fact finder, rejected that testimony in favor of evidence relating to the ASTM D3359 test.

[00:48:33] Speaker 02:
and the testimony that there was oil present on.

[00:48:37] Speaker 08:
Why is the test being rejected?

[00:48:41] Speaker 08:
I mean, the evidence with respect to the test.

[00:48:44] Speaker 02:
The Odra rejected the test that Mr. Rudd, the petitioner's expert, because he had essentially used a watered down test.

[00:48:56] Speaker 02:
He took a standardized test and then modified it to the point that it really no longer had- Okay, no, that's not the gap.

[00:49:03] Speaker 08:
The gap, I'm just trying to make sure I understand this more and more.

[00:49:06] Speaker 08:
The issue is they didn't reject the plaintiff's test.

[00:49:11] Speaker 08:
I understand that, but they accepted

[00:49:14] Speaker 08:
standard test, which they claim now was more than is required, and what was the fact-finding with respect to that?

[00:49:22] Speaker 08:
The more than required, was there some answer given to that?

[00:49:27] Speaker 08:
In other words, the test that you're looking to, they're saying is more than was required.

[00:49:34] Speaker 02:
ODRA found that it was reasonable for the parties to rely on that test because everyone had been looking at it before, had been using the test before the litigation.

[00:49:44] Speaker 02:
So when Archer hired SME to investigate the delamination, SME, Soils and Management Engineering, turned around and used the ASTM test.

[00:49:55] Speaker 02:
When GK hired SME to look at it, they used, SME used ASTM test.

[00:50:04] Speaker 02:
BioShield, the coding manufacturer, also used that test.

[00:50:10] Speaker 02:
So Odra found that it was reasonable for FAA to rely in part on that test because that's what everyone else was using.

[00:50:18] Speaker 08:
Okay, I hear your answer.

[00:50:19] Speaker 08:
Thank you.

[00:50:20] Speaker 07:
The turning veins are part of the rectangular ducts.

[00:50:24] Speaker 07:
Is that correct?

[00:50:27] Speaker 02:
My understanding is that they are part of the rectangular duct.

[00:50:30] Speaker 02:
They may be sort of a unique part of the rectangular duct, but they are part of the rectangular duct.

[00:50:47] Speaker 07:
Why does, I mean this is a friendly question, why does the delamination, the turning veins, not equate to a failure by Archer to strictly comply with the contract?

[00:51:02] Speaker 07:
Or does it?

[00:51:04] Speaker 02:
The turning, the delamination, Your Honor, in the turning veins was an indication that the

[00:51:13] Speaker 02:
that there could be delamination in the rectangular veins, but it was not, it was not, they are of a slightly different nature.

[00:51:26] Speaker 02:
And so to be candid, I don't think that the delamination in the turning veins alone would be a basis for rejecting all of the rectangular duct.

[00:51:41] Speaker 07:
That's helpful.

[00:51:42] Speaker 07:
I appreciate that.

[00:51:43] Speaker 07:
The candor.

[00:51:50] Speaker 02:
If there are no further questions, then we respectfully request that the court affirm the decisions of Odra.

[00:52:00] Speaker 04:
So let me be clear.

[00:52:04] Speaker 04:
So I understand.

[00:52:05] Speaker 04:
What the test?

[00:52:10] Speaker 04:
that odor was relying on showed as to the rectangular vents.

[00:52:23] Speaker 02:
Your honor, what it showed was that in various places in the rectangular duct,

[00:52:30] Speaker 02:
there was an adhesion rating of as low as zero, and then sometimes an adhesion rating as high as five, and there were 68 instances where there was an O5 rating, I'm sorry, a zero rating.

[00:52:47] Speaker 04:
And where did the evidence come from that adhesion in the rectangular vents was improving?

[00:52:59] Speaker 02:
That was the comparing test results, which from, um, I believe your honor, it was like a June test result to some earlier test results using the ASTM 3359 test.

[00:53:15] Speaker 04:
That's the test Ogero lied on.

[00:53:20] Speaker 02:
Right.

[00:53:20] Speaker 02:
It was improving in some areas and then in other areas it was getting, um, it was not improving.

[00:53:27] Speaker 04:
So with that evidence, what was the basis for requiring replacement of all the rectangular events?

[00:53:46] Speaker 02:
The basis for it was the concern that some of the rectangular duct was likely to delaminate.

