[00:00:00] Speaker 00:
I do have a motion before the court.

[00:00:10] Speaker 04:
I move for the admission of Charles Cardy Davis.

[00:00:12] Speaker 04:
He's a member of the bar and is in good standing with the highest courts of Virginia and the District of Columbia.

[00:00:18] Speaker 04:
I have vast knowledge of his qualifications because he's been a law clerk for me for now just about going on 18 months.

[00:00:28] Speaker 04:
He is quite the brainiac.

[00:00:29] Speaker 04:
with the degree in chemistry with all kinds of honors and a PhD to follow on that.

[00:00:36] Speaker 04:
And then he just happened to be first in his class, an editor and chief of the Law Review at GW.

[00:00:42] Speaker 04:
And he knows more about the Supreme Court than any of us care to ever know.

[00:00:47] Speaker 04:
And he has been a wonderful admission to our chambers.

[00:00:50] Speaker 04:
And he will be greatly missed, but we know he's going to go on to do great things.

[00:00:55] Speaker 04:
So I would move his admission.

[00:00:57] Speaker 00:
Well, I'll see.

[00:00:58] Speaker 00:
We'll take a vote.

[00:01:00] Speaker 00:
Judge Chen, how do you vote?

[00:01:06] Speaker 00:
I too.

[00:01:07] Speaker 00:
It's my pleasure to grant the motion.

[00:01:10] Speaker 00:
Please approach the clerk for the award.

[00:01:13] Speaker 02:
Do you solemnly swear that you will report yourself in the term of the counsel of this court, up right to the court of law, and it will support the Constitution of the United States of America?

[00:01:25] Speaker 00:
I do.

[00:01:25] Speaker 00:
Congratulations.

[00:01:26] Speaker 00:
Welcome to the bar of the court.

[00:01:28] Speaker 00:
We look forward to hearing from you.

[00:01:29] Speaker 00:
listening to your arguments in the future.

[00:01:32] Speaker 00:
Thank you.

[00:01:35] Speaker 00:
Hearing is scheduled for this morning.

[00:01:39] Speaker 00:
The first case is number 15-11-48, Kellogg's Brown and Root Services against the Army.

[00:01:48] Speaker 00:
Mr. McIsh.

[00:01:54] Speaker 03:
Good morning.

[00:01:54] Speaker 03:
May I please record?

[00:01:56] Speaker 03:
Under this cost reimbursement contract, KBR's claim for non-reimbursement of costs could not accrue until KBR had requested payment from the government and the government had failed to pay.

[00:02:08] Speaker 00:
Well, I appreciate the argument, but to carry that to an extreme, if KBR and its subcontractor had been arguing for years, as perhaps they were,

[00:02:22] Speaker 00:
with the understanding that whatever they finally resolve will be presented to the government for payment, saying that there is no claim until that final step is taken.

[00:02:35] Speaker 03:
Yes, under this court's ruling in Parsons Global, cited in our briefs, a contractor, a prime contractor with the government under a cost reimbursement contract cannot bring a claim.

[00:02:46] Speaker 03:
The claim is not ripe, a CDA claim, until it's requested payment from the government and the government has declined to pay.

[00:02:53] Speaker 00:
So we have to conclude that this is different from contract law in general?

[00:02:59] Speaker 03:
It's not different from contract law in general, except to the extent that the Federal Acquisition Regulation changes it.

[00:03:07] Speaker 03:
And the Federal Acquisition Regulation defines claim accrual.

[00:03:11] Speaker 03:
And we're relying on two parts of that definition to argue that this claim had not accrued six years prior to when the claim was submitted in May of 2012.

[00:03:21] Speaker 03:
Those two elements are, first, all of the

[00:03:26] Speaker 03:
The government, to show that the claim accrued more than six years before, must show that all events that permit assertion of the claim had occurred six years early, and they must show that KBR had suffered some injury, both of those things.

[00:03:44] Speaker 03:
The first one, all events that permit assertion of the claim had not occurred until KBR requested payment from the government and the government failed to pay.

[00:03:55] Speaker 03:
Until then, the government had not done anything.

[00:03:58] Speaker 03:
It wasn't even aware of the issue.

[00:04:00] Speaker 01:
I guess following up on Judge Newman's question, what if the prime contractor and the subcontractor

[00:04:07] Speaker 01:
were in litigation for fifteen years.

