[00:00:01] Speaker 06:
All right.

[00:00:02] Speaker 06:
I move to grant the motion.

[00:00:04] Speaker 06:
Thank you.

[00:00:05] Speaker 06:
Motion to grant.

[00:00:06] Speaker 06:
I would simply comment that I'm pleased to say, pleased that Mr. Taylor Gooch chose to come to this court as a law clerk.

[00:00:14] Speaker 06:
He was taught and trained at the University of Pennsylvania Law School by one of my former law clerks, Pope Wagner.

[00:00:22] Speaker 06:
So I knew he was well-trained when he came here, and he's performed beautifully.

[00:00:27] Speaker 06:
I now have two motions to make.

[00:00:31] Speaker 06:
regarding hopefully new members of the bar of our court.

[00:00:37] Speaker 06:
It's my pleasure to move the admission in alphabetical order of Abigail Amato Reeves.

[00:00:45] Speaker 06:
She's a member of the bar in good standing in the highest court in New York.

[00:00:49] Speaker 06:
I have knowledge of her credentials.

[00:00:51] Speaker 06:
I'm satisfied that she possesses the requisite qualifications.

[00:00:56] Speaker 06:
I also move the admission of Anna Elizabeth Solstrom, who is a member of the Bar and in good standing with the highest court in the state of California.

[00:01:05] Speaker 06:
I have knowledge of her credentials and I'm satisfied that she possesses the necessary qualifications.

[00:01:12] Speaker 06:
I can make those attestations because both of these women have served for approximately the last 12 months as law clerks in my chambers.

[00:01:24] Speaker 06:
In the course of their service with me, it's become clear to me that they are not only highly intelligent, well prepared, thoughtful people, but they also are of the highest character, moral and otherwise.

[00:01:44] Speaker 06:
And so I'm delighted to propose their admission to my colleague and I hope that they will get a favorable vote.

[00:01:53] Speaker 00:
Well, I have also had the pleasure of getting to know these young women and enthusiastically correct the motion.

[00:02:01] Speaker 06:
I'd also like to recommend, thank you for voting.

[00:02:04] Speaker 06:
I'd like to note that in the courtroom today, Ms.

[00:02:07] Speaker 06:
Rive's mother has come to witness this great event.

[00:02:11] Speaker 06:
And I think she has a camera.

[00:02:14] Speaker 06:
I'd also like to request from the presiding judge that the mother be allowed to take a picture at the appropriate time.

[00:02:20] Speaker 00:
Absolutely.

[00:02:21] Speaker 00:
I think we have somebody here on our end, too, for photographs.

[00:02:25] Speaker 00:
Thank you.

[00:02:26] Speaker 00:
So why don't we rise, and the oath will be administered.

[00:02:30] Speaker 05:
Congratulations.

[00:02:44] Speaker 00:
Okay.

[00:02:50] Speaker 00:
First case on the docket this morning is 151025.

[00:02:55] Speaker 00:
Macro's the technology versus Navy.

[00:02:57] Speaker 00:
Mr. Nagel, whenever you're ready.

[00:03:00] Speaker 04:
Whenever you're ready.

[00:03:06] Speaker 04:
Good morning, Your Honor.

[00:03:08] Speaker 04:
Does a properly certified claim containing a definite, unqualified, some certain, which was never questioned nor retracted, become defective years after, when the appellant narrows the claim after discovery?

[00:03:22] Speaker 04:
The answer under this Court's precedent and the CDA is a resounding no.

[00:03:27] Speaker 04:
But one panel of the board, without notice to the parties, years after the certification, decided that the claim was actually two claims and that the sum certain was only superficial, when neither the contracting officer, experienced Navy counsel, nor the two ASPCA panels who had issued extensive decisions on this case beforehand,

[00:03:47] Speaker 04:
had ever challenged that certification.

[00:03:49] Speaker 02:
Why did you drop the... I don't know how to call them anything other than a claim, but why did you drop the claim for impact damages?

[00:03:59] Speaker 04:
Because they were unnecessary, Your Honor.

[00:04:01] Speaker 02:
Because what?

[00:04:02] Speaker 04:
It was unnecessary.

[00:04:04] Speaker 04:
At Joint Appendix 45, we made it very clear that that basis was interconnected with the first basis, the primary basis, which is the superior knowledge doctrine.

[00:04:17] Speaker 04:
everything but for the violation of the superior knowledge doctrine, those consequences would not have occurred.

[00:04:25] Speaker 02:
I don't understand.

[00:04:26] Speaker 02:
You have 40 separate impact items that are line items, and each one of them has a precise dollar amount attributed to them.

[00:04:35] Speaker 02:
I don't see how that is immediately clear that that is what you would be seeking to recover in a quantum merit situation.

[00:04:47] Speaker 02:
That's the claim that's still on the table.

[00:04:52] Speaker 04:
Well, Your Honor, the $4.8 million was there and the $610,000 for liquidated damages was never retracted.

[00:04:59] Speaker 04:
We basically said we don't need to prove those specific impact damages because under JA-45 it is still connected.

[00:05:09] Speaker 04:
It is still based on the primary basis.

[00:05:11] Speaker 04:
which is superior knowledge talk, but for the violation of superior knowledge.

[00:05:16] Speaker 06:
Why don't you take one of the impact damages, any one you want, and explain to me why it's necessarily connected to the problem from your perspective that the government knew that it would cost more to build a new building that they didn't tell you to.

[00:05:30] Speaker 04:
Yes, Your Honor.

[00:05:32] Speaker 04:
The Navy wanted a brand new firehouse.

[00:05:34] Speaker 04:
But they estimated that that would cost $8.15 million.

[00:05:39] Speaker 04:
They told offerors they could propose either renovation or new construction, but they recognized they only had the money for renovation.

[00:05:49] Speaker 04:
The appellant to small business bid $3.99 million, less than half of the government estimate.

[00:05:55] Speaker 06:
I know what I was probably trying to do.

[00:05:58] Speaker 06:
I'm just trying to pick out one of the items that the impact damages.

