[00:00:17] Speaker ?:
All right.

[00:00:45] Speaker 01:
Okay, let's go.

[00:01:22] Speaker 01:
Yeah, I thought we were going to...

[00:01:41] Speaker 01:
I'm going to wipe your lips.

[00:02:01] Speaker 01:
.

[00:02:28] Speaker ?:
.

[00:02:28] Speaker ?:
.

[00:02:28] Speaker ?:
.

[00:02:28] Speaker ?:
.

[00:02:28] Speaker 01:
uh... uh...

[00:02:57] Speaker 01:
Good.

[00:03:25] Speaker ?:
Good.

[00:03:25] Speaker ?:
Good.

[00:03:36] Speaker ?:
Okay.

[00:04:07] Speaker 01:
So that's how it's done.

[00:04:36] Speaker 01:
We are also looking at the other side.

[00:05:05] Speaker ?:
We are looking at the other side.

[00:05:12] Speaker ?:
I'm going to do that.

[00:05:27] Speaker 01:
Thank you.

[00:05:44] Speaker 01:
.

[00:06:14] Speaker 01:
.

[00:06:14] Speaker 01:
.

[00:06:14] Speaker 01:
All right.

[00:06:35] Speaker 01:
Yeah, I totally got it.

[00:07:00] Speaker 01:
Okay.

[00:07:23] Speaker ?:
Okay.

[00:07:25] Speaker 01:
All rise.

[00:07:44] Speaker ?:
The United States form a bill for the federal target.

[00:07:49] Speaker ?:
It now opens and concessions.

[00:07:49] Speaker ?:
God save the United States.

[00:08:05] Speaker 04:
We'll hear argument first, and number 141498, USIA underwater equipment versus DHS.

[00:08:17] Speaker 04:
Mr. Billing.

[00:08:24] Speaker 05:
Your Honors, I'd like to just make two points.

[00:08:27] Speaker 05:
First, this matter should have been resolved on summary judgment, which plaintiff filed at the board.

[00:08:35] Speaker 05:
with regard to the material breach that occurred as a result of the Coast Guard's purchasing replacement suits from Coke Attack before the final testing of the suits on July 25, 2011.

[00:08:52] Speaker 03:
How is it a breach when it's not a requirements contract?

[00:08:58] Speaker 05:
A requirements contract is not relevant to this.

[00:09:02] Speaker 03:
You agree it's not a requirements contract?

[00:09:04] Speaker 03:
I agree it's not a requirements contract.

[00:09:06] Speaker 03:
So the Coast Guard wasn't obligated to buy all of the suits from you, it was just obligated to buy a set amount, right?

[00:09:12] Speaker 05:
That's exactly our point.

[00:09:14] Speaker 05:
They were obligated to buy 777 suits from USIA.

[00:09:19] Speaker 03:
So why is their choice to buy some other number of suits from a different company a breach?

[00:09:27] Speaker 05:
Simply the purchase from another company would not be a breach.

[00:09:32] Speaker 05:
The point is that they bought those suits from Coca-Tac as replacements for 423 of the 777 suits that they purchased from USIA.

[00:09:44] Speaker 05:
Not only that, if you look at the, I think it's page seven of the board's decision, it points out that every dollar that the Coast Guard spent on suits, replacement suits, including the ones from Mustang,

[00:10:02] Speaker 05:
They tried to charge USIA for that, 627.

[00:10:05] Speaker 03:
Sure, but the board didn't give them that kind of reprocurement cost.

[00:10:10] Speaker 03:
So that issue isn't really before us, is it?

[00:10:12] Speaker 05:
Yes, it is.

[00:10:13] Speaker 05:
Because it's not the reprocurement cost per se that they can collect it here that's an issue.

[00:10:19] Speaker 05:
The issue is that they tried to collect that from USIA because they were claiming they were replacement suits.

[00:10:28] Speaker 05:
That's the point.

[00:10:29] Speaker 05:
They were saying,

[00:10:30] Speaker 05:
We bought 423 suits from Coca-Tat on January 28th and April 20th, 2011, even though we'd agreed to wait till retesting was done, which was July 25th, 2011.

[00:10:46] Speaker 03:
Then they turned around and said, I really, I fail to see how that can be a breach though.

