[00:00:00] Speaker 04: Next case for argument is 162600, Regency Construction versus Department of Agriculture. [00:00:52] Speaker 00: I got jumped on one time for trying to start too quickly, and I stopped ever doing that again. [00:00:56] Speaker 00: Your Honor, Matt Willis on behalf of the Appellant Regency Construction Company. [00:01:02] Speaker 00: Honestly, this is my first time before this court, so if I fall over myself, I apologize. [00:01:08] Speaker 00: Your Honor, our appeal has two points, but the main focus of our appeal is on the issue of whether or not the 4 to 1 slope in the project specifications on the side slopes of the prison [00:01:20] Speaker 00: was a design or a performance specification. [00:01:22] Speaker 00: Your Honor, as background, this is a, unlike what we just heard, it is not nearly so intricate, I won't say simple, but not so nearly so intricate a situation. [00:01:32] Speaker 00: This is a maintenance dredging contract for a canal in the New Orleans area. [00:01:36] Speaker 00: This is after Katrina. [00:01:38] Speaker 00: There's a bunch of stuff, mainly material, silted into the canal. [00:01:42] Speaker 04: So what's your best argument? [00:01:44] Speaker 04: What's your best case? [00:01:45] Speaker 04: I mean, the board concluded otherwise. [00:01:46] Speaker 04: They concluded this was a performance specification and not a design specification. [00:01:52] Speaker 00: I think that Blake is our best case, Your Honor. [00:01:55] Speaker 04: I'm sorry, I didn't mean your best case in terms of a legal case. [00:01:57] Speaker 04: I meant how you convince us that it's a design specification as opposed to performance. [00:02:03] Speaker 00: The engineers for the NRCS designed this project. [00:02:06] Speaker 00: The testimony was in both testimony in trial and in their interrogatory responses that they made an engineering decision [00:02:12] Speaker 00: The slopes would hold at four to one. [00:02:14] Speaker 00: They made that a specific provision in the contract for the final product that had to be reached. [00:02:20] Speaker 01: And I believe that... The degree of the slope wasn't your obligation, but the method by which you achieved that slope was. [00:02:30] Speaker 01: That's correct, right. [00:02:31] Speaker 01: And you were free to use whatever method you wanted to. [00:02:36] Speaker 00: Yes, Your Honor. [00:02:37] Speaker 00: The regency was, in fact, free to use whatever... Wasn't that point to performance requirement? [00:02:43] Speaker 00: Your Honor, respectfully, I believe it creates, like most of these distinctions, a mixed bag. [00:02:48] Speaker 00: I believe that there's always going to be an element of means and method that's left up to a contractor. [00:02:53] Speaker 00: There's always going to be a degree of design specification that is designed by the, typically the government in a procurement contract. [00:03:02] Speaker 00: And so I believe that means and methods in this contract were limited in availability. [00:03:06] Speaker 00: I mean, certainly you couldn't bring in a hydraulic seagoing or river going dredge into this area. [00:03:12] Speaker 00: They would never have allowed Regency to put in cofferdams and dewater the canal and then do it by hand. [00:03:18] Speaker 00: So, I mean, there was a very limited amount of ways that you could do this other than by drag line or crane. [00:03:25] Speaker 00: However, yes, they were enabled to pick their own means and methods. [00:03:29] Speaker 00: However, I think, you know, when we look at a case like Blake's that I already tried to mention, that you're always going to have a mixed bag. [00:03:36] Speaker 00: Like cases are almost always a question of law and fact. [00:03:39] Speaker 00: performance of a construction contract is always going to have a certain amount of leniency given toward the contractor in how they pursue the work. [00:03:48] Speaker 00: I've never seen a heavy construction contract in which the actual means and methods were so specifically designed as to leave no room for the contractor to choose their own methods to some degree. [00:04:01] Speaker 00: In this case, certainly had our means and methods been the failure, been the basis for the failure of the slopes, [00:04:08] Speaker 00: We wouldn't have an appeal here today. [00:04:10] Speaker 00: However, when the designed elements of the job, which I believe the slopes to be a design specification, not a performance, when those failed through no fault of the means and methods of the contractor used, and especially when there's no indication that any other means or methods would have been successful and would have avoided the failure of the engineer decisions by the NRCS, I believe that those slopes are in fact a design specification. [00:04:34] Speaker 04: Can I ask you, the nature of your argument here, which I appreciate and respect, which is kind of like, well, this is a close call. [00:04:41] Speaker 04: Well, I think you used the term mixed bag. [00:04:44] Speaker 04: Yes, Your Honor. [00:04:45] Speaker 04: Doesn't that answer the question given our standard of review of the