[00:00:00] Speaker 00:
Welcome all.

[00:00:03] Speaker 00:
The first case for argument this morning is 20-2024 Star Walkers versus Secretary of the Army, Mr. Dowd, whenever you're ready.

[00:00:16] Speaker 01:
And you may remove your mask while you're at the podium if you're comfortable with that.

[00:00:20] Speaker 01:
If you're not, you can keep it on.

[00:00:21] Speaker 02:
Thank you, Your Honor.

[00:00:22] Speaker 02:
Thank you, Judge Christ.

[00:00:28] Speaker 02:
If I may, for one second.

[00:00:44] Speaker 02:
Good morning, honors, and may it please the court, Matthew Dowd for the appellant Starwalker.

[00:00:49] Speaker 02:
This case concerns a government contract called the HNT, or the Host Nation Trucking Contract, for trucking services during wartime Afghanistan in 2009 to 2011.

[00:00:59] Speaker 02:
And that covers the period that's commonly known as the surge that President Obama implemented shortly after he entered office.

[00:01:07] Speaker 00:
It feels kind of weird to be talking about Afghanistan these days, right?

[00:01:11] Speaker 02:
It is very odd timing, judge first.

[00:01:15] Speaker 02:
But I'll turn back to this case.

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Here, the board issued, some two and a half years after its hearing, about a six page decision

[00:01:28] Speaker 02:
which showed absolutely almost no consensus.

[00:01:32] Speaker 02:
One board member.

[00:01:32] Speaker 00:
No, we understand that.

[00:01:33] Speaker 00:
Let me just glide over that to get to what I think is the heart of the case.

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Because in any event, a lot of these issues are Genova review.

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So we're going to look at the record and look at the contract and make a decision about that.

[00:01:44] Speaker 00:
So why don't we get to that?

[00:01:47] Speaker 00:
And looking at 4.1, section 4.1, 4.10,

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They require the operation of the trucks must be directed on the official MLMR-TMR in the mission sheet.

[00:02:04] Speaker 00:
And so if an empty return trip is not directed on the mission sheet, how is it authorized?

[00:02:11] Speaker 02:
And Judge Price, what we've tried to explain in our briefs is that

[00:02:15] Speaker 02:
When you read all of the applicable provisions together, including the LMR and TMRs, including Q&A 34, the only reasonable conclusion is that backhaul was necessarily required.

[00:02:28] Speaker 02:
So when you look at section 4.11.1, it's actually the only section in the contract that talks about mission completion.

[00:02:38] Speaker 02:
The fundamental basis and the fundamental pay scale for this contract.

[00:02:42] Speaker 03:
Are you saying that because they have to ultimately carry the paperwork back to Bagram that the mission completion isn't until then?

[00:02:51] Speaker 02:
Judge, you absolutely yes.

[00:02:53] Speaker 03:
How is that right?

[00:02:54] Speaker 03:
Because it talks about the paperwork being signed off at the final destination by a point of contact, which is where the delivery is.

[00:03:04] Speaker 03:
If that's the final destination, why isn't that

[00:03:07] Speaker 03:
the final destination for the mission.

[00:03:10] Speaker 02:
For several reasons, Your Honor.

[00:03:12] Speaker 02:
So both the contracting officer and the contracting officer representative testified during the hearing and during deposition that the mission was not completed until the mission sheets were returned back to the program manager.

[00:03:24] Speaker 03:
Yeah, but we're not in an ambiguous world.

[00:03:28] Speaker 03:
Let's just assume that we're looking at the language of these provisions.

[00:03:32] Speaker 03:
So what the testimony is is not relevant.

[00:03:35] Speaker 03:
Explain to me, based on the plain language, why just delivering paperwork back to headquarters essentially has anything to do with when a trucking operation is complete.

[00:03:47] Speaker 02:
Because, Your Honor, it was more than just paperwork.

[00:03:50] Speaker 02:
These are government resources.

[00:03:52] Speaker 02:
These were government resources that allowed- The paperwork is a government resource?

[00:03:57] Speaker 02:
Absolutely, Judge Chen, because it allows the Army to track where critical equipment, material, supplies were transported, whether they were transported or not.

[00:04:07] Speaker 03:
And in fact, when we look at the- Let me ask you a hypothetical, or not really a hypothetical.

[00:04:12] Speaker 03:
Aren't you also asking for and saying backhaul is movement from Bagram to someplace else if the truck is empty?

[00:04:21] Speaker 03:
not necessarily honor because i think that the way you did this you basically just took each lmr thing and doubled it so if it went if the truck was sent empty the background and then came or empty from background to someplace else you want payment for that and then if it comes back from background loaded the paperwork is going to be delivered then uh... i don't understand how

[00:04:46] Speaker 03:
That first part is when they end up in whatever the location is, they don't have to first take the paperwork back for that to be completed.

[00:04:57] Speaker 03:
I really don't understand this point at all.

[00:04:59] Speaker 03:
The paperwork point seems not your best argument here.

[00:05:04] Speaker 02:
Well, Your Honor, we're basing this on the record.

[00:05:06] Speaker 02:
We're basing this on the testimony.

[00:05:07] Speaker 02:
We're basing this on

[00:05:09] Speaker 02:
the language of section 4.11.1.

[00:05:12] Speaker 02:
So if I have a minute to address a couple of your points.

[00:05:15] Speaker 02:
So I believe you're referring to an example that my counsel for the government raised with respect to transport from Camp Phoenix to Bagram.

[00:05:24] Speaker 02:
And as we've explained in our briefs, that may be an instance which backhaul is not required.

[00:05:31] Speaker 02:
And I think that's part of the reason why this record's a little confused, because the board, at least one member of the board, Judge Macomail, ruled against us for quantum.

[00:05:41] Speaker 02:
Quantum was not properly before the board, and consistent with this court's jurisprudence in Dewey Electronics, for example.

[00:05:49] Speaker 02:
The contracting officer only ruled on entitlement.

[00:05:53] Speaker 02:
contract interpretation.

