[00:00:06] Speaker 04:
The first case for argument this morning is 16-1345, De Danion Corporation versus Defense Logistics Agency.

[00:00:14] Speaker 04:
Mr. Kaufman, whenever you're ready.

[00:00:20] Speaker 02:
Good morning and with your permission.

[00:00:35] Speaker 02:
The board misused DCX and in doing so disturbed sound legal principles found in Burlington, Chenery, Chevron, the APA, the presumption of regularity doctrine, McDonald Douglas cases, and DCX itself.

[00:00:55] Speaker 02:
The board found SIRS accepted by the government and should have found a statutory or regulatory waiver resulted.

[00:01:03] Speaker 02:
The board created

[00:01:04] Speaker 02:
memorandum required by federal regulations that the government had admitted did not exist.

[00:01:14] Speaker 02:
The board allowed post hoc rationale to stand as contemporaneous considerations.

[00:01:21] Speaker 02:
The FAR clause language that is clear and unambiguous and conveys a right to the contractor were ignored.

[00:01:29] Speaker 03:
Why does

[00:01:31] Speaker 03:
49-4025 create a right in the contractor when DCX says that a similar provision does not create a right in the contractor.

[00:01:40] Speaker 02:
It's not Section 5, Your Honor, that creates the right.

[00:01:42] Speaker 02:
It's 4023C that creates the right.

[00:01:46] Speaker 03:
What does that say?

[00:01:48] Speaker 02:
4023C, specifically, starting in the middle of 4023C, indicates that, however, if the government has taken

[00:02:01] Speaker 02:
any action that might be construed as a waiver of the contract delivery performance date, the contracting officer shall send a notice to the contractor setting a new date for the contractor to make delivery or complete performance.

[00:02:15] Speaker 02:
And this final sentence is key.

[00:02:17] Speaker 02:
The notice shall reserve the government's right to use the default clauses.

[00:02:22] Speaker 02:
So failure to send that notice has consequence.

[00:02:25] Speaker 02:
And the board sort of dismissed that concept altogether.

[00:02:30] Speaker 02:
and ignored it in their findings.

[00:02:33] Speaker 03:
So, but that provision's been construed to just restate the general rule about waiver by the government, right?

[00:02:43] Speaker 02:
Not that I'm aware of.

[00:02:44] Speaker 02:
I have not found federal holding, case holding, by a court that limits the interpretation to 4023C.

[00:02:56] Speaker 03:
Well, the DeVito case came after that regulation, right?

[00:03:01] Speaker 02:
Correct.

[00:03:01] Speaker 02:
But it spoke to other forms of waiver, not statutory waiver or regulatory waiver.

[00:03:09] Speaker 03:
So you're saying this regulation goes beyond the DeVito requirements?

[00:03:13] Speaker 02:
It's different than the DeVito requirements.

[00:03:16] Speaker 02:
Correct.

[00:03:17] Speaker 02:
It's statutory in nature.

[00:03:18] Speaker 02:
It grants a contractual right unto the contractor, protecting them.

[00:03:23] Speaker 02:
And it also protects the government.

[00:03:26] Speaker 02:
The reason it's there, the reason that clause says that,

[00:03:30] Speaker 02:
is it specifically wants the government to be able to protect its rights under the default clause.

[00:03:42] Speaker 02:
DCX's explicit language indicates that the DCX case referred to section F of that same code or that same regulation.

[00:03:54] Speaker 02:
And that section doesn't convey any such rights.

[00:04:00] Speaker 02:
Here's what the contracting officer shall consider and gives a list.

[00:04:04] Speaker 01:
But there's nothing to say.

[00:04:06] Speaker 01:
DCX is about subsection four, right?

[00:04:09] Speaker 01:
In this case, it deals with five.

[00:04:13] Speaker 02:
My understanding is DCX addresses the specific seven steps of 49-4023F.

[00:04:25] Speaker 03:
So just to be clear, you're not arguing

[00:04:28] Speaker 03:
that 494025 was violated here.

[00:04:31] Speaker 02:
I am.

[00:04:32] Speaker 03:
You are, but then that comes back to my question.

[00:04:35] Speaker 03:
Why isn't this regulation just like the one at issue in DCX?

