Free Order - District Court of Federal Claims - federal

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TRANSCRIPT OF PROCEEDINGS
TRAVELERS CASUALTY, Plaintiff, v. UNITED STATES, Defendant. ) ) ) ) ) ) ) ) )

Docket No. 04-487

Live Tape

(The following transcript was transcribed from a digital recording provided by the U.S. Court of Federal Claims to Heritage Reporting Corporation on October 12, 2006.)

Pages: Place: Date:

1 through 109 Washington, D.C. October 11, 2006

HERITAGE REPORTING CORPORATION
Official Reporters 1220 L Street, N.W., Suite 600 Washington, D.C. 20005-4018 (202) 628-4888 [email protected]

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1 IN THE UNITED STATES COURT ) ) ) ) ) ) ) ) ) OF FEDERAL CLAIMS

TRAVELERS CASUALTY, Plaintiff, v. UNITED STATES, Defendant.

Docket No. 04-487

Courtroom 5, Room 505 National Courts Building 717 Madison Place NW Washington, D.C. Wednesday October 11, 2006 BEFORE: HONORABLE LAWRENCE J. BLOCK Judge

APPEARANCES: For the Plaintiff: JAMES HOPKINS, Esquire For the Defendant: REID PROUTY, Esquire U.S. Department of Justice Civil Division Commercial Litigation Branch 1100 L Street, N.W. Washington, D.C. 20530

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2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 then. MR. HOPKINS: in status, I believe. THE COURT: MR. PROUTY: Mr. Prouty? Good morning, Your Honor. Reid It would certainly elevate me Hopkins. P R O C E E D I N G S THE CLERK: All rise. The United States

Court of Federal Claims is now in session, the Honorable Lawrence J. Block presiding. THE COURT: ALL: Good morning.

Good morning, Your Honor. All right. I understand we have

THE COURT:

cross-motions for summary judgment on Travelers Casualty Insurance Company v. United States. correct? A PARTICIPANT: THE COURT: Correct, Your Honor. I'll let, for the record, Mr. Hopkins. I'm Jim Is that

Okay.

the Plaintiff introduce himself. MR. HOPKINS:

Yes, Your Honor.

I represent the Plaintiff. THE COURT: Forgive me if I slip up and

refer to you as Johns Hopkins. MR. HOPKINS: THE COURT: Very well. That would be distinguished,

Prouty for the United States. Heritage Reporting Corporation (202) 628-4888

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3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: I thought long and hard about

the best way to proceed, and what I'm going to do -is divide this motion hearing into three parts. first part: The

I have some general questions about facts

and the testing and how it's done. Then I would just like to ask some general questions about the applicable law and the standards. Now, the Court always has an advantage over litigants because I find too often that litigants arguing that it's their job to be good advocates, zealous advocates, for their clients. Sometimes they

shoehorn the law into the facts, where I can apply the facts to the law, which is my job. neutral viewpoint. I take a more

I'm always surprised by

disagreements on how to apply law, so I just want to go back to basics. And the third thing is, we're going to look at the facts far more in detail and what it means, given the superstructure of the law that we're going to establish in the hearing. My understanding is, Mr. Prouty, that the government was the first movant. MR. PROUTY: THE COURT: MR. PROUTY: Is that correct?

Yes, Your Honor. Well, then you go first. Good morning, Your Honor.

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4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 that. MR. PROUTY: THE COURT: MR. PROUTY: THE COURT: MR. PROUTY: THE COURT: understanding? MR. PROUTY: THE COURT: MR. PROUTY: the winter. THE COURT: And the contract calls for two It is, indeed, Your Honor. Okay. A tough place, especially in Okay, Your Honor. Okay. This is in Alaska. THE COURT: MR. PROUTY: Good morning. Given the structure Your Honor

has, would you like to begin with questions, or shall I -THE COURT: I would like to know exactly

sort of the contour of the facts here. MR. PROUTY: Sure, Your Honor. The way we

see it is that when this project was first being investigated, a minor, geotechnical investigation was taken at the beach; that is, five test pits were taken -THE COURT: Let's even be more basic than

Yes, Your Honor. King Cove, Alaska. It is. It's in the Aleutian Islands, my

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5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 harbor. parts. MR. PROUTY: That's correct, Your Honor.