[00:05:55] Speaker 02:
So I admit and we admit and we tried to explain in our briefs that there may be instances of mission sheets that backhaul is not required to be paid for.

[00:06:05] Speaker 03:
But that's not how you at least initially calculated your damages.

[00:06:09] Speaker 03:
I mean, I don't want to get hung up on this because I think this delivery of paperwork is a very insubstantial argument.

[00:06:17] Speaker 03:
I think there are other parts of this that may be a little bit stronger.

[00:06:20] Speaker 03:
But if you're hanging your hat on, the fact that paperwork ultimately gets sent back to headquarters because the government wants the final documents in its program office and not spread out all over a war zone,

[00:06:33] Speaker 03:
That makes sense for purposes of paperwork, but it doesn't have anything to do with what the government's going to pay for in terms of moving trucks around.

[00:06:41] Speaker 02:
Your honor, your judges, I'll push back a little bit on that, because I think, again, below before the board, it's not really just paperwork.

[00:06:49] Speaker 00:
But what we've tried to do- Can I just ask you a basic question about this, since we're spending time on this paperwork thing?

[00:06:55] Speaker 00:
It didn't necessarily involve the actual trucks coming back.

[00:06:59] Speaker 00:
I mean, delivering the paper could be somebody on a motorbike

[00:07:03] Speaker 00:
What are we, and what am I missing here?

[00:07:06] Speaker 00:
Did it necessarily, absolutely, did you say you have to deliver the program sheets in the empty trucks?

[00:07:15] Speaker 02:
So your honor, I'll take that in a couple points.

[00:07:18] Speaker 02:
So when you look at the mission sheets, the LMR, TMRs, there are some examples in the Joint Appendix of 2058, 2060, 2082.

[00:07:27] Speaker 02:
And if I could explain.

[00:07:31] Speaker 02:
I'll give your honors a moment to pull it up.

[00:07:37] Speaker 03:
Can you give us those numbers again?

[00:07:40] Speaker 02:
The three that I mentioned were 2058, 2060, and 2082.

[00:07:45] Speaker 02:
So it should be in the third volume.

[00:07:53] Speaker 02:
And I apologize, but these are not the best reproductions.

[00:07:58] Speaker 02:
But if we could turn to 20

[00:08:01] Speaker 02:
Maybe 2060 is a clean example.

[00:08:05] Speaker 02:
So this is an example of a mission sheet.

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And the way this contract was structured and the expectation and the intent of the parties was that each order, each mission sheet, each task order was tied to a mission sheet.

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And the instructions were on the mission sheet.

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And they specified specific drivers.

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They specified specific tracking numbers and cargo.

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And they had to be signed off, like Your Honor recognized.

[00:08:32] Speaker 02:
Now, when we look at the bottom left-hand side, it's just above the black box.

[00:08:39] Speaker 02:
It reads, Carrier's Proof of Mission Completion.

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If possible, retain a copy for your records.

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If not possible, record the TMR and truck information.

[00:08:51] Speaker 02:
Then on the previous page, sorry, 2058, a similar one says, do not keep the original mission sheet.

[00:09:01] Speaker 02:
So the instruction on the LMRTMR itself is that the driver itself has to keep the mission sheet and the return at the bottom.

[00:09:12] Speaker 02:
Your example of one motorbike driving through the back roads of Afghanistan.

[00:09:16] Speaker 00:
Well, it doesn't have to be the actual truck.

[00:09:18] Speaker 00:
He doesn't have to come back with the actual, he doesn't have to deliver it via the actual empty truck, right?

[00:09:24] Speaker 02:
So, Your Honor, if we're talking about the realities of what was going on in Afghanistan in 2009 and 2010, absolutely.

[00:09:33] Speaker 02:
There's no feasible way to return these other than that.

[00:09:36] Speaker 02:
And that gets to our point that we tried to explain, where our client offered multiple times, hey, if you want these returned, we'll set up an email system.

[00:09:46] Speaker 02:
If you want these returned, we'll set up a fax.

[00:09:50] Speaker 02:
The government refused to accept those offers.

[00:09:53] Speaker 03:
What does that have to do with whether they meant to pay for backhaul?

[00:09:58] Speaker 03:
It meant that they wanted the original documentation.

[00:10:00] Speaker 03:
You do government contracts.

[00:10:02] Speaker 03:
You know that the government sometimes has arbitrary requirements for original documents versus copied documents for whatever reason.

[00:10:10] Speaker 03:
I don't understand how that has anything to do with whether they intended it.

[00:10:14] Speaker 03:
Because these are all firm fixed price contracts.

[00:10:16] Speaker 03:
They have a specific amount for every specific type of contract.

[00:10:19] Speaker 03:
And what you're basically saying is the government intended, when it set a number, that they're actually going to pay double for each trip.

[00:10:27] Speaker 02:
Your Honor, I respectfully disagree.

[00:10:30] Speaker 02:
The intent of this contract, again, think about it.

[00:10:34] Speaker 02:
Early 2009, it was solicited in 2008.

[00:10:36] Speaker 02:
2009, the value of the contract gets multiplied sixfold.

[00:10:43] Speaker 02:
The intent of this contract was to support the surge.

[00:10:46] Speaker 02:
We're adding 30,000 troops.

[00:10:48] Speaker 02:
all of the Humvees, MRAPs, material, clothing, food, toilet paper for the troops out in the front lines and the FOBs, it was all intended to be flown in through Bagram.

[00:10:58] Speaker 02:
And then from Bagram, it's delivered to the FOBs out in the troops, southern Iraq, past Kandahar, down the south, by camp

[00:11:08] Speaker 03:
I don't understand how any of this is happening to you.

[00:11:10] Speaker 03:
Why aren't you talking about the actual contract language, which shows that the government clearly intended to pay for the return trips?

[00:11:20] Speaker 02:
Because that goes to the Q&A.

[00:11:23] Speaker 02:
And when we ask specifically, how is that?

[00:11:25] Speaker 00:
Are you saying that that language means nothing, as directed by the LMRTMR?

[00:11:31] Speaker 02:
Judge, first, absolutely not.