[00:04:39] Speaker 03:
It's not designed to benefit the contractor.

[00:04:42] Speaker 02:
It's not that it's a benefit.

[00:04:43] Speaker 02:
At that point, the violation of Section 5 goes to speak to the irregularities of the contracting officer's behavior and the lack of a contemporaneous record.

[00:04:52] Speaker 02:
There's no way it's prejudicial to the contractor

[00:04:55] Speaker 03:
You're not answering my question.

[00:04:57] Speaker 03:
Why isn't 4025 a provision just like the one in DCX, which isn't designed to benefit the contractor?

[00:05:05] Speaker 02:
It's in addition to the list of things in F, because it sort of memorializes the behavior.

[00:05:20] Speaker 02:
Five doesn't say, this is what you'll do to make your analysis.

[00:05:25] Speaker 02:
It says, this is what you do to show that you even went through the analysis.

[00:05:30] Speaker 02:
So that after the fact, we can look and see, what did the contracting officer do?

[00:05:35] Speaker 02:
What steps did they take?

[00:05:36] Speaker 02:
Who did they talk to?

[00:05:38] Speaker 02:
What analysis did they make about time, money, the proprietary nature of the agreements and the modifications?

[00:05:47] Speaker 02:
So without it, we're left just guessing at what the CO may or may not have done.

[00:05:53] Speaker 02:
So in that way, I believe that's how it's different.

[00:06:04] Speaker 02:
We also believe that the board found that the government accepted shipping requests, a fact that the CO denied, in error, in his termination notice.

[00:06:12] Speaker 03:
What do you mean, accepted shipping requests?

[00:06:15] Speaker 02:
The CSRS, in the court's finding, he indicated that the CSRS were accepted by the

[00:06:23] Speaker 03:
How are they accepted by being entered into the government system?

[00:06:27] Speaker 02:
And then the DCMA accepts them, begins to set up shipping dates, then they start corresponding about how many trucks do you need, how much is it going to weigh, when can we set up inspections.

[00:06:37] Speaker 02:
There's procedures that set up.

[00:06:39] Speaker 02:
The contracting officer is notified that that happens, and that's what prompts that requirement that he give notice.

[00:06:49] Speaker 02:
Again, 4023C at that point kicks in, and the contracting officer can say, well, wait a second.

[00:06:54] Speaker 02:
I don't accept that.

[00:06:55] Speaker 02:
And he could stop it.

[00:06:57] Speaker 02:
He can say, well, OK, I'll agree, but I don't agree with your dates.

[00:07:00] Speaker 02:
Here, I'll give you the new dates, and here's your notice.

[00:07:02] Speaker 02:
Well, you didn't even comply with your own dates, right?

[00:07:05] Speaker 02:
There was no delivery.

[00:07:06] Speaker 02:
That's correct, because we had no inspections.

[00:07:13] Speaker 01:
What do you mean you had no inspections?

[00:07:15] Speaker 02:
The timing of this is very odd.

[00:07:17] Speaker 02:
At the end of February, the inspector involved in the contract retired.

[00:07:24] Speaker 02:
So it took some time for a new inspector to be assigned to the case.

[00:07:28] Speaker 02:
During the month of March, there's communications in the record that indicate that they, Daniel, had contacted DCMA asking for new inspections to be set up, and the timing of those inspections just were never finalized.

[00:07:42] Speaker 03:
But I don't recall that you argued that you were entitled to a time extension here because the government failed to do the required inspections.

[00:07:53] Speaker 03:
No, that's just a fact.

[00:07:57] Speaker 03:
If you believed that you were entitled to a time extension based on the lack of inspection, you had to ask for one.

[00:08:04] Speaker 02:
Well, we hadn't been given the notice by the government, by the contracting officer, for an extension of the time

[00:08:11] Speaker 02:
to start.

[00:08:12] Speaker 02:
That would have been the appropriate first step.

[00:08:14] Speaker 04:
I don't understand.

[00:08:15] Speaker 04:
What kind of notice did you expect and when did you expect it?

[00:08:19] Speaker 02:
The contracting officer should have, in a reasonable time after the service was accepted by DCMA, the government, he should have notified all the parties involved that there's an extension or a new date for delivery determined and set that calendar.