[00:06:02] Speaker 06:
Pick one of them.

[00:06:04] Speaker 04:
Take around, for example, the sound attenuation issue.

[00:06:07] Speaker 04:
There was obviously not a meeting of the minds because the appellant bid so low as to what exactly the Navy expected.

[00:06:15] Speaker 04:
If the Navy had fulfilled its duties under the Superior Knowledge Doctrine and specifically... I agree about one that came up in the summary judgment motion.

[00:06:24] Speaker 06:
This was blast-proof windows.

[00:06:26] Speaker 06:
Yes, Your Honor.

[00:06:27] Speaker 06:
Right.

[00:06:27] Speaker 06:
And so there was a claim about...

[00:06:31] Speaker 06:
Reading the spec on blast-proof windows, wouldn't blast-proof windows be the same whether you're replacing the windows in rehab as opposed to new?

[00:06:40] Speaker 04:
No, Your Honor, the entire framework around that could be substantially affected in terms of length of time it takes to do that.

[00:06:49] Speaker 04:
You've got to build up.

[00:06:50] Speaker 04:
everything around that.

[00:06:53] Speaker 06:
It's cheaper to put in new ones than to rehab the old.

[00:06:58] Speaker 04:
Depending on the rest of the construction, Your Honor.

[00:07:02] Speaker 06:
Your argument is that all of the damages that you add up to the penny, the damages that were in your certified claim are to the penny accounted for by all your impact damages and other specific claims.

[00:07:19] Speaker 04:
To the penny.

[00:07:21] Speaker 04:
Yes, Your Honor.

[00:07:21] Speaker 04:
All of which stem from the violation of the superior knowledge doctrine.

[00:07:26] Speaker 06:
How do I know they all stem from?

[00:07:27] Speaker 06:
You say that.

[00:07:29] Speaker 06:
Yes, Your Honor.

[00:07:30] Speaker 06:
What is the proof that all of those damages would have been incurred regardless of whether you were building new or whether you were building by rehabbing?

[00:07:40] Speaker 04:
Well, first of all, that goes to the merits.

[00:07:43] Speaker 04:
It does not go to jurisdiction, we would submit.

[00:07:45] Speaker 04:
That is something we would have to prove at the hearing, but we would deny that chance when five and a half years into the litigation, the board suddenly decided we have no jurisdiction to hear this.

[00:07:56] Speaker 06:
Jurisdictional, as you know from your experience, courts frequently, frequently jurisdictional defects are missed.

[00:08:03] Speaker 06:
They're overlooked.

[00:08:04] Speaker 06:
And I agree with you, this is coming up at the tag end, but it comes up at the time when what you've done is shucked away from the case, the piece of the case, the impact damages, there'd be, if all you'd asked for were impact damages, there's no question that you had a certified claim of this unserved.

[00:08:25] Speaker 06:
And that's by having stripped that away, you focused the spotlight on what was left.

[00:08:31] Speaker 04:
Yes, Your Honor, because those impact damages were unnecessary because of JA-45.

[00:08:36] Speaker 06:
It seems to me, from my perspective, that what you have to do is to convince us that there was a mistake here in saying that there were two claims instead of one.

[00:08:47] Speaker 06:
Yes, Your Honor.

[00:08:47] Speaker 06:
Because if there are two claims here, I think your case is substantially weaker than if it's only one.

[00:08:54] Speaker 04:
Yes, Your Honor.

[00:08:54] Speaker 04:
There's only one claim because there can only be one claim.

[00:08:57] Speaker 04:
There is no such thing as a pre-ward claim under the contract.

[00:09:01] Speaker 06:
Does your case law say that claims are different claims if they're based on different theories and if they have different theories of relief?

[00:09:12] Speaker 04:
No, Your Honor, it depends on the transgression that we are talking about.

[00:09:18] Speaker 06:
If all of a sudden I started saying in front of you... You think KCON is not applicable here?

[00:09:26] Speaker 04:
No, Your Honor, I think there are various aspects of KCON that are directly applicable.

[00:09:30] Speaker 04:
Certainly people can refine, revise their claim as they should do after discovery.

[00:09:35] Speaker 06:
I appreciate that.

[00:09:36] Speaker 06:
It seems to me that that's really where the rubber hits the road.

[00:09:39] Speaker 06:
The government relies heavily on K-Con.

[00:09:42] Speaker 06:
Yes, Your Honor.

[00:09:42] Speaker 06:
They say K-Con and you sit down.

[00:09:45] Speaker 06:
All they have to do is cite K-Con.

[00:09:47] Speaker 06:
You cite K-Con and say, government, you sit down.

[00:09:51] Speaker 06:
So how am I supposed to figure out which one of the two you write on the K-Con case?

[00:09:55] Speaker 04:
Your Honor, it depends on how refined, how varied the facts diverge.

[00:10:02] Speaker 04:
The government, on page 19 of its brief,

[00:10:04] Speaker 04:
Well, totally different facts, totally different facts.

[00:10:08] Speaker 04:
It's a different time period.

[00:10:10] Speaker 06:
Well, no, there are different facts involved in whether or not the government did or did not know about the $8 million estimate for new and whether or not that was a real number and relied on.

[00:10:22] Speaker 06:
At the summer judgment stage, the judges on the summer judgment case said, we didn't even think that necessarily was a real number.

[00:10:30] Speaker 06:
So that whole factual dispute on your unconscionability superior knowledge claim would be whether or not that number was real.

[00:10:43] Speaker 06:
Did the government know about it?

[00:10:45] Speaker 06:
Did the government have an investment in that number?

[00:10:47] Speaker 06:
Because if the number was illusory, your case would go away.

[00:10:51] Speaker 06:
So that's the factual dispute, as I understand it.

[00:10:55] Speaker 04:
Yes, Your Honor.

[00:10:55] Speaker 06:
And that goes to the merits, but it does not go to jurisdiction.

[00:10:58] Speaker 06:
No, but when you're talking about is a claim the same, I do believe the precedent tells us to inspect the factual underpinnings of the claim to ascertain whether the facts are the same.