[00:11:32] Speaker 02:
We're saying that you have to read that in the context of 411.1.

[00:11:37] Speaker 02:
And when you look at the government's argument, they rely only on three provisions.

[00:11:41] Speaker 02:
Their main argument refers to 4.1, 4.2, and 4.10.

[00:11:44] Speaker 02:
What we've tried to say is, well, let's look at the contract as a whole.

[00:11:48] Speaker 02:
Consider the Q&A.

[00:11:50] Speaker 02:
We have 4.1, 4.2, 4.10, 4.11.1.

[00:11:54] Speaker 02:
We have section E-1.2 of the invoicing clause that says, for specific activities, you cannot invoice.

[00:12:00] Speaker 02:
And it doesn't include backhaul.

[00:12:03] Speaker 02:
And then when you read all of that in the context of our Q&A 34, which necessarily becomes part of the contract because

[00:12:13] Speaker 02:
We asked specifically, how will backhaul be compensated?

[00:12:17] Speaker 02:
And the government's response is, quote, it will be counted per 4.2.

[00:12:22] Speaker 02:
And then when you go back to 4.2.

[00:12:24] Speaker 03:
But wait, can I just stop you here?

[00:12:25] Speaker 03:
Because this is, I think, critical is the question.

[00:12:29] Speaker 03:
I mean, it may not have been the way you formulated it, but the way the government reformulated it when it answered was, how will backhaul and retrograde, as defined by whatever, is it

[00:12:40] Speaker 03:
4.10, that is the backhaul retrograde provision.

[00:12:43] Speaker 03:
Well, that provision already says as dictated by an LMR.

[00:12:49] Speaker 03:
So the government understood this question, at least is my best reading, is you have this whole schedule of here are these regular things.

[00:12:57] Speaker 03:
You've got a whole schedule of prices.

[00:12:59] Speaker 03:
You know how you're going to do those.

[00:13:01] Speaker 03:
But the 4.10 things where you might be required to do backhaul retrograde missions as defined by an LMR doesn't necessarily

[00:13:11] Speaker 03:
correspond to that price list, you ask, how are they going to be paid?

[00:13:14] Speaker 03:
And the government says, just like all the others.

[00:13:17] Speaker 03:
But you're trying to define backhaul as something just in general, as opposed to backhaul as articulated on an LMR.

[00:13:26] Speaker 03:
And I don't see where the government ever suggested that backhaul without an official order would be compensated.

[00:13:33] Speaker 02:
Your Honor, if that's your view of the contract and if that

[00:13:37] Speaker 02:
comes out as the correct interpretation of contract, and that essentially means that through these two years, two and a half years of contracting, a two billion dollar contract, where we have our client alone

[00:13:49] Speaker 02:
executed over about 20,000 missions, the government never offered to pay backhaul.

[00:13:55] Speaker 02:
And they should have said that in response to the Q&A.

[00:13:57] Speaker 03:
What do you mean they never offered to pay backhaul?

[00:14:00] Speaker 03:
Do you mean they never offered to pay backhaul for an empty vehicle?

[00:14:04] Speaker 03:
Or if they ordered cargo to be put on a vehicle on a return trip, they didn't offer to pay?

[00:14:10] Speaker 02:
That's a little different, Your Honor, because I think if there's cargo on it, that's not necessarily backhaul.

[00:14:19] Speaker 02:
right so back all is the return trip this list is if you're going from barbara out uh... can't help uh... camp uh... out the coast product is next to pakistan the trucks have to come back that was the intent of this contract there was no feasible way to ask why isn't this reading is the intent of the contract is when they put up the firm fixed price for use this kind of truck uses kind of container that it included the entire mission

[00:14:46] Speaker 02:
then the government should have said that in response to Q&A 34.

[00:14:50] Speaker 02:
Now, that's what they said when they modified the contract for the option year.

[00:14:53] Speaker 03:
No, but you were asking them about how to price backhaul under that provision, which incorporated a reference to an LMR.

[00:15:00] Speaker 03:
And they said, if you get an LMR for backhaul, then it's priced the same way.

[00:15:06] Speaker 03:
You're saying they never gave you an LMR for backhaul.

[00:15:08] Speaker 03:
Well, that means they never intended to pay.

[00:15:10] Speaker 03:
Did you ask for LMRs for a cargo list backhaul?

[00:15:13] Speaker 02:
When you read the contract in connection with 411.1, and when you read the contract with the understanding of the intent of the parties to ship supplies and arms and ammunition and MRAPs and Humvees for 30,000 new troops, the only way to reasonably construe this is

[00:15:34] Speaker 02:
that the government expected backhaul.

[00:15:37] Speaker 02:
You had to get the troops back from the FOB.

[00:15:38] Speaker 00:
Whether that's right or wrong, you're asking us to read a provision of the contract 4.10 and eliminate what is arguably the basis for the provision in its entirety, which says, as indicated in an official LMR.

[00:15:53] Speaker 00:
You read that language outright.

[00:15:55] Speaker 00:
You're saying that's not a requirement.

[00:15:58] Speaker 02:
You honor, we disagree.

[00:16:01] Speaker 03:
I think another way to look at this, at least in our view, is that is the only reasonable construction of- I'm just confused, because if your client honestly thought it should be getting LMRs for empty return trips, you would think that you would have seen them raise that issue far earlier and say, why aren't you giving us an order for the empty return trip so we can get paid for it?

[00:16:25] Speaker 02:
Your Honor, we did, actually.

[00:16:26] Speaker 02:
It's in the record.

[00:16:27] Speaker 02:
So there's emails corresponding back and forth with the contracting officer.

[00:16:31] Speaker 02:
This is the summer of 2009.

[00:16:33] Speaker 02:
We never got an answer from the contracting officer.

[00:16:37] Speaker 02:
We never got a definitive answer saying that backhaul is not.

[00:16:41] Speaker 02:
There were emails back and forth.

[00:16:42] Speaker 02:
They were from the tenants.

[00:16:43] Speaker 02:
They were from Major Coger, who wrote that email against our client.

[00:16:47] Speaker 02:
And there was a lot of back and forth.