[00:08:37] Speaker 02:
Once that calendar was set, then all the parties could have proceeded in

[00:08:41] Speaker 02:
properly scheduling inspections and properly setting up a delivery date, not just a proposed delivery date based on the CSRS that was submitted by the contractor.

[00:08:54] Speaker 01:
It seems odd that there would be scheduling dates set up when visits to the plant indicated that there was, you know, the situation was nowhere close to production.

[00:09:07] Speaker 02:
I think the danger with

[00:09:10] Speaker 02:
that phrasing or the phrasing in some of the language that you see in the record is that these are J-mix.

[00:09:17] Speaker 02:
I'm not a technical guy, but they're collapsible containers.

[00:09:22] Speaker 02:
And some of the essential parts of the production are actually showing how they're put together.

[00:09:28] Speaker 02:
So when Oppen-Sandano, who was the DCMA rep, would go and say, well, nothing's happening.

[00:09:37] Speaker 02:
Well, you've got hundreds of

[00:09:39] Speaker 02:
parts that have to come together.

[00:09:42] Speaker 02:
The coming together of those parts is part of the essential process in production.

[00:09:47] Speaker 02:
Also showing that that can happen and how that happens is also essential.

[00:09:51] Speaker 01:
But there were no parts, I mean, there was not even one product that had been assembled.

[00:09:57] Speaker 01:
It was so easy to assemble.

[00:10:01] Speaker 02:
I misspoke if I said anything was easy.

[00:10:02] Speaker 02:
I don't believe it's necessarily easy.

[00:10:04] Speaker 02:
I just think once everything would have been inspected and approved,

[00:10:08] Speaker 02:
the process could have accelerated quite quickly.

[00:10:10] Speaker 02:
And I believe that there's evidence in the record that they indicate that somewhere between 24 and 28 units per day, once the final inspection of the procedures of assemblage was accomplished, that would have been the output.

[00:10:27] Speaker 03:
Where does the contract say the government has to inspect the procedures for assembling as opposed to the product?

[00:10:38] Speaker 02:
I don't know.

[00:10:38] Speaker 02:
I'm not aware if that's a specific clause in the contract.

[00:10:42] Speaker 02:
Hold on, let me...

[00:11:08] Speaker 02:
Again, I'm not sure if that specific language is in the contract itself, but that's the reality of what the JMIC is.

[00:11:17] Speaker 04:
You're into your rebuttal time, so you want to save it when you're from government.

[00:11:22] Speaker 04:
That would be great.

[00:11:23] Speaker 04:
Thank you.

[00:11:23] Speaker 04:
Thank you.

[00:11:37] Speaker 01:
The regulations seem pretty clear to me that there's a requirement that there be a termination memorandum in the file.

[00:11:46] Speaker 01:
And there's a lot of really good reasons for that, including some of the discussion of some of the facts that we heard today.

[00:11:53] Speaker 01:
Why is it that the government believes that, contrary to what appears to be clear language in the regulation, that there must be a termination memorandum that in this case or

[00:12:07] Speaker 01:
that that doesn't apply.

[00:12:10] Speaker 00:
Good morning, Your Honor.

[00:12:11] Speaker 00:
May it please the Court.

[00:12:13] Speaker 00:
Your Honor, you're correct that the FAR provision 49.402-5 states that when a contract is terminated for default, the contracting officer shall prepare a memorandum for the contract file explaining the reasons for the action taken.

[00:12:29] Speaker 00:
That regulation in the FAR does not specify the precise form that the memo has to take.

[00:12:34] Speaker 00:
In this case, there's absolutely no dispute that the contracting officer did prepare a written document, four and a half pages, single space.

[00:12:43] Speaker 01:
There was a document, but this was a determination memorandum, correct?

[00:12:48] Speaker 01:
It was not titled as such.

[00:12:49] Speaker 01:
Right.

[00:12:49] Speaker 01:
I'm sorry?

[00:12:50] Speaker 01:
It was not titled as such.

[00:12:51] Speaker 01:
That's correct.

[00:12:54] Speaker 01:
So any document that's prepared during the course of, let's say, inspections or during the course leading up to performance,

[00:13:03] Speaker 01:
Your position is that that can be viewed as the termination memorandum?

