Free Transcript - District Court of Federal Claims - federal

Case 1:07-cv-00206-FMA

UNITED STATES Page 1 of 81 Document 31 Filed 05/27/2008 COURT OF FEDERAL CLAIMS
) ) ) ) ) Docket No. 07-206C ) ) ) )

LUBLIN CORPORATION, Plaintiff, v. UNITED STATES, Defendant.

Live Tape (The following transcript was transcribed from a digital recording provided by the United States Court of Federal Claims to Heritage Reporting Corporation on May 20, 2008.)

Pages: Place: Date:

1 through 94 Washington, D.C. May 13, 2008

HERITAGE REPORTING CORPORATION
Official Reporters

1 Case 1:07-cv-00206-FMA Document 31 Filed 05/27/2008 Page 2 of 81

IN

THE

UNITED

STATES

COURT

OF

FEDERAL

CLAIMS

LUBLIN CORPORATION, Plaintiff, v. UNITED STATES, Defendant.

) ) ) ) ) Docket No. 07-206C ) ) ) )

Tuesday, May 13, 2008

Live Tape (The following transcript was transcribed from a digital recording provided by the United States Court of Federal Claims to Heritage Reporting Corporation on May 20, 2008.) APPEARANCES: On Behalf of Plaintiff: WILLIAM F. THOMSON, JR., Esquire Gilbert & Thomson 952 Trenton Rd. Fairless Hills, Pennsylvania 19030 (215) 337-3900 On Behalf of Defendant: MATTHEW SOLOMSON, Esquire U.S. Department of Justice

Heritage Reporting Corporation (202) 628-4888

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P R O C E E D I N G S (2:05 p.m.) THE COURT:

We are on the record in the matter of Lublin

Corporation v. United States, Case No. 07-206C. Mr. William F. Thomson. MR. THOMSON: THE COURT: Good afternoon, sir.

For Plaintiff, we

Good afternoon, Your Honor. All right.

And we're using electronic digit

recording, and so I'm going to ask you both to one, stay relativel

those microphones when you're seated and also stay relatively clos the microphone when you get up to the podium. name is T-H-O-M-S-O-N. I'll also note for the record that if you desire a copy

So Mr. Thomson's la

essentially the proceedings today or a transcription, you can actu that one of two ways.

You can request a copy of the audio file, w

be provided to you on a CD-ROM, or you can ask for an actual transcription to be made based upon that recording.

So either one

those is a possibility if for some reason you think you need it. And for Defendant, we have Matthew Solomon from Department of Justice. MR. SOLOMSON: THE COURT: Good afternoon, Mr. Solomon. Good afternoon, Your Honor.

And I'll just spell your name for the record

too, which is S-O-L-O-M-S-O-N. Heritage Reporting Corporation (202) 628-4888

3 Case 1:07-cv-00206-FMA Document 31 Filed 05/27/2008 Page 4 of 81

So it's Defendant's motion to dismiss, and we're going t to it in a moment.

What I thought I would do, though, at the outs

give you a sense as to what I'm seeing.

We're going to start in a

while here with Mr. Solomon first, then go to you, Mr. Thomson, an

of go back and forth as long as you have something that you all wa say.

Mr. Solomson has several theories that he's arguing in h

motion to dismiss, but the two that I think are things that we can

today or at least the two that I think are the primary focus today

the question of whether or not the Contracts Disputes Act covers t

of a contract such that jurisdictional prerequisites to bringing a need to be met. And then the second has to do with the potential

application to this case of 31 U.S.C. ' 1501.

I know there's a co

arguments sort of hanging out there, but those really are the two want to focus on. So let me just give you some preliminary thoughts about those.

The Contracts Disputes Act of course defines what types of

arrangements are subject to that statute for a variety of purposes

purpose that it does so is to help to define this Court's jurisdic of its Contracts Disputes Act jurisdiction.

The other thing of co

that same provision serves to do is to help define the jurisdictio

various Boards of Contract Appeals, which also have jurisdiction t up CDA cases. Heritage Reporting Corporation (202) 628-4888

4 Case 1:07-cv-00206-FMA Document 31 Filed 05/27/2008 Page 5 of 81

In the context of the latter, the Federal Circuit has co the language of 41 U.S.C. ' 602(a) on several occasions. And in

particular, the focus that they've had is not on the portion of th

that talks about goods or services but on what is meant by the ter procurement.

And they've said a couple of things in their cases regar

what that terms means, most recently in a case, and let me just pu

here, that they decided I think just last year, actually two years Wesleyan Company, Inc. v. Harvey. And that's a case that was

construing 602(a) in the context of deciding whether or not the Bo Contract Appeals had jurisdiction over a matter.

In Wesleyan, they focused in on the definition, and they

cited some of their earlier cases, so this is not sort of new law.

actually a restatement of about three or four at least other Feder

opinions in which they've said that procurement for purposes of th

statute means "the acquisition by purchase, lease or barter of pro

services for the direct benefit or use of the Federal Government",

limitations of that definition in many cases deriving from the ref

"by purchase, lease or barter" and also by virtue of the reference phrase "direct benefit or use". And so that language appears not just in this Wesleyan

case, again, that's 454 F.3d 1375, it actually originated in a cas

New Era Construction v. United States, which is 890 F.2d 1152, a 1 Heritage Reporting Corporation (202) 628-4888

5 Case 1:07-cv-00206-FMA Document 31 Filed 05/27/2008 Page 6 of 81

Federal Circuit opinion.

And it actually shows up in about two or

other Federal Circuit opinions that have essentially restated that definition.

I'm not going to go through every single one that doe

you were to run that definition, you would see that it pops up in cases. Another one it pops up in is called Bonneville Associates

States, 43 F.3d 649, a 1994 opinion. So one of the questions I guess I have in my mind in

deciding whether or not this type of contract that we have here is

to the CDA is how it meets or does meet for that matter the defini

procurement that's set forth in these cases, which again are const Section 602(a).

So it's not like they're just sort of setting out a defi the word "procurement" for some other purpose.

In fact, they're d

procurement in the context of the precise provision that's the con

one for deciding whether or not the CDA provisions somehow limit t Court's jurisdiction.

The same provision, 602(a), defines essenti

is a contract subject to the Contract Disputes Act.

And so, in my mind, it's I guess difficult at this point

will be for Mr. Solomson I guess to convince me otherwise, to conc

how this involves a situation where there was a purchase, an acqui

a barter to use that language from these various cases -- a purcha lease or a barter to be more specific is the language. there's a purchase?

Does it lo

Certainly it doesn't look like there's a leas

Heritage Reporting Corporation (202) 628-4888

6 Case 1:07-cv-00206-FMA Document 31 Filed 05/27/2008 Page 7 of 81

think the term "barter" also doesn't quite at least jump out at me

And in fact, Judge Bruggink in a separate opinion, and I

don't think we have to probably get there, has even questioned whe or not the reference to barter in this definition is dicta and in

might not even be part of the definition so that, in fact, to have definition in his view, you might just have to show a purchase or All right?