[00:04:11] Speaker 01:
Sometimes litigation unfortunately takes a very long time and the dispute is what was actually performed by the subcontractor, alleged damages that the subcontractor suffered by the termination of the subcontract.

[00:04:28] Speaker 01:
I mean does that mean that the government has to wait fifteen years or even longer before it receives

[00:04:37] Speaker 01:
As you would put it, a routine request?

[00:04:41] Speaker 03:
Yes, there are procedures and rules in place that protect the government in that instance.

[00:04:48] Speaker 03:
For one thing, under the allowable cost and payment clause, which is the central clause in the cost reimbursement contract, it allows the contractor to get paid during performance.

[00:04:56] Speaker 03:
submitting proof of costs and getting financed throughout.

[00:05:00] Speaker 03:
Under that clause, the contractor must submit all its costs by the close out of the contract at the end when the contract is ready to close out, which has not even happened yet with this KBR contract and often doesn't happen for a number of years.

[00:05:19] Speaker 03:
There is also a provision there that allows the contractor to inform the government that some costs are yet undetermined and keep the government informed that those additional costs are coming down the pipe.

[00:05:33] Speaker 03:
And in fact, in this case, KBR kept the government informed at every step.

[00:05:37] Speaker 03:
KBR and the subcontractor reached an initial settlement where KBR paid the subcontractor $17.4 million, immediately requested payment from the government,

[00:05:49] Speaker 03:
got payment on that 17.4 and told the government, there's more coming.

[00:05:54] Speaker 03:
We're working it out with the subcontractor.

[00:05:56] Speaker 03:
Then there was litigation.

[00:05:57] Speaker 01:
So, just to follow up on the question again, what if the prime contract was for a term of four years, but the litigation between the subcontractor and the contractor, prime contractor, took ten years?

[00:06:11] Speaker 03:
If you jump in there, the contractor has an obligation to tell the government

[00:06:17] Speaker 03:
there is this unresolved issue, and they are supposed to have a list of claims that are remaining at the time of contract closeout that the government is on the hook for going forward.

[00:06:31] Speaker 03:
So in effect, the contract doesn't get closed out in entirety until that issue is resolved.

[00:06:38] Speaker 03:
And that happens.

[00:06:40] Speaker 03:
That occurs.

[00:06:41] Speaker 03:
But in this instance, it's clear that

[00:06:46] Speaker 03:
that the contract is still not over.

[00:06:48] Speaker 03:
It certainly wasn't over at the time that KBR submitted its claim, and it submitted its claim well within six years of when it first requested any payment at all.

[00:06:58] Speaker 03:
The earliest you could say that KBR requested payment was in November of 2006.

[00:07:03] Speaker 04:
Does it matter as a matter of fact that the subcontractor was not operating under the original contract during the interim period?

[00:07:13] Speaker 03:
No, that doesn't matter to KBR's claim.

[00:07:16] Speaker 03:
KBR's claim against the government is the only claim it can have under a cost reimbursement contract, essentially, which is, we incur these costs.

[00:07:24] Speaker 03:
You need to reimburse them, government.

[00:07:26] Speaker 03:
And the circumstances under which those costs were incurred could affect whether it's reimbursable, whether it's reasonable, allowable, eligible.

[00:07:37] Speaker 03:
But the government has never said that it's not paying these costs on that ground.

[00:07:41] Speaker 03:
It just hasn't paid them.

[00:07:43] Speaker 03:
So KBR's claim is, we have these costs, please pay them.

[00:07:48] Speaker 03:
And under Parsons Global, until the contractor has asked for payment and not been paid, the government hasn't done anything to give rise to a CDA claim against it.

[00:07:59] Speaker 03:
And so there can be no claim.

[00:08:00] Speaker 03:
Therefore, the statute of limitations cannot yet be run.

[00:08:04] Speaker 04:
Did you and the government discuss the possibility of a joint remand to the board to address the Corsi?

[00:08:12] Speaker 03:
We have not discussed that.

[00:08:14] Speaker 03:
No, Your Honor, and I don't think a remand in light of Sikorsky is necessary because the Court can rule that on the undisputed facts that claims not barred by the statute of limitations.