[00:16:49] Speaker 02:
And this is all during there's a congressional investigation.

[00:16:53] Speaker 02:
Concerning this contract, there was a criminal investigation by the Division of the Army.

[00:16:57] Speaker 02:
So we certainly raised it.

[00:16:59] Speaker 02:
There's no question that we raised it.

[00:17:02] Speaker 02:
The expectation all along was that the deliveries would be coming from Bagram, going out to the FOBs, the COPs, and the trucks would necessarily have to come back.

[00:17:12] Speaker 02:
And with all respect, if the government simply intended never to pay back haul,

[00:17:18] Speaker 02:
They could have said that and they should have said that in response to Q&A 34.

[00:17:22] Speaker 02:
And they finally did say that when they modified the contract for the option year, where when you look at sections 4.10 and 4.11,

[00:17:31] Speaker 02:
And Judge Yeas, this goes to your question about distinguishing retrograde and backhaul.

[00:17:36] Speaker 02:
First time they distinguish retrograde and backhaul is in the modification 3.

[00:17:40] Speaker 02:
Backhaul is now in section 4.10.

[00:17:45] Speaker 02:
Retrograde is now in 4.11.

[00:17:49] Speaker 02:
They modified sections 4.2 and 4.10 of the contract to expressly say that backhaul will not be paid.

[00:17:57] Speaker 02:
And they actually changed it, because they say about negotiation with

[00:18:01] Speaker 02:
the MCB, the Movement Control Battalion.

[00:18:05] Speaker 02:
Now ultimately, from a practical and very feasible standpoint, there is really no way to operate this contract or execute this contract successfully without backhaul.

[00:18:16] Speaker 02:
And our client did our best.

[00:18:18] Speaker 02:
We asked

[00:18:19] Speaker 03:
But I don't think the government is saying that it didn't understand that there would be cargo-less backhaul.

[00:18:28] Speaker 03:
Their argument is that this is all incorporated in the firm fix price for each trip that's based on an LMR.

[00:18:38] Speaker 02:
Your Honor, but that gets us to the question of whether the government's interpretation is the only reasonable interpretation, because

[00:18:46] Speaker 02:
I think most of our discussion today is about whether the contract itself is unambiguous.

[00:18:51] Speaker 02:
We focused on that.

[00:18:52] Speaker 02:
We haven't focused on any parole evidence or the extrinsic evidence.

[00:18:56] Speaker 02:
For this court to affirm the board's decision, actually Judge Shackelford's decision, on the contract interpretation, the court has to conclude that the only reasonable interpretation of contract is that backhaul is excluded from payment.

[00:19:13] Speaker 02:
unless it's absolutely specifically specified on an LMR and TILA.

[00:19:18] Speaker 04:
The 4.10, the only reference to backhaul in the contract?

[00:19:22] Speaker 02:
Judge Chen, correct.

[00:19:23] Speaker 02:
So there's no definition of backhaul.

[00:19:26] Speaker 04:
But the only reference to the word backhaul in the entire contract is connected to these official LMR admission sheets.

[00:19:35] Speaker 02:
And when you read 410 in connection with 411.1, and the key here really is what defines the completion.

[00:19:43] Speaker 04:
411.1, though, says upon mission completion, which suggests to me, the plain reading to me is, you have to return the sheets after the mission has been completed.

[00:19:56] Speaker 04:
And the mission statement explains that you complete the mission once you deliver the goods and equipment to the destination

[00:20:04] Speaker 02:
Judge Tan, our response to that is, I think, at best, that's a reasonable interpretation.

[00:20:11] Speaker 02:
But again, it doesn't say, the contract language itself doesn't say that the mission completion is ended at the destination point.

[00:20:20] Speaker 02:
If that were the case, I would agree that that would be perhaps fatal to our case.

[00:20:27] Speaker 02:
But all that does is confirm that there's some ambiguity here.

[00:20:34] Speaker 02:
There's no definition of mission completion, because that defines when travel is getting paid.

[00:20:39] Speaker 02:
And there's no definition of backhaul.

[00:20:41] Speaker 02:
So again, at best, this contract is ambiguous.

[00:20:45] Speaker 02:
And if it is ambiguous for that provision, then the government agrees that this should at least be a remit.

[00:20:49] Speaker 02:
And Your Honor, I know I'm way into my rebuttal time.

[00:20:51] Speaker 00:
Yeah, you're way over every time.

[00:20:53] Speaker 00:
So we'll restore some rebuttal, but why don't we hear from the governor?

[00:20:56] Speaker 02:
Thank you, Judge Christy.

[00:21:23] Speaker 01:
Good morning.

[00:21:24] Speaker 05:
Good morning, Your Honor.

[00:21:25] Speaker 05:
May it please the court?

[00:21:26] Speaker 05:
The court should affirm the denial of Stahl-Walker's claims because the clear plain language of the Bayshear contract.

[00:21:36] Speaker 03:
Are backhaul and retrograde the same thing?

[00:21:38] Speaker 05:
No.

[00:21:41] Speaker 05:
Referring now to the terms of the Bayshear contract, retrograde was explicitly defined.

[00:21:48] Speaker 05:
There was a definition.

[00:21:49] Speaker 05:
It involved moving

[00:21:53] Speaker 05:
supplies, resources, back to AdRat, so they would go to the continental United States.

[00:22:01] Speaker 05:
And that's explicit in the definition.

[00:22:04] Speaker 05:
So retrograde operations in the basher of the contract are a very narrow

[00:22:11] Speaker 05:
group of operations.

[00:22:12] Speaker 03:
When you say it's that narrowly defined, you mean to include the limitation to moving the equipment back to the United States, not just moving equipment around?

[00:22:24] Speaker 05:
Correct.

[00:22:25] Speaker 05:
It is defined as going back toward continental United States.

[00:22:29] Speaker 03:
And that's in the contract?

[00:22:31] Speaker 05:
That's in the first year of the contract.

[00:22:33] Speaker 03:
Okay.

[00:22:33] Speaker 05:
Okay, the definition changes for

[00:22:36] Speaker 05:
the option year of the contract.