[00:53:56] Speaker 04:
There were these problems, 68 problems, let's say, in discrete places.

[00:54:05] Speaker 04:
And there was evidence that adhesion was improving over time.

[00:54:15] Speaker 04:
Nevertheless, Odra had substantial evidence for ordering removal of all replacement of all rectangular vents.

[00:54:35] Speaker 04:
That's what I'm having trouble understanding.

[00:54:38] Speaker 04:
In other words, you put this coding on, doesn't it here great everywhere at the beginning, but then over time,

[00:54:46] Speaker 04:
the testing shows its adherence levels are improving.

[00:54:54] Speaker 02:
Your honor, the adherence levels were improving in some places, but not across all of the rectangular duct.

[00:55:02] Speaker 02:
And what Odra said at A97 of the record was that the record showed that the test results

[00:55:12] Speaker 02:
on the rectangular ducts were similar to that of the round ducts in various places.

[00:55:19] Speaker 04:
And so... Suppose the ducts are, I don't know, what?

[00:55:25] Speaker 04:
Half a million feet long and the 68 places amount to a thousand feet.

[00:55:37] Speaker 04:
I didn't find, and maybe I missed it, any suggestion that

[00:55:43] Speaker 04:
the thousand feet problem dispersed over this huge, long vent meant everything had to be replaced.

[00:55:53] Speaker 04:
That's what I'm trying to understand.

[00:55:54] Speaker 04:
Where's the substantial evidence for that?

[00:55:58] Speaker 04:
When the evidence was adhesion was improving.

[00:56:04] Speaker 02:
Your honor, it would be impossible for the agency to

[00:56:12] Speaker 02:
identify just the areas where there is... So let me back up, Your Honor.

[00:56:18] Speaker 02:
What they're doing is sort of spot testing the ducts.

[00:56:22] Speaker 02:
They could not test the entire duct for adhesion levels across the entire duct.

[00:56:28] Speaker 04:
And so they're spot testing and they can't... Is it too costly to do so?

[00:56:36] Speaker 02:
My understanding of the test, Your Honor, is that it is

[00:56:42] Speaker 02:
it is essentially destructive.

[00:56:44] Speaker 02:
So you would, I think you'd have to take the ducts out to test them and that would be counterproductive.

[00:56:54] Speaker 02:
And so what Odra is looking at is, okay, here's this evidence of adhesion levels varying throughout the ducts.

[00:57:05] Speaker 04:
Improving, improving, improving.

[00:57:08] Speaker 02:
Improving in some areas.

[00:57:12] Speaker 04:
Do we know that these are not the 68 areas?

[00:57:18] Speaker 02:
I don't answer to that, Your Honor.

[00:57:20] Speaker 04:
Yeah, I didn't see any equation on that.

[00:57:23] Speaker 04:
Okay, thank you.

[00:57:24] Speaker 04:
Anything further on substantial evidence?

[00:57:28] Speaker 04:
No, Your Honor.

[00:57:30] Speaker 04:
Thank you.

[00:57:33] Speaker 02:
So for these reasons, we ask that the court affirm the board, Odra's decision.

[00:57:45] Speaker 04:
All right.

[00:57:50] Speaker 04:
Are we ready for the replies?

[00:57:55] Speaker 04:
Mr. Strull.

[00:57:57] Speaker 00:
Yes, there we go.

[00:57:57] Speaker 00:
Just had to unmute.

[00:57:58] Speaker 00:
Thank you.

[00:57:59] Speaker 00:
Yes, Your Honor, ready for the reply.

[00:58:01] Speaker 00:
Thank you.

[00:58:03] Speaker 00:
Just a few points first on the proposed change item 16 or change 16 item 10.

[00:58:09] Speaker 00:
Council for the FAA just referenced the Robinson case.

[00:58:13] Speaker 00:
And that case is distinguishable because there, the contractor thought it had to wait until the very end of the project till all the work was done before it could even file a claim.

[00:58:22] Speaker 00:
That's not what Archer Western here is arguing.

[00:58:24] Speaker 00:
But importantly, in Robinson, the claim held or the contractor, excuse me, the court held that the claim accrued when the contractor actually began performance of the changed work.

[00:58:36] Speaker 00:
Here at the earliest, that was when there was an order to do that work.