[00:13:11] Speaker 00:
Well, Your Honor, in this case, that memorandum was prepared contemporaneously with the contracting officer's decision to terminate, and it explains the rationale.

[00:13:21] Speaker 00:
It's the termination notice, right?

[00:13:23] Speaker 00:
I'm sorry.

[00:13:23] Speaker 03:
It's the termination notice.

[00:13:25] Speaker 00:
Yes, it accompanied the termination notice that was sent to the contractor.

[00:13:30] Speaker 00:
That's correct.

[00:13:31] Speaker 00:
But it explained in great detail the reasons for the contracting officer's decision.

[00:13:36] Speaker 00:
And it is the government's position, as found by the board and supported by numerous board decisions and the Court of Federal Claims decision, that under these circumstances, that document fully satisfied the FAR requirement.

[00:13:52] Speaker 00:
The fact that Day-Danyon's argument is really an argument of form over substance.

[00:13:57] Speaker 04:
Is there any guidance as to what the memorandum is supposed to say or do?

[00:14:01] Speaker 00:
I mean, not in the fire, Your Honor.

[00:14:03] Speaker 00:
It simply says that the memorandum shall explain the reasons for the action taken.

[00:14:08] Speaker 04:
Okay.

[00:14:09] Speaker 04:
And is it your view that this notice of termination, which is this four or five page letter that was sent, effectively does that?

[00:14:19] Speaker 04:
Yes, Your Honor.

[00:14:20] Speaker 04:
So if you look at page appendix 172, if they had just put the header in, which is memorandum, where they say,

[00:14:31] Speaker 04:
The bottom of the first page says the Cure Notice was issued because of the following facts.

[00:14:37] Speaker 04:
If they had labeled that memorandum, that would have satisfied to the letter what the regulation says, right?

[00:14:46] Speaker 00:
Yes, Your Honor.

[00:14:47] Speaker 00:
In other words, it is simply an issue of how the document was titled, I suppose.

[00:14:53] Speaker 00:
If it had simply contained a title that said memorandum versus notice for termination for default,

[00:15:01] Speaker 00:
then apparently under Day-Danyon's reasoning, this would have fully satisfied the requirement, which I think highlights the, as I said, the form over substance nature of the argument because there's been absolutely no showing by Day-Danyon here that if there had been, if the contracting officer had simply taken this same document, put a different title on it, stapled it, and put it in a different section of the file, the contract file, as a termination memorandum, and it said the exact same thing,

[00:15:31] Speaker 00:
then under Day-Danyon's reasoning, it wouldn't have any basis for complaining.

[00:15:35] Speaker 00:
So there's simply no purpose to that because the same material was contained in this notice.

[00:15:41] Speaker 00:
It was in the contract file.

[00:15:42] Speaker 00:
It was also sent to Day-Danyon.

[00:15:44] Speaker 00:
So Day-Danyon was fully aware of the reasoning.

[00:15:47] Speaker 00:
And so under the various board decisions and the court of federal claims decision that we cited in our brief,

[00:15:55] Speaker 04:
What is the point of the memorandum and the regulations?

[00:15:59] Speaker 04:
Is it the trigger so that the contractor will know what basis for his notice and then he can proceed to challenge that if he wishes?

[00:16:09] Speaker 00:
Really, Your Honor, the purpose of the regulation, it's the government's position, is to benefit the government so that the government will have something in the file that it can show if there is subsequent litigation about the termination to show that yes, there was an exercise.

[00:16:26] Speaker 04:
One of the aspects may be to have a paper trail for the government, but isn't the main reason, or at least a reason, so that the contractor will know the basis for the termination?

[00:16:37] Speaker 00:
Well, Your Honor, the termination, the basis for the termination is, of course, communicated to the contractor.

[00:16:44] Speaker 00:
So the contractor should already know the basis for it.

[00:16:47] Speaker 03:
Is there a separate provision dealing with the notice of termination?

[00:16:53] Speaker 03:
Yes, Your Honor, there is.

[00:16:55] Speaker 03:
Let me pull it out here momentarily.

[00:17:01] Speaker 03:
And that says that the government has to describe the contract or what the basis for the termination is, right?

[00:17:09] Speaker 03:
Yes, Your Honor.