[00:10:53] Speaker 03:
I mean, if it had turned out that your suits had all tested fine and they had accepted them,

[00:10:58] Speaker 03:
And then the Coast Guard had said, well, we already bought these.

[00:11:01] Speaker 03:
We're not going to buy your full order.

[00:11:04] Speaker 03:
Then that might have been a breach because they were obligated to buy up to 700 from you.

[00:11:08] Speaker 03:
But it didn't place a limit on how many they could buy from anybody else.

[00:11:12] Speaker 03:
So why is it a breach that they went out and purchased some from another company, even if they're categorized as replacement?

[00:11:20] Speaker 05:
Well, it's a matter of time.

[00:11:22] Speaker 05:
They had no right to buy replacement suits.

[00:11:25] Speaker 05:
Even the board acknowledged that.

[00:11:27] Speaker 03:
Well, the board acknowledged it in the context of a reprocurement request.

[00:11:30] Speaker 03:
And certainly, because they didn't wait to see if your suits failed or not, then they couldn't get reprocurement costs, because you hadn't defaulted yet.

[00:11:40] Speaker 03:
But again, terming them replacement or not, they were legally entitled to go buy suits from somebody else, right?

[00:11:48] Speaker 05:
If they wanted to buy additional suits, that was their prerogative, Your Honor.

[00:11:54] Speaker 04:
In those terms, I assume that it was not actually a breach at that time because the government's obligation was merely to pay upon receipt for $777.

[00:12:08] Speaker 04:
They didn't breach that.

[00:12:11] Speaker 04:
But sometimes a party can repudiate in advance

[00:12:17] Speaker 04:
an obligation of performance.

[00:12:20] Speaker 04:
What I don't see is how you established that the February purchase of 149 suits from Coca Tech was a repudiation of the obligation to pay for 777 if and when they got them.

[00:12:36] Speaker 04:
That is, I don't see a record that says there was no way in the world that government was going to buy 926 suits.

[00:12:46] Speaker 04:
Well, I see it differently, your honor.

[00:12:48] Speaker 04:
Where is the evidence?

[00:12:50] Speaker 04:
Where is the evidence that just because they bought 149 suits in February from Coke Attack, that they would, if and when you delivered the full 777, say no thank you, we won't pay for all 777 because we don't need all of them anymore.

[00:13:13] Speaker 05:
Well, they claimed in their amended complaint and other pleadings and in the stipulation of facts that these were in fact replacement suits.

[00:13:23] Speaker 05:
And then they tried to charge USIA for the value of those replacement suits.

[00:13:29] Speaker 05:
So the law is clear.

[00:13:30] Speaker 05:
You can't go out and buy replacement suits before the termination of the contract.

[00:13:36] Speaker 05:
And that's what they did.

[00:13:37] Speaker 05:
And even after the termination of the contract, the only benefit that you get is you have

[00:13:43] Speaker 05:
You can expedite.

[00:13:44] Speaker 04:
Procedurally, how did this come up in the board?

[00:13:47] Speaker 04:
Because it sounds like you're saying that their assertion that these were replacement suits, even though the board rejected it on another issue, automatically establishes that the February purchase from Coke Attack was a repudiation.

[00:14:05] Speaker 04:
that relieved you of your further performance application.

[00:14:08] Speaker 05:
Is that?

[00:14:09] Speaker 05:
Absolutely, your honor.

[00:14:10] Speaker 05:
If they say they bought a misreplacement suit, why can't I take their word for that?

[00:14:13] Speaker 05:
So how did procedurally, how was this presented to the board?

[00:14:18] Speaker 05:
They put it in their complaint.

[00:14:20] Speaker 05:
Then they modified their complaint, did an amended complaint.

[00:14:23] Speaker 05:
And then I've got, they had an operative.

[00:14:26] Speaker 05:
We put in an affirmative defense that they materially breached.

[00:14:31] Speaker 05:
In our answer, they materially breached

[00:14:34] Speaker 05:
the contract by purchasing replacement suits.

[00:14:39] Speaker 05:
And then the government asked for an opportunity to respond to our affirmative defenses.

[00:14:46] Speaker 05:
And they reaffirmed again that they purchased replacement suits but claimed that they were entitled to do it because we didn't have a requirements contract.

