[00:00:00] Speaker 04: The first case for argument is 151555, agility, logistics, services versus defense. [00:00:12] Speaker 04: Mr. Elwood, whenever you're ready. [00:00:14] Speaker 02: May it please the court, John Elwood for appellant. [00:00:17] Speaker 02: Agility performed a difficult and dangerous job of supporting U.S. [00:00:20] Speaker 02: military and reconstruction efforts in an active war zone. [00:00:24] Speaker 02: Now, years after receiving the benefit of Agility services, the United States is trying to avoid fair payment by saying that the U.S. [00:00:31] Speaker 02: contracting officers who disbursed U.S. [00:00:33] Speaker 02: funds in implementing these task orders were actually acting as Iraqi agents. [00:00:38] Speaker 00: But the United States wasn't a party to the contract, was it? [00:00:42] Speaker 02: I don't think the court actually has to decide that. [00:00:45] Speaker 02: The CPA signed or it was issued the umbrella contract. [00:00:49] Speaker 02: But our principal submission is that the task order is consistent with COAS professional, that each of the new task orders are new contracts. [00:00:57] Speaker 02: And those contracts were overwhelmingly issued in the names of US Army entities, the Project and Contracting Officer, the Joint Contracting Command. [00:01:06] Speaker 02: And not only were they issued in their names, they said payment will be provided by a US Army [00:01:10] Speaker 02: finance office in Tennessee. [00:01:14] Speaker 04: So I mean, everything about the- So on your original point though, I can't find it quite here, but wasn't there a provision in the contract that said that this supersedes task orders and so forth, that the task orders come within the umbrella and those rules supersede? [00:01:28] Speaker 02: It says, to the extent that they're inconsistent, that the umbrella contract governs. [00:01:32] Speaker 02: But to begin with, in December of 2004, the United States, in its own name, the Projects and Contracting Office, amended the umbrella contract to explicitly remove that limitation that it was DFI-funded contracts. [00:01:47] Speaker 02: And we say that is an amendment to that contract. [00:01:52] Speaker 01: But I guess what we're trying to figure out is, you know, we know that these United States contracting officers [00:01:58] Speaker 01: were serving as contracting officers on behalf of the interim Iraqi government. [00:02:04] Speaker 01: And so now your argument is somewhere along the way these contracting officers blurred the lines to such a degree, significant degree, that they were now, they began to serve in their standard role as contracting officers for the United States government. [00:02:21] Speaker 01: Is that? [00:02:22] Speaker 02: I'm not saying even that they blurred the lines that much. [00:02:24] Speaker 02: If you look at pages 877 to 78, [00:02:27] Speaker 02: their appointment papers actually appointed them to act in behalf of the United States government in implementing the umbrella contract. [00:02:38] Speaker 01: Right, but I think we have to take it as a launching point given for purposes of this appeal that it was very clear under the umbrella contract that the United States was not going to be liable for anything under the umbrella contract. [00:02:52] Speaker 01: And so what you need now [00:02:54] Speaker 01: to convince us of is that the task orders themselves somehow established and created separate new contracts that really are not governed by the umbrella contract. [00:03:05] Speaker 02: Well, a couple of things. [00:03:07] Speaker 02: First of all, the umbrella contract itself was amended to allow expenditure of DFI funds, and that was done in the name of the Projects and Contracting Office. [00:03:17] Speaker 02: But in addition to that, [00:03:22] Speaker 02: is the fact that it was treated as a government contract essentially at every point. [00:03:28] Speaker 02: At the point the task orders are signed, they are signed in the name of the government. [00:03:33] Speaker 02: And that is a sign that they are making it for purposes of the Contract Disputes Act. [00:03:37] Speaker 02: Throughout the course of the agreement, they are acting as though they are principles in that they are making modifications and amendments that they don't have the authority to do under the delegation from Iraq throughout. [00:03:52] Speaker 01: Well, wasn't it then the contractor's [00:03:56] Speaker 01: obligation to alert the other side if the task orders were going outside the scope of the contract? [00:04:04] Speaker 01: That's in page 657, the same page of the umbrella contract that says that the umbrella contract controls over any task orders to the extent there's a contract. [00:04:15] Speaker 02: But also I think one thing that's very important is the waiver of liability from the United States is a provision [00:04:21] Speaker 02: under a section of the contract that says, contract provisions applicable to seized invested Iraqi property or development fund of Iraq. [00:04:30] Speaker 02: And beginning with task order three, we're not talking about those contracts, those task orders. [00:04:33] Speaker 02: We're talking about ones that were funded with US funds that, by its own terms, that waiver doesn't apply