[00:17:14] Speaker 00:
Well, it's 49.42-3 subsection C that Dave Danyan's counsel was also discussing that outlines

[00:17:24] Speaker 00:
the notice that's required prior to issuance of a termination for default and the process that the contracting officer follows in issuing a notice for termination for default.

[00:17:36] Speaker 03:
I'm talking about the notice of termination.

[00:17:39] Speaker 03:
Doesn't the notice of termination have to describe the basis for it?

[00:17:43] Speaker 00:
Yes, Your Honor.

[00:17:45] Speaker 00:
And the notice in this case, undeniably, did exactly that.

[00:17:50] Speaker 00:
There's no contention that it doesn't, right?

[00:17:52] Speaker 00:
Correct.

[00:17:54] Speaker 01:
The notice calls for curing on certain deficiencies, right?

[00:18:00] Speaker 00:
Well, Your Honor, there were two notices in this case.

[00:18:02] Speaker 00:
There was a notice to cure that was issued before the termination on February 22, 2011, before the contract or delivery order deadlines came and went.

[00:18:13] Speaker 00:
And then after that, there was a termination notice that was issued in April 2011, after the deadlines had come and gone.

[00:18:20] Speaker 00:
And so at that point, it was no longer simply

[00:18:24] Speaker 00:
of failure to cure the lack of progress by Day Danian.

[00:18:28] Speaker 00:
The deadlines had, in fact, come and gone.

[00:18:29] Speaker 00:
Not only the delivery deadlines that were mutually agreed to in the contract by the parties, but even the first two of the proposed new deadlines that had been suggested and requested by Day Danian, those had also come and gone with no delivery by Day Danian of even a single completed unit of these containers.

[00:18:50] Speaker 04:
Now, your friend seemed to suggest that the government dropped the ball in certain respects at certain time frames, including the failure to do the inspection or to schedule the inspection.

[00:19:02] Speaker 04:
What do you say to those assertions?

[00:19:05] Speaker 00:
Your Honor, what I would say is that to the extent De Danion, two things.

[00:19:10] Speaker 00:
First of all, to the extent De Danion is challenging the factual record before the board, at best for De Danion, there was conflicting evidence from two

[00:19:19] Speaker 00:
the retired DCMA individual, Mr. Johnson, and the ongoing DCMA representative, Mr. Opatesado, about how far along Dave Daniel had progressed up to February of 2011.

[00:19:34] Speaker 00:
But even under that scenario, there was a conflict of evidence.

[00:19:38] Speaker 00:
As Dave Daniel says in his brief, page 24, the board was presented with two very different perspectives of where Dave Daniel stood.

[00:19:45] Speaker 00:
The board weighed that evidence, and there's no basis for this court to overturn it.

[00:19:48] Speaker 00:
What does the board say about inspection?

[00:19:50] Speaker 00:
In terms of inspection, the testimony before the board... What did the board say?

[00:19:56] Speaker 00:
The board... I believe the board said...

[00:20:25] Speaker 00:
I'm not immediately finding the board's discussion of that, Your Honor.

[00:20:51] Speaker 00:
But the testimony before the board in the record

[00:20:54] Speaker 00:
from both the contracting officer was that DLA wanted to inspect a completed unit.

[00:21:03] Speaker 00:
That's its supplemental appendix 387 to 88.

[00:21:06] Speaker 00:
And Mr. Jankowski of Day Daniel likewise testified before the board that the anticipated inspection was to examine assembled units.

[00:21:14] Speaker 00:
So there weren't any assembled units.

[00:21:16] Speaker 00:
That's correct.

[00:21:17] Speaker 00:
That's at page supplemental appendix 470.

[00:21:19] Speaker 00:
And so as a result of that, because there were no completed units to inspect,

[00:21:24] Speaker 00:
no inspection occurred.

[00:21:27] Speaker 00:
And there was nothing, certainly in the contract, that required or even contemplated any inspection prior to having a completed unit.

[00:21:39] Speaker 03:
Could I ask you about 49-402-3C, which is a very, in my mind, confusing provision of the FAR, which hasn't been much litigated and has been longstanding?

[00:21:52] Speaker 03:
I mean, it just seems to me a very odd provision.

[00:21:55] Speaker 03:
If the government has taken action that might be construed as a waiver, it's supposed to do these things.