[00:11:11] Speaker 06:
Yes, Your Honor.

[00:11:12] Speaker 06:
Right.

[00:11:12] Speaker 06:
Well, for your impact damages claim, you didn't need any factual basis pertaining to whether or not the $8 million figure even existed.

[00:11:22] Speaker 06:
You were making post-award claim, correct?

[00:11:29] Speaker 06:
We are proving the pre-award damages because they... Because you were making a post-award claim specific to the penny in damages based on things that had nothing to do with whether or not there had ever been an $8 million estimate.

[00:11:45] Speaker 04:
Oh, absolutely not, Your Honor.

[00:11:47] Speaker 04:
Tell me then more about it.

[00:11:48] Speaker 04:
If the government had fulfilled its duties under the Superior Knowledge Doctrine and said MCP,

[00:11:54] Speaker 04:
Our estimate is 8.1 million.

[00:11:57] Speaker 04:
How can you guys, a small business, come in and bid less than half of that, 3.99?

[00:12:03] Speaker 04:
Have you considered differing views about sound attenuation?

[00:12:07] Speaker 04:
Have you considered differing views about glass proof windows?

[00:12:11] Speaker 04:
Have you considered the ground you might have to excavate?

[00:12:13] Speaker 04:
If those had come up and MZT had said, shoot, maybe you're right, maybe we should bid closer to that,

[00:12:19] Speaker 04:
then those impact damages, we wouldn't have made an issue of them, because it already would have been included within our claim, and we would have prepared for it, and we would have been accordingly.

[00:12:30] Speaker 06:
There may be some, but not all, right?

[00:12:32] Speaker 04:
Yes, Your Honor, but again, that goes to the merits.

[00:12:34] Speaker 04:
It does not go to jurisdiction.

[00:12:36] Speaker 06:
Well, that would then go to the specificity of the dollar amount in the claim.

[00:12:41] Speaker 06:
That's possible, but remember what you're...

[00:12:46] Speaker 06:
Just guess at a number, can you?

[00:12:48] Speaker 06:
Or the requirement in a CBA certified claim.

[00:12:52] Speaker 06:
You can't just guess.

[00:12:53] Speaker 06:
You just throw a number, right?

[00:12:54] Speaker 04:
No, Your Honor.

[00:12:55] Speaker 04:
I agree you cannot do that.

[00:12:57] Speaker 04:
The number has to be tethered.

[00:12:59] Speaker 04:
Yes, Your Honor.

[00:12:59] Speaker 04:
And it was tethered.

[00:13:01] Speaker 04:
Remember, there were three bases.

[00:13:04] Speaker 04:
Joint Appendix 45, which I keep going back to.

[00:13:07] Speaker 04:
And if I may, one second, digress for a moment.

[00:13:11] Speaker 04:
What you really have to decide here today is one of two things.

[00:13:17] Speaker 04:
Contradict officer, experienced Navy counsel, a judge involved in this case, prior to Judge James was either asleep at the switch or they recognized that the claim was one claim and the damages were set forth in the some certain.

[00:13:33] Speaker 04:
We submit that the other judges and personnel did because they recognized that everything was interconnected because they read specifically Joint Appendix 45.

[00:13:45] Speaker 04:
When we dropped those claims,

[00:13:47] Speaker 06:
Let me ask one question about that.

[00:13:49] Speaker 06:
You had related focusing specifically on what I'm calling the $8 million estimate for new construction which you feel existed and wasn't conveyed to you.

[00:14:02] Speaker 06:
It seemed to me you were making two arguments.

[00:14:05] Speaker 06:
You're making just a flat out superior knowledge argument and then you were making an unconscionability claim.

[00:14:11] Speaker 06:
It was unconscionable because they had superior knowledge that they didn't convey to you.

[00:14:23] Speaker 04:
Is that the theory?

[00:14:26] Speaker 04:
No other bid for new construction was anywhere close to us.

[00:14:30] Speaker 04:
We didn't know that before.

[00:14:32] Speaker 04:
Anywhere close.

[00:14:34] Speaker 04:
I mean, they were less than 8 million.

[00:14:37] Speaker 06:
They were less than 8 million, but the closest bid was somewhere between the two of you.

[00:14:41] Speaker 06:
But remember, a lot of those were renovations.

[00:14:44] Speaker 06:
What's the difference between you drop your unconscionability claim

[00:14:50] Speaker 06:
You waved it off.

[00:14:53] Speaker 06:
Well, if you waved that off, why aren't you in essence waving off your superior knowledge claim?

[00:14:58] Speaker 06:
They're the same.

[00:14:59] Speaker 04:
No, Your Honor, they're superior now.

[00:15:01] Speaker 04:
First of all, I don't agree that we waved unconscionability.

[00:15:05] Speaker 06:
I thought you said you weren't going to pursue unconscionability any further.

[00:15:09] Speaker 04:
I thought we weren't going to pursue a unilateral mistake anymore, Your Honor.

[00:15:13] Speaker 06:
We were stupid.

[00:15:15] Speaker 06:
I may be wrong, but don't waste your time answering that.

[00:15:17] Speaker 06:
No, I'm sorry.

[00:15:19] Speaker 04:
Okay.

[00:15:19] Speaker 04:
No, no, no.

[00:15:20] Speaker 04:
Not a problem, Your Honor.

[00:15:24] Speaker 04:
To go back, then, in the remaining time I have... Well, you're into your rebuttal, so you want to make a short statement and save some.

[00:15:31] Speaker 04:
Yes, Your Honor.

[00:15:33] Speaker 04:
There is only one claim.

[00:15:35] Speaker 04:
There cannot be a pre-award claim.

[00:15:36] Speaker 04:
That's just one shoe dropping.

[00:15:38] Speaker 04:
That's an element.

[00:15:39] Speaker 04:
But the damages must occur post-award.

[00:15:42] Speaker 04:
That's what we put in the claim as the impact damages.

[00:15:46] Speaker 04:
But they all flowed from.