[00:08:28] Speaker 03:
However, I don't think the Court could affirm the Board in light of the fact that the Board made fact-findings on the assumption that it was K.D.

[00:08:40] Speaker 03:
Orr's burden

[00:08:41] Speaker 03:
to prove that his claim was timely when under Sikorsky, it's in fact the government's burden to prove that the statute of limitations had run.

[00:08:50] Speaker 03:
So the board should not have made fact findings adverse to KPR.

[00:08:55] Speaker 00:
And- Well, now that is what troubles me.

[00:08:57] Speaker 00:
The statute says when the claim accrues,

[00:09:00] Speaker 00:
and you're telling us that the claim doesn't accrue until a request for payment is made to the government.

[00:09:10] Speaker 00:
Even though all of the facts existed as to the claim, there were negotiations with a subcontractor that it's understood that this will be essentially a subcontractor claim passed through the government said that

[00:09:29] Speaker 00:
KBR needs to resolve it.

[00:09:32] Speaker 00:
But trying to understand really the difference between when a claim accrues from the limitations viewpoint.

[00:09:41] Speaker 00:
We know that the board thought it had accrued well before the demand for payment to the government.

[00:09:48] Speaker 03:
Right.

[00:09:49] Speaker 03:
And that's because under a cost reimbursement contract,

[00:09:56] Speaker 03:
There's no claim.

[00:09:58] Speaker 03:
The prime contractor does not have a CDA claim, a claim that the government has done something.

[00:10:05] Speaker 03:
that gives rise to a claim under the Contractors Peace Act until the government has violated the contract in some way, such as by not paying when requested.

[00:10:18] Speaker 03:
The fact that it's a subcontractor arguing with KBR about the amount, that goes to whether there's a claim under the subcontract, whether the subcontractor has a claim.

[00:10:28] Speaker 03:
But under the Severn Doctrine, as discussed in some detail in our brief,

[00:10:33] Speaker 03:
The subcontractor does not have a claim against the government, cannot bring a claim against the government.

[00:10:39] Speaker 03:
The prime contractor cannot bring a claim against the government based on the subcontractor claim unless the prime contractor is liable to the subcontractor.

[00:10:48] Speaker 03:
In other words, the prime contractor has to have been injured by some action of the government.

[00:10:53] Speaker 03:
Either the government injured the subcontractor, which is not the case here, or the government has done something to injure the prime contractor.

[00:11:00] Speaker 03:
Here the government did something.

[00:11:02] Speaker 03:
The thing that the government did to injure the prime contractor was fail to pay when requested.

[00:11:09] Speaker 03:
That's the only injury that KBR could have or did suffer at the hands of the government.

[00:11:16] Speaker 03:
And until that happened, there was no basis for a CDA claim against the government, regardless of what was happening between KBR and its subcontractor.

[00:11:25] Speaker 03:
All that that means is that KBR was incurring costs as it was supposed to under its cost reimbursement contract.

[00:11:33] Speaker 03:
And until the day of final payment comes, KBR is free to submit its cost to the government and get paid.

[00:11:41] Speaker 01:
So if I can maybe sum up your position, from the government's perspective with its contract with KBR,

[00:11:50] Speaker 01:
The government shouldn't care if there's some kind of squabble between KBR and its subcontractor.

[00:11:57] Speaker 01:
All that matters to the government is a request comes into the government for reimbursement of costs that were incurred in the performance of the prime contract, right?

[00:12:09] Speaker 01:
Correct.

[00:12:10] Speaker 01:
And so if that request, in fact,

[00:12:14] Speaker 01:
factually reflects costs incurred in performance of Task Order 59 then that's all that should matter and therefore it's a routine request just like any other request for costs incurred according to the contract.

[00:12:31] Speaker 03:
Correct.

[00:12:32] Speaker 03:
Just as in Parsons Global it was a subcontractor

[00:12:36] Speaker 03:
was owed money by the prime contractor and the prime contractor, the contractor long terminated for convenience and the prime contractor was coming in with new subcontractor costs and asked them to be paid and it submitted a claim.

[00:12:52] Speaker 03:
Denied and it was appealed and this court said that claim was too early, was not right, because you had not yet followed the contractual mechanism to get paid.

[00:13:02] Speaker 01:
The request for reimbursement you put in, it included construction costs, meals served, overhead, profit, and something called termination settlement proposal resolution costs.