[00:14:54] Speaker 05:
And that's totally irrelevant because we had a fixed price contract with 770 suits in under Stone Forest in similar cases.

[00:15:04] Speaker 05:
They can't just take away the 423 suits.

[00:15:08] Speaker 03:
Where in the record, besides this description of these as replacement suits, does it ever suggest that the Coast Guard wouldn't have bought all of the ones that it contracted for you with if they proved satisfactory?

[00:15:25] Speaker 03:
Well, there isn't anything there.

[00:15:28] Speaker 03:
My problem is that by describing them as replacement suits,

[00:15:33] Speaker 03:
and trying to get re-procurement costs, which the board found was improper, you're saying that evidence is their intent not to fulfill their order with you.

[00:15:42] Speaker 03:
But I don't see anything that suggests that the Coast Guard said, we're not going to fulfill our contract with you.

[00:15:48] Speaker 05:
By virtue of saying they're replacement suits, that's saying it right there.

[00:15:54] Speaker 05:
I mean, they're the ones that said they're replacement suits.

[00:15:57] Speaker 05:
They repeatedly said it.

[00:15:59] Speaker 05:
tried to charge USIA for those costs, the board said that's improperly.

[00:16:04] Speaker 03:
So that would be after the contract was defaulted, right?

[00:16:07] Speaker 03:
Not during the performance of your contract when they were doing the testing on all the suits.

[00:16:11] Speaker 03:
They never evidenced any intent not to go through with your contract until your goods didn't fulfill the testing requirements.

[00:16:19] Speaker 05:
Well, that's true.

[00:16:20] Speaker 05:
They didn't tell us about it until the suit was filed.

[00:16:23] Speaker 05:
And they filed the appeal file, and we found out about that.

[00:16:28] Speaker 05:
So that's our point.

[00:16:30] Speaker 05:
There was no waiver.

[00:16:30] Speaker 03:
Let me ask you this a different way.

[00:16:33] Speaker 03:
If your suits had fulfilled the testing requirements and the Coast Guard had went ahead and purchased all 700 and some that they'd ordered from you, would their other purchase from the other company constitute a breach?

[00:16:50] Speaker 05:
Well, if they wound up paying USIA, of course not.

[00:16:54] Speaker 05:
they had already determined that they were replacement suits.

[00:17:00] Speaker 05:
I mean, they're the ones that claimed it.

[00:17:04] Speaker 04:
Can I switch topic before your opening argument time elapses?

[00:17:13] Speaker 04:
You complained that the testing that was done, particularly the July testing by the Navy, did not

[00:17:23] Speaker 04:
comply with certain conditions on what you describe as proper testing.

[00:17:29] Speaker 04:
What specific conditions were not met in that testing?

[00:17:34] Speaker 04:
And what was the source of those conditions?

[00:17:38] Speaker 04:
In particular, why were they contractual obligations?

[00:17:45] Speaker 05:
OK.

[00:17:46] Speaker 05:
I spell them out in the brief, but the

[00:17:50] Speaker 05:
The primary source is the maintenance procedure that's called out in the contract, paragraph 8.2.

[00:17:58] Speaker 04:
I understand that the maintenance procedure is part of the contract.

[00:18:03] Speaker 04:
What condition in the maintenance procedure was not followed in the testing?

[00:18:08] Speaker 05:
OK, the maintenance procedure says there's a leak if there is a soak spot

[00:18:15] Speaker 05:
Or if there are soaked socks, they did not follow that procedure.

[00:18:20] Speaker 05:
They used a less stringent standard.

[00:18:22] Speaker 05:
It says to put it under garments.

[00:18:25] Speaker 05:
And during the trial, that was indicated that that was the same thing as in the rescue and survival systems manual, which is the polypropylene first layer and the fleece second layer.

[00:18:38] Speaker 05:
Now, the fleece second layer sheds water.

[00:18:41] Speaker 05:
It doesn't absorb water.

[00:18:43] Speaker 05:
Instead, they used a 65%

[00:18:45] Speaker 05:
cotton, which absorbs water.

[00:18:48] Speaker 05:
And cotton also spreads the water.

[00:18:53] Speaker 05:
Therefore, it appears to be wetter than it is.