[00:22:38] Speaker 04:
What about the common ordinary meaning of backhaul?

[00:22:41] Speaker 04:
Doesn't that encompass just merely a return trip to the point of origin, and whether that's with cargo or without cargo?

[00:22:51] Speaker 05:
I would agree that backhaul is returning to the point of origin.

[00:22:57] Speaker 05:
What the contract said in this case is that backhaul is payable only if it is indicated on the LMOR TMR.

[00:23:07] Speaker 04:
Where does the contract say precisely what you just said?

[00:23:11] Speaker 05:
It says that.

[00:23:12] Speaker 04:
The only backhaul that you're going to get paid for is backhaul that's set forth explicitly in a mission statement.

[00:23:21] Speaker 05:
That is our understanding of paragraphs 4.1 combined with 4.10

[00:23:26] Speaker 05:
4.1 says, convoys may travel only as directed on the official LMR-TMR.

[00:23:34] Speaker 05:
And then going to paragraph 4.10, it says, that's the one for backhaul operations, retrograde operations.

[00:23:43] Speaker 05:
It says there, the contractor shall pick up and deliver equipment and resources associated with backhaul operations.

[00:23:50] Speaker 00:
Well, I understood your answer.

[00:23:52] Speaker 00:
So you think there's backhaul all of the time, but that the contract only says, we're only going to pay for those

[00:24:01] Speaker 00:
instances of backhaul in which we did the official LMR?

[00:24:08] Speaker 05:
I understood Judge Chen's question to go to the, what is backhaul?

[00:24:13] Speaker 05:
And that's all I was answering.

[00:24:15] Speaker 00:
Well, actually, I may be sorry to interrupt.

[00:24:18] Speaker 00:
So you agree there were backhaul on all these trips?

[00:24:21] Speaker 00:
Is the government's view, though, yes, there was backhaul, but you only get

[00:24:26] Speaker 00:
paid for those instances of backhaul in which we've indicated this on the LMR?

[00:24:32] Speaker 00:
Are you saying that none of these trips that they're arguing about constituted backhaul under the contract?

[00:24:40] Speaker 05:
Actually, it's three separate questions.

[00:24:41] Speaker 05:
The first is, what is backhaul?

[00:24:44] Speaker 05:
I answered Judge Chen's question.

[00:24:47] Speaker 05:
The second question is, did backhaul occur?

[00:24:51] Speaker 05:
I understand that that's part of your honors question.

[00:24:56] Speaker 05:
Certainly, it appears based on the testimony in the record that backhaul occurred, meaning movement from the point of delivery to somewhere else.

[00:25:07] Speaker 05:
If you go into the testimony, backhaul happened.

[00:25:10] Speaker 05:
That backhaul was not on an LMR, TMR.

[00:25:15] Speaker 05:
That's absolutely clear in the record.

[00:25:18] Speaker 03:
I'm getting a little confused myself.

[00:25:23] Speaker 03:
it can include just the return of the empty truck, or it can include a return trip where you carry cargo back, right?

[00:25:36] Speaker 03:
Is that correct?

[00:25:39] Speaker 03:
Does backhaul have both definitions, or in your view, is it just return of the empty truck?

[00:25:47] Speaker 05:
If the question is the definition,

[00:25:49] Speaker 05:
as how people understood backhaul.

[00:25:52] Speaker 03:
Yeah, the general definition.

[00:25:54] Speaker 05:
People understood backhaul to be either carrying cargo or not carrying cargo.

[00:25:59] Speaker 03:
OK.

[00:26:00] Speaker 03:
And so I just wanted to get there.

[00:26:03] Speaker 03:
And then are you saying that you're aware of instances where backhaul happened where these return trucks were carrying cargo?

[00:26:12] Speaker 03:
but not for an LMR?

[00:26:14] Speaker 03:
Or are you saying you're aware that backhaul of empty trucks occurred, but there is no LMR that would get them compensated for that?

[00:26:23] Speaker 05:
The latter, Your Honor.

[00:26:24] Speaker 05:
Backhaul of empty trucks occurred, there was never referring to both years of the contract.

[00:26:32] Speaker 03:
So in your view, the backhaul that's referenced in 410 has to be read in

[00:26:38] Speaker 03:
in combination with the first part of the sentence, which contractors shall pick up and deliver equipment and resources associated with backhaul on an LMR.

[00:26:51] Speaker 05:
Yes, certainly.

[00:26:51] Speaker 05:
You read the whole sentence there, subparagraph 4.10.

[00:26:55] Speaker 05:
In order to be payable under the base year, the express language is here.

[00:27:02] Speaker 05:
It has to be associated with picking up equipment and resources and traveling it as directed on the LMR, TMR.

[00:27:13] Speaker 05:
That did not happen.

[00:27:16] Speaker 05:
Therefore, it was not payable.

[00:27:19] Speaker 05:
There was never an instance where the government directed that the contractor

[00:27:26] Speaker 05:
backhaul carrying cargo from one location to another location because we never directed it.

[00:27:33] Speaker 05:
They were never entitled to payment.

[00:27:37] Speaker 00:
And also, we're relying on... But you're talking about backhaul now where you are delivering goods on the back end between one place or another and not empty trucks returning them back?

[00:27:50] Speaker 05:
Yes, that's what I was referring to.

[00:27:51] Speaker 05:
If there was an instance where we had directed on an LMR, TMR,

[00:27:56] Speaker 05:
that the carrier carry equipment or cargo or whatever, fuel from one location back to another location, and it was on the LMR, TMR, then the government would have paid for it, and they would have been entitled to it.

[00:28:15] Speaker 05:
It did not happen.

[00:28:16] Speaker 05:
That's why.

[00:28:17] Speaker 00:
So it's your view that the government had the discretion on a case-by-case basis.

[00:28:21] Speaker 00:
So even, we're not talking about empty truck movement and return.

[00:28:25] Speaker 00:
We're talking about you get to one location, you drop off your stuff and you're told and take this back to the other location.