[00:13:17] Speaker 01:
Correct.

[00:13:18] Speaker 01:
That last item, why is that a routine request?

[00:13:22] Speaker 03:
Because prime contractors under cost reimbursement contracts settle and terminate their subcontractors frequently this happens and it's an allowable cost under the allowable cost and payment clause under the cost principles under the FAR.

[00:13:39] Speaker 03:
Termination costs with your subcontractor are usually allowable.

[00:13:43] Speaker 03:
The government has never said they're not allowable.

[00:13:44] Speaker 01:
Which FAR provision is that?

[00:13:48] Speaker 03:
It's the

[00:13:50] Speaker 03:
Allowable cost and payment clause.

[00:13:58] Speaker 01:
Was that our provision part of the prime contract?

[00:14:02] Speaker 03:
Yes.

[00:14:04] Speaker 03:
All the cost principles that are generally incorporated into every foster reimbursement contract are specified.

[00:14:12] Speaker 03:
There's an umbrella provision.

[00:14:13] Speaker 03:
All reasonable costs are

[00:14:15] Speaker 03:
allowable, and then there are a lot of specific costs that are allowable, and subcontractor costs are among them, and termination costs have long been deemed allowable.

[00:14:25] Speaker 03:
Could I save my time for rebuttal?

[00:14:27] Speaker 00:
Yes, please do.

[00:14:28] Speaker 00:
We will save you for rebuttal time.

[00:14:30] Speaker 00:
Let's hear from Ms.

[00:14:31] Speaker 00:
Leach.

[00:14:38] Speaker 05:
We respectfully request that this court affirm the Armed Services Board of Contract Appeals decision dismissing KBR's claim because KBR failed to present claims in the six-year statute of limitations.

[00:14:50] Speaker 04:
This depends on your conclusion that this is a non-routine request, correct?

[00:14:55] Speaker 05:
That is correct, Your Honor.

[00:14:56] Speaker 05:
That is the crux of this case.

[00:14:57] Speaker 05:
And it is a very fact-dependent question, and that's what this court recognized in both Parsons and Ellis, that it's a fact-dependent situation whether a request is routine, which is that it's made under the normal course of the contract, or if it's a non-routine request.

[00:15:14] Speaker 01:
So what would you say is the principle the board below relied upon in order to conclude that this was a non-routine request?

[00:15:22] Speaker 05:
Initially, the termination for default, that KBR terminated for default with the KCPC MARA,

[00:15:27] Speaker 05:
And then the alternative ground that the board found made this a non-routine request was that in January of 2005, KBR entered into a settlement agreement with KCPC MARA.

[00:15:39] Speaker 05:
The settlement agreement was for $17 million and the right to continue negotiating further costs.

[00:15:45] Speaker 00:
But it was also converted to termination for convenience.

[00:15:53] Speaker 00:
How can that have been routine?

[00:15:55] Speaker 05:
Well, that is our argument, Your Honor, that at that date, in January of 2005, that's when all of the events needed to fix KBR's liability to the sub, and in turn, government liability.

[00:16:07] Speaker 00:
But the amount of liability hadn't been decided.

[00:16:10] Speaker 00:
So how can the claim have accrued when you don't know the amount of the claim?

[00:16:14] Speaker 05:
Well, they knew that there was some additional monies out there, and the FAR did not require money damages to have actually been incurred in order for a claim to have a fruit at that point.

[00:16:25] Speaker 04:
But the contract that is at issue when you're deciding if something is routine or non-routine is the contract with the general contractor.

[00:16:34] Speaker 04:
The relationships between the sub and the general contractor don't define what's routine or non-routine, correct?

[00:16:41] Speaker 05:
Well, that is, in this case, that is what took KBR's, what would have been a normal payment request.

[00:16:47] Speaker 05:
The $17 million settlement amount that KBR and the sub agreed to back in January of 2005 was a routine request.

[00:16:55] Speaker 05:
That $17 million payment was submitted to the Army and the Army paid in due course.

[00:16:58] Speaker 05:
They were put on notice and that's precisely the fact of this case that takes this outside of a routine request for payment and put it into the non-routine.

[00:17:11] Speaker 01:
I'm confused why part of the request is deemed to be a routine request and then the other part of the request is deemed to be a non-routine request.