[00:18:56] Speaker 05:
It is supposed to be soaked, not just damp or anything like that.

[00:19:02] Speaker 05:
Then they also wore wristwatches.

[00:19:05] Speaker 04:
No, I think I understand actually the facts that you identify as being problematic, what I am unclear about.

[00:19:15] Speaker 04:
is precisely which ones of those facts come from which sources and why those particular sources are part of the contractual obligation as opposed to the user's manual or something else that may or may not be part of the contractual obligation for how they have to determine whether the goods are defective.

[00:19:37] Speaker 05:
OK.

[00:19:37] Speaker 05:
The risk watches are mentioned in the user manual, which both parties agreed would be used.

[00:19:42] Speaker 04:
Postparties agree would be used.

[00:19:45] Speaker 04:
I'm not sure what that means, that their testing contractually must follow user manual instructions in order to decide whether something is defective.

[00:19:57] Speaker 05:
The user manual was not incorporated into the contract.

[00:20:00] Speaker 05:
So why is it relevant?

[00:20:01] Speaker 05:
Because any user manual, if you buy any item, you're supposed to comply with the user manual.

[00:20:10] Speaker 05:
And the government agreed that they had to comply with the user's manual.

[00:20:14] Speaker 05:
In fact, they did.

[00:20:15] Speaker 04:
So the government agreed that testing out of compliance with the user's manual would be a contract violation?

[00:20:23] Speaker 05:
Yes.

[00:20:24] Speaker 04:
Do you happen to have a site for that?

[00:20:26] Speaker 05:
Well, CW Shea pointed out, I asked him if he'd comply with the user's manual.

[00:20:34] Speaker 05:
And he said, absolutely.

[00:20:38] Speaker 05:
Jerry Lang told the contracting officer that they needed to comply with the user banter, and he said they did.

[00:20:46] Speaker 05:
There was agreement on that.

[00:20:47] Speaker 05:
The rescue and survival systems manual, that is an overarching manual that also includes the wristwatches, the different types of undergarments that you're supposed to wear.

[00:21:05] Speaker 05:
But the important thing here, too, is that

[00:21:09] Speaker 05:
Regardless of what the source is, if you wear cotton, it's going to absorb water.

[00:21:15] Speaker 05:
If you're wearing fleece, which is a synthetic wool, it's not going to.

[00:21:20] Speaker 05:
And the cotton is going to look like it's wet, even though it may be just a little bit damp.

[00:21:28] Speaker 05:
Whereas the fleece would shed the water.

[00:21:30] Speaker 05:
It would just get little balls of water, and that's it.

[00:21:35] Speaker 04:
So you are into your rebuttal time?

[00:21:37] Speaker 04:
I'm well into it.

[00:21:39] Speaker 04:
So why don't we give the government a chance to argue, and we'll get from you afterwards.

[00:21:45] Speaker 02:
Thank you.

[00:21:53] Speaker 02:
May it please the court, on the question of the purchases from third parties of the additional suits, there's no evidence in the record that that was done

[00:22:05] Speaker 02:
to preclude purchases from USIA.

[00:22:10] Speaker 04:
What did the government mean when, or what did you mean when you asserted as a claim these were replacement suits?

[00:22:18] Speaker 04:
How does that not mean that the 149 we bought from Coca-Tac were going to be subtracted from what we were going to buy from USIA?

[00:22:31] Speaker 02:
First of all, there is the testimony at trial from the contracting officer.

[00:22:35] Speaker 02:
at A32 of the appendix, it's transcript 32 to 33, where he testifies that they were hoping that the suits would pass the immersion test so that they could purchase them.

[00:22:48] Speaker 02:
In terms of the legal defense that was being raised at the board, there was a warranty provision, and the argument was made that there was a breach of the warranty provision

[00:22:59] Speaker 02:
by providing suits that did not pass the immersion test.

[00:23:02] Speaker 02:
I'm not saying that this is a good argument or that the government is continuing to make that argument.

[00:23:08] Speaker 04:
I'm not understanding how what you just said is responsive to my question.

[00:23:12] Speaker 04:
I take it that you said, we terminate the contract because your goods are defective.