voids decision? [00:04:51] Speaker 04: Right? [00:04:51] Speaker 04: I mean, you think the standard of review is quite deferential. [00:04:55] Speaker 04: As to questions of fact. [00:04:57] Speaker 04: And so even if we agree with what you say, I think you acknowledge in your argument [00:05:04] Speaker 04: It's a questionable proposition, whichever way you come out. [00:05:07] Speaker 04: And doesn't that compel us to agree with the board over you? [00:05:14] Speaker 00: No, Your Honor, respectfully, I don't agree with that. [00:05:16] Speaker 00: I believe that while I did use the phrase mixed bag as to the elements of a contract, I'm quite firm in my position that it's a design specification on the slopes. [00:05:28] Speaker 00: And also the standard of review as to findings of fact, [00:05:31] Speaker 00: certainly are entitled to a great deal of deference to her honor who heard the case. [00:05:35] Speaker 00: However, this court is not bound by her legal decisions, and her legal decision is that the slope is a performance, not a design specification. [00:05:44] Speaker 00: I believe that's a question of contract interpretation, not of factual determination for the court. [00:05:51] Speaker 00: So I believe that is actually being reviewed de novo by this court, not given us any deference to her honor. [00:06:01] Speaker 00: And essentially, Your Honor, I'm not going to belabor the point and talk longer than I have to. [00:06:05] Speaker 00: I have saved some time for rebuttal, but that is essentially our point. [00:06:08] Speaker 00: The slopes were designed. [00:06:11] Speaker 00: They were engineered. [00:06:12] Speaker 00: The means and methods I concede, you know, there was and always will be some variance allowed to contractors in how they're going to pursue the work. [00:06:22] Speaker 00: However, in this case, there's no evidence that any other means and methods would have been any more efficient and certainly not [00:06:29] Speaker 00: that these means and methods contributed to the failure of the slopes. [00:06:33] Speaker 00: The slopes failed because they were improperly designed to hold a 4 to 1, which they simply did not do. [00:06:38] Speaker 00: The uncontroverted evidence at trial from geotechnical engineer Trauber was that these slopes were going to suffer what he called a sapping mechanism, what the contractor refers to as a sloughing mechanism of failure. [00:06:50] Speaker 00: But basically, that on one side of the canal, when you cut it to 4 to 1, even if you cut it perfectly, [00:06:56] Speaker 00: It's going to fail. [00:06:57] Speaker 00: You're going to have material coming into the canal. [00:06:59] Speaker 00: You're going to have to continue dredging that out. [00:07:03] Speaker 00: That failure is not the responsibility of the contractor. [00:07:06] Speaker 00: His means and methods of performance were his own, but they didn't contribute to the failure of the slopes. [00:07:11] Speaker 00: The slopes were a design feature, and therefore under SPIRIN, they come with the inherent representation, the implicit representation that the slope will halt. [00:07:22] Speaker 00: The slope didn't halt. [00:07:24] Speaker 00: We held that the sides of the prism were a design, not a performance specification, and that the contractor had no responsibility for their failure nor for their design. [00:07:37] Speaker 00: That this court should overturn the board's decision on that point and remand back for further findings as to damages as a result of the failed slopes and the sapping mechanism. [00:07:47] Speaker 04: Thank you. [00:07:48] Speaker 04: Since you mentioned it's your first time at this court, I will tell you that as one of our colleagues often says, [00:07:53] Speaker 04: You don't do a bad job when you sit down when you have nothing more to say. [00:07:59] Speaker 00: I learned that before another court. [00:08:03] Speaker 04: Good morning. [00:08:10] Speaker 04: Mr. Salitro? [00:08:11] Speaker 03: Good morning, Your Honor. [00:08:12] Speaker 03: And I will take your court's advice as well. [00:08:16] Speaker 03: I will be very brief. [00:08:18] Speaker 03: May it please the court, the Department of Agriculture respectfully requests the decision of the Civilian Board of Contract [00:08:24] Speaker 03: appeals be affirmed in its entirety. [00:08:26] Speaker 03: There are two narrow issues on this. [00:08:27] Speaker 02: Is this a legal question or a factual question, whether or not the contract term at issue is a design spec or a performance spec? [00:08:38] Speaker 03: We've conceded in our brief that it should be analyzed de novo as a contract interpretation, despite that some cases say that the termination of whether specification is a performance spec [00:08:49] Speaker 03: Or design spec is a mixed question of fact and law. [00:08:52] Speaker 03: We've analyzed it under de novo standard. [00:08:57] Speaker 03: And as council acknowledges on page 22 of its brief, it could determine the means and methods of the slope requirement. [00:09:09] Speaker 03: There's a four to one slope requirement that was the end requirement of the channel