[00:58:40] Speaker 00:
And at the latest, it was when the administrative process, the REA process described in the contract had been exhausted.

[00:58:47] Speaker 00:
In fact, counsel for the FAA just stated with respect to the electric boat case, that in that case, there was no requirement to exhaust an administrative remedy.

[00:58:56] Speaker 00:
So that case is distinguishable here.

[00:58:59] Speaker 00:
With respect to disruptions then, two quick points on that.

[00:59:03] Speaker 00:
The Norman case, which was decided by the NASA Board of Contract Appeals,

[00:59:08] Speaker 00:
found that where there was a waiver of direct costs, cumulative impact claims were not waived.

[00:59:14] Speaker 00:
They could arise from the same operative facts and reference the Placeway Court, where the Federal Circuit reversed the Court of Federal Claims, when the Court of Federal Claims put too much emphasis on form over what facts were actually put.

[00:59:28] Speaker 04:
Here, the notice of- But where is the additional allegation that was needed here?

[00:59:36] Speaker 00:
With respect to disruptions, Your Honor?

[00:59:38] Speaker 04:
with respect to the overall disruptions.

[00:59:44] Speaker 04:
In other words, it was a disruption as to this matter, as to that matter, as to this matter, as to that matter.

[00:59:52] Speaker 04:
And moreover, as to the entire project, there were these disruptions.

[00:59:58] Speaker 00:
Understood, thank you.

[00:59:59] Speaker 04:
And with that latter part in your client's petition too.

[01:00:09] Speaker 00:
The references to cumulative impacts are in the 4,000 plus pages of supplemental information that ultimately became part of the dispute file, which is similar to the Resnick case, which was an odor decision that found that they would not be, quote, overly technical, unquote, about what constitutes a notable contract.

[01:00:26] Speaker 04:
And so what do we find in the supplemental record that says, in addition to all these individual problems, there was this overarching problem

[01:00:39] Speaker 00:
There are references throughout that documentation, Your Honor, portions of which are in the appendix.

[01:00:45] Speaker 00:
The whole thing is not in there, but portions are that reference cumulative impacts, trade stacking, ripple effects, and these are all synonymous terms related to and reflecting cumulative impact claims.

[01:00:57] Speaker 04:
All right.

[01:00:57] Speaker 04:
So ripple effect and what's the other?

[01:01:00] Speaker 00:
Trade stacking, inefficiencies are others.

[01:01:05] Speaker 00:
Lost productivity is another synonymous term.

[01:01:10] Speaker 04:
And the agency never considered this?

[01:01:12] Speaker 04:
Is that your argument?

[01:01:14] Speaker 00:
That's correct, your honor.

[01:01:15] Speaker 00:
And for that reason, we would ask that the court find that the disruption claim was arbitrarily dismissed as untimely and that the proposed change 16 item 10 was similarly arbitrarily dismissed.

[01:01:27] Speaker 04:
So in your opening brief, do you cite to this supplemental record specifically to ripple effect trade stacking lost profits?

[01:01:36] Speaker 00:
Yes, Your Honor.

[01:01:37] Speaker 00:
There are references in there to the supplemental information that became part of the dispute file.

[01:01:41] Speaker 04:
I understand that, but specifically as to these items that you just identified.

[01:01:48] Speaker 00:
As to these terms, ripple effect, and lost productivity, I believe so, Your Honor.

[01:01:52] Speaker 00:
I'm sorry I don't have the paper.

[01:01:53] Speaker 04:
Well, I'm sorry, too, because I didn't find them.

[01:01:57] Speaker 04:
Doesn't mean they're not there.

[01:01:58] Speaker 04:
I didn't find them.

[01:02:01] Speaker 04:
That's what I was looking for, something more than these discrete claims.

[01:02:05] Speaker 04:
this additional argument.

[01:02:10] Speaker 04:
And in your brief, you're saying you didn't cite them, other than refer to the supplemental materials.

[01:02:17] Speaker 00:
I'm saying we did, Your Honor, and part of the supplemental materials are part of the record.

[01:02:21] Speaker 04:
To understand what I'm getting at is if you tell the agency we have a cumulative impact claim, and all you have to do is look at these supplemental materials.

[01:02:31] Speaker 04:
And here are 1,000 pages.

[01:02:35] Speaker 04:
Where?

[01:02:36] Speaker 04:
What specifically?