[00:23:19] Speaker 04:
They say, we didn't any longer after February, after the government bought 149 suits from

[00:23:28] Speaker 04:
have any performance obligation anymore.

[00:23:31] Speaker 04:
And the reason we didn't is that that was, in fact, by the government, a repudiation of its contractual obligation to buy 777 suits if and when they were delivered in non-defective form.

[00:23:47] Speaker 04:
Why is that argument wrong, either as a matter of law or unsupported by the evidence, the evidence consisting of the government's own assertion

[00:23:57] Speaker 04:
that it bought 149 suits from Coke Attack in February to replace what it was going to buy from USIA.

[00:24:06] Speaker 02:
The government still had a need to purchase additional suits as the contracting officer testified at trial.

[00:24:15] Speaker 02:
Where is that?

[00:24:16] Speaker 02:
As I said, it's at A32, transcript pages 32 to 33.

[00:24:21] Speaker 02:
It's appendix 32.

[00:24:24] Speaker 04:
And furthermore... That testimony says that the government was prepared to buy 926 suits.

[00:24:31] Speaker 02:
It doesn't go into numbers, Your Honor, but it does say that they were hoping that they would pass so that they could purchase the suits.

[00:24:39] Speaker 02:
There was still a need to purchase suits.

[00:24:44] Speaker 02:
Also, there's testimony from

[00:24:48] Speaker 02:
the government witnesses at the trial that the reason the purchases were made was because there was training that had to be conducted and they needed suits at that time for that training.

[00:25:00] Speaker 02:
That doesn't take away from the need to get additional suits under the USIA contract.

[00:25:06] Speaker 04:
I'm not sure exactly what you mean by additional.

[00:25:10] Speaker 04:
Suppose that the government was going to need 777 suits for the next five years.

[00:25:17] Speaker 04:
It had a contract to buy 777 suits from USIA.

[00:25:22] Speaker 04:
It didn't say everything we need.

[00:25:24] Speaker 04:
It wasn't a requirement contract.

[00:25:25] Speaker 04:
But suppose it were clear that once it bought 149 from somebody else, it absolutely had no need to buy 777 anymore.

[00:25:36] Speaker 04:
And so their purchase of, what, 20% or something

[00:25:40] Speaker 04:
Um, from somebody else meant as sure as could be meant that they were not going to fulfill their obligation to pay for 777 suits from USIA.

[00:25:52] Speaker 04:
Why would that not be a repudiation?

[00:25:55] Speaker 04:
And does the record in fact support all the assumptions that I just built in?

[00:25:59] Speaker 02:
No, the record doesn't support it.

[00:26:01] Speaker 02:
And I'm not disputing that there could be a repudiation in such a case as hypothetical as the court is outlining.

[00:26:07] Speaker 02:
What I'm pointing out here is the contracting officer specifically testified that there was still a need to purchase these suits.

[00:26:17] Speaker 02:
And they were hoping that they would pass the immersion test.

[00:26:22] Speaker 02:
And in fact, the government, the Coast Guard paid the Navy thousands of dollars to conduct this immersion test.

[00:26:32] Speaker 02:
And with the anticipation that if it

[00:26:34] Speaker 02:
If they had passed, then they could have gone ahead and purchased suits for the government's needs.

[00:26:41] Speaker 02:
And I cited you to the appendix page 32.

[00:26:45] Speaker 04:
And which of the four main pages is the testimony that you were referring to?

[00:26:53] Speaker 02:
It's transcript page 32 to 33.

[00:27:03] Speaker 04:
This is the line that says it seemed like, and we actually hoped that the product would work.

[00:27:07] Speaker 04:
That's it.

[00:27:08] Speaker 02:
Yes, yes.

[00:27:09] Speaker 02:
And there's also testimony.

[00:27:11] Speaker 04:
That doesn't necessarily mean anything other than it was perfectly happy to, it was hoping that USIA would end up supplying 777 minus 149.

[00:27:22] Speaker 04:
I said it didn't go to numbers.

[00:27:25] Speaker 04:
Right, but that's the whole question.

[00:27:26] Speaker 04:
The whole question is whether having bought

[00:27:29] Speaker 04:
20% of the number in the USIA contract from somebody else, that meant you were absolutely not going to buy that number from USIA.

[00:27:41] Speaker 04:
And you called them replacement suits.