But be that as it may, it seems to me that w

going to have to examine here whether or not there was some acquis here by purchase, lease or barter. And then we get into a question as to what do they mean

when they talk about "direct benefit or use of the Federal Governm

That language has been focused upon in cases in which the governme essentially acquires some benefit but does so indirectly.

In othe

the benefit flows to it from some other arrangement it has with a party. And so I think it's maybe a little bit more problematic

terms of trying to decide whether we're dealing with a direct bene

use, but that's also part of the calculus here in deciding whether

a procurement, and if we have a procurement, then whether or not w then have the Contract Disputes Act being triggered. There's of course a number of interesting questions

associated with whether this is covered by the Contract Disputes A

because if it is, well, then there's a whole bunch of other things Heritage Reporting Corporation (202) 628-4888

7 Case 1:07-cv-00206-FMA Document 31 Filed 05/27/2008 Page 8 of 81

would sort of expect to see here which you don't see, all right?

you're going to say that a contract is covered by the Contract Dis

Act, it seems a little odd that we wouldn't have had some identifi a contracting officer associated with this arrangement, because, otherwise, I'm not sure how one would meet the requirement of the

statute that you have to file a claim with the contracting officer know who the contracting officer is. And in fact, while I haven't done that yet but probably before we get to the point of actually rendering an opinion here,

that we're going to find that if you trigger the definition of wha

contract for purposes of the Contract Disputes Act, it actually ha

number of implications when we look at the FAR, the Federal Acquis Regulations, and we look at other places. So, in other words, there's sort of corresponding responsibilities and obligations associated with being covered by Contract Disputes Act.

It's not just there is a jurisdictional pr

There's actually meaningful sort of distinctions that have been ma

based upon the administration of the contract associated with qual as a contract for purposes of that statute. All right? So, to me, there's sort of a practical side

because I don't think it makes sense to focus upon this jurisdicti requirement I guess in the abstract without sort of saying, well,

this seem to fit the overall purpose of the Contract Disputes Act? Heritage Reporting Corporation (202) 628-4888

8 Case 1:07-cv-00206-FMA Document 31 Filed 05/27/2008 Page 9 of 81

Of course, I'm not the first person to come to that conc

because the Pasteur case, which is discussed in your briefs, a Fed

Circuit case from 1987, in applying this provision looks at the pu the Contracts Dispute Act and sort of asks the question, are they or not served by treating a particular type of arrangement as one covered by that statute. And so it seems to me that apart from a plain meaning

construction of the term, the focus is on the word "procurement" a

have the analysis in Pasteur to deal with as well, which is explai

fully apart from sort of looking at this in the abstract as a juri

issue this sounds like the type of contract that ought to be subje overall Contracts Disputes Act mechanism. thoughts I have on that issue.

So that's at least some

The other thing I wanted to talk about preliminarily bef

we hear arguments has to do with this other provision, 31 U.S.C. '

There are probably very few Federal Judges who spent a substantial

portion of their time doing budget work before they came to the be however, am somebody who spent substantial time doing budget work the Department of Justice before I came here, and there are terms in this statute which actually had meaning to me based upon that experience, one of which is the term "obligation", okay?

Obligation is actually in Title 31 a technical term of a

talking about essentially setting up a debt on the books to be ass Heritage Reporting Corporation (202) 628-4888

9 Case 1:07-cv-00206-FMA Document 31 Filed 05/27/2008 Page 10 of 81

with a particular budget so that that budget can be allocated to t obligation for purposes of budgeting.

It doesn't generally I thin

sort of obligation in the sense of any obligation, but it's talkin

about a term of art and that term of art being one that deals with government budget accounting. And so one of the questions I have about this Title 31

provision, recognizing that there's surprisingly little law out th

about this provision apart from the D.C. Circuit case that you bot

discussed and maybe a case here that sort of glancingly deals with

thing, but it seems to me that one of the questions is when it's t

about obligation here, is it really just talking about that techni

of a matching of a debt to a specific budget authority, or does it mean obligation in the broader legal sense.

One indication in my mind that it doesn't mean it in the

broader legal sense is the fact that both the Contracts Dispute Ac

as this Court's Tucker Act statute, 1491, talk about both Courts h

jurisdiction, our Court having jurisdiction and the Board of Contr Appeals having jurisdiction, over implied contracts, all right?

By definition, okay, an implied contract can be one that not have a written agreement, okay?

One reason it doesn't is that

always it deals with a situation in which acceptance occurs by vir performance.

So, even if you had a writing that evidenced the aut

those situations, you almost never have any writing that evidences Heritage Reporting Corporation (202) 628-4888

10 Case 1:07-cv-00206-FMA Document 31 Filed 05/27/2008 Page 11 of 81

acceptance because the acceptance is done by performance. All right?

And in fact, if you take a look at some auth

construing this 31 U.S.C. ' 1501, and there's actually Comptroller

General opinions out there that deal with it, you'll see that they

about a wide range of documents that can evidence the type of obli that's being referred to in the statute.

So they're not talking a

you have to have "a writing in the sense of a formal contract".

In fact, if you take a look at some of these Comptroller

General opinions, you'll see that they're talking about having wri in some form. It doesn't even have to be the contract.

There mig

other things that essentially identify the debt in such a fashion it to be matched up with budget authority.

So, in many ways, I'm not sure that the way that writing

used even in the context of this particular statute is necessarily

refer to as a fully incorporated contract, but instead they're tal documented evidence of a binding agreement, okay?

And that doesn'

necessarily mean that it has to be the binding agreement in the ty sense of an integrated written contract. But be that as it may, the problem with construing this statute as requiring as a matter of any enforcement an integrated

is the fact that there's a whole bunch of things that we have juri over here that don't seem to meet that definition. And so I don't know how that can be construed in that Heritage Reporting Corporation (202) 628-4888

11 Case 1:07-cv-00206-FMA Document 31 Filed 05/27/2008 Page 12 of 81

fashion and have 1491 be construed the way that it's been construe terms of authorizing certain forms of implied contracts, nor do I

you could have this statute mean what it means and have Section 60

the same one that we talked about in the context of the other one, about implied agreements. Those have always been viewed as implied in fact agreements rather than ones implied in law. But implied in fact

agreements by definition are not witnessed by integrated written agreements. If they were, then they would be express contracts.

So the one case that talks about the statute sort of dan

around this point, because it sort of says on the one hand, gee, w this statute means that you can't have oral contracts.

On the oth

we recognize that that would create a problem for implied in fact contracts. Definitely we don't think that it means that.

And it'

well, I don't really know aside from convenience how you get to th distinction. So it seems to me in for a dime, in for a dollar.

So either this statute is construed as requiring a writt

contract, in which case I think it blows out all those other requi it's not.