[01:02:39] Speaker 04:
That's what I'm trying to understand.

[01:02:40] Speaker 04:
And the argument is that wasn't done here.

[01:02:44] Speaker 00:
That the lines were not connected from the notices to the supplemental information.

[01:02:49] Speaker 00:
Is that correct?

[01:02:50] Speaker 04:
No.

[01:02:51] Speaker 04:
That the supplemental information, in fact, cured the defect as failure to specifically allege

[01:03:05] Speaker 04:
a cumulative impact claim.

[01:03:09] Speaker 00:
We believe it did, Your Honor, to the extent there was a defect to begin with, and the FAA was not prejudiced because they filed responses.

[01:03:16] Speaker 04:
No, no, no, counsel.

[01:03:18] Speaker 04:
What I'm saying is I didn't see it in your brief, and I am happy to acknowledge maybe I overlooked it, but that's what I was looking for.

[01:03:30] Speaker 04:
Something that said, if you look in the supplemental filing,

[01:03:35] Speaker 04:
you will see at A, whatever, that we had this ripple effect, we had lost profits, et cetera.

[01:03:46] Speaker 00:
Those references were made to the FAA, Your Honor, and the FAA responded there, too, for over three and a half years with expert testimony.

[01:03:55] Speaker 00:
So my point is, Your Honor, if they had never been, if the lines had never been connected, if the references to the supplemental information had never been given.

[01:04:03] Speaker 04:
The point I'm getting at is you're in the Court of Appeals.

[01:04:06] Speaker 04:
And in your opening brief, don't you have to identify with some specificity the nature of your claim?

[01:04:14] Speaker 04:
Then the agency comes forth and says, well, you made all these discrete claim arguments, but you never alleged the cumulative overall impact aspect of your claim.

[01:04:34] Speaker 04:
So I would have expected on reply that you would have said, no, if you see the supplemental record at whatever it is, J or A, you'll see.

[01:04:45] Speaker 04:
And I didn't see that there either.

[01:04:50] Speaker 04:
In other words, whose burden is it to identify the record to support your claim?

[01:04:59] Speaker 04:
And you'll notice that the agency is saying all you did was make

[01:05:03] Speaker 04:
these discrete claims.

[01:05:06] Speaker 00:
At the outset, I agree, your honor, it's archa Western's burden to provide notice to the FAA of those claims.

[01:05:12] Speaker 00:
But then in deciding whether those claims were timely alleged or adequately alleged, I think the case law establishes that the odor has to look at not only the notice of contract dispute, but the information that was provided to support it with further detail, like the resident case.

[01:05:30] Speaker 03:
All right, thank you, counsel.

[01:05:31] Speaker 00:
Thank you.

[01:05:36] Speaker 06:
OK, Your Honor, in regards to a couple of things, in regards to expert testimony, we do believe that expert testimony is necessary to establish whether there's going to be future delamination.

[01:05:50] Speaker 06:
And we do not have that in this case.

[01:05:53] Speaker 06:
There was no expert, there was no one from ODRA that was qualified to make a determination as to whether there would be future delamination of the rectangular duct work.

[01:06:04] Speaker 07:
On review that's just inquiring into whether there were substantial evidence, why is it not enough for the government to say, everyone agrees the round ducks didn't meet standards.

[01:06:22] Speaker 07:
They didn't meet standards because they weren't cleaned in an appropriate way before the special stuff was put on them.

[01:06:34] Speaker 07:
And the same people who didn't clean them well were the people who were responsible for cleaning the rectangular ducts well.

[01:06:42] Speaker 06:
I can address that, Your Honor, because even the government or even the FAA acknowledged early on in the process that there was a different methodology that was being used to manufacture the rectangular duct versus the round duct.

[01:06:56] Speaker 06:
When you manufacture the round duct, there's an oil material that is lined that helps in the

[01:07:04] Speaker 06:
the circulation in preparing the round deck.

[01:07:07] Speaker 06:
You don't have that with the rectangular deck.

[01:07:10] Speaker 06:
The rectangular duct is just bent with a breaker.

[01:07:15] Speaker 07:
And in fact, let's say I hire someone to clean my house and they use a certain method for cleaning the floors and they use a certain method for cleaning the carpets.

[01:07:29] Speaker 07:
And they do a terrible job with the floors.