[00:27:43] Speaker 04:
That's the problem.

[00:27:44] Speaker 02:
It was done in litigation.

[00:27:47] Speaker 02:
In litigation, the assertion was made that it was a replacement suit.

[00:27:51] Speaker 02:
And as I said, there was a warranty provision.

[00:27:54] Speaker 02:
And the government was making an argument under the warranty provision at that time.

[00:27:59] Speaker 02:
that there was a breach of warranty.

[00:28:01] Speaker 02:
I'm not saying that that's a good argument.

[00:28:03] Speaker 02:
We're not making that argument today.

[00:28:05] Speaker 02:
But that's the argument that was made below.

[00:28:08] Speaker 02:
And I would point out that the board did find a lack of jurisdiction on the question of whether the government could recover any monies for reprocurement costs.

[00:28:21] Speaker 02:
The board did distinguish between the different purchases.

[00:28:25] Speaker 02:
There were some purchases made.

[00:28:28] Speaker 02:
prior to the termination for default, and then there was a purchase made after the termination for default.

[00:28:33] Speaker 02:
With regard to the purchase after the termination for default, the board indicated that that possibly might support a reprocurement claim, but not the other purchases.

[00:28:44] Speaker 04:
Did USIA make a repudiation defense to your termination for cause claim?

[00:28:56] Speaker 02:
They phrased it as a breach of the

[00:28:58] Speaker 02:
duty of good faith and fair dealing.

[00:29:01] Speaker 02:
I didn't see specifically mention of repudiation.

[00:29:05] Speaker 02:
I read it as a breach of the duty of good faith and fair dealing.

[00:29:10] Speaker 02:
I think that's what certainly their main thrust is.

[00:29:15] Speaker 02:
I didn't read their papers as saying repudiation.

[00:29:23] Speaker 02:
The second issue that was raised today has to do

[00:29:26] Speaker 02:
with the testing itself.

[00:29:28] Speaker 02:
And the court asked, well, which documents are part of the contract?

[00:29:33] Speaker 02:
And it is the maintenance procedure that is part of the contract.

[00:29:39] Speaker 02:
That was an attachment.

[00:29:42] Speaker 02:
It was incorporated into the contract.

[00:29:45] Speaker 02:
And that would be at pages, it's in the appendix at multiple times.

[00:29:50] Speaker 02:
For example, at pages 127 to 30.

[00:29:53] Speaker 02:
The other two documents are separate documents.

[00:29:56] Speaker 02:
One is the user manual and that, as USIA agrees, was not part of the contract.

[00:30:03] Speaker 02:
The other document is the rescue and survival manual.

[00:30:07] Speaker 02:
That also was not part of the contract.

[00:30:10] Speaker 02:
There's nothing in the contract that purports to incorporate the rescue and survival manual.

[00:30:16] Speaker 04:
And is it the rescue manual that says the water should be cold?

[00:30:21] Speaker 04:
It's the user manual.

[00:30:23] Speaker 04:
The user manual.

[00:30:23] Speaker 02:
The user manual.

[00:30:25] Speaker 04:
Mr. Billings, I think when he was standing up here, suggested that the government agreed that the testing had to be, under the contract, had to be in accordance with the user manual.

[00:30:38] Speaker 02:
That's not supported.

[00:30:40] Speaker 02:
What actually happened is there were several rounds of testing, as the court would recall.

[00:30:44] Speaker 02:
There are two rounds of testing in January and then the round of testing in July by the Navy.

[00:30:51] Speaker 02:
This has to do with the rounds of testing that were done by the Coast Guard itself.

[00:30:56] Speaker 02:
First three suits were tested.

[00:30:58] Speaker 02:
They didn't pass.

[00:30:59] Speaker 02:
Then there was a more extensive testing in January.

[00:31:03] Speaker 02:
Those suits didn't pass.

[00:31:05] Speaker 02:
And it was Mr. Shea of the Coast Guard who testified with regard to the testing that was done in January.

[00:31:13] Speaker 02:
And in his testimony, he explains that the

[00:31:21] Speaker 02:
There's the three suits, then the more extensive testing, and then another round of more extensive testing.

[00:31:27] Speaker 02:
During the first round of more extensive testing of the suits, they're not all wearing polyester.