[00:15:47] Speaker 04:
They would not have occurred absent the violation of the Superior Knowledge Doctrine.

[00:15:53] Speaker 04:
Now when we raise the quantum mirror width, that is still all based on the same basic facts.

[00:16:01] Speaker 04:
Again, Your Honor, you've got to conclude that either everybody else involved in the case for the previous five and a half years, including those two prior panels, was asleep at the switch, or they recognized that it is all one interconnected case.

[00:16:16] Speaker 04:
Now the government... That's what we have to decide, whether they were asleep at the switch or... Yes, Your Honor, but if you take a look at that decision on the motion for summary judgment, that is a very

[00:16:28] Speaker 04:
detailed, analytical, comprehensive decision.

[00:16:33] Speaker 04:
The government appears to recognize some of the problems.

[00:16:41] Speaker 06:
It never addresses the issue of superficial.

[00:16:48] Speaker 06:
So that's unhelpful to you.

[00:16:53] Speaker 06:
It would have been helpful to you if there had been a dissent from the judge in common saying, hey, wait a second, this is unfair, there is certified claim here.

[00:17:05] Speaker 06:
The judge who was on the earlier panel that didn't raise the jurisdictional issue joins the opinion saying there's no jurisdiction, leading me to think that that judge said, whoops, I was asleep at the switch.

[00:17:17] Speaker 04:
if they recognize the issue at all.

[00:17:19] Speaker 04:
There's nothing in the decision that references it all to J845 and the interconnectability of the basis.

[00:17:26] Speaker 04:
People are allowed to present alternate views.

[00:17:30] Speaker 06:
And if one goes... I think the bottom line question, as I said earlier, comes down to whether or not UNS has created a second claim by throwing out the first one.

[00:17:40] Speaker 04:
I mean, isn't that really one of the things?

[00:17:42] Speaker 04:
I think, in a nutshell, it is, you know, and I've never before heard a case when by narrowing your claim, you multiply it.

[00:17:51] Speaker 04:
The government's cases all deal with the situation all at once.

[00:17:54] Speaker 04:
You come up with brand new facts, totally new arguments, totally unconnected, never before seen in the eyes of a man in the case.

[00:18:01] Speaker 06:
If you've subdivided, which you did do, then the question is whether that original number relates to the subdivision.

[00:18:09] Speaker 06:
And I think the reason why you got ruled against down below was that they looked and said, whoops, he's not even standing on that old number anymore.

[00:18:17] Speaker 06:
He's got a new theory for calculation of damages, which is to say you take the 8 million, you take the amount of money that we've already been paid, and then you give us something in between, which we say is the amount we were hurt.

[00:18:32] Speaker 06:
That's a very, very different calculation than the way the 8 million got calculated, pardon me, the money you're asking for in your REACDA claim got calculated, because it got calculated entirely off of the impact damages.

[00:18:49] Speaker 04:
There were actual incurred costs, and we proffered the idea of quantum merit, because by that time we could see what the other bids were, which we did not know beforehand.

[00:19:01] Speaker 04:
So we were able to say, okay, then give us the difference between this and this greater amount, which is less than... You have two theories of relief, and you have two computations.

[00:19:12] Speaker 06:
Yes, your honor.

[00:19:14] Speaker 06:
I don't know if you want to say yes, your honor, because you may be walking into a trap, but you have two theories of relief.

[00:19:20] Speaker 06:
One is your impact damage, et cetera, and your other is superior knowledge, yada yada, right?

[00:19:25] Speaker 06:
And you have two very different calculations.

[00:19:28] Speaker 06:
And our case law says whether cases are, whether it's one big claim or whether it's a bunch of little claims, you have to look at the facts, you have to look at the relief asked for, this is going to be the government's argument, that you then look here and you say, well, the relief being asked for is really different.

[00:19:45] Speaker 06:
It's dollars, but it's different in the way it's been computed.

[00:19:49] Speaker 04:
And we are not aware of any case where the damage calculation method, whether you go from total cost to modified cost to actual cost, was ever decided that that relates back five and a half years previously and invalidates the original certification.

[00:20:05] Speaker 00:
Your Honor, I think that's fine.

[00:20:06] Speaker 00:
We'll restore a couple minutes for rebuttal, and let's hear from the government.

[00:20:10] Speaker 00:
Thank you, Your Honor.

[00:20:15] Speaker 00:
Mr. Conner.

[00:20:16] Speaker 03:
Thank you, Your Honor.

[00:20:17] Speaker 03:
I may please the court.

[00:20:18] Speaker 03:
The board's dismissal for lack of jurisdiction should be affirmed because after the certified claim, during the pendency of the board appeal, the appellant in this case brought a new claim and they withdrew the entirety of the certified claim that was presented to the contracting officer.

[00:20:35] Speaker 06:
What do you mean, a new claim?

[00:20:37] Speaker 06:
You think there was no basis in the R.E.A.

[00:20:40] Speaker 06:
and the original C.D.A.

[00:20:42] Speaker 06:
claim for a superior knowledge claim?

[00:20:44] Speaker 03:
Yes, there was a reference to a superior knowledge claim.

[00:20:47] Speaker 03:
So it's not new?

[00:20:49] Speaker 03:
So it's not new?

[00:20:52] Speaker 03:
The superior knowledge theory is not new.

[00:20:54] Speaker 03:
Excuse me?

[00:20:55] Speaker 03:
The superior knowledge theory is not new.

[00:20:57] Speaker 06:
You just said it was.

[00:20:58] Speaker 03:
Yes, it's new.

[00:20:59] Speaker 06:
So you don't want to be accurate?

[00:21:00] Speaker 03:
Yes, I would like to be accurate.

[00:21:03] Speaker 03:
The reason why it's new, however, is that the relief that was sought during the penalty of the board appeal was rescission of the contract and quantum error, neither of which was ever presented to the contracting officer for decision.

[00:21:17] Speaker 03:
The certified claim was based on 85 very discrete, very specific, B, they refer to them as betterment and variance claims.