[00:28:32] Speaker 00:
You're saying that sometimes the government may have indicated that that's official and therefore they got paid and other instances the government may not have indicated it on an LMR and they were not paid for that.

[00:28:45] Speaker 05:
That's not what I'm saying.

[00:28:47] Speaker 05:
OK.

[00:28:48] Speaker 05:
What we're saying is that in order to be entitled to payment, there had to be an LMR, TMR directing you, the carrier, to do backhaul.

[00:29:03] Speaker 05:
And as the paragraph 4.10, that contemplates that you would be carrying something.

[00:29:09] Speaker 05:
There was never any instance during the basher of the contract where we directed

[00:29:16] Speaker 05:
through an LMR, TMR that the contractor performed backhaul.

[00:29:21] Speaker 05:
Now, the other question your honor asked was, did they travel back to the origin?

[00:29:27] Speaker 05:
Well, according to the testimony, in many cases, they did.

[00:29:32] Speaker 05:
But that was the carrier's decision as to how they would route their trucks.

[00:29:38] Speaker 05:
The trucks were empty.

[00:29:39] Speaker 05:
They went where the

[00:29:42] Speaker 05:
carrier told them to go.

[00:29:43] Speaker 05:
We didn't direct it.

[00:29:45] Speaker 00:
And we're also... Is it your view that that was, I think Judge, you suggested this earlier with your friend, that that was sort of built into the amount that the contract was valued at?

[00:29:55] Speaker 00:
Kind of like, I hire a moving company to move me to California.

[00:29:59] Speaker 00:
I'm paying for them to go from DC to California.

[00:30:03] Speaker 00:
I'm not officially paying them to drive the truck back empty, back to DC, but presumably the cost of that is somehow included in the cost of my move, right?

[00:30:15] Speaker 05:
Is that what's going on here?

[00:30:21] Speaker 05:
It could very well.

[00:30:22] Speaker 05:
Well, I have to now rely on testimony, Your Honor.

[00:30:26] Speaker 05:
There was testimony in the record from one of the subcontractors that worked for Starwalker.

[00:30:34] Speaker 05:
And he testified that he was one of the truckers.

[00:30:38] Speaker 05:
His rates.

[00:30:40] Speaker 05:
included backhaul.

[00:30:42] Speaker 05:
He gave a fixed rate, and it covered moving his trucks forward and moving his trucks back to the origin.

[00:30:50] Speaker 05:
And that's the way he priced it, and that's what he was paid.

[00:30:54] Speaker 00:
And we were talking in those circumstances where the truck coming back, the backhaul consisted of an empty truck.

[00:31:00] Speaker 05:
Yes.

[00:31:01] Speaker ?:
OK.

[00:31:01] Speaker 05:
Yes, based on that subcontractor's testimony.

[00:31:04] Speaker 04:
Why isn't your answer to Judge Prost's question just yes?

[00:31:10] Speaker 04:
Because based on the unambiguous reading of this contract, the contractor needed to factor in its own costs of returning truck back without any cargo to the point of origin so that it could pick up more cargo and to deliver to other parts of the Warsaw.

[00:31:32] Speaker 05:
Your Honor, we certainly agree with you.

[00:31:35] Speaker 05:
I took Judge Pro's question to be asking me what actually happened, as opposed to what should have happened.

[00:31:44] Speaker 05:
And I distinguish between the two points Your Honors are making.

[00:31:48] Speaker 00:
Can I just, I know maybe this is frustrating for you because we're asking questions that are unclear, but bear with me.

[00:31:57] Speaker 00:
Let me just ask you one question for me to put this all together in my head.

[00:32:02] Speaker 00:
There seem to be two kinds of back hauls.

[00:32:04] Speaker 00:
One is just returning the empty truck.

[00:32:07] Speaker 00:
And you say, generally, the government doesn't pay for that.

[00:32:10] Speaker 00:
That's just built-in costs.

[00:32:12] Speaker 00:
But then 410 seems to refer to a particular kind of backhaul, where you are directed to pick up and deliver equipment.

[00:32:24] Speaker 00:
So the backhaul operation is the pick up and delivery of equipment, not just the driving back the empty truck.

[00:32:33] Speaker 00:
So are you saying that 410 means that in that limited circumstance where you're directed to move stuff back, it's kind of up to the government?

[00:32:44] Speaker 00:
I mean, you still need an indication on the LMR that that's what you're doing, but you get paid for that.

[00:32:50] Speaker 05:
you do get paid for it because it is on the LMR.

[00:32:55] Speaker 00:
So in those instances, there has to be an LMR that tells you you're going to move this stuff back to Valgrove.

[00:33:03] Speaker 00:
Yes.

[00:33:03] Speaker 00:
And that's the indication that means that you're going to get paid because you're told to take these goods and bring them back.

[00:33:10] Speaker 00:
Yes.

[00:33:10] Speaker 00:
All right.

[00:33:10] Speaker 00:
Thank you.

[00:33:12] Speaker 05:
And the invoicing clause also makes clear that you're paid for the movement of trucks that is directed

[00:33:20] Speaker 05:
by the government.

[00:33:21] Speaker 05:
If it's directed, we pay for it.

[00:33:25] Speaker 05:
And in fact, we did.

[00:33:27] Speaker 00:
There is directed.

[00:33:28] Speaker 00:
In 410, it used the word as indicated.

[00:33:34] Speaker 05:
Certainly.

[00:33:34] Speaker 05:
I was referring there to the invoicing clause when I just spoke.

[00:33:38] Speaker 05:
But I don't read this as any different between.

[00:33:43] Speaker 05:
I read 4.1 and 4.10 together.

[00:33:47] Speaker 05:
And if it's on the LMR, TMR, it's directed.

[00:33:54] Speaker 05:
And we paid for everything on the LMR, TMRs.

[00:34:00] Speaker 04:
And then 4.2 emission days, where there's an E1 invoicing heading.

[00:34:10] Speaker 04:
Contractors shall only invoice for days of actual service performance.

[00:34:14] Speaker 04:
And then there's another statement.

[00:34:18] Speaker 04:
Any event not directed by the government shall not be included as a day of services for the purposes of invoices submitted to the government.