to. [00:04:39] Speaker 02: At page J666, in bold all cap letters, in boldface type, it says, those are contract provisions applicable to DFI funds. [00:04:48] Speaker 02: These task orders are not DFI funds. [00:04:50] Speaker 02: And Judge Laurie was on the panel for Agility Project, a public warehousing company versus Mattis, in April of this year, where this court held that, you know, basically if the contract provision is, if a later amendment is inconsistent, then it, you know, it ceases to govern. [00:05:06] Speaker 01: And in this case, when they... When you say it ceases to govern, what is it? [00:05:09] Speaker 01: And govern what? [00:05:11] Speaker 02: The limitation on liability that's in the umbrella contract for DFI contracts ceases to govern [00:05:16] Speaker 02: when the United States amended the umbrella contract to make it possible to spend DFI funds. [00:05:23] Speaker 02: And I think that that is inconsistent with the idea that the United States wouldn't be liable when it amends the contract to spend US funds. [00:05:30] Speaker 02: And when it starts signing contracts in its own name that say payment will be provided by a US Army finance group in Tennessee, I don't think that that's consistent with the idea that the United States will be liable. [00:05:41] Speaker 02: At that point. [00:05:41] Speaker 02: Who amended the contract? [00:05:44] Speaker 02: The contract was amended by the Projects and Contracting Office, which is a U.S. [00:05:47] Speaker 02: Army group, in December of 2004. [00:05:49] Speaker 02: And that is, of course, after it had already issued a couple of DFI-funded contracts, one in its own name. [00:05:57] Speaker 02: And from that point forward, it was implemented. [00:05:59] Speaker 01: I guess the problem is we can't tell, really, or we can't be sure when actions are taking place to issue orders and things like this, whether, even if it's [00:06:10] Speaker 01: coming out of an office that's related to the U.S. [00:06:13] Speaker 01: military, whether it's the United States that's now having taken over the contract and taken over amending the contract and issuing task orders versus the United States in this peculiar context serving as [00:06:30] Speaker 01: basically an agent and a contracting officer for the Iraqi government. [00:06:34] Speaker 02: I disagree because remember the umbrella contract wasn't signed as, you know, PCO as agent for the Coalition Provision Authority. [00:06:41] Speaker 02: It was signed, it was issued by the Coalition Provision Authority. [00:06:44] Speaker 02: So if it were going to behave as it did in the umbrella contract, it would have said, you know, interim Iraqi government by PCO or something like that. [00:06:53] Speaker 02: Instead it just issued it in the name of the actual army office. [00:06:56] Speaker 04: Can I just walk you back a little, because I missed something in this that you were having with Judge Chan. [00:07:01] Speaker 04: There's a provision that says that the US isn't going to be liable to the contractor for any performances. [00:07:07] Speaker 04: What is your position about [00:07:09] Speaker 04: What effect that has? [00:07:11] Speaker 04: That that was obviated? [00:07:12] Speaker 04: That that was not part of what you were doing in the task orders? [00:07:15] Speaker 04: How do you get around that? [00:07:16] Speaker 02: That is at page JA 671. [00:07:18] Speaker 02: A few pages earlier, JA 666, it says, and this is under that, it says, contract provisions applicable to vested and seized Iraqi property and development fund of Iraq. [00:07:30] Speaker 02: And so by its own terms, that provision doesn't apply to US-funded contracts. [00:07:35] Speaker 02: That's our principal position. [00:07:37] Speaker 02: But secondly, [00:07:38] Speaker 02: even if it did for some reason, when the United States government, in its own name as Project and Contracting Office, amended the umbrella contract in December of 2004 and said, now we can spend U.S. [00:07:49] Speaker 02: funds under this. [00:07:50] Speaker 02: And they started spending U.S. [00:07:52] Speaker 02: funds under U.S. [00:07:52] Speaker 02: task orders. [00:07:54] Speaker 02: That that is inconsistent with the idea that there's going to be a waiver of U.S. [00:07:57] Speaker 02: liability. [00:07:57] Speaker 02: When it starts signing contracts in its own name that say, payment will be provided by a U.S. [00:08:02] Speaker 02: Army Finite Center in Tennessee, that is inconsistent. [00:08:05] Speaker 02: Just as in Agility versus Mattis, a provision that's still in the contract saying you can't store things on agility trucks, that when the government later caps payments at 29 days, that that is inconsistent with the idea that you can't store stuff on trucks during that time. [00:08:22] Speaker 01: Wasn't there something in some original memo or authorization that said that [00:08:26] Speaker 01: sources of funds could include US funds, not just DFI funds? [00:08:31] Speaker 01: And then ultimately, you're right, that there was a memo that ultimately issued later that expanded the ability to draw not only from DFI funds, but also from US funds. [00:08:41] Speaker 02: There was a coalition change. [00:08:44] Speaker 02: It eliminated a thing, limiting