[00:21:27] Speaker 06:
Right, that's not the basis on which the decision was made.

[00:21:31] Speaker 06:
The failure to have certified a quantum mirror rescission claim, right?

[00:21:36] Speaker 06:
Yes, the basis... Were we allowed to decide a case on grounds other than it was a side block?

[00:21:41] Speaker 03:
Yes, the court... Why?

[00:21:43] Speaker 03:
Because jurisdiction is a legal question and the court can affirm the sentence for lack of jurisdiction on alternative grounds.

[00:21:52] Speaker 03:
The basis for the dismissal at the board was the lack of the sum certain.

[00:21:57] Speaker 06:
Well, the board decided to lack jurisdiction for a specific reason.

[00:22:02] Speaker 06:
You're telling us that the board lacked jurisdiction for a different reason.

[00:22:07] Speaker 06:
Yes.

[00:22:07] Speaker 06:
You're saying because there was no rescission quantum Maryland claim ever certified, ever made to the contracting officer, there was no jurisdiction.

[00:22:16] Speaker 03:
Yes.

[00:22:17] Speaker 06:
I'm still asking the cheater a question.

[00:22:19] Speaker 06:
Could we rule on that?

[00:22:21] Speaker 03:
Yes.

[00:22:22] Speaker 03:
Why?

[00:22:22] Speaker 03:
Because the court can affirm.

[00:22:24] Speaker 03:
Again, the question of jurisdiction is a legal question, which the court reviews without any deference to lower court.

[00:22:35] Speaker 03:
So the court can affirm on an alternative jurisdiction.

[00:22:37] Speaker 06:
Well, your argument, your colleague, is that it's not really not a new claim.

[00:22:41] Speaker 06:
Doesn't your colleague use this as one big gimmick, right?

[00:22:47] Speaker 06:
And they argued, so they're now saying, when you want to know how much money you should give us for the government's failure to honor superior knowledge, you should use a quantum calculation, right?

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

[00:23:04] Speaker 06:
And in order to use the quantum calculation, you have rescission of the contract.

[00:23:11] Speaker 06:
So why is that new?

[00:23:13] Speaker 06:
It's new because the... Are any of the facts that underlie this rescission quantum theory different than the original claim for superior knowledge?

[00:23:29] Speaker 06:
The original claim, there's one reference... The facts are the same, right?

[00:23:33] Speaker 03:
No.

[00:23:34] Speaker 03:
The facts in the certified claim, and the certified claim is hundreds of pages long.

[00:23:40] Speaker 06:
I understand that, but I'm just trying to get at whether or not this is actually a new independent claim, as opposed to a claim that is part of the whole gomish of what the contractors are arguing for.

[00:23:50] Speaker 03:
Yes, we believe it is a new independent claim, but in addition to that, even if it's viewed that the claim was asserted in the first instance in the certified claim,

[00:23:58] Speaker 03:
that specific what is referred to as the pre-award claim, which is a language that was used by macro Z in their first appellate brief and by the board.

[00:24:06] Speaker 06:
That lack of uncertainty.

[00:24:07] Speaker 06:
I hear you leading with this argument.

[00:24:08] Speaker 06:
You're not waving off the primary argument in your briefs, are you?

[00:24:13] Speaker 03:
No, certainly not.

[00:24:14] Speaker 03:
The pre-award claim

[00:24:17] Speaker 03:
that was asserted in the certified claim, lack of some certainty.

[00:24:23] Speaker 03:
All of the relief, all of the damages that were sought in the certified claim related to the post-award conduct, the defective specifications, the constructive change,

[00:24:33] Speaker 03:
Then there were, again, 85 betterment and invariance claims, which are attached in which we included in the appendix at J344-500.

[00:24:41] Speaker 03:
These are very specific items, things like moving a drain, things like altering a kitchen.

[00:24:50] Speaker 03:
JA 348, there's an example of an attic area increase and the appellant goes through the basis of entitlement, betterment to project, a detailed narrative of the issue, the cost of that, the associated delay.

[00:25:05] Speaker 00:
So where would he have gotten the amount for having the sum certain with regard to the pre-award damages?

[00:25:11] Speaker 00:
I mean, there's some numbers that, you know, you're just at the beginning.

[00:25:14] Speaker 00:
You're just making an allegation.

[00:25:16] Speaker 00:
He obviously didn't have the documents.

[00:25:17] Speaker 00:
He didn't know anything about this until he did some discovery.

[00:25:20] Speaker 00:
So what number is he supposed to come up with?

[00:25:23] Speaker 00:
What would have been the correct number in your view?

[00:25:25] Speaker 03:
The same number that appellant argued before the board, the 8.15 million minus the amount paid.

[00:25:32] Speaker 03:
They had all that information when they filed the certified claim.

[00:25:35] Speaker 03:
The 8.15 million dollar estimate is repeatedly referenced throughout the certified claim.

[00:25:39] Speaker 00:
And so what is that number?

[00:25:40] Speaker 00:
8.1.

[00:25:40] Speaker 00:
I mean, we're pretty close, right, in terms of what he asked for and what the difference between those two numbers are?

[00:25:47] Speaker 03:
I think it's about a million dollars off.

[00:25:48] Speaker 03:
But the 8.15 million is what MACRAZE contends was the government's new construction estimate.

[00:25:57] Speaker 03:
We dispute that, as was detailed in the motion for partial summary judgment.

[00:26:01] Speaker 03:
But that is their basis for damages.

[00:26:04] Speaker 03:
And the board below correctly noted that that

[00:26:09] Speaker 03:
specific relief, the 8.15 million minus the amount they've been paid, approximately three and a half million, that that, some certain, was not presented to the contracting officer in the certified claim.

[00:26:21] Speaker 03:
And so that was the basis of the board's decision that there was lack of jurisdiction.

[00:26:25] Speaker 03:
It goes hand in hand with our alternative argument, which is that Mackrozee asserted a new claim for the first time

[00:26:35] Speaker 03:
during the penalty of the board appeal and not to the contracting officer.