But I don't think that you can somehow say, well, it re

written contract unless you have an implied in fact contract, and don't see how you can reconcile that.

It just seems to me that in

the analysis in the one opinion that does that is basically bootst So I don't find it very persuasive at all. Heritage Reporting Corporation (202) 628-4888

12 Case 1:07-cv-00206-FMA Document 31 Filed 05/27/2008 Page 13 of 81

All right?

So now that said, I'm a little surprised by

that there are not more cases dealing with the question squarely o

whether or not you can have an oral contract that's enforceable ei under the CDA or under 1491.

There are of course a number of cases, and I can tell yo

this because I went to look, in which oral contracts appear to get

hurdle and then we get into other questions involving whether or n they're breached, whether or not there's damages owed, all right, like.

Now you can say, and I think it's fair to say, that thos

don't take a position one way or the other as to whether or not yo going to have an oral contract.

On the other hand, it does strike

bit odd that you could have a dozen or more opinions that I found

looking quickly that involve oral contracts and nobody thought tha

was a slam dunk point that basically said, oral contract, automati the door, don't have to deal with anything else.

Because, of course, that would have been the easiest way

to resolve all those cases, all right, because if oral contracts a

period, well, then you don't have to get into questions as to whet

were breached or not or as to whether or not there was authority o as to whether or not the damages were "x" versus "y". I've got an oral contract, end of discussion. this statute. Heritage Reporting Corporation (202) 628-4888 You simply

It's not cognizable

13 Case 1:07-cv-00206-FMA Document 31 Filed 05/27/2008 Page 14 of 81

All right?

But I will grant the fact that there is not

there on that, and it seems to me that one of the tasks here is go to put this statute in some context.

For me, that might mean also

look at the legislative history, because this statute dates back i 1950s and, in fact, there is legislative history that talks about

some point, it seems like it might make sense to see what the Cong thought they were doing when they passed this statute. All right.

So that's pretty much what I want to say out

outset, and that's probably a mouthful.

But I do that to help gui

and particularly you, Mr. Solomson, in terms of the points that yo address when you get up there.

Now let me actually tell you just a little bit about the that we're not talking about today.

I take Rule 12 very seriously

basically says what is or is not within the realm of something tha properly a motion to dismiss, all right?

And in my view, if you have to start looking outside the complaint, that means that you've now passed the realm of Rule 12

unless we're dealing with purely jurisdictional facts, you know, w

not a claim was filed, for example, would be appropriate in this c

this was a CDA case to look at because you can look at jurisdictio facts. But in my view, questions involving authority really go

to maybe allegations that are in the complaint, and the actual tes Heritage Reporting Corporation (202) 628-4888

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whether or not there was authority, the actual testing of who the agreement was with, whether or not it was ratified by somebody or

like in my view implicate discovery and are the types of questions should be raised up after discovery in this case.

So, if we get to that point where those arguments are th I'm not suggesting that they're not bona fide.

I am suggesting th

probably what I'm going to do is to hold those arguments until dis

occurs in this case and have them be examined at that point just s know why we're not talking about those other issues today. All right. proceed? Thomson? MR. THOMSON: THE COURT: No, Your Honor. Mr. Solomson? No, Your Honor. So any questions about how we're going to

So not merits but just procedurally, any questions, Mr.

MR. SOLOMSON: THE COURT:

All right then, Mr. Solomson, why don't you

go ahead and take the podium and let's start talking about some of issues. CDA. MR. SOLOMSON: May it please the Court.

Why don't we start talking first about the questions invo

I would like to

pick up with something the Court indicated about whether the Tucke

since it mentions implied contracts would sort of suggest that the

exist some type of implied contract over which the Court has juris Heritage Reporting Corporation (202) 628-4888

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and that usually those are going to not have a writing. THE COURT: Well, they might have some writing, but

they're not going to be integrated written agreements, because if

were, they wouldn't be implied agreements; they'd be express, whic the other word that's in the statute. MR. SOLOMSON: And on that note, though, in 602(a), the

CDA indicates that the chapter applies to any express or implied c and then lists the number of types of procurement that can occur. there are two ways to look at it.

If we were to determine or if t

were to determine or inclined to determine that procurement would necessarily include acquisition with appropriated funds and those of -THE COURT: Well, I don't know about the appropriated

funds part, but, I mean, it seems to me I'm faced up with the fact

have not one or two, and I haven't done an absolute on those count

more like three or four Federal Circuit opinions that have defined "procurement" in the context of this statute, 602(a), as meaning something that involves purchase, lease, barter, all right?

And s

question here preliminarily I think is, was there a purchase, leas here? MR. SOLOMSON: But one could not have a purchase

under that theory without appropriated funds.

So the government's

though, is that implied contract in the CDA wouldn't make any sens Heritage Reporting Corporation (202) 628-4888

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you had to use appropriated funds because there would never be a circumstance in which you have an implied contract. THE COURT: Well, I don't have any reason to know that

the word purchase requires obligation of appropriated funds.

I me

moreover, agencies have in some situations very broad procurement authority, all right?

So it's not like every single purchase of s

to be associated with an obligation that goes on the books in a pa fashion. authority.

Some agencies have the ability to spend money under gene

So I don't know anything about the word purchase and I'm

not actually sure where you're heading, because you're saying it i subject to the CDA.

So it seems to me that then you'd have to sho

that it's either a purchase, a lease or a barter.

So you're givin

reason why it's not a purchase, but what's the reason why it is a here then? MR. SOLOMSON: No, Your Honor, I think the argument is

that the implied contract in the CDA wouldn't make any sense if it limited to purchases. THE COURT: I've got four Federal Circuit opinions that

define procurement in that fashion, and so I can tell you that whe

think it makes a lot of sense or not, it's going to have to be a p lease or a barter to meet the definition of procurement. If it's

procurement, then we don't even get it, because procurement is par Heritage Reporting Corporation (202) 628-4888

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that definition, correct? MR. SOLOMSON: THE COURT: I concur.

It has to be a procurement to meet the

602(a) definition, correct? MR. SOLOMSON: THE COURT: Correct. So I can't weave my way around

All right.

the Federal Circuit opinion. MR. SOLOMSON:

How is it that that definition is me

Well, I confess that out of all those

cases, I saw only Wesleyan, and if I recall, it was the facts in t were dealing with purchase orders. Circuit used the word purchase. making a -THE COURT: Well, they're picking up a definition that

So it makes sense that the Fed

I don't know that they were neces

comes from the Board of Contract Appeals, and in that case, in fac they're citing a prior case in which they used that definition. certainly isn't sort of itself defining it.

S

It's referring to ano

other case is one of three or four that refers to a BCA opinion th

procurement for purposes of whether or not that Court has jurisdic over a particular category of contract. MR. SOLOMSON: Well, if procurement in fact meant

purchase, I don't know how else we would define purchase except wi appropriated funds. THE COURT: But that didn't happen here, right?