[00:17:21] Speaker 05:
Yes, Your Honor.

[00:17:23] Speaker 05:
When you look at the facts of this case, what occurred after it, in November of 2006, KDR forwarded what they called a claim to the Army, which included some additional costs after that initial $17 million payment was made.

[00:17:37] Speaker 05:
And then, but KBR refused to certify it.

[00:17:41] Speaker 05:
And so it was this back and forth that occurred.

[00:17:43] Speaker 01:
But isn't it fair to say that both for the 17.4 and then the second more fine particular request, whether it was 14 or 10, they were all coming from the same source of costs being incurred.

[00:18:00] Speaker 01:
The character of the costs were all the same, which was trying to figure out how much it cost to put those facilities together and to serve all those meals and then also overhead back in the 2003 time frame.

[00:18:15] Speaker 05:
That could be correct, Your Honor.

[00:18:17] Speaker 05:
However, in KBR's own letters and correspondence back and forth with the Army, there was a letter dated September 8, 2010, which is in the appendix at page 354.

[00:18:28] Speaker 05:
KBR withdrew a certified claim that it submitted to the government in 2008 because they classified, they noted that it was a business dispute between KBR and KCPC Morris to be resolved in accordance with its subcontract arrangement.

[00:18:42] Speaker 01:
The government hasn't disputed that.

[00:18:44] Speaker 01:
the request for reimbursement, whether you characterize it as routine or non-routine, these are all for costs that were incurred in the performance ultimately of the contract, right?

[00:18:56] Speaker 05:
That is correct, Your Honor.

[00:18:57] Speaker 01:
So then that's classic routine request.

[00:19:00] Speaker 05:
Well, again, when you look at the facts of this case and you look at what the submission of a claim that KBR refused to certify, the submission of a certified claim in January of 2008, the withdrawal of that certified claim in September of 2010, there was a dispute of some sort going on between KBR and KCPC MARA.

[00:19:20] Speaker 04:
But that's exactly what the government wants them to do.

[00:19:23] Speaker 04:
They want the general contractor.

[00:19:25] Speaker 04:
The government says, we're not going to deal with your subs.

[00:19:27] Speaker 04:
You deal with your subs.

[00:19:28] Speaker 04:
You get your ducks in a row.

[00:19:31] Speaker 04:
You figure out what the agreement is, the settlement is with respect to those payments.

[00:19:35] Speaker 04:
And then you come to us.

[00:19:36] Speaker 04:
So they did exactly what they're constantly told to do.

[00:19:40] Speaker 04:
And you're saying just because they went back and forth, that somehow changed the character of the repayment request?

[00:19:46] Speaker 05:
Yes, your honor.

[00:19:47] Speaker 05:
In this case, these are very unique facts in this case, and it's these facts that the board relied upon.

[00:19:54] Speaker 05:
And KBR hasn't disputed any of the dates, any of the dates that the board found in its decision in finding that the claim actually accrued either back in September of 2003 or in January of 2005 during the settling up that KBR did.

[00:20:10] Speaker 05:
Why is it a problem that the board placed a burden on the wrong party?

[00:20:13] Speaker 05:
Because KBR hasn't identified a single fact that's in dispute.

[00:20:17] Speaker 05:
So the facts are what the facts are, and if this court determines that the board correctly found that the claim accrued in either September of 03 or January of 05.

[00:20:28] Speaker 00:
How can a claim accrue when you don't know the amount?

[00:20:32] Speaker 05:
Well, they knew that there were damages.

[00:20:36] Speaker 05:
The money damages don't have to actually have been incurred, but they knew that there were money damages.

[00:20:41] Speaker 05:
They knew there was an amount.

[00:20:42] Speaker 00:
And how can it accrue if they haven't even been incurred?

[00:20:46] Speaker 05:
That's the far definition.

[00:20:48] Speaker 00:
It says that money damages don't have to have been incurred, but all events... I don't see any authority saying that the claim accrues when you have no idea of the magnitude of the claim or what's been incurred.

[00:21:04] Speaker 05:
Well, Your Honor, they did have an idea.

[00:21:06] Speaker 05:
They were going back and forth with the sub.

[00:21:08] Speaker 00:
I'm not saying in general, oh, there's millions of dollars.