[00:31:35] Speaker 02:
It's in the final round in January, where some of the test subjects wear polyester.

[00:31:44] Speaker 04:
What about July?

[00:31:47] Speaker 04:
Was everything in the user manual or the maintenance procedure followed in the July testing?

[00:31:57] Speaker 02:
Yes, yes.

[00:31:58] Speaker 04:
Including the user manual?

[00:32:00] Speaker 02:
No, no.

[00:32:01] Speaker 02:
Not the user manual?

[00:32:02] Speaker 02:
No.

[00:32:02] Speaker 02:
The user manual is the one that requires cold temperatures, requires cotton undergarments, and what I would point out.

[00:32:12] Speaker 04:
Non-cotton.

[00:32:13] Speaker 04:
Non-cotton.

[00:32:14] Speaker 02:
Correct.

[00:32:15] Speaker 02:
Correct.

[00:32:15] Speaker 02:
Actually two layers.

[00:32:16] Speaker 02:
Polyester and then a fleece on top.

[00:32:19] Speaker 02:
And what I wanted to point out about Mr. Shea's testimony was Mr. Shea at the Coast Guard testified that it's only when you're actually in cold water that you have to wear the polyester undergarments.

[00:32:37] Speaker 02:
You don't have to wear

[00:32:38] Speaker 02:
polyester when you're doing the testing itself.

[00:32:41] Speaker 02:
That's what he testified to.

[00:32:43] Speaker 02:
Now, as I said, during some of the testing by the Coast Guard, they did use polyester.

[00:32:49] Speaker 02:
Not fleece on top, but they used polyester.

[00:32:52] Speaker 02:
And it's that testimony that I think USIA is relying upon.

[00:32:56] Speaker 04:
What about the focus, USIA's focus on the word soaked?

[00:33:03] Speaker 02:
Here, if you look at the report for the Navy testing,

[00:33:09] Speaker 02:
The Navy testing, in most of the cases, states that they are wet from the waist down.

[00:33:19] Speaker 02:
And this is confirmed in the video where the undergarments are padded by Mr. Lawson.

[00:33:28] Speaker 02:
And he pats the undergarments, and he states that they are wet from the waist down.

[00:33:34] Speaker 02:
These are soaked.

[00:33:35] Speaker 02:
They are wet from the waist down.

[00:33:38] Speaker 02:
In many cases, eight of the post-cure suits are documented in the report as being wet from the waist down.

[00:33:47] Speaker 02:
There was one that is wet with the legs and the feet.

[00:33:51] Speaker 02:
So this is, as Mr. Lawson testified, the amount of wetness is something more than anyone could sweat.

[00:33:59] Speaker 02:
These are soaked from the waist down.

[00:34:02] Speaker 02:
Now to point to his testimony, it's appendix page 96.

[00:34:06] Speaker 02:
That would be transcript 286 to 87.

[00:34:09] Speaker 02:
And this is specifically mentioned by the board.

[00:34:13] Speaker 02:
The board cites his testimony and credits his testimony with stating that the amount of wetness is more than anyone could sweat.

[00:34:25] Speaker 02:
And then finally, as was testified at the hearing, there is a safety issue here.

[00:34:33] Speaker 02:
We can't have Coast Guard members out there in dry suits that leak.

[00:34:42] Speaker 04:
Can I ask you a question about one sentence in the contract that I didn't quite understand?

[00:34:49] Speaker 04:
And I'm looking at appendix page A119 at the very, very top.

[00:34:56] Speaker 04:
This is the last sentence of clause E6, the non-acceptance of items.

[00:35:02] Speaker 04:
There's a sentence that says, repair shall not be a cure for items that are not accepted.

[00:35:13] Speaker 04:
What does that mean, and how does that fit with what I guess I was assuming, which is that you agreed that they did have some right to cure defects?

[00:35:29] Speaker 04:
I'm not sure anything turns on it, but since all of this seemed to be about a multi-month seemingly agreed upon opportunity to cure the initial problem and an ultimate conclusion that they had not cured the problem, I wasn't sure what to make of a sentence that said, repair shall not be a cure for items that are not accepted.

[00:35:53] Speaker 02:
I'm not sure that it has application in the circumstances of this case.