Heritage Reporting Corporation (202) 628-4888

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MR. SOLOMSON: THE COURT:

That did not happen here.

All right. If the Court were to construe or is

MR. SOLOMSON:

committed to construing that phrase, then in fact the CDA would no apply. THE COURT: Well, the problem I have is I'm not sure I

have a lot of flexibility on that point, because Wesleyan is defin word "procurement" for purposes of Section 602(a), okay?

Let's wo

way back through these cases here just so we understand the full s breadth of authority that we're talking about here. So Wesleyan is citing, hold on here -- so we're looking

page, I'm sure you're looking on the same place as me, on page 137 the opinion, right?

It says there, "We begin our analysis with th

language of the statute," and so it says in citing to the Pasteur

"Pursuant to the CDA, the Board," okay, so it's referring to the B

Contract Appeals, "has subject matter jurisdiction over any expres implied contract entered into by an executive agency for (1) the

procurement of property other than real property and being," okay? All right?

And then it says procurement is "the acquisi

by purchase, lease or barter of property or services for the direc or use of the Federal Government." And it's quoting from the New

Construction case, all right, which is a 1989 case. you'll see that. Heritage Reporting Corporation (202) 628-4888

So, if you lo

19 Case 1:07-cv-00206-FMA Document 31 Filed 05/27/2008 Page 20 of 81

Now, if we go to New Era, we'll see that there it says o page 1157, it goes through the same analysis.

So it says, "Sectio

of the Contract Disputes Act, 481 U.S.C. ' 602(a), makes the act applicable to any express or implied contract entered into by the

executive agency for", and this one now is using the third definit procurement of construction of real property." And then it says, "The procurement that this provision covers is a procurement by an executive agency as the Board has stated." stated.

So now it's picking up the Board's definition of procure

"The acquisition by purchase, lease or barter of property

services for the direct benefit or use of the Federal Government characterizes a Federal procurement." the Board, all right?

That's the quote it picks u

So I'm up to two cases now construing 602(a

But there in fact are two or three other ones that use t same language.

Is there any definition of contract that you're re

that doesn't rely on the word "procurement"? MR. SOLOMSON: No, I mean, I just don't know where any

of those lines get us, because that would just turn procurement in meaning purchase, and then -THE COURT: barter. MR. SOLOMSON: Well, no, excuse me, purchase, lease or

So, in this case then, our position would

be that we purchased the information and management assistance Heritage Reporting Corporation (202) 628-4888

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services from Plaintiff by the promise of confidentiality.

I mean

see any reason why purchase would be limited to just money, which would get us back to the other -THE COURT: Well, it might not be limited to money, but

presumably it might be limited to money and something else that ha essentially property value. MR. SOLOMSON: But that would then get into the sort of

analysis in the other Board cases that the government cited in its

supplemental notice yesterday wherein the government did not actua give anything tangible. THE COURT: I mean, the other problem I have with the

argument is it seems to be limitless.

If you go there and you bas

purchase is anything that has value, tangible, intangible, you kno security value, value that doesn't necessarily have to correspond

monetary value or money worth, then pretty much everything is cove by the CDA. MR. SOLOMSON: THE COURT: I agree.

Which means that every contract we have in

this Court that we've dealt with under 1491 as a non-CDA contract probably is a CDA contract. MR. SOLOMSON: No, the Winstar cases, for example,

would not be CDA contracts because they were not purchases of serv but for regulatory treatment, certain regulatory treatment. Heritage Reporting Corporation (202) 628-4888

21 Case 1:07-cv-00206-FMA Document 31 Filed 05/27/2008 Page 22 of 81

THE COURT: "services."

It depends on how you define the word

You've argued for the term "services" to be construed

If services here is the provision of information, why wouldn't ser there be, for example, the willingness to acquire a failing bank?

I'm going to take the word "services" out that broadly, in other w

anything that sort of turns into some performance, that means serv okay, that's everything. MR. SOLOMSON: But we're now going to shift the

discussion away from the word "procurement" to the word "services" just proposed one instance in which it would not cover, but based word "services" -THE COURT:

The fact of the matter is you don't know tha

there's any cases that define purchase as broadly as you're sugges

other words, that it doesn't have to be an exchange of something f something of monetary value. MR. SOLOMSON: Correct.

But there are recent cases that

have adopted broader definitions of the word "procurement" that ar necessarily mutually exclusive with the word purchase. THE COURT: statute? Well, but the ones in the contest of this

I mean, I know I could go to Webster's and find a defini

procurement, all right, and I did and it's a pretty broad definiti

But I've got four cases that are construing the section you're inv

right, defining the word "procurement" for that purpose and in fac Heritage Reporting Corporation (202) 628-4888

22 Case 1:07-cv-00206-FMA Document 31 Filed 05/27/2008 Page 23 of 81

even different clauses in your definition. So I just don't see how I could just sort of say, well, for that definition, let me go to Webster's. period. MR. SOLOMSON: That is the method that Flying Horse It just talks about

used in a 2001 case in this Court. THE COURT: Right. And that's Judge Gibson, correct?

MR. SOLOMSON: THE COURT: these cases, did he? MR. SOLOMSON:

Correct.

All right.

Who apparently didn't find any o

No.

No, none of those are discussed,

but I'm not sure that the dictionary definition is somehow preclud word purchase.

I just don't know that in those other cases, and I

that I have not taken a detailed look other than that I briefly re Wesleyan -THE COURT: Horse, right? MR. SOLOMSON: THE COURT: Yes. He's construing 602(a), isn't he, in Flying

All right.

And so, I mean, it's nice that h

wants to pull out Webster's, but he's got binding Circuit preceden he's not paying any attention to. MR. SOLOMSON: That he's not addressing, but I'm not

sure that it's inconsistent with it. Heritage Reporting Corporation (202) 628-4888

23 Case 1:07-cv-00206-FMA Document 31 Filed 05/27/2008 Page 24 of 81

THE COURT:

Well, to the extent that it's not focusing o

that definition, it's not like he's focusing on the same basic lan

the definition and just happens to use a broad definition of the w purchase for example. That's not what he's doing.

I mean, he goes to Webster's and says, procure simply means to obtain or acquire. right?

That's what he says, to obtain or acq

So he's not looking at the same concept at all as the defi

the Federal Circuit has mapped out.

He's using an entirely differ

definition, one which is so generic that seemingly it would sweep everything: to obtain.

MR. SOLOMSON:

But purchase still, I mean, all it does f

the way we would define it, it does not preclude -THE COURT:

If you haven't looked at it before today, ho

do you know how you define the word purchase?

I mean, did you act

look at the word purchase and see whether not there's been constru

of the term someplace in a case that's consistent with what you're me? MR. SOLOMSON: THE COURT:

No, Your Honor, but in Institut Pasteur -

Right.