[00:26:38] Speaker 00:
Can I ask you, what's the practical implication?

[00:26:40] Speaker 00:
Is there any way, I know the timeframes are tight, I mean is there a way that at some point they could have withdrawn and they still wouldn't have been time hired to amend their original certified claim?

[00:26:53] Speaker 00:
Was there a window there that they could, was that doable?

[00:26:57] Speaker 03:
I'm not sure of the answer to that question because I don't know how long they waited after the contract announced the decision to file their board appeal.

[00:27:04] Speaker 03:
They would have one year from doing that.

[00:27:07] Speaker 03:
And so I'm not sure of the answer to the question.

[00:27:10] Speaker 03:
But I would imagine that they would, had they would drawn this claim sort of right away, they would have had an opportunity to pursue the pre-award claims to the extent they adequately disclosed them to the company.

[00:27:21] Speaker 00:
Well, we'd say right away.

[00:27:23] Speaker 00:
Obviously, they didn't know that the case was going to turn this way, right away, meaning as soon as somebody ruled against them and pointed this out, or as soon as they did discovery and found out that the government had documentation with regard to superior knowledge, or what?

[00:27:41] Speaker 03:
Your Honor, they asserted the superior knowledge, they stated superior knowledge in their initial certified claim.

[00:27:48] Speaker 06:
That was in 2008.

[00:27:51] Speaker 06:
I'm sorry?

[00:27:52] Speaker 06:
2008, that's when they made their claim.

[00:27:54] Speaker 06:
Yes.

[00:27:55] Speaker 06:
And then it's four years later, 2012, when you get a summary judgment.

[00:28:01] Speaker 03:
Yes.

[00:28:02] Speaker 06:
Time is slow here, right?

[00:28:05] Speaker 06:
And then it takes two more years until August 14 before we get the final judgment.

[00:28:10] Speaker 03:
Yes, and I think it's important to note the reason why the case turned in such a fashion.

[00:28:18] Speaker 03:
It wasn't the conduct of the government or the Navy that caused it.

[00:28:21] Speaker 03:
The plaintiff filed a certified claim that was very specific, that asked for very specific damages, and years into the litigation they decided to withdraw all of those claims.

[00:28:31] Speaker 02:
Why?

[00:28:32] Speaker 02:
Well, I don't have any... And two little tiny portions were settled, right?

[00:28:37] Speaker 02:
Like two little things with a hundred grand.

[00:28:40] Speaker 02:
But why?

[00:28:41] Speaker 02:
Why did they... I just don't understand why they went through the impact damages post-award.

[00:28:47] Speaker 03:
I can't answer for why that happened, but your honor's point about the contracting officer granting two of those claims goes to the fundamental nature of the contract of FUSAC.

[00:28:57] Speaker 03:
The contracting officer is supposed to get an opportunity to assess the claims.

[00:29:01] Speaker 03:
And when they submitted these 85 claims, the contract answer did have that opportunity.

[00:29:05] Speaker 03:
The contracting officer did not have the opportunity to rule on the claims that Matthew Rizzi ultimately put forward before the board.

[00:29:12] Speaker 02:
But the contracting officer, did he rule on the other of the AD5s?

[00:29:17] Speaker 02:
Did he rule against them?

[00:29:18] Speaker 02:
Is that why they withdrew them as they moved forward?

[00:29:20] Speaker 03:
The contracting officer did deny the remainder.

[00:29:23] Speaker 03:
But they continued to assert those claims throughout the pensions of the board appeal, only to later withdraw them in 2013.

[00:29:30] Speaker 06:
Was it factual denial or in-game denial?

[00:29:33] Speaker 06:
Was it a deemed denial or an actual denial?

[00:29:36] Speaker 06:
It was an actual denial.

[00:29:37] Speaker 06:
It was a one line.

[00:29:38] Speaker 06:
Oh no, he granted two of the requests.

[00:29:40] Speaker 03:
Yes.

[00:29:41] Speaker 03:
And this court's precedent in KCON states presenting a materially different factual or legal theory, example, breach of contract for not constructing a building on time versus breach of contract for constructing with wrong material, does create a different claim.

[00:29:56] Speaker 03:
And the court's decision in Santa Fe, engineers, is instructive.

[00:30:00] Speaker 03:
Because in that case, the contractor initially came forward with challenges to three specific change orders.

[00:30:07] Speaker 03:
Then during the pendency of the case, the contracting officer and this court stated, profoundly altered their claim.

[00:30:15] Speaker 02:
Why did the contracting officer deny the other 83?

[00:30:18] Speaker 02:
Did he say that they were subsumed in the original contract?

[00:30:21] Speaker 02:
Or what was the basis?

[00:30:22] Speaker 03:
There was not a detailed basis.

[00:30:26] Speaker 03:
well anything uh... we didn't know what what was the baby why did he deny them we have an expert on the island yes and and uh... denial jay one sixty three uh... one fifty five is that there's not a specific uh...

[00:30:53] Speaker 03:
and now that's why it was denied, but the contract answer does sort of account the claim and then ultimately conclude on J165 in a short one paragraph decision that the claims are denied.

[00:31:09] Speaker 06:
That's not atypical.

[00:31:10] Speaker 03:
No, it's not atypical.

[00:31:12] Speaker 03:
In fact, oftentimes, or I should say sometimes,

[00:31:16] Speaker 03:
there will be a deemed denial where there's not a decision issued but because of that.

[00:31:21] Speaker 06:
So your view of this matter is that for this contractor to have succeeded he should have had a certified claim that says I have essentially two theories as to why I should have recovery and I have two amounts that I should be awarded one on one theory and one on the other.

[00:31:41] Speaker 06:
That's what you're saying.

[00:31:44] Speaker 03:
Yes, if those were the claims.

[00:31:46] Speaker 03:
The initial

[00:31:49] Speaker 03:
The initial certified claim, again, the sum certain that was in the certified claim only related to the post-award claim.

[00:31:56] Speaker 03:
So the extent that they had claims based on... But you're saying it only related.