[00:21:12] Speaker 00:
A precise idea is what we're talking about.

[00:21:15] Speaker 00:
exact to the penny.

[00:21:17] Speaker 05:
Well, and KBR did submit claims to the government, the claim that they refused to certify in November of 2006.

[00:21:24] Speaker 05:
In October of 2007, they submitted a sponsored claim to the government.

[00:21:30] Speaker 00:
But that's within the six years.

[00:21:32] Speaker 05:
That is, and then ultimately... But you're saying that doesn't count.

[00:21:36] Speaker 04:
That is correct, again, because of KBR's own actions.

[00:21:47] Speaker 04:
puts it into a category of non-routine.

[00:21:49] Speaker 04:
It might have been non-routine in terms of how the government usually goes back and forth with its contractors on a claim, but it's not non-routine within the meaning of the law.

[00:21:58] Speaker 04:
All discussion of what constitutes a non-routine request has to do with circumstances in which the government either asks for additional work or cancels a contract with the general contractor.

[00:22:13] Speaker 04:
So the fact that there might have been more

[00:22:16] Speaker 04:
with the government doesn't make it non-routine under the regulations or under the contracts?

[00:22:22] Speaker 05:
Well, again, it's whatever this dispute was between KBR and KCPC Morris that makes it non-routine.

[00:22:29] Speaker 05:
But I don't get that.

[00:22:30] Speaker 04:
The government says, I don't want to drill down to the relationship between you and your subcontractor, but I'm going to drill down and say, just because you've got a dispute with your subcontractor, I'm going to characterize it as non-routine?

[00:22:41] Speaker 05:
Well, and again, it's based on this back and forth that KBR had with the government.

[00:22:46] Speaker 05:
submitting claims, taking them back and then again in that September 2010 letter denoting it as a business is what was going on as a business dispute between

[00:22:55] Speaker 05:
KBR and its sub that would be resolved in accordance with the subcontract.

[00:22:59] Speaker 05:
Does that happen all the time?

[00:23:01] Speaker 04:
Business disputes with their subcontractors?

[00:23:04] Speaker 05:
Yes, Your Honor.

[00:23:04] Speaker 05:
It does happen and that's what the $17 million initial payment and settlement was about in January of 2005.

[00:23:12] Speaker 05:
It's the actions of KBR and its sub post-2005 that take this out of the routine and bring it to non-routine.

[00:23:18] Speaker 01:
What if there was no subcontractor and it was just the prime contractor?

[00:23:23] Speaker 01:
and the prime contractor performed all the services, built the dining facilities, served the meals, had all this overhead, but then somehow

[00:23:35] Speaker 01:
all of its computer files got wiped out and it took the prime contractor six or seven years to try to figure out exactly how to rebuild what all those costs were and then submitted the request for reimbursement for all those services with the dining facilities and the meals served, etc.

[00:23:55] Speaker 01:
Would that be a routine request or a non-routine request?

[00:23:59] Speaker 01:
uh... that would be because it was a that close out of the contract that would be a routine request and then the prime contractor also as far as what the government saw initially submitted a reimbursement form but then pulled it back and then submitted another one but then pulled that back upon finding more information and then finally submitted a third one would that be third one be a routine request or a non-routine request?

[00:24:24] Speaker 05:
well that would potentially also be outside of the statute of limitations

[00:24:29] Speaker 01:
But it's a routine request?

[00:24:32] Speaker 05:
Yes, it would still be a routine request.

[00:24:35] Speaker 01:
Okay, so there isn't a statute of limitations problem in that fact pattern.

[00:24:38] Speaker 01:
That's hypothetical.

[00:24:39] Speaker 05:
Well, there might be, depending upon if there was a withdrawal and then the ultimate submission was outside of the six years.

[00:24:45] Speaker 01:
Oh, the first submission?

[00:24:47] Speaker 01:
Yes.

[00:24:47] Speaker 01:
Okay.

[00:24:48] Speaker 01:
No, that's not part of this fact pattern.

[00:24:50] Speaker 01:
Okay.

[00:24:55] Speaker 05:
uh... for these reasons here are the respect for you uh... thank you thank you mister wish thank you the couple point the government arguments are uh... completely inconsistent with

[00:25:20] Speaker 03:
Parsons Global in which this court held that on a very similar fact pattern that the submission was routine and therefore no claim could be brought.