MR. SOLOMSON:

-- the Federal Circuit briefly touched on

whether there was a necessity of being a buyer or seller relations

noted the Claims Court position in that case that there was no nee cash payment and went on to say that it was donated in that case. Heritage Reporting Corporation (202) 628-4888

24 Case 1:07-cv-00206-FMA Document 31 Filed 05/27/2008 Page 25 of 81

THE COURT:

They also of course looked at the purpose of

the procurement statute.

Are you going to suggest somehow that th

purposes are somehow served by treating this as a contract subject CDA? MR. SOLOMSON: No.

I would just suggest, though, that i

Institut Pasteur, that's not ultimately what they relied on to dec case. THE COURT:

Who's the contracting officer in this contra I assume it would -- well, that gets us

MR. SOLOMSON:

into the notion of the authority issue that -THE COURT: Well, no, I'm just saying if it's a Contact

Disputes Act contract, all right, so basically you're saying that

why there is nobody is because fundamentally the agency still does believe it has a contract. MR. SOLOMSON: THE COURT: Correct.

Okay.

All right, but in reality, there woul I mean, the letter

nobody for this person to defend a claim two.

debating about whether it's a claim or not is actually just sent t agency essentially.

It's not sent to anybody who is denominated a

contracting officer for purposes of this claim, correct? MR. SOLOMSON: Or the individual who the Plaintiff

believes was authorized to and in fact did enter into a contract. THE COURT: All right.

But you know, as I know you know

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that the term "contracting officer" is a term of art. we decide has the authority to enforce a contract.

It's just n

There's a sort

specific set of provisions that talk about the appointment of that

and what you got to say when you do it and what their authority is what it isn't. In reality, we don't have any of that here. Correct. and I believe had Plaintiff

MR. SOLOMSON:

submitted a letter or a claim that met the tests of the CDA, the C

would not find the government arguing that Plaintiff failed to sub proper contracting officer if it were sent to the person. THE COURT:

Well, I don't know what you would argue, but

quite frankly, I don't know how you'd come to the conclusion.

I'm

assuming that in a real CDA case, if someone sent the letter to th

agency in general and didn't send it to the contracting officer th

probably would be grounds for concluding that you didn't file a cl the contracting officer. All right?

So it's the fact that this is something that

quite fit the CDA rubric that maybe would lead you to sort of be a more lenient in terms of your definition as to who it's got to go MR. SOLOMSON: But then we're back to the issue of the

fact that the CDA in 602(a) does make itself applicable to implied

contracts, which in a classic sense with the contracting officer u FAR would never be oral. THE COURT: Sure they would.

I mean, I could say to the

person, if you Heritage IReporting Corporation do "x", will pay you $200,000, and then they go p (202) 628-4888

26 Case 1:07-cv-00206-FMA Document 31 Filed 05/27/2008 Page 27 of 81

MR. SOLOMSON:

Except that the FAR would restrict the

authority of that contracting officer to do anything that's not in

he would have no authority to enter into an oral contract under th so there would no way to have a contract -THE COURT: contracts.

But the FAR only applies to certain types of

Otherwise, you would never have an implied in fact con Give me an example of an implied in fact contract that

somehow is subsumed within these definitions, because the hurdles

you're posing I think basically get to the point where I can't con how one could have an implied in fact contract. one that is bona fide. MR. SOLOMSON: The way we were thinking about this

Give me an exampl

case is that where someone alleges an implied in fact contract for

procurement of goods or services, then it is covered by the CDA an they're required to submit a claim to the contracting officer. THE COURT: Well, that's not what I asked you.

I said g

me an example of something that's an implied in fact contract that all the requirements you're mapping out have to occur. MR. SOLOMSON: Well, under the definition of purchase

that the Court has set out, with that understanding, I cannot conc one. THE COURT: Sure you can. I mean, what if an agency

says to somebody, if you do "x", I'll pay you $200,000, and puts t Heritage Reporting Corporation (202) 628-4888

27 Case 1:07-cv-00206-FMA Document 31 Filed 05/27/2008 Page 28 of 81

written offer and it's accepted by performance? there. There would be cash involved there.

There would be a

Why would that not be

purchase? MR. SOLOMSON: implied contract. Oh, in that case, there would be an

Well, it wouldn't be implied.

It would be an a

THE COURT:

No, it's accepted by performance.

Therefore

it's an implied in fact contract.

That's the classic example of a

fact contract is one which is accepted by performance. There is no written acceptance, okay? It's accepted

because the person takes the offer and then performs and the performance is viewed as the acceptance.

That's sort of the arche

version of an implied in fact contract at least within this Court' jurisdiction, okay? All right. It just is.

Moreover, in those situations, it's not alwa

case at least in the cases I've seen that you specify up front exa much you're going to pay the person.

You sometimes indicate that,

know, if you do "x", then we will compensate you for that, all rig

the person accepts the offer by performance and then they figure o much money they owe the person. All right? So I'm looking for an example of an implied

contract that would weave around all the requirements you're talki

about, because if I'm hearing you, you're saying it has to be in w Well, by definition, it's not. It's not. Part of it might be.

I

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looked in our jurisprudence, we would actually find examples of or

in fact that are accepted by performance, and as long as the perso

making the oral offer is authorized, that's been viewed as okay to MR. SOLOMSON:

I think the recent jurisprudence from the

Federal Circuit says that that's not the case. THE COURT:

There's actually a case that says you have t

have these things all in writing. MR. SOLOMSON: That would be Harvard Lummis (ph),

that there's just no authority to enter into contracts or to make

modifications unless they're in writing, and that's the definition in -THE COURT:

Well, that depends, doesn't it, upon whether

or not the procurement is subject to the FAR to begin with, and so types of contracts are not subject to the FAR. MR. SOLOMSON: acquisition -THE COURT: Well, yes, but that's the whole point. You But if it was an

That's the whole p

can't say that, and I haven't looked at this, but I suspect that w

the definition of what's subject to the FAR, okay, has a limitatio too.

Not every single contractual arrangement that the Federa Government enters into is subject to the FAR.

You know for a fact

that's not the case, because the Winstar-type cases that you're ta Heritage Reporting Corporation (202) 628-4888

29 Case 1:07-cv-00206-FMA Document 31 Filed 05/27/2008 Page 30 of 81

about are contracts, all right, but they're not subject to the FAR

So we know there's whole classes of contracts recognizab

as contracts, enforceable as contracts, okay, that are not only ou CDA regime, they're also outside the FAR regime, all right? All right. omnipresent, okay?

So, for that to be the case, the FAR can't b It can't be all- inclusive. All right?