[00:32:00] Speaker 06:
You're getting a stern argument from your adversaries saying, oh no, it did.

[00:32:03] Speaker 06:
It's just that he didn't expressly state in his REA certified claim, oh by the way, the money I want is the same money I would want if you ruled for me on my unconscionability superior knowledge claim.

[00:32:20] Speaker 06:
If he'd said that, he would be home free, right?

[00:32:23] Speaker 03:
Yes, and the fundamental thing the court looks to in all the cases, in all this court's cases... So it boils down to, is he right?

[00:32:30] Speaker 06:
When he says, what I suffered by way of laws was the same either way.

[00:32:37] Speaker 06:
That's what he said.

[00:32:39] Speaker 06:
He said he agrees that if he went to trial, it may be proven that he wasn't internally right.

[00:32:45] Speaker 06:
that the number wasn't exactly the same.

[00:32:48] Speaker 06:
But he says, I'm ballpark close to 1.

[00:32:52] Speaker 03:
The fundamental operative facts that relate to that pre-award claim have nothing to do with the 85 specific claims that add up to some certain that's in the certifying claim.

[00:33:03] Speaker 06:
Well, we don't know that.

[00:33:04] Speaker 06:
He's saying it did.

[00:33:06] Speaker 06:
He said, I would have suffered the same damage either way.

[00:33:11] Speaker 03:
But the 85 claim items relate to

[00:33:14] Speaker 03:
macro disease allegations that the government did not live up to the contract, the pre-award claim is asking for rescission and quantum merit.

[00:33:24] Speaker 03:
The quantum of damages that they seek have nothing to do with the specific 85 items that add up to some certain certified claim, but rather simply state, we want the difference between your estimate and

[00:33:37] Speaker 03:
what we were paid.

[00:33:39] Speaker 03:
The court in K-Con stated that identifying whether separate claims exist is important.

[00:33:45] Speaker 03:
And so it was entirely appropriate for the board below to look at certified claims and determine that there were two different claims, one of which had a sum certain and one of which didn't.

[00:33:54] Speaker 06:
Well, sir, but the elephant in the room here is that we really don't want contractors to start putting their claims up.

[00:34:00] Speaker 06:
First, we don't want them to split their claims up to avoid the $100,000 limit for certification.

[00:34:04] Speaker 06:
You don't want that either.

[00:34:06] Speaker 06:
That's right.

[00:34:06] Speaker 06:
But as a matter of good administrative and judicial policy, we don't want to have a lot of different cases going on, right?

[00:34:14] Speaker 06:
Yes, and we are not arguing that... It's nice that the contracting officer gets the whole conviction at once.

[00:34:20] Speaker 03:
Yes, and we certainly are not and did not mean to suggest that.

[00:34:24] Speaker 03:
But what is important is for the contracting officer to have an opportunity to assess what the claim is.

[00:34:30] Speaker 03:
And in this case, the contracting officer would not give them that opportunity because the certified claim and the sum certain that's in the certified claim is based on entirely on specific claims that were withdrawn by an accuracy.

[00:34:43] Speaker 06:
What's the usual remedy in a superior knowledge case?

[00:34:48] Speaker 06:
Let's assume it's just a flat out, that's all it is, superior knowledge.

[00:34:53] Speaker 06:
Is the contract rescinded?

[00:34:56] Speaker 03:
It could be.

[00:34:57] Speaker 06:
Isn't it ordinarily rescinded?

[00:34:59] Speaker 03:
I don't know that it's ordinarily rescinded.

[00:35:02] Speaker 03:
I'm not 100% sure it's the answer to that question.

[00:35:04] Speaker 06:
Is that understood to be an acceptable result that you would get?

[00:35:09] Speaker 06:
You'd get rescission if superior knowledge has been had and wasn't conveyed?

[00:35:14] Speaker 03:
Yes, that is a claim for a lease that can be brought.

[00:35:17] Speaker 06:
So if you're arguing, if you're making a certified superior knowledge claim, isn't it implicit that you might be asking for a rescission?

[00:35:26] Speaker 03:
No, we do not believe that that is implicit.

[00:35:32] Speaker 03:
It's Macro's ease burden to come forward and say what the relief they're seeking.

[00:35:37] Speaker 03:
The contracting officer, and it's not as if the superior knowledge is stated throughout the certified plan.

[00:35:42] Speaker 02:
Well, they did.

[00:35:43] Speaker 02:
They did come forward and state the reliefs that they were seeking.

[00:35:45] Speaker 02:
You directed us to JA 163, which is the contracting officer's final decision.

[00:35:51] Speaker 02:
And it says, I've reviewed your request.

[00:35:54] Speaker 02:
You contend you expended $4.8 million for direct costs, indirect cost delays, and 610 for liquidated damages.

[00:36:01] Speaker 02:
So they did come forward and express a sum certain.

[00:36:06] Speaker 02:
And then on the next page, at least this contracting officer keeps referring to it as a single claim with three bases of recovery.

[00:36:18] Speaker 02:
And he lumps them all together.

[00:36:19] Speaker 02:
So it's clear from his writing that he understood

[00:36:23] Speaker 02:
the superior knowledge claim to be seeking the same $4.8 million and $610,000.

[00:36:30] Speaker 03:
Yes, and if the appellant were still seeking that $4.8 million based on the 85 items that's in the certified claim, this would be a different case.

[00:36:39] Speaker 03:
But the appellant is not seeking the $4.8 million that they disclosed to the contracting officer.

[00:36:45] Speaker 03:
They're seeking an entirely different remedy based on entirely different facts.

[00:36:49] Speaker 02:
Why?

[00:36:51] Speaker 02:
They alleged superior knowledge.

[00:36:53] Speaker 02:
He decided after thorough review that the claim was denied and he understood their superior knowledge claim to be for a sum certain of 4.8 and 610,000.

[00:37:07] Speaker 02:
The fact that they're trying to morph their claim now, maybe they're not allowed to do that, but didn't they state a some certain?

[00:37:15] Speaker 02:
Didn't he understand them to state a some certain?