[00:22:02] Speaker 00:
Yes, Your Honor.

[00:22:05] Speaker 03:
What does that mean?

[00:22:07] Speaker 00:
Well, Your Honor, I think, as the Court noted earlier, you have to read this provision of the FAR in the context of the Court's explanations of the waiver doctrine, starting with DeVito.

[00:22:23] Speaker 00:
before you could have a finding under FAR section 49.4023C that there's been action that might be construed as a waiver.

[00:22:34] Speaker 00:
You have to look to how the court has defined waiver as in DeVito with the two elements of forbearance and reliance.

[00:22:41] Speaker 00:
And so if the government hasn't taken any action that could be construed as amounting to a waiver, then that language doesn't come into play.

[00:22:50] Speaker 00:
But here, certainly, Your Honor,

[00:22:53] Speaker 03:
After the... It seems to me this provision is very confusing to come by.

[00:23:00] Speaker 03:
I have no idea why this has remained in the fall over these years.

[00:23:04] Speaker 03:
Might be construed as a waiver.

[00:23:06] Speaker 03:
I mean, I can understand if the regulation said if the government has taken action which constitutes a waiver, but might be construed as a waiver.

[00:23:15] Speaker 03:
That's very strange.

[00:23:17] Speaker 00:
Yes, sir.

[00:23:18] Speaker 00:
I can't speak to why it has not been amended, but

[00:23:21] Speaker 00:
In the context of this case, certainly, there cannot be any finding of waiver.

[00:23:26] Speaker 00:
First of all, it's the government's position that, day in, it has not advanced that argument in its opening brief, other than in two cursory references.

[00:23:33] Speaker 00:
So essentially, it's waived any waiver argument.

[00:23:36] Speaker 00:
But even if the court were to address it on the merits, the short period of time between the passage of the delivery order deadlines in mid-March 2011 and the termination issuance

[00:23:50] Speaker 00:
in April 2011, roughly a month, in the context that this case would not be sufficient to allow the court to reach a conclusion that there had been any forbearance by the government of the deadline with an indication that it wanted Day-Danion to continue to perform.

[00:24:07] Speaker 00:
In fact, as Day-Danion has said in its brief, the only response to its request or proposal

[00:24:14] Speaker 00:
in response to the notice to cure of additional deadlines pushing all the way out to May 2011 with silence.

[00:24:20] Speaker 00:
There was no indication or response from the contracting officer that they should go forward and that they would be allowed to extend out the deadlines.

[00:24:30] Speaker 00:
And in addition to that, there was a total failure of proof before the board on the second prong of any waiver argument, which would be the reliance by Day D. And as the board found

[00:24:43] Speaker 00:
There was some minimal evidence offered by Day Dannion of about $1,000 that was spent on some parts and about $32,000 in payroll.

[00:24:53] Speaker 00:
But there was no evidence that those expenses actually related to performing this contract as opposed to other work.

[00:24:59] Speaker 00:
So there was simply no evidence that's found by the board that could support any finding of waiver.

[00:25:07] Speaker 00:
Unless the court has any further questions, we would ask that the court affirm the board's decision.

[00:25:12] Speaker 00:
Thank you.

[00:25:26] Speaker 02:
With the court's permission, my time is brief, so I'll try to be quick.

[00:25:32] Speaker 02:
The memorandum has utmost importance, and it's not just a recitation of determination notice.

[00:25:38] Speaker 02:
It has to go to the analysis made by the contracting officer so that there is a contemporaneous record that if the contractor wants to bring the matter forward for review, that there's explanations, not just restatements.

[00:25:52] Speaker 02:
There's explanations of the steps taken by the contracting officer to make the determination that he sets forth in the termination notice.

[00:26:02] Speaker 02:
In the record, the contracting officer was asked specifically, did you provide one upon the interrogatories?

[00:26:09] Speaker 02:
No, I don't know.

[00:26:11] Speaker 02:
Well, yes.

[00:26:12] Speaker 02:
No, I don't know.

[00:26:13] Speaker 02:
Then he was asked, are you sure?

[00:26:15] Speaker 02:
Is there a memorandum?

[00:26:17] Speaker 02:
Is there a termination memorandum?

[00:26:19] Speaker 02:
And the answer was no.