So th

the FAR might require that contracts subject to the FAR be in writ doesn't mean that all contracts have to be in writing. MR. SOLOMSON: Correct. And I believe in fact that the

FAR itself has these limitations of procurement and acquisition in THE COURT:

It wouldn't shock me to find out that lo and

behold, the CDA and the FAR are looking pretty much at the same classes of contracts. But then, if you say that it's not subject

I'm not sure that it tells me very much to say that if it is subje

FAR, it has to be in writing, because the answer may be what's not subject to the FAR. MR. SOLOMSON: that may be the case. THE COURT:

I'm not willing to agree to that here, bu

That may be the case that they're cotermino All right. So, when the Federal Circuit is

construing the FAR and says in that context it has to be in writin

not saying that all contracts, all contracts have to be in writing subject to the FAR to begin with, correct? MR. SOLOMSON: Well, of course, because they're

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interpreting the application of the FAR provision. THE COURT: All right.

So until we decide, though, whet

or not the contract we have is subject to the FAR, then we don't k

whether the writing requirement that's in the FAR is going to be c or not.

So you can't say based upon that opinion that all contra

have to be in writing or that the offer in all contracts have to b

because one of the questions is, is it subject to the FAR or is it

not, then you're going to have to point to something else that wou require writing, not the FAR. MR. SOLOMSON: But getting back to the definition of

implied contract in 602(a) -THE COURT: Right. -- I mean, my understanding, for

MR. SOLOMSON:

example, of acceptance by performance is classically in the purcha order context where you issue a purchase order. THE COURT: Well, that may be, but the whole point is

purchase I still think is talking about some form of compensation

in exchange for the acquisition of the goods or services, all righ

haven't seen a case I guess that you've cited that would suggest t

mean, we haven't even focused on the definition until today, all r

So I don't see anything here that tells me that purchase

be construed so broadly as to basically pick up everything, becaus Heritage Reporting Corporation (202) 628-4888

31 Case 1:07-cv-00206-FMA Document 31 Filed 05/27/2008 Page 32 of 81

much here the only "consideration" that's flowing from the governm

Lublin is the alleged promise that we will not tell your prime con you provided us the information. government down to Lublin here? MR. SOLOMSON: THE COURT: Not as alleged, no. Any other consideration flowing

All right.

So basically whether it's a cont

or not may be subject to debate.

But at least the alleged contrac

takes the form of, you give us information in exchange for a promi

we won't tell your prime contractor what you told us or that you t all right? MR. SOLOMSON: THE COURT: Right. So the only consideration that

All right.

passes here in exchange for the information is that promise. MR. SOLOMSON: THE COURT: Correct. So then I guess I don't see how

All right.

looks like a purchase to me. MR. SOLOMSON: But then the Court would be saying that

purchases are limited to -THE COURT:

No, because I can think of a lot of situatio

in which implied in fact contracts occur in which something other a nice promise is the consideration. that's a fairly typical one. In some cases, it's cash.

I

So you do the service and I now pay

service, all right, hard dollars, okay, implied in fact contract. Heritage Reporting Corporation (202) 628-4888

32 Case 1:07-cv-00206-FMA Document 31 Filed 05/27/2008 Page 33 of 81

okay? All right? So those are implied fact contracts. definitely would meet the definition of purchase. They

Cash flows in t We give

transactions, you do the service by accepting the offer. money.

In fact, in some cases, the offer might be one that basica

to the person orally -- and we realize it doesn't have to be a gen It might be an offer to a particular person. "x" and we'll compensate you for it, okay? get money for it. You do

And they go do "x" and

Sounds like a purchase to me, and it would qual

implied in fact contract. MR. SOLOMSON: promise of cash. THE COURT: But that would be it would be the

Well, that would be, but you're trying to ar

to me that if I define purchase as requiring some form of cash or

equivalent to be transferred that I would blow out the entire defi implied in fact contract. MR. SOLOMSON: I don't see that. But then the Court would be saying that

those two ASPCA cases that we cited yesterday are erroneous. THE COURT: If they don't follow the Federal Circuit's

definition of what is a procurement, I don't care whether they're wrong because I'm stuck with the Federal Circuit's definition. MR. SOLOMSON: -Heritage Reporting Corporation (202) 628-4888 Unless we can read purchase to mean

33 Case 1:07-cv-00206-FMA Document 31 Filed 05/27/2008 Page 34 of 81

THE COURT:

But that's not what they do, is it?

Do they

apply a definition like the one of procurement that we're talking

and apply portions of it broadly to conclude that in those cases w talking about a contract subject to the CDA? MR. SOLOMSON: THE COURT: They don't do that,

The Federal Circuit cases?

No, the two BCA cases or Board cases that your supplemental?

you're talking about, that you cited in MR. SOLOMSON: THE COURT:

No, cash is not the only --

Well, that may be, but they're talking about

some form of hard consideration, aren't they? MR. SOLOMSON: Well, one was the opportunity for a

bagger to perform bagging services.

That's to me a fine line betw

there and saying we'll give Plaintiffs the opportunity to come in

information in exchange for our commitment to pay if we breach ano promise of confidentiality. I mean, in some sense, there is a promise of payment to Plaintiffs here. It's just conditional.

You don't get paid unles

the promise of confidentiality. THE COURT: Right.

But that has value.

But that case, so Hernandez, does

basically what Judge Gibson did, applies a dictionary definition o word "procurement", I'm looking right at your supplemental brief, means to get possession of, obtain or acquire. MR. SOLOMSON: Right.

That's all it does

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THE COURT:

All right.

And I have Federal Circuit opini

now that seemingly say, no, that word procurement is a term of art

it's used in the context of CDA, because there's no way to -- I me

these cases are actually based in some cases upon particular words

that definition, the Federal Circuit's definition, that are not fo Webster definition.

So, for example, one of the Federal Circuit cases goes o on whether it's direct or not, all right? definition that's direct or not. this just in dicta.

Well, there's nothing i

So obviously the Federal Circuit

They're actually applying that definition and

what is a contract or not a contract within the meaning of the CDA

So I don't see how I can take a dictionary definition th

doesn't even have in it the prongs that the Federal Circuit is act applying in deciding cases and say that they are the equivalent. obviously not the equivalent. MR. SOLOMSON: But here we have a direct benefit to the

government, and in the end -THE COURT: You're missing my point. My point is let's

operate on the assumption I'm bound by the Federal Circuit opinion

anything that doesn't apply to that definition I'm going to say is right? So that's a safe assumption, okay? So purchase, you're saying, doesn't require any form of money or money equivalent, i.e., property would be an example. Heritage Reporting Corporation (202) 628-4888

35 Case 1:07-cv-00206-FMA Document 31 Filed 05/27/2008 Page 36 of 81

MR. SOLOMSON: THE COURT: what you're saying? MR. SOLOMSON: THE COURT:

Correct. It can include anything.

All right.

Is tha

Anything of value.

Anything of value. Correct. So, for example, you

MR. SOLOMSON: THE COURT:

Even intrinsic value.

can't take a promise not to reveal the source of information and g exchange someplace and convert it into a monetary equivalent.