it to what is defined as Iraqi funds. [00:08:48] Speaker 02: But Iraqi funds were defined as development fund for Iraq funds. [00:08:52] Speaker 02: When it expanded that, what it essentially did is [00:08:55] Speaker 02: It said it's public funds. [00:08:56] Speaker 01: So I'm just trying to remember the record. [00:08:59] Speaker 01: Am I misremembering that there was something originally in a memo or authorization that said that US funds could potentially be used? [00:09:06] Speaker 01: Of course, for this umbrella contract, you are right. [00:09:09] Speaker 01: It talked about using DFI funds. [00:09:11] Speaker 01: But then I thought there was something before that that suggested there was a possibility of using US funds. [00:09:18] Speaker 01: Am I wrong? [00:09:18] Speaker 02: I'm not sure if I know what you're talking about. [00:09:22] Speaker 04: My recollection is that at least there was an amendment in December of 2004 which specifically allowed use of U.S. [00:09:30] Speaker 04: funds. [00:09:30] Speaker 04: Am I wrong about that? [00:09:31] Speaker 02: No, and that was made not by the Iraqi government, but by the Projects and Contracting Office. [00:09:38] Speaker 02: The United States government did that amendment in its own name. [00:09:41] Speaker 02: It wasn't allowed under the delegation from Iraq, you can see that at page 373, it wasn't allowed to make amendments. [00:09:48] Speaker 02: Instead, it amended it in its own name and said, you can use U.S. [00:09:51] Speaker 02: funds now. [00:09:52] Speaker 04: So they were amending the contract? [00:09:56] Speaker 02: They amended the umbrella contract, that's correct. [00:09:58] Speaker 02: And then each of the task orders issued under it are consistent with COAS professional. [00:10:05] Speaker 02: It's the established rule that new task orders are new contracts. [00:10:10] Speaker 04: And task orders 6 and 11 through 20... Will you say established rule that new task orders are new contracts? [00:10:16] Speaker 04: But again, can we start by talking about a provision that says [00:10:19] Speaker 04: that everything, at least inconsistent, everything's going to be governed by the provisions of the contract. [00:10:24] Speaker 02: But there are no further inconsistencies once the umbrella contract is amended to allow the expenditure of US funds. [00:10:31] Speaker 02: At that point, the inconsistency is done away with. [00:10:35] Speaker 00: Isn't there a question of your right to appeal to the board? [00:10:39] Speaker 00: Isn't there some relevant provision here that says you have to be subject to Iraqi law? [00:10:48] Speaker 00: There is not. [00:10:48] Speaker 00: Not subject to the CDA, but not even appealable to the board. [00:10:54] Speaker 02: Order 100 said that going forward, laws and regulations would provide it would be subject to Iraqi law. [00:11:04] Speaker 02: That did not mention existing contracts. [00:11:06] Speaker 02: And indeed, if you look at page JA 660, there's a reference to [00:11:09] Speaker 02: a defense FAR that itself says it's subject to American law. [00:11:15] Speaker 02: It's subject to the Contract Disputes Act. [00:11:17] Speaker 02: The Disputes Clause here itself references a FAR clause that says it's subject to the Contract Disputes Act. [00:11:22] Speaker 02: And so no. [00:11:23] Speaker 02: I mean, the contract itself specifies that at a minimum this will go to the Board of Contract Appeals. [00:11:30] Speaker 02: So no. [00:11:31] Speaker 02: We don't think that there is anything that takes us away from that. [00:11:33] Speaker 02: And on top of all of that, as I say, you have the government issuing in its own name [00:11:39] Speaker 02: these task orders, task orders 6 and 11 through 20. [00:11:42] Speaker 02: 15 through 20 were all issued after the delegation from Iraq expired completely. [00:11:48] Speaker 00: I don't know how that's supposed to be done as a delegation. [00:11:51] Speaker 00: Doesn't the contract say this contract is not subject to the CDA? [00:11:55] Speaker 02: It says that in a provision that, again, applies only to development fund for Iraq contracts. [00:12:02] Speaker 02: That's there in black and white, all bold letters, all capital letters on page JA666. [00:12:08] Speaker 02: And it says, [00:12:09] Speaker 02: It's not subject to the CDA there. [00:12:11] Speaker 02: But there's no reason to believe that would apply when the government starts in its own name. [00:12:16] Speaker 02: Again, this is the Projects and Contracting Office, a US Army entity. [00:12:19] Speaker 01: Another question I have is, is it necessarily so that if these contracting officers were operating outside the scope of the umbrella contract, does that necessarily translate to those contracting officers having created a binding contract with the United States versus the possibility that [00:12:38] Speaker 01: They're just operating outside of the original contract, period. [00:12:42] Speaker 01: Well, I think if you look at it... There's a lacuna, is what I'm wondering. [00:12:46] Speaker 02: Well, I don't think that there is a lacuna and that they are doing this in the name of the government. [00:12:52] Speaker 02: They're doing it, they're doing things they're not supposed to be able