[01:07:33] Speaker 07:
Isn't there at least this scintilla of evidence?

[01:07:37] Speaker 06:
They probably did a crummy job on the whole house.

[01:07:42] Speaker 06:
we don't know who the same, whether they were same labors or whatever.

[01:07:45] Speaker 06:
I mean, that's like saying, okay, somebody is convicted of a crime.

[01:07:52] Speaker 06:
Well, given the fact that it was in the same environment, his brother was raised in the same environment, the same people, the same education.

[01:07:59] Speaker 06:
Well, he's also has a problem there.

[01:08:01] Speaker 06:
I mean, there's just no link to

[01:08:04] Speaker 06:
the manufacturing process and that the same people were doing it.

[01:08:08] Speaker 06:
The other thing I'd like to raise is the 68-0 tests that the government raised.

[01:08:15] Speaker 06:
The 68-0 tests were not taken while the duct work was in place.

[01:08:21] Speaker 06:
The ducts were tested after the duct had been demolished.

[01:08:27] Speaker 06:
It had been ripped out of the building.

[01:08:30] Speaker 06:
It had been taken into a garage where it was twisted, mangled, whatever.

[01:08:36] Speaker 06:
And the tests were made there.

[01:08:39] Speaker 06:
We do not believe that that is an accurate way to take the tests.

[01:08:43] Speaker 06:
And that was done after the ductwork was removed.

[01:08:47] Speaker 06:
All of the tests that were done prior to the ductwork being removed showed a significantly higher

[01:08:54] Speaker 06:
adhesion test using the ASTM 359.

[01:08:58] Speaker 06:
In addition, the government's own witness, expert witness, testified that the ASTM D359 was too rigorous for this application and

[01:09:13] Speaker 06:
The government talked about the modified test.

[01:09:16] Speaker 06:
The modified test wasn't in relationship to the D359.

[01:09:20] Speaker 06:
It was 3359.

[01:09:21] Speaker 06:
It was in relationship to an air velocity test, which there is an ASTM abrasion test where you shoot air against the surface to see if it'll delaminate.

[01:09:36] Speaker 06:
because this is a filtered system, there is no sand or anything else, the expert just used velocity error.

[01:09:45] Speaker 06:
And what he found was even on the zero B tests that the government had rejected, that the velocities were stood pressures of five to 13 times higher than what would be experienced

[01:09:58] Speaker 06:
in the conditions that the ductwork were operating in.

[01:10:03] Speaker 06:
In addition, on those tests, the government raises, well, this was what was used by everyone.

[01:10:11] Speaker 06:
Well,

[01:10:12] Speaker 06:
Keep in mind that the very first test that was done, where they tested the rectangular duct, there were 28 locations where they tested, and two of them showed zero.

[01:10:24] Speaker 06:
Well, the government, as well as Gallagher, Kaiser, and Archer-Western said, this is a general test to give an idea of adhesion.

[01:10:32] Speaker 06:
It's not a spot test.

[01:10:34] Speaker 06:
You don't look at the outliers.

[01:10:36] Speaker 06:
And so what happened is, even though the rectangular duct had zero B rating at two of those locations,

[01:10:42] Speaker 06:
The government said that's fine.

[01:10:44] Speaker 06:
It doesn't look like the rectangular duct has to be removed.

[01:10:47] Speaker 06:
It's acceptable.

[01:10:50] Speaker 06:
And during the course of the project, when the government was addressing the ASTM test, they were also saying, Gallagher-Kaiser and Ericsson-Western, well, what is satisfactory?

[01:11:02] Speaker 06:
What is a passing test?

[01:11:04] Speaker 06:
Is it going to be a 2B, a 3B, a 1B, whatever?

[01:11:08] Speaker 06:
And the government gave absolutely no indication.

[01:11:10] Speaker 06:
The government did a wholesale rejection of the rectangular duct based upon

[01:11:17] Speaker 06:
conjecture and speculation without expert testimony, without expert opinion as to whether this would delaminate in the future.

[01:11:28] Speaker 04:
All right.

[01:11:30] Speaker 04:
Anything further?

[01:11:31] Speaker 06:
Nothing further, Your Honor.

[01:11:33] Speaker 04:
Thank you.

[01:11:34] Speaker 04:
We'll take the case under advisement.

[01:11:35] Speaker 06:
Thank you for your time today.