So,

definition, your definition of that which could be considered some that's exchanged for the goods or services here will be something does not have monetary value, correct? MR. SOLOMSON: I guess the promise of confidentiality

and whether it has value depends upon the context. THE COURT: Well, any type of promise could have

importance or value, but it doesn't mean it's a money equivalent.

words, it does not have to have a value, in other words, a fair ma value. It doesn't have to have that.

It's anything that has valu

of broadest sense of the word value. MR. SOLOMSON: is correct. THE COURT: Okay. Otherwise, in fact, there would be no That is the government's position. That

MR. SOLOMSON:

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contract.

If it had no value at all, and not just in the Federal THE COURT: Right. -- there would be no consideration.

MR. SOLOMSON: THE COURT: decide.

Right, but you haven't looked anywhere to

The definition is something that we're talking about toda

mean, nothing in your supplemental brief is talking about these ca correct? MR. SOLOMSON: THE COURT: Correct. So how do you know this aside

All right.

from the fact that at least it's the conclusion that you want? MR. SOLOMSON: that that definition -THE COURT: They're applying, but they're applying a And the other authorities that suggest

totally different definition. MR. SOLOMSON: I don't know. It seems to be subsumed

in the end as to whether we have a definition of purchase that is cash or cash equivalence. THE COURT: definitions.

It doesn't even say that in these dictionary

It says, "to get possession of, obtain or acquire."

says, and that's what the Board opinion that you cite in here, Her says. That's what Judge Gibson, I think he might even be citing

same dictionary, says in the other case. about in exchange for what.

There's nothing there th

It just says, "to get possession of,

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37 Case 1:07-cv-00206-FMA Document 31 Filed 05/27/2008 Page 38 of 81

acquire."

I'm looking right at your brief. MR. SOLOMSON: THE COURT: Right.

All right.

and if I went back to his opinio

pretty sure that that's the definition he's applying too. MR. SOLOMSON: I'm just saying the alternative reading

that the Court is proposing within the Federal Circuit opinion see

then that purchase would have to be limited to something that coul converted into cash. THE COURT: Well, or has some sort of cash equivalent,

yes, I guess that would be my definition until I see something tha otherwise. All right. doesn't conform.

But your definition of purchase I think basi

I mean, I'm not sure what you're basing it upon

I don't think you focused on the word purchase until you were here MR. SOLOMSON: THE COURT: That's correct. So I'm not sure based upon what

All right.

research you're making this argument.

It just seems to me that yo

making an argument based upon a construction of the word purchase based upon what? We don't even have a definition of purchase. I

we haven't even looked to see whether or not if we went to Webster what it would say about the word purchase. MR. SOLOMSON: But if purchase were so narrow, then

some of these other Federal Circuit cases it seems would have gone Heritage Reporting Corporation (202) 628-4888

38 Case 1:07-cv-00206-FMA Document 31 Filed 05/27/2008 Page 39 of 81

that way too. in play.

I mean, in Pasteur, there was no allegation that mo

It was a promise to not use something without permission

the Federal Circuit in Pasteur doesn't say, well, there's no purch get out of Dodge. THE COURT:

Well, but Pasteur concludes, does it not, th

that agreement is not subject to the CDA? MR. SOLOMSON: THE COURT: they had three others. Right, but for different reasons.

All right, so they didn't happen upon this o

By the way, here's Webster's I hate to tel

This is the definition of purchase: or its equivalent." dictionary.com, okay? All right.

"To acquire by the payment of

That's what it says, okay? Actually that's

So it's not even saying what you're saying.

went and looked in the dictionary for the word purchase, lo and be find payment of money or its equivalent.

so I guess "purchase" is

of art then, or do I use the dictionary definition for that term? dictionary definition says "money or its equivalent". MR. SOLOMSON: Without having done extensive research

on the meaning of the word purchase, I can't say except that it se me that it would be a very narrow reading of the CDA's coverage. THE COURT: Well, maybe that's intended. I mean, you

see, one of the problems I'm having with your whole argument is I

that if you said to me step back from the statute, and this is sor Heritage Reporting Corporation (202) 628-4888

39 Case 1:07-cv-00206-FMA Document 31 Filed 05/27/2008 Page 40 of 81

to Pasteur, what type of things is this thing talking about, okay? talking about typical procurements of goods and services. pencils, okay? I'm buying grass-cutting services, okay?

I'm buy I don't

has this type of contract at all in mind, and the only time these

seem to come up is when you all want to invoke the claim requireme

In fact, there are other situations in which I could ima

would not be to the government's advantage to argue that something contract within the meaning of the CDA. interest might be an example, all right.

So I don't know, prejudgm

And I wouldn't be surprised if I went to go find, to loo

cases where it was disadvantageous, that a narrow construction was placed on the same definition of the term "contract". So it just seems to me that the problem that I'm having I've got a Federal Circuit definition.

It doesn't look like it fi

and, in fact, you know, now I can take a look and see that the wor purchase doesn't seem to fit the situation. and I don't think it's a barter, all right? Certainly it's not a

And so let's get this

purchase means to acquire something in exchange for money or its equivalent, this is not a purchase, correct, if it means that? MR. SOLOMSON: THE COURT: Yes, that would be correct.

All right. Maybe it's also a barter. I don't know

MR. SOLOMSON: what a barter is.

I mean, maybe there's a whole host of reasons w

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Plaintiff wanted to, as if the allegations were taken as true, gav information to the agency for the agency's benefit.

For instance, part of their allegation is that they were guaranteed the continued business from the government in relation prime contractor.

You know, maybe their interest was in getting t

promise that their business would continue and that the confidenti breach, there would be no breach of confidentiality, and if there would get money. of promises.

Maybe that's the type of an exchange that is a b I admittedly don't know.

I don't know.

THE COURT:

The problem I'm having is if I adopt your

definition, I think it sweeps up everything. contract that we have here, doesn't it? MR. SOLOMSON:

It sweeps up every i

Well, I would argue that the informant

contracts the Federal Circuit has said are limited to sort of the context. THE COURT: Well, that may be, and some of them might

not be viewed as contracts which are enforceable at all.

But in s

situations, they've been held to be contracts in which you can hav information passed, all right, and they'd be subsumed here, would not?

I mean, it just seems even the Winstar cases I think are sub

by your definition, because if I take a broad definition of the wo

"service", doing something that's beneficial to the government, ok

say, gee, what happened in those cases, it's like, okay, well, wha Heritage Reporting Corporation (202) 628-4888

41 Case 1:07-cv-00206-FMA Document 31 Filed 05/27/2008 Page 42 of 81

essence of the contracts in those cases?

The essence of the contr

those cases is you acquire this savings and loan or do something e

that causes it not to go under and we will afford you a variety of among which is beneficial accounting treatment, okay? That seems to meet your definition.