[00:34:28] Speaker 04:
So again, this says only when you're directed by the government does the government have an obligation to pay

[00:34:38] Speaker 04:
services that day.

[00:34:40] Speaker 05:
Yes, we agree with that.

[00:34:43] Speaker 04:
Is there any way for the government to direct an event to be performed by the contractor outside of the use of a mission statement, outside of the use of an LMR, TMR?

[00:35:03] Speaker 05:
Having reviewed the entire record, I'm not aware of any, but I can see that

[00:35:07] Speaker 05:
being wartime, something might occur.

[00:35:10] Speaker 05:
But in any event, if it did occur, the obligation of the government is to put it in an LMR, TMR.

[00:35:17] Speaker 05:
And we believe that they would have put it in the LMR, TMR, and you would have been paid for it if you did it pursuant to direction.

[00:35:33] Speaker 05:
Now if I could just address briefly the other points that were made by my colleague here referring to the question and answer, number 34.

[00:35:50] Speaker 05:
I think that's very clear that the question was about paragraph 4.10 and 4.10 combined with 4.1 and the invoice enclosed together.

[00:36:00] Speaker 05:
It all makes very clear that it has to be on

[00:36:04] Speaker 05:
a LMR, TMR in order for back wall operations to be payable.

[00:36:09] Speaker 05:
And if it was, then it would be paid at the rates.

[00:36:12] Speaker 05:
And that's how the government responded.

[00:36:16] Speaker 05:
The other provision that was argued is paragraph 4.11.1.

[00:36:27] Speaker 05:
And here, as I understand the argument that's being made, it's one of necessity

[00:36:34] Speaker 05:
They're arguing, well, this was really we needed to do it this way.

[00:36:39] Speaker 05:
Well, that's not how you become entitled to payment.

[00:36:43] Speaker 05:
You're only entitled to payment if the travel of the truck is directed by the government in the LMR, TMR.

[00:36:52] Speaker 05:
It's not whether you, the contractor, view travel of a truck as being necessary.

[00:36:58] Speaker 05:
That's not what entitles you to payment.

[00:37:02] Speaker 05:
And hypothetically, these convoys traveled with convoy team leaders.

[00:37:06] Speaker 05:
Those are the CTLs.

[00:37:08] Speaker 05:
Hypothetically, those individuals could have returned the LMR, TMRs to the program manager at Bagram.

[00:37:17] Speaker 05:
The point here is only is that the action was not directed

[00:37:21] Speaker 05:
by the government.

[00:37:22] Speaker 05:
It was actions that the contractor decided it would take on its own.

[00:37:30] Speaker 05:
Then just turning to the modification.

[00:37:35] Speaker 05:
This is modification three of the contract, which changed the terms.

[00:37:47] Speaker 05:
Our position on modification three is that it clarified language that was already clear in the base contract.

[00:38:00] Speaker 05:
And because the base contract is clear and has only one reasonable interpretation, what that means is that even if modification three was void and the original language remained in place,

[00:38:18] Speaker 05:
the claim for the option year.

[00:38:21] Speaker 00:
Doesn't that suggest, and we do a lot of statutory construction here and all of this stuff.

[00:38:26] Speaker 00:
I mean, doesn't the subsequent codification of a clearer rule suggest that it was different than the previous rule?

[00:38:36] Speaker 05:
No, no.

[00:38:38] Speaker 05:
Well, there is a difference.

[00:38:40] Speaker 05:
If you look at the change, there is a difference.

[00:38:43] Speaker 05:
Because they changed, for example, they changed the definition of retrograde.

[00:38:47] Speaker 05:
They changed the definition of backhaul.

[00:38:50] Speaker 05:
But that's not the question before the court.

[00:38:53] Speaker 05:
The question before the court is whether there's only one reasonable interpretation of the contract language for the base year.

[00:39:02] Speaker 05:
That's the issue before the court.

[00:39:04] Speaker 04:
And the question I think Judge Prost has, doesn't the modification to the contract raise an inference that what the contract says now as modified has a different meaning than what was there before?

[00:39:25] Speaker 05:
Well, but not with respect.

[00:39:30] Speaker 05:
The terms are different.

[00:39:32] Speaker 05:
There's a different definition of retrograde.

[00:39:34] Speaker 05:
And there is a different definition of backhaul.

[00:39:40] Speaker 05:
But the issue was whether you were entitled to compensation under the terms of the base year contract.

[00:39:49] Speaker 05:
And there, there is only one reasonable interpretation.

[00:39:54] Speaker 05:
And we're relying here on paragraphs 4.1, 4.10, the invoicing clause.

[00:40:01] Speaker 04:
The fact that... So then what was the purpose of the modification?

[00:40:05] Speaker 05:
The modification... What was the intent?

[00:40:09] Speaker 05:
There was a dispute between the Starwalker and the government.

[00:40:16] Speaker 05:
Starwalker contended that they should be entitled, they should be paid for backhaul, even though it was not an LMR.

[00:40:23] Speaker 05:
They weren't carrying anything.

[00:40:25] Speaker 05:
They should be paid.

[00:40:27] Speaker 05:
And just to clarify, if I could,

[00:40:29] Speaker 05:
There was a question from Dutch Hughes about whether the Stoworker asked for an LMR or TMR.

[00:40:38] Speaker 05:
That, in fact, did not happen.

[00:40:39] Speaker 05:
If you look at the emails that are in the appendix, you'll see that that question was not raised.

[00:40:46] Speaker 05:
But there was indeed a dispute.

[00:40:49] Speaker 05:
And in order to resolve the dispute for the option year, the language was changed.

[00:40:55] Speaker 05:
But the point I'm making here about modification three is if you agree with us that there's only one reasonable interpretation of the contract base year terms, even if mod three is void and the original language remains in place, what that does is it results in an affirmance of the denial

[00:41:19] Speaker 05:
for the option year, because they're not entitled.

[00:41:22] Speaker 00:
We're way over time.

[00:41:24] Speaker 00:
We appreciate your effort.

[00:41:25] Speaker 00:
Thank you.