[00:25:32] Speaker 03:
No claim could yet be brought because no request for payment had been made to the government and denied yet.

[00:25:38] Speaker 03:
And the court said that and of course it was the government in that case arguing that the request was routine and the court said that

[00:25:47] Speaker 03:
The costs originate from scheduled contract work that the subcontractor performs on the prime contractor's behalf from 2004 to 2006.

[00:25:57] Speaker 03:
None of the work was additional or unforeseen work at the government's behest.

[00:26:02] Speaker 03:
The prime contractor explicitly covers these costs.

[00:26:05] Speaker 03:
The allowable cost and payment provision provides for the submission of those costs and repayment.

[00:26:12] Speaker 03:
The payment that the prime contractor seeks is not a result of intervening unforeseen circumstances or government action.

[00:26:20] Speaker 03:
Just like here, the government hadn't done anything.

[00:26:22] Speaker 03:
Because the prime contractor's request should be submitted under the prime contract and in accordance with the expected progression of contract performance, it is routine.

[00:26:32] Speaker 03:
Therefore, in November of 2006,

[00:26:36] Speaker 03:
The KBR had never requested payment of any of the costs that are issued in this case.

[00:26:44] Speaker 03:
It had determined that the subcontractor was entitled to $17.4 million.

[00:26:50] Speaker 03:
So it submitted that.

[00:26:51] Speaker 03:
It was all agreed.

[00:26:51] Speaker 03:
It was clear.

[00:26:52] Speaker 03:
That amount is owed.

[00:26:54] Speaker 03:
That was submitted and paid, taken off the table.

[00:26:57] Speaker 03:
There were other costs that were undetermined at that time that the government had never been asked to pay.

[00:27:03] Speaker 03:
So in November of 2006 was the first time a request for payment was made and that is the very, very earliest that the statute of limitations could have begun running.

[00:27:13] Speaker 03:
The claim was submitted in May of 2012 and therefore it is within six years.

[00:27:21] Speaker 03:
Now let me touch briefly on

[00:27:25] Speaker 03:
The second point, even if you consider this non-routine, there's still the injury component.

[00:27:31] Speaker 03:
The definition of claim approval says the claim is not approved until the claimant here, KBR, has been injured.

[00:27:38] Speaker 03:
What is the injury to KBR?

[00:27:40] Speaker 03:
KBR is not injured here until the government does something to it that injures it.

[00:27:45] Speaker 03:
Just the mere incurrence of cost to its subcontractor is not an injury.

[00:27:49] Speaker 03:
That's what KBR is supposed to be doing.

[00:27:51] Speaker 03:
The government did not injure KBR until the government failed to pay when it was supposed to.

[00:27:57] Speaker 03:
That was the injury.

[00:27:58] Speaker 03:
That happened after November 2006.

[00:28:01] Speaker 03:
Therefore, the claim is timely, regardless of whether you consider it routine or non-routine.

[00:28:07] Speaker 03:
government council emphasizes that this is a very fact-dependent issue and because it's a fact-dependent issue the government should not, the board should not have found facts against KDR prior to any discovery contrary to the allegations in our complaint especially on equitable polling

[00:28:26] Speaker 03:
point, which I haven't had time to get to in too much detail here, but the board found against us factually on equitable tolling, saying that the government hadn't done anything to mislead KBR, despite our argument that the government said to do exactly what we did, work it out with the subcontractor, then bill the government.

[00:28:45] Speaker 03:
Now they're saying you shouldn't have done that because your claim is going to be out of time.

[00:28:51] Speaker 03:
The court does not overturn on the statute of limitations point, on the claim of cruel point, on the equitable tolling.

[00:28:59] Speaker 03:
They have to send it back to the board for proper development of the record and give KBR an opportunity to demonstrate that it's entitled to equitable tolling on the facts.

[00:29:09] Speaker 00:
Any more questions?

[00:29:12] Speaker 00:
Any more questions?

[00:29:13] Speaker 00:
Thank you.

[00:29:13] Speaker 00:
Thank you, Ms.

[00:29:14] Speaker 00:
Leach.

[00:29:14] Speaker 00:
Thank you, Ms.

[00:29:15] Speaker 00:
Leach.

[00:29:15] Speaker 00:
This is taken under submission.