Yet I don't think t

any cases out there that say that those contracts were subject to

type requirements or that people then filed claims, for example, t should be out of Court. The HUD cases that we have here, the Farmers Home

Administration cases that we have here all involve situations in w

person who is providing housing, for example, is providing a servi okay? Depending on how you want to view it, it directly benefits

government because it's providing that which the government wants. providing rural housing.

It's providing housing to low income ind

Certain things are received in exchange for that: low interest mortgage arrangements. purchases?

subsi

Why wouldn't those be all

It sounds like they're all purchases. MR. SOLOMSON: Well, I don't know about the HUD

agreements, but I would say that the Winstar cases are distinguish because those are regulatory treatment and not services. THE COURT: Why would that make any difference? It's one chose a broad enough definition

MR. SOLOMSON: of services that --

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THE COURT:

Well, no.

If one also takes a broad enough

sense of what is considered a purchase, then yes, it seems to me a those things are. If you don't have to have money or monetary

equivalence and you don't have all these other limitations of what doing, then I think everything becomes a purchase. MR. SOLOMSON: Everything might be a purchase, but it

wouldn't be a service, in which case it wouldn't sweep up everythi THE COURT:

I think initially, before we even focused on

this, you argued for an extraordinarily broad definition of the wo "service". MR. SOLOMSON: No, here, though, our definition of

service is a provision of information. FAR. THE COURT:

I mean, that is the defini

Well, that may be, but the basic definition There's no requirement

service subsumes a whole bunch of things.

direct versus indirect, and the definition of the Federal Circuit But service if we look at it, are you acquiring a service? Sure.

of information is a service, why wouldn't the acquisition of a sav loan be a service? MR. SOLOMSON: But there's no doubt that in our case,

had we had the government hire one of the large consulting firms t

in and help evaluate the performance of its prime contractors, tha would be a service within the meaning of the CDA. Heritage Reporting Corporation (202) 628-4888

43 Case 1:07-cv-00206-FMA Document 31 Filed 05/27/2008 Page 44 of 81

THE COURT:

That's exactly why I don't think the rubber It may well even be the case, okay,

meets the road on that term.

the Winstar context, okay, that's a service. limitation.

That might not be th

The limitation I think probably comes from the defini And the answer is it's not a purchase.

word "procurement".

So I'm not disagreeing with you at all in terms of the b or the sweep of the word "service", all right?

My problem is, and

why I asked you to focus on that to be prepared for today, is the think where the limiting language in the statute is is the term "procurement", all right? So no, I think it conceivably could be

that a whole bunch of things fit under acquisition of services, al

just I'm not sure that those are procurements of services within t meaning of that statute. MR. SOLOMSON:

Well, there's no doubt that if we go with

the definition of purchase, cash or cash equivalence, that the CDA not apply. THE COURT: All right.

Well, what I'm going to do is gi

you a little time after this I guess to come back and show me whet

anybody has actually applied a definition of purchase under 602(a)

broader than that, and if they have, then I want to see those case right?

But I don't view the cases that sort of go off to Webste

here as giving me any type of ready way of dealing with Federal Ci Heritage Reporting Corporation (202) 628-4888

44 Case 1:07-cv-00206-FMA Document 31 Filed 05/27/2008 Page 45 of 81

opinions that are defining the term for purposes of the statute th talking about.

And it seems to me that I have to start with the p

that that's binding law and that that's where I'm going to start i the analysis. All right?

So I can tell you that as far as I'm concern

other cases that don't do that are probably erroneous.

To be fair

Gibson, some of the cases that are doing this don't state his opin you're citing, all right, but not all of them, all right? And so

the definition here is more well established now than it was back or 2001 when he wrote his opinion. But the fact of the matter is

are more precedents prior to his opinion that defined the term

"procurement" in the same fashion, and for whatever reasons, he do discuss them. I haven't read those Board opinions that you cited, but what you're telling me about them, it appears that they go off on

Webster's type route and that they don't cite the Federal Circuit' definition of procurement either. MR. SOLOMSON: No, I don't believe they do, but I do

believe that Hernandez, and I can't swear on it, but I do believe

definition, and if not that case, then one of the other ones in ou supplemental notice cites the definition in Title 43. THE COURT: No, you're saying Hernandez does that. I think it may.

MR. SOLOMSON:

I don't have it in front

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me. THE COURT: Well, your brief says that. Oh. Well --

MR. SOLOMSON: THE COURT: around it.

But I don't really see where that gets me As far as I can

I have a Federal Circuit -- not one.

to four, and I suspect when I start looking, I'll probably find a

And they're not defining the word procurement for purposes of some statute.

They're defining the word procurement for purposes of th

exact provision we're looking at.

So it seems to me it's going to have to be a purchase or lease or a barter.

And if purchase means, all right, cash or cash

equivalent, and assuming there's not some creative definition of b

that would cover this, but I view a barter as an exchange of commo Okay, that's one commodity exchanged for another. So I would be surprised if that term picked this up.

Th

answer would be, it doesn't mean any of those three terms, all rig

I'll give you some time to see if you can find something that some

sheds some light on what the word purchase means in a way differen

don't see just off the top of my head anything that would be incon

between applying that Federal Circuit decision by its terms and sa that the statute could also cover implied in fact contracts. it. I can see situations in which implied in fact contracts Heritage Reporting Corporation (202) 628-4888

I ju

46 Case 1:07-cv-00206-FMA Document 31 Filed 05/27/2008 Page 47 of 81

not meet that definition, but I don't see anything about the use o

purchase in the facts that we're talking about that would eliminat

the use of implied in fact contracts in such a way as to create an inconsistency between the definition of the word purchase and the reference in the statute to implied in fact.

I don't see that eit

I definitely see it as a limiting term.

In other words,

no doubt that it means that some things that would be implied in f

contracts are not going to be subsumed within the meaning of the t contract for purposes of the CDA. intended. MR. SOLOMSON: whether that's the case. I would also like to take a look at

I actually think that's probabl

I just can't conceive of anything off th

head still that would be an implied contract that would involve ca

cash equivalence that would not be subject to the FAR, and then we would be back to the issue of the problem with having a -THE COURT: Yes, but if you're right about what the FAR

requires, and I think that again, there's a whole category of impl

contracts which are not subject to the FAR, then you couldn't have

implied in fact contracts not for anything that's in the CDA or my of purchase.

It has to do with the writing requirement in the FAR

was something applied to virtually everything, well, then yes, you problem with implied in fact contracts. All right?

But I don't think it does

At this point, I think I'm going to limit yo

Heritage Reporting Corporation (202) 628-4888

47 Case 1:07-cv-00206-FMA Document 31 Filed 05/27/2008 Page 48 of 81

dealing with the word purchase because I want to get the briefing sort of done. MR. SOLOMSON: THE COURT: Okay.

Anything else about this first issue? No, Your Honor. Now I

MR. SOLOMSON: THE COURT:

Let's talk about 31