to do, which is spend non-DFI money. [00:12:58] Speaker 02: They're doing it after the expiration expires, the delegation expires completely. [00:13:03] Speaker 02: 15 through 20, tests for the 15 through 20 were all issued after the delegation expired completely. [00:13:08] Speaker 02: And they're doing things they don't have authority to do, which is expand, make amendments, and expand the total value of the contract. [00:13:16] Speaker 02: I mean, task order three alone was increased by $180 million. [00:13:20] Speaker 02: And by two years, it was extended. [00:13:22] Speaker 02: This isn't a foot fault that one contracting officer would do. [00:13:26] Speaker 02: And you have 26 contracting officers who did all the contracts here. [00:13:30] Speaker 02: And basically, there's two ways to look at this case. [00:13:32] Speaker 02: Either it is, as we say, and this is contracting officers doing what they do all day, every day, day in and day out. [00:13:38] Speaker 02: or it is a group of 26 contracting officers who are historically bad agents, who are literally exceeding virtually every limitation that is placed on the modest delegation of authority by Iraq. [00:13:50] Speaker 02: And I think that between the two of them, there's really only one explanation, which is that they were acting as principals, just like their appointment papers said, just like that's 877 to 878. [00:14:02] Speaker 02: And at 793, you have an internal government document that says, [00:14:06] Speaker 02: This agility is a primary contractor, a prime contractor. [00:14:10] Speaker 02: to the United States of America on the umbrella contract. [00:14:13] Speaker 04: So I guess, so your point is, even in the act that I don't want to use the word rogue agents, but even if they exceeded their authority, then let's accept that and say, so what are the consequences of that? [00:14:24] Speaker 04: And your answer is, if you exceeded your authority, that makes you a party to the contract. [00:14:28] Speaker 02: No, no, there's two ways. [00:14:29] Speaker 02: I think that it's first that it's not plausible that they were acting as that kind of rogue agents without anybody saying a word about it for numerous years, including afterwards. [00:14:40] Speaker 02: And again, remember, when they issued this, it wasn't a rogue agent. [00:14:43] Speaker 02: Rock Woodstock wasn't acting as a rogue agent. [00:14:45] Speaker 02: When he defintitized the contract and said, you owe the United States, not the Iraqi government, you owe the United States. [00:14:50] Speaker 04: But let's assume they acted outside of the scope of their authority. [00:14:54] Speaker 04: Then what is the consequence? [00:14:55] Speaker 02: The consequence is that they were liable to agility as for violating the implied warranty that they were acting within the scope of their agency. [00:15:02] Speaker 02: It's covered in our brief. [00:15:03] Speaker 02: But I mean, when they're saying we can do this, and they don't have authority to actually act as that, they become liable as agents. [00:15:11] Speaker 02: And if I could, I'd like to reserve my time for a while. [00:15:13] Speaker 02: Thank you. [00:15:28] Speaker 03: Good morning, Your Honors. [00:15:30] Speaker 03: Excuse me. [00:15:30] Speaker 03: May it please the Court? [00:15:32] Speaker 03: Your Honor, yes, this is certainly a peculiar context that we have here for this case. [00:15:37] Speaker 03: And there are not two ways to look at this case. [00:15:39] Speaker 03: As we say in this brief, there are three ways to look at this case, certainly the two options that Appalance mentioned. [00:15:45] Speaker 03: But the third is the plain meaning of the contract. [00:15:48] Speaker 03: And that is the United States officers here acted on the role as contract administrators. [00:15:55] Speaker 04: I would like to first- What about the funds question? [00:15:56] Speaker 04: What about the use of the US funds and people signing it on behalf of the US? [00:16:02] Speaker 03: Well, certainly that's the role of a contracting officer is to sign. [00:16:05] Speaker 01: Well, to be more specific, the other side is saying the umbrella contract was unambiguously limited to DFI funds. [00:16:14] Speaker 01: And then when all these task orders were getting pumped out, where the origin of the funds were not going to be DFI funds because those were exhausted, it was going to be US funds. [00:16:24] Speaker 01: Correct. [00:16:25] Speaker 01: And so now the other side is saying, aha, [00:16:28] Speaker 01: These are a different animal than what the umbrella contract was contemplating. [00:16:33] Speaker 01: So what's the answer to that? [00:16:34] Speaker 03: Well, Your Honor, the contract doesn't limit the source. [00:16:39] Speaker 01: You talked about DFI funds. [00:16:40] Speaker 01: It says it's going to be from DFI funds. [00:16:42] Speaker 03: It certainly does. [00:16:43] Speaker 03: And all the terms and conditions that are in the contract, which start on page 666 and run to at least page 671, those are all the terms of the contract. [00:16:55] Speaker 03: Everything's in there. [00:16:56] Speaker 03: There's a limitation of funds. [00:16:58] Speaker 03: There's the dispute clause, Your Honor, that mentions that this