[00:37:18] Speaker 02:
The fact that they may be walking away and asking for different damages is a different question.

[00:37:22] Speaker 02:
The lower court ruled no jurisdiction because they never had a claim with a some certain.

[00:37:28] Speaker 02:
He understood them to be articulating a some certain for a superior knowledge claim.

[00:37:34] Speaker 03:
Yes, there's no question that there was some certain that was in the certified claim.

[00:37:40] Speaker 03:
That was the 5.8 million.

[00:37:41] Speaker 02:
For the superior knowledge claim.

[00:37:44] Speaker 03:
That is what the contracting officer determined.

[00:37:46] Speaker 03:
But again, they're not seeking the 4.8 million anymore.

[00:37:52] Speaker 03:
They're seeking an entirely different amount based on entirely different legal theories that were never disclosed to the contracting officer.

[00:38:00] Speaker 06:
quantum error will end in rescission and I see that.

[00:38:08] Speaker 03:
The contractor needs to know the basis of the claim, the factual basis of the claim.

[00:38:13] Speaker 03:
Here, that did not happen because... Let me ask you this question.

[00:38:19] Speaker 06:
Policy question.

[00:38:20] Speaker 06:
We reflect on and sets up the requirement that a CDA claim has to be specific and has to have some certainty, right?

[00:38:28] Speaker 05:
Yes.

[00:38:29] Speaker 06:
For whose benefit does that rule exist?

[00:38:33] Speaker 06:
Who's in this system of ours?

[00:38:35] Speaker 06:
Who's the beneficiary of this ruling we have with this jurisdictional requirement?

[00:38:41] Speaker 03:
I think it's to the benefit of the contractor and the government.

[00:38:44] Speaker 06:
Isn't it the contracting officer?

[00:38:46] Speaker 06:
Yes.

[00:38:47] Speaker 06:
Right.

[00:38:47] Speaker 06:
Because we want the contracting officer to understand what the nature of the claim is and what the punishment is going to be, right?

[00:38:57] Speaker 05:
Yes.

[00:38:58] Speaker 06:
Now, Judge Moore was asking you, I think, in this case, why shouldn't we think that the contracting officer knew what the theories are, right?

[00:39:08] Speaker 06:
It wasn't being misled.

[00:39:11] Speaker 06:
And he also knew how much money the contractor thought he was entitled to.

[00:39:16] Speaker 03:
Yes.

[00:39:17] Speaker 03:
The number doesn't have to be correct.

[00:39:19] Speaker 06:
You can have a sum certain that you don't win, right?

[00:39:24] Speaker 06:
Literally, do you ever get what you ask for?

[00:39:26] Speaker 05:
Yes, that's correct.

[00:39:27] Speaker 06:
So what's your answer to Judge Moore's question as to why on the very face of the contracting officer's decision the jurisdictional question wasn't answered favorably to the contract?

[00:39:38] Speaker 03:
Because the operative facts that were asserted before the board, what we intend to be a new claim, are fundamentally different than the operative facts that are in the certified claim.

[00:39:50] Speaker 03:
The operative facts in the new claim before the board had nothing to do with the 85 betterment and variance claims, and only related to the estimate and what they've been paid.

[00:40:00] Speaker 03:
So the basis for relief, the operative facts, and the specific relief requested was different in both claims.

[00:40:08] Speaker 03:
Therefore, two claims existed, and Appellant only provided a sum certain during the pendency of the board appeal, which means the board correctly ruled that it lacked jurisdiction.

[00:40:19] Speaker 03:
Thank you.

[00:40:20] Speaker 03:
Thank you.

[00:40:25] Speaker 04:
Your Honor, I have to add a pretty big gauntlet in my opening, talking about JA45.

[00:40:30] Speaker 04:
Did you hear a syllable from the government about JA45, which specifically said the second and third bases

[00:40:40] Speaker 04:
48 claims are connected to the first phase.

[00:40:44] Speaker 04:
Everything goes back to superior knowledge.

[00:40:47] Speaker 04:
The contracting officer was not misled.

[00:40:49] Speaker 04:
The contracting officer knew full well what she was deciding at that point.

[00:40:56] Speaker 04:
The facts are not materially different.

[00:40:59] Speaker 04:
We have not varied from the superior knowledge doctrine.

[00:41:03] Speaker 04:
That is the allegation in 2008 is the allegation

[00:41:07] Speaker 04:
Fourteen, if the allocation today, the numbers may have changed, but contractors are not required to be clairvoyant.

[00:41:18] Speaker 04:
You put in your claim, you come up with the best estimate for what your sum cert is, and then you go into the discovery process.

[00:41:29] Speaker 04:
If we knew in great detail in 2008 what the government's internal thinking was on source selection, somebody should go to jail.

[00:41:37] Speaker 04:
Because there's obviously been a leak of source sensitive information in violation of the German Integrity Act.

[00:41:44] Speaker 04:
We did the best job we could at the time.

[00:41:47] Speaker 04:
The contracting officer was not misled.

[00:41:49] Speaker 04:
Experienced Navy Council never said, oh my gosh, this is two claims.

[00:41:53] Speaker 04:
The previous judges did not.

[00:41:55] Speaker 04:
It was only when Judge James got to it and he issued the decision saying, well, this has never before been questioned that the $4.8 million covered the pre-award conduct.

[00:42:06] Speaker 04:
It was never questioned because JA-45 and the County Officer's decision made it clear that it did and that no one up to that point was misled.

[00:42:18] Speaker 04:
Damages, even on a pre-war element of a claim, have to occur post-war.

[00:42:27] Speaker 04:
That's the second shoe dropping.

[00:42:29] Speaker 04:
They coalesce, they coincide with the 4.8 million.

[00:42:33] Speaker 04:
We are not bound to 4.8 million dot dot dot period.

[00:42:39] Speaker 04:
Whatever I doubt is going to be proved.

[00:42:42] Speaker 00:
Thank you.

[00:42:43] Speaker 00:
We thank both counsel and the case is submitted.