[00:35:58] Speaker 02:
What we're concerned about here is suits that leak.

[00:36:02] Speaker 02:
They fail an immersion test.

[00:36:04] Speaker 02:
And it was stated specifically that they had to pass an immersion test.

[00:36:09] Speaker 02:
And further, if they leak, that they fail the immersion test.

[00:36:14] Speaker 02:
So I'm not sure that that has an application in the circumstances of this case.

[00:36:21] Speaker 02:
Accordingly, here,

[00:36:24] Speaker 02:
USIA provided the government with suits that leaked.

[00:36:29] Speaker 02:
This included the post-cure suits that were tested by the Navy.

[00:36:34] Speaker 02:
And as shown in the test results, Mr. Lawson's testimony, and in the video, these suits did in fact leak.

[00:36:41] Speaker 02:
And there's been no showing that USIA, by USIA, that the cause of the leakage was due to the government's actions.

[00:36:51] Speaker 02:
So it wouldn't fit under the FAR clause for excusable delay.

[00:36:56] Speaker 02:
The court is complete later.

[00:36:58] Speaker 02:
Thank you.

[00:37:06] Speaker 04:
Two minutes, please.

[00:37:09] Speaker 05:
Appreciate that.

[00:37:11] Speaker 05:
Your Honor, one point.

[00:37:14] Speaker 05:
It wasn't the breach of good faith and fair dealing with regard to the replacement suits.

[00:37:18] Speaker 05:
It was a pure breach of contract.

[00:37:21] Speaker 05:
That's what we argued.

[00:37:22] Speaker 05:
Asserted as a breach, not as a repudiation.

[00:37:25] Speaker 05:
That's correct.

[00:37:26] Speaker 05:
But it wasn't under the concept of good faith and fair dealing, just a pure breach.

[00:37:36] Speaker 04:
With regard to cold water.

[00:37:38] Speaker 04:
And I'm sorry, procedurally, you made that as a defense.

[00:37:43] Speaker 04:
Affirmative defense because the complaint was filed by the government.

[00:37:46] Speaker 04:
Right.

[00:37:46] Speaker 04:
And then was that issue tried?

[00:37:48] Speaker 04:
Yes.

[00:37:49] Speaker 04:
It was tried.

[00:37:50] Speaker 04:
Yes, Your Honor.

[00:37:52] Speaker 04:
OK.

[00:37:52] Speaker 04:
And I don't remember, so just remind me.

[00:37:55] Speaker 04:
The board said what about that affirmative defense?

[00:38:00] Speaker 05:
What the board said was that they had a footnote.

[00:38:05] Speaker 05:
It just said they considered all other arguments, and that was included in other arguments, and they disagreed.

[00:38:11] Speaker 05:
No merit to it.

[00:38:11] Speaker 05:
So that's all we have.

[00:38:13] Speaker 05:
It's in a footnote.

[00:38:16] Speaker 05:
With regard to the cold water issue, that is not in the user manual.

[00:38:22] Speaker 05:
It's in the rescue and survival systems manual at page A101 of the joint appendix.

[00:38:31] Speaker 05:
The user manual does call out.

[00:38:34] Speaker 05:
the survival systems manual with regard to undergarments.

[00:38:44] Speaker 05:
Both the user manual and the survival systems manual does say you're not supposed to wear wristwatches, things like that.

[00:38:51] Speaker 05:
But even if you didn't use those as a basis, it's common sense that you wouldn't use those because those could rip the seals.

[00:38:59] Speaker 05:
The same thing, even with regard

[00:39:01] Speaker 05:
Even if you don't use the user manual and the rescue and survival systems manual to say you don't wear cotton, the testimony of the government witnesses was that, yes, cotton will absorb moisture.

[00:39:20] Speaker 05:
And that could include perspiration at high temperatures that this was tested at and would mar the results.

[00:39:28] Speaker 05:
I think your time.

[00:39:30] Speaker 05:
I got it in 19 seconds.

[00:39:33] Speaker 04:
No, that's going in the wrong direction.

[00:39:35] Speaker 04:
Oh, I'm sorry.

[00:39:36] Speaker 04:
Thank you for your argument.

[00:39:37] Speaker 04:
And the case has been submitted.