is not a CDA contract. [00:17:02] Speaker 03: There's the payment clause. [00:17:03] Speaker 03: There's the transition of authority clause. [00:17:05] Speaker 03: It's all in there. [00:17:08] Speaker 03: What appellants are now arguing is that when US funds were used, when the CPA and the Iraqi government chose to amend order number four through order number 100, because the Iraqi government did this, not the United States, as the appellant says, [00:17:26] Speaker 03: On June 28, 2004, the Iraqi government changed the ability to use US any funds. [00:17:32] Speaker 03: And this is page 400 of the record on these contracts. [00:17:38] Speaker 03: And later, as Your Honor mentioned, it was actually amended formally into the contract in December 2004. [00:17:43] Speaker 03: And the signature was by a US contracting officer. [00:17:46] Speaker 03: But all the signatures were done by US contracting officers. [00:17:49] Speaker 03: They were acting within their role. [00:17:51] Speaker 04: So you're saying there was a switch up, and they were allowed to do US funds, but that changes none of the consequences of the liability? [00:17:58] Speaker 03: That's correct. [00:17:59] Speaker 03: Because when the interim Iraqi government took over for the CPA, a successor interest, order number 100 was issued. [00:18:08] Speaker 03: It changed a lot of the previous order number four. [00:18:11] Speaker 03: Now, what was order number four? [00:18:13] Speaker 03: Order number four had many different things in it about contracting with the CPA. [00:18:17] Speaker 03: But one of the key things it has for relevant for today [00:18:20] Speaker 03: is a block set of contract terms. [00:18:23] Speaker 03: These terms were cut and pasted out of order number four and pasted into this contract, into the umbrella contract. [00:18:31] Speaker 03: And that's where you see joint appendix page 666 all the way through your honors 671. [00:18:39] Speaker 03: These are terms from order number four. [00:18:41] Speaker 03: These are terms that were amended when order number 100 came out. [00:18:47] Speaker 03: What appellants are arguing is that all these clauses disappeared from the contract when US funds were used. [00:18:54] Speaker 03: Certainly, why these contract clauses are in the contract is irrelevant to the fact that they are in the contract. [00:19:01] Speaker 03: They are bound by them. [00:19:03] Speaker 03: The terms are here. [00:19:05] Speaker 03: Now, certainly, they were amended by Order 100, but they were not removed, including the liability clause that says the United States is not liable for anything. [00:19:14] Speaker 04: So you're in a situation where what if the US government, obligating US funds, had never paid any US funds? [00:19:23] Speaker 04: Does this person have any recourse? [00:19:26] Speaker 03: Yes, the recourse here is under Iraqi law. [00:19:29] Speaker 03: The dispute clause was changed by order number 100 to say that Iraqi law would be used for disputes. [00:19:35] Speaker 03: And why does that make sense? [00:19:36] Speaker 03: Why is this logical, Your Honors? [00:19:38] Speaker 03: Because at that point, the successor in interest on this contract was the interim Iraqi government. [00:19:43] Speaker 04: But if the US was liable to pay the money, how would the US not be a necessary party even if the dispute were adjudicated under Iraqi law? [00:19:53] Speaker 03: Well, I think the answer to that would have to be under Iraqi law and an Iraqi court as to how the United States would be liable to Iraq for the funds that they propose to use for such a contract. [00:20:05] Speaker 03: It's beyond the scope of a joint appendix we have. [00:20:08] Speaker 03: I don't think that kind of material is in here. [00:20:09] Speaker 01: Well, I guess it's confusing because [00:20:12] Speaker 01: The contracting officers here were authorizing the use of US funds. [00:20:21] Speaker 01: So if the contractor felt like there was a breach of those task orders, you're saying they needed to go to the Iraqi government to go get money from where? [00:20:33] Speaker 01: From the US funds? [00:20:36] Speaker 03: Well, how the Iraqi government would pay, I'm not [00:20:40] Speaker 03: Sure, how the Iraqi government would pay this judgment. [00:20:42] Speaker 04: The U.S. [00:20:43] Speaker 04: is liable under the contract. [00:20:44] Speaker 04: The Iraqi government is not liable under the contract. [00:20:47] Speaker 03: I'm sorry, the United States is not liable under the contract. [00:20:49] Speaker 03: There's the clause that you mentioned earlier, Your Honor, that says, it's page 671, that following the transition of authority, the United States will not be liable on this contract. [00:20:59] Speaker 04: But if the US was supposed to obligate US funds for purposes of the tax orders, and they failed to do that, why then would recourse be against the Iraqi government? [00:21:13] Speaker 04: And how would the Iraqi government be the appropriate party then to seek redress from? [00:21:18] Speaker 03: Well, Your Honor, we're talking about who the contracting party is. [00:21:23] Speaker 03: Wherever you have contract privity, it's who you can sue. [00:21:26] Speaker 03: You can't sue a third party under the