[00:26:20] Speaker 02:
The judge even said,

[00:26:21] Speaker 02:
I think this is resolved.

[00:26:23] Speaker 02:
We've got it.

[00:26:24] Speaker 01:
Do you know whether the file has a termination memorandum in it now?

[00:26:28] Speaker 01:
Excuse me?

[00:26:29] Speaker 01:
Does the file have a termination memorandum in it?

[00:26:32] Speaker 02:
Not an actual one, just the one that the judge sort of created ad hoc by his findings.

[00:26:42] Speaker 02:
OK.

[00:26:42] Speaker 02:
Additionally, Burlington supports that concept that you can't create post hoc.

[00:26:48] Speaker 03:
something that will prejudice the contractor.

[00:26:50] Speaker 03:
What do you get out of a memorandum that the contractor didn't get out of the notice?

[00:26:55] Speaker 02:
The steps that he actually took.

[00:26:56] Speaker 02:
Who did he talk to?

[00:26:57] Speaker 02:
The seven steps that F says that DCX addresses.

[00:27:01] Speaker 02:
The reason DCX is good law and was held the way it was held.

[00:27:05] Speaker 03:
DCX says that the contractor doesn't have to take the seven steps, that the contractor can't complain about that.

[00:27:12] Speaker 02:
Correct, but in the fact of DCX, the contractor did have a memorandum.

[00:27:17] Speaker 02:
went through a rational explanation of their decision, described the steps they took, this contracting officer did not do that.

[00:27:25] Speaker 02:
So where DCX was great in those facts, in these facts, the contracting officer doesn't have the contemporaneous record to establish that he followed any of those steps.

[00:27:39] Speaker 02:
And then again, specifically with regards to the memorandum, he admitted that he didn't do one.

[00:27:51] Speaker 02:
And again, the notice of termination does specifically lay out facts, but it doesn't describe analysis.

[00:27:59] Speaker 02:
They never made the comparison of, OK, well, we need these units.

[00:28:03] Speaker 02:
Somebody new is going to get it to us in 120 days, where the inspector had already testified that they genuinely could probably have these things done in two weeks.

[00:28:14] Speaker 01:
Why would you have done differently had there been a termination memorandum that reflected what was already in the record?

[00:28:23] Speaker 01:
It would have, if it was an honest one, it would have shown that he made no analysis.

[00:28:28] Speaker 01:
If there was a document that had the title termination, a memorandum, and simply repeated all the steps that were in the termination notice, what would you have done differently?

[00:28:39] Speaker 02:
It would have exposed the fact that none of the seven steps required by Section F that DCX says you can use to determine an abuse of discretion, it would show that they didn't get done.

[00:28:52] Speaker 04:
And in the absence of a memorandum, you can make those same arguments.

[00:28:55] Speaker 04:
You tried to make those arguments, and you didn't prevail.

[00:29:02] Speaker 02:
That's why I believe why we're here is because we have no record to go on.

[00:29:08] Speaker 02:
So part of what we have talked about is that prejudices our clients and my clients claim, the contractor claims.

[00:29:19] Speaker 02:
is he doesn't have a way to even analyze what the contracting officer reviewed to make his determination because he doesn't give the reasoning.

[00:29:26] Speaker 02:
He just recites facts and conclusions.

[00:29:30] Speaker 02:
Conclusions are not reasons.

[00:29:33] Speaker 02:
They're not reasoning.

[00:29:34] Speaker 03:
They're not analysis.

[00:29:35] Speaker 03:
Again... He doesn't have the information to see that the contracting officer followed the steps which DCX said he didn't have to follow.

[00:29:44] Speaker 02:
Well, it's not whether or not he has to or doesn't have to follow them.

[00:29:47] Speaker 02:
It's those

[00:29:48] Speaker 02:
aren't determinative of conveying a right to the contractor.

[00:29:52] Speaker 02:
But the contracting officer is still obligated to follow those steps.

[00:29:57] Speaker 02:
Well, you can't complain about it.

[00:30:01] Speaker 02:
And as a result, that behavior on the government side is prejudicial and is an abuse of his discretion.

[00:30:08] Speaker 04:
OK, time is up.

[00:30:09] Speaker 04:
We thank both sides of the case.