side slopes, and the contractor [00:09:15] Speaker 03: was not told how it was to achieve that objective, simply what it was to achieve. [00:09:21] Speaker 03: The cases most analogous that are cited in the briefs are both the Stuyvesant dredging case, which was this court's case, and the Bean Horizon case. [00:09:32] Speaker 03: Both those cases support a finding of performance specification for similar requirements. [00:09:40] Speaker 03: And finally, before leaving it up to the court [00:09:45] Speaker 03: question on the design spec issue, it's important to note how the contractor was paid for this particular task order. [00:09:52] Speaker 03: The contractor was paid for this particular task order on a cubic yard basis based on the cubic yards of sediment removed from the canal. [00:10:03] Speaker 03: The estimated amount in the task order, which was bid, was 63,130 cubic yards. [00:10:10] Speaker 03: The actual amount excavated from the canal was 63,130 [00:10:15] Speaker 03: 612 cubic yards, nearly 99% accurate. [00:10:19] Speaker 03: And the 482 cubic yards additional was paid to the contractor in a modification on a per cubic yard basis. [00:10:29] Speaker 03: So the court should not lose sight of the fact that that was the payment mechanism. [00:10:34] Speaker 01: Do you argue this in your brief? [00:10:36] Speaker 03: We did not argue this in our brief. [00:10:40] Speaker 01: Your Honor, we can't hear that argument. [00:10:42] Speaker 01: If Peter presented a brief, we can't hear that argument. [00:10:44] Speaker 03: I understand, Your Honor. [00:10:45] Speaker 03: And I think the brief showed that it is a performance, showed why it is a performance specification and not a design specification. [00:10:53] Speaker 03: I'll move on to the second issue, which is the issue of indirect costs relating to this separate delay claim. [00:11:01] Speaker 02: He didn't even address that in his opening. [00:11:03] Speaker 02: You really want to spend your time going through something and open the door for him and rebuttal to stand up and now address it? [00:11:08] Speaker 02: He didn't address it in his reply brief. [00:11:09] Speaker 02: He didn't address it in his opening argument today. [00:11:11] Speaker 02: You said you were going to take the chief judge's hint about sitting down when you had nothing more to say, and yet now you're going to address an issue nobody ever raised in oral argument or in a reply brief. [00:11:20] Speaker 03: In your honor, I was simply going to say that he did not address it. [00:11:23] Speaker 02: I feel like you didn't actually follow your own suggestion from the outset. [00:11:28] Speaker 03: Unless your honor has any other questions, I was simply going to say that he did not address it in his reply brief or an argument. [00:11:35] Speaker 03: And unless the court has any questions, the government respectfully requests [00:11:39] Speaker 03: that the court affirmed the board's decision in its entirety. [00:11:42] Speaker 03: Thank you. [00:11:43] Speaker 03: Thank you, Your Honor. [00:11:50] Speaker 00: I think I saved four minutes. [00:11:51] Speaker 00: I won't need them. [00:11:54] Speaker 00: I'm pleased the court appellee has pointed out two cases which they indicate are supportive of their position. [00:12:02] Speaker 00: I simply disagree. [00:12:03] Speaker 00: Bean, Horizon Corporation Weeks Marine, which was a joint venture case of the engineering board, [00:12:08] Speaker 00: It was dealing with the slopes, slopes in a dredging contract. [00:12:13] Speaker 00: However, those were estimated slopes. [00:12:14] Speaker 00: They were not specified in the contract as in the case before us today. [00:12:19] Speaker 00: In the case before us today, the design said four to one on the sides of the prism. [00:12:24] Speaker 00: Got to get it. [00:12:27] Speaker 00: Being that was not the case, and the stuvescent is how I've always pronounced it, isn't even talking about the slopes of the prism. [00:12:37] Speaker 00: It's talking about [00:12:39] Speaker 00: How much of the accumulated material in the canal need be removed and from what year had that accumulated from? [00:12:46] Speaker 00: Your honor, I can point out to the court that I believe that Blake is a much more dispositive case for our position, that yes, it's always going to be in some ways a mixed bag. [00:12:59] Speaker 00: But when you have a mixed bag, I think the court has to, at a minimum, look to see what level of the mixture [00:13:08] Speaker 00: is law and what level of the mixture is fact. [00:13:11] Speaker 00: In this case, especially with the question of the side slopes and whether they're designed and whether that they design specification, I believe that the mixture strongly favors this to be a legal determination, which is not granted difference, and that the correct contract interpretation is that those side slopes were a design specification for which the contractor should have been compensated. [00:13:32] Speaker 04: Thank you. [00:13:33] Speaker 00: Thank you. [00:13:33] Speaker 04: We thank both sides. [00:13:34] Speaker 04: The case is submitted.