contract. [00:21:29] Speaker 03: They're not privity to said contract. [00:21:31] Speaker 03: To the extent the United States didn't provide money, which is certainly not our case, we've pulled money back here, Your Honors, then it would be a dispute between the Iraqi government and the United States as to why we promised to provide funds for one of their contracts and then did not provide it. [00:21:50] Speaker 03: But again, not the facts of the case we have here. [00:21:52] Speaker 04: But why does that make any difference? [00:21:53] Speaker 04: You took back the funds from another contract that was owed to compensate for what effectively you were doing, which is saying, we're not going to pay you this amount under this task order. [00:22:05] Speaker 03: Right. [00:22:06] Speaker 03: And those funds, well, first off, there has been a claim filed for the monies that have been set off. [00:22:12] Speaker 03: So that ultimately probably will be litigated one day, as your honor. [00:22:16] Speaker 03: But the United States at that point was acting as still as contract administrator and, you know, checking the contract for fraud, waste, or abuse, all the things that we were responsible to do under the various clauses of the contract. [00:22:30] Speaker 03: And to circle back to what the contract actually says here, Your Honor. [00:22:33] Speaker 01: I still need a little more clarification. [00:22:35] Speaker 01: If the task order says you're going to get $5 million from U.S. [00:22:40] Speaker 01: funds. [00:22:40] Speaker 01: Correct. [00:22:41] Speaker 01: Okay. [00:22:43] Speaker 01: The United States never coughs up that $5 million. [00:22:48] Speaker 01: And then they want to sue for those $5 million US fund dollars. [00:22:55] Speaker 01: Do they go to an Iraqi court to go get those US funds, or do they go somewhere else to get those US funds? [00:23:02] Speaker 03: Well, two things about that. [00:23:04] Speaker 03: Yes, they would go to an Iraqi court. [00:23:06] Speaker 03: But the question here is, Your Honor is calling them. [00:23:08] Speaker 01: And I'm wondering why is that if the task order authorized the funds to be from the United States, not from any Iraqi source? [00:23:18] Speaker 03: Because of contract privity with the Iraqi government, Your Honor. [00:23:21] Speaker 03: You can't sue outside of a contract another party. [00:23:24] Speaker 03: You have to sue the party you have contract privity with. [00:23:26] Speaker 03: Contract has a disfuse clause saying that it's governed under Iraqi law. [00:23:31] Speaker 03: I'm not sure if Iraqi government has its own type of judgment fund or something else that could be used in a similar situation. [00:23:37] Speaker 03: Iraqi law hasn't been presented in this case, as the board noted. [00:23:42] Speaker 01: So maybe I shouldn't be thinking of the funds like there's some red. [00:23:45] Speaker 01: Right. [00:23:45] Speaker 01: It's fungible, right? [00:23:46] Speaker 01: It's located in the United States Treasury account. [00:23:49] Speaker 03: It's fungible. [00:23:50] Speaker 03: Money is fungible, your honor, right? [00:23:52] Speaker 03: What is interesting about the argument the appellant is positing [00:23:58] Speaker 03: is that they are ignoring the terms of the contract, that there is this precedent clause on page. [00:24:03] Speaker 03: And I'm blanking right now, Your Honors. [00:24:06] Speaker 03: I apologize. [00:24:07] Speaker 03: There are a lot of pages in this contract. [00:24:10] Speaker 03: And the, oh, I'm sorry. [00:24:16] Speaker 03: I have it right here. [00:24:21] Speaker 03: I made a little cheat sheet and forgot about it here, Your Honors. [00:24:23] Speaker 03: It is page 657 of the record. [00:24:26] Speaker 03: This is the method of ordering clause. [00:24:28] Speaker 03: What is very interesting about the Kingdomware case, about the Coast professional case, which deals with GSA federal supply schedule contracts, is that they are wholly unlike the vehicle we have here today. [00:24:39] Speaker 03: GSA contracts are entered into with GSA, the contractor, and then any federal agency may come along and get an order underneath them. [00:24:51] Speaker 03: The terms of those contracts often change. [00:24:54] Speaker 03: I've seen many GSA FSS procurement competitions, there's also often competitions with them, where the new federal agent's trying to get a lower price or to change something slightly in the actual order. [00:25:06] Speaker 03: Here, we have a method of ordering clause that says the task orders are subject to the terms and conditions of the basic contract, and that the basic contract will take precedent in the event of a conflict with any of the task orders. [00:25:20] Speaker 03: Here, we have a completely different situation [00:25:23] Speaker 03: than the GSA FSS contract. [00:25:25] Speaker 03: We have task orders that are bound by the umbrella contract. [00:25:30] Speaker 03: And as the Court of Federal Claims... I'm sorry, did you say umbrella contract? [00:25:34] Speaker 03: Yes, the umbrella contract, Your Honor. [00:25:36] Speaker 03: And then, Your Honor, recently the Court of Federal Claims, looking at KingdomWare and Coastal Group, when there was an argument that all task orders are new contracts