[00:41:27] Speaker 00:
Mr. Dowd, will we still have three minutes of rebuttal?

[00:41:39] Speaker 02:
Thank you, Your Honors.

[00:41:40] Speaker 02:
I will be brief.

[00:41:43] Speaker 02:
In terms of the modification, I think there's no question that

[00:41:46] Speaker 02:
That shows us there's at a minimum some ambiguity in the original contract.

[00:41:50] Speaker 03:
Well, doesn't it just show that you thought there was ambiguity and the government, in order to get over the dispute with you, made it clear it thought there was no ambiguity?

[00:42:00] Speaker 02:
I think in the abstract, judges, I might agree with you, but when you look at the record, so for example, the contracting officer, Lieutenant Colonel McIntyre, he issued a memorandum December 15, 2009.

[00:42:12] Speaker 02:
in connection with the proposed modification saying that there's a likelihood that there's going to be equitable adjustments given the scope of the change.

[00:42:19] Speaker 02:
He testified that he was changing the language of the contract to make sure that that backhaul was no longer compensable.

[00:42:27] Speaker 02:
So in the abstract, I might agree, but when you look at the language, 4.10, 4.2, they both expressly say... Is the government counsel correct that you never

[00:42:40] Speaker 03:
asked for an LMR for a cargo-less backhaul operation?

[00:42:44] Speaker 02:
Did we ever ask for an LMR or TMR?

[00:42:48] Speaker 02:
I think the answer to your question is it's not in the record.

[00:42:52] Speaker 02:
There's no indication of such, but I'm not really sure that's relevant because there was clear dispute June, July 2009 back and forth with the contracting office that

[00:43:02] Speaker 02:
we explain based on the contract language that we think backhaul should be compensable.

[00:43:09] Speaker 02:
Does that answer your question?

[00:43:12] Speaker 03:
Yeah, it answers my question.

[00:43:13] Speaker 03:
If you thought cargoless backhaul should be compensated and you knew the way to get compensated was to ask for an LMR, I'm kind of curious why you didn't ask for an LMR.

[00:43:23] Speaker 02:
So I think that's where the miscommunication or the ambiguity lies.

[00:43:30] Speaker 02:
Because when our contractor asked Q&A 34, the government didn't respond.

[00:43:37] Speaker 02:
The government pointed to Section 4.2.

[00:43:42] Speaker 02:
all the parties knew that backhaul would be necessary.

[00:43:45] Speaker 02:
I mean, it's absolutely necessary to execute this contract.

[00:43:48] Speaker 04:
Your question specifically referenced 4.10.

[00:43:52] Speaker 04:
And so if 4.10 unambiguously restricts backhaul being contemplated in that provision to backhaul that includes cargo as directed by the government through an LMR-TMR, then that's

[00:44:10] Speaker 04:
That's the reason why the Q&A doesn't help you, because in the context of that Q&A, it's all inside the idea of a very limited kind of LMR, a backhaul that's actually directed by the government through an LMR TMR.

[00:44:25] Speaker 02:
Judge Chen, if you come to that conclusion, I'll agree with you, but I think the only way you can come to that conclusion is read 4.10 in the absence of the Q&A.

[00:44:35] Speaker 02:
We all understood what backhaul was.

[00:44:37] Speaker 02:
We all understood it was necessary.

[00:44:39] Speaker 03:
No, no, no, no.

[00:44:40] Speaker 03:
This is where I think, I don't think you're making the correct argument here, because of course backhaul, as a generic term, can include cargo-less movement of vehicles.

[00:44:53] Speaker 03:
Yes.

[00:44:53] Speaker 03:
But backhaul, as defined in 410, specifically references the delivery of goods and resources, right?

[00:45:01] Speaker 03:
And then further says, as

[00:45:03] Speaker 03:
as indicated on an LMR.

[00:45:05] Speaker 03:
So the government is not using this generic definition of backhaul that is both cargoed and cargoless return.

[00:45:14] Speaker 03:
It is talking only about cargoed return.

[00:45:17] Speaker 02:
Judge, 410, it doesn't define backhaul.

[00:45:19] Speaker 02:
It actually uses the distinction between backhaul and retrograde.

[00:45:23] Speaker 02:
So retrograde is generally considered retrograde operations delivering material from the FOBs back to the base.

[00:45:30] Speaker 03:
OK, let's put that aside.

[00:45:32] Speaker 03:
Actually, never mind.

[00:45:33] Speaker 03:
You're well over your time.

[00:45:36] Speaker 03:
It defines backhaul in the sense that it is using it in the context of that whole sentence, which talks about the delivery of goods and resources as indicated on an LMR.

[00:45:48] Speaker 03:
So he contemplates cargoed backhaul, not cargoed backhaul.

[00:45:53] Speaker 03:
Why isn't that the best reading?

[00:45:55] Speaker 02:
Because I think perhaps at best it's a reasonable reading, but it's not the only reasonable reading.

[00:46:01] Speaker 02:
And the reasonable reading is to look at that provision and say there's delivery to and from.

[00:46:06] Speaker 02:
There's delivery, including retrograde operations, which are different than backhaul operations.

[00:46:12] Speaker 02:
So I think, Your Honor, at best, there's some ambiguity.

[00:46:15] Speaker 02:
And in fact, my colleagues from the government acknowledged that in response today, saying that she had to rely on testimony in response to one question.

[00:46:23] Speaker 02:
And my closing thought, Your Honor, because I know I'm way over time.

[00:46:27] Speaker 02:
Just to address my colleague's point about Mr. Mohadidi's testimony, he testified clearly that he was compensated for backhaul.

[00:46:36] Speaker 02:
And that was 1438.

[00:46:37] Speaker 02:
And I think that's not an accurate reading of the testimony.

[00:46:42] Speaker 02:
I know that goes for an ambiguous plan.

[00:46:45] Speaker 00:
Thank you.

[00:46:45] Speaker 00:
Thank you, Your Honor.

[00:46:46] Speaker 00:
Thank you very much, both sides.

[00:46:48] Speaker 00:
And the case is submitted.