under KingdomWare and Coast professionals, [00:25:50] Speaker 03: said that that's not true. [00:25:51] Speaker 03: And I think the court of fellows claims was correct on this. [00:25:53] Speaker 03: They said, Kingdomware does not stand for the general proposition that all task orders are considered contracts as a matter of law. [00:26:00] Speaker 03: And if you look at page 1978 of Kingdomware, you see that these specifically rely on the fact that FSS contracts are not bound by the terms of the original contract. [00:26:11] Speaker 03: Unlike the situation we have here today, Your Honor, where this contract specifically says on page 657, [00:26:17] Speaker 03: You must look at the original terms of the contract. [00:26:20] Speaker 01: So what should agility have done going back in time? [00:26:25] Speaker 01: You know, we're in this wartime situation. [00:26:27] Speaker 01: There's contracting officers, you know, lighting up this umbrella contract like a Christmas tree, ordering things left and right. [00:26:39] Speaker 01: What should they have done to protect themselves? [00:26:42] Speaker 01: Exactly. [00:26:43] Speaker 01: If you feel like everything was so crystal clear, [00:26:46] Speaker 03: They made an attempt to protect themselves, Your Honor. [00:26:48] Speaker 03: And that's on page 785 of the record. [00:26:49] Speaker 03: There's an email sent to the contracting officer four days after the signing of the contract. [00:26:55] Speaker 03: This email points specifically to what is JA 671, the turnover of the CPA provision, saying that successor in interest will be the interim Iraqi government. [00:27:05] Speaker 03: And they say, well, we're not very comfortable with this clause that we've already signed. [00:27:09] Speaker 03: Maybe we can have a performance font. [00:27:11] Speaker 03: So they were looking for a way here to make sure that they would actually get paid. [00:27:15] Speaker 03: When it came down to it, they were paid, Your Honors. [00:27:17] Speaker 03: Now, there was some dispute over whether they were paid. [00:27:20] Speaker 03: Certain monies were paid too much here or too little there, but the money did come through. [00:27:24] Speaker 03: So four days after they signed this, they were well aware of the situation they were in. [00:27:28] Speaker 03: This is not a surprise that came upon them. [00:27:32] Speaker 03: And of course, they are certainly not left without a recourse here. [00:27:36] Speaker 03: As we mentioned, the dispute clause now says that Iraqi law governs this contract, and agility can go to Iraq [00:27:44] Speaker 03: I should mention the correct real interest in party, because we do dispute that Agility LSE is a real interest in party. [00:27:52] Speaker 03: And we believe that this court can affirm an alternative grounds there. [00:27:55] Speaker 03: But they can, whoever is the real interest in party, can go to Iraqi government. [00:28:02] Speaker 04: Isn't the liability would lie with the Iraqi government? [00:28:05] Speaker 03: Correct. [00:28:06] Speaker 03: And if any dispute over whether the United States was supposed to pay would be a dispute between the United States and Iraq. [00:28:12] Speaker 03: That would come subsequently to value partner. [00:28:14] Speaker 01: There's a litigation going on in Georgia right now. [00:28:18] Speaker 01: What is the status of that? [00:28:20] Speaker 03: The fraud litigation, Your Honor? [00:28:21] Speaker 03: I believe that's been settled. [00:28:23] Speaker 03: OK. [00:28:23] Speaker 03: Yes. [00:28:24] Speaker 03: And that kind of specific context that we're talking about here with the fraud, Your Honor, is exactly why we feel that it is important that Agility LSC does not exist, that a company that does not exist and never existed certified this claim here. [00:28:40] Speaker 03: If there is some sort of fraud or false statement made with this certification, there could be issues arising over the fact that a nullity signed the certification. [00:28:50] Speaker 04: But what do we do with that? [00:28:51] Speaker 04: If we just affirm the board, we don't have to go there or reach that equation? [00:28:54] Speaker 03: Well, yes. [00:28:54] Speaker 03: Basically, the board said the same thing in its remand decision, Your Honor, that since they already said there's no jurisdiction because of the CPA, there's no need to actually fully decide who the real interest, the party with the real interest here is. [00:29:10] Speaker 03: uh... but to the extent the court finds that this does fall under the cpa or there is a charter issue here which we believe is not in this court's jurisdiction anyway any remand would have to involve figuring out who the real party in interest actually is before anyone can actually get a final judgment on the decision of the board below the december four amendment six seventy-four record your honor [00:29:37] Speaker 01: Did he sign that on behalf of IIG or on behalf of the United States? [00:29:41] Speaker 03: Every action the United States took here was on behalf of the IIG unit, Your Honor. [00:29:45] Speaker 01: It says United States of America. [00:29:47] Speaker 03: Of course, Your Honor. [00:29:48] Speaker 03: I mean, they were acting as the contract administrators here. [00:29:53] Speaker 03: Things weren't carefully done. [00:29:54] Speaker 03: This is something that is recognized. [00:29:56] Speaker 03: I think there was 27 was a number of different contracting officers. [00:29:59] Speaker 03: It was said to us by appellate on here. [00:30:03] Speaker 03: The answer the United States put forth to the board mentions that a contractor officer was killed in the line of duty here. [00:30:10] Speaker 03: Records were destroyed. [00:30:11] Speaker 03: I think there was a warehouse fire destroying more records. [00:30:13] Speaker 03: Things weren't perfectly done here, Your Honor. [00:30:16] Speaker 03: But that doesn't create contract privity, nor does exceeding your authority, as Your Honor mentioned before. [00:30:23] Speaker 03: To the extent the court has no further questions, we respectfully request the court affirm the decision. [00:30:27] Speaker 03: Thank you. [00:30:31] Speaker 04: May it please the court. [00:30:34] Speaker 02: There's no inconsistency with task orders being issued by an entity different than the one that signs the umbrella contract. [00:30:42] Speaker 02: In Amoresco, the Department of Energy signed the umbrella contract, and the Department of Defense did the task orders. [00:30:48] Speaker 02: And in this case, the contract specifies that contracting officers can issue task orders. [00:30:55] Speaker 02: It doesn't say only on behalf of the Iraqi government. [00:30:59] Speaker 02: It says contracting officers can do it. [00:31:01] Speaker 02: and other places that says the government can do that and I think that that's a term that has to mean the United States in part because contracting officers defined as government employees and every contracting officer here was a United States employee and in addition you know there's some indemnity clauses that don't make any sense unless it's the government, the United States government being indemnified because it's to indemnify for Iraqi fines and Iraq isn't going to indemnify itself. [00:31:26] Speaker 02: So I think that it's impossible to say that there's any inconsistency between [00:31:30] Speaker 02: at the U.S. [00:31:31] Speaker 02: saying we have this umbrella contract here, maybe it's with the CPA, but we can issue individual task orders under it. [00:31:38] Speaker 02: And there's no inconsistency because it allows the expenditure of U.S. [00:31:41] Speaker 02: funds. [00:31:42] Speaker 02: Those contracts were made by the United States. [00:31:45] Speaker 02: They weren't signed as the CPA. [00:31:47] Speaker 02: They were signed by the Projects and Contracting Office or the Joint Contracting Command, both U.S. [00:31:51] Speaker 02: Army entities. [00:31:52] Speaker 02: They were signed saying payment will be provided by a U.S. [00:31:56] Speaker 02: Army finance center in Tennessee. [00:31:58] Speaker 02: So again, there is no inconsistency between the two of them. [00:32:01] Speaker 02: I know the government says it takes the position that everything done here was done as a US agent. [00:32:06] Speaker 02: They have to deal with the fact that that agency expired by its own terms in December of 2006. [00:32:11] Speaker 02: And when that government of Iraq re-upped that at page JA 377 of the Joint Appendix, it said, again, limited to DFI funds. [00:32:20] Speaker 02: And it said this is a limited number of contracts, because DFI funds, of course, were spent by that point. [00:32:26] Speaker 02: And it says they'll all be wrapped up by 2006. [00:32:29] Speaker 02: But this contract was not wrapped up by the end of 2006. [00:32:31] Speaker 02: As I say, 15 through 20 were all issued in 2007, where the government's authority as an agent was completely gone. [00:32:39] Speaker 02: 2008, they increased the total cost of 15 and 20. [00:32:45] Speaker 02: And in the 2009 audits, those were done for consistency with the federal acquisition regulation and US law. [00:32:52] Speaker 02: They weren't done for consistency with Iraq law. [00:32:55] Speaker 02: And they were done at the behest. [00:32:57] Speaker 02: If you look at the audit things, they were requested by U.S. [00:32:59] Speaker 02: agencies. [00:33:00] Speaker 02: They were distributed only to U.S. [00:33:01] Speaker 02: agencies, not to Iraq. [00:33:03] Speaker 02: And remember, at the end, Rockwood Stock, he wasn't a rogue agent. [00:33:07] Speaker 02: He said, you are indebted to the United States, not you're indebted to Iraq under these contracts. [00:33:13] Speaker 02: And they said, pay the United States Treasury. [00:33:15] Speaker 02: In addition, at the end of it, he said, you have CDA remedies. [00:33:19] Speaker 02: Remember, when he definatized all of these task orders, they looked perfectly like United States contracts. [00:33:27] Speaker 02: And there was no authority that the government had. [00:33:29] Speaker 02: They're saying now that they've been acting without authority since 2006. [00:33:32] Speaker 02: And the only explanation is, without anyone complaining, is that they were really acting, as they always do, with the United States as a party. [00:33:41] Speaker 04: Thank you. [00:33:42] Speaker 04: Thank you. [00:33:43] Speaker 04: Thank you. [00:33:43] Speaker 04: We thank both sides in the case to submit.