The first part is to go to breakwater, essentially take large boulders and rocks and giant (inaudible) and sort of make an area that would sort of act as a breakwater to prevent the area, which will later become the harbor, from being exposed directly to the sea; that is, to prevent storms and whatnot and the wave action from going directly to this area that they wanted to have as a protected harbor for small boats. The idea was, let's make a small boat What you do is you basically dredge an area

near King Cove so that it's deep enough for the boats, but, of course, that does us no good if that dredged area is exposed to unmitigated elements, and also it's possible that might also lead to the dredged area being refilled, much less the boats being subjected to waves coming all the way from Russia, et cetera. The notion was, you build the breakwater first, which gives you a protected area, and then after you build the breakwater, in the next boating season, because you're boating by seasons in Alaska, (inaudible) during the winter, you come in, and you do a standard dredging operation where you take a specified area and dig it to a specified depth, and, Heritage Reporting Corporation (202) 628-4888

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6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 voila, at the end of the day, you have a protected, small boat harbor that the fishermen on King Cove can use. THE COURT: That's what this is designed to

do, to aid the fishermen. MR. PROUTY: Generally, yes, Your Honor. Primarily, my understanding I'm sure there

It's a small boat harbor.

is that it's fishermen who use it.

might be others who would use it for other reasons, but the general notion is that small boats for people in King Cove to use and primarily to work in the Aleutian Islands, is my understanding. THE COURT: down there. MR. PROUTY: year, Your Honor. of the year. THE COURT: MR. PROUTY: THE COURT: I'm sure. In any event -And does the darkness, the sixIt is at the right time of the I understand it's very beautiful

It's also very scary at other times

month darkness, affect this, too? MR. PROUTY: I know it certainly changed the

number of daylight hours in the days as time went on. However, I'm not so certain that the darkness, per se, was the concern because actually some of the dredging Heritage Reporting Corporation (202) 628-4888

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7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 of Alaska. MR. PROUTY: THE COURT: Close, relatively. Relatively, because we're going operations just went around the clock, if memory serves -THE COURT: MR. PROUTY: Is that right? -- when the weather was right.

It's far more important what the weather is than the darkness. Certainly, I think a pilot would say that

the darkness is a weather condition, and I think that that's really when it would be less productive, with no light at all. Then you would be saying 23 hours of

light, as you might in the right circumstances(inaudible). THE COURT: The Aleutian Islands -- I looked How far is

at the map -- go way out into the Pacific. this? It's not really relevant. MR. PROUTY:

I'm just curious.

My understanding is it's one of

the first of the Aleutian Islands. THE COURT: It's pretty close to the coast

to get to that relatively shortly. MR. PROUTY: Indeed, Your Honor, but it's

still quite a flight in a plane from, say, Anchorage to get there. So, in any event, the notion was that they Heritage Reporting Corporation (202) 628-4888

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8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 were going to build a small boat harbor, which is not saying it's (inaudible) difficult. It takes work.

It's nothing novel or something that they have not done. People know how to build breakwaters out in the Yes, it's been difficult because of the

Aleutians.

weather, but they know how to do it, and, yes, they have to dredge because they have done it out there. So the notion was, let's build this breakwater. When the Corps assembled and documented

and (Inaudible) recently went through all of the review stages one has to do to do a contract like this. They did a geophysical investigation, and

essentially there are different components of that. One component was, let's take a quick look and sort of see where bedrock is by digging to it, and that's what caused the test pits to be dug(inaudible) to be held. Mr. Wilson went out -THE COURT: MR. PROUTY: THE COURT: I'm sorry. More basic.

Yes, Your Honor. The distinction between a

bore -- I'm sort of an alumnus as a park manager, so I think I know this, but I just want to make sure I understand how it's used in the context. A bore; my

understanding is you're going to take some sort of pipe and then drill down and bore it and bring out a Heritage Reporting Corporation (202) 628-4888

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9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 sample. MR. PROUTY: THE COURT: That's exactly right. Is it? Okay. My understanding

also from the documents is that that was not done in the area of the harbor. MR. PROUTY: That's right. You can look

actually at one of the maps, and it's included in the bid documents -- I can tell you what page it's on. You can look at Plaintiff's appendix, and you can see page 210, which shows a map of the test pits were one of (inaudible), and the bore holes, at least a few of them, are far away. the map myself. The notion was that these bore holes had been done earlier for a different project, and when they were assembling later on their documents, they said, Well, we do have this information -- it's in our possession -- that it's in the general area. So we're I only saw two when I looked at

going to put it in (inaudible) because we don't know what use they might have, but somebody might have a use for them. So let's provide it, being overly

generous as opposed to under generous(inaudible). The test pit is simply taking an excavator, a John Deere in this case, and digging holes. THE COURT: Get to that in a minute Heritage Reporting Corporation (202) 628-4888

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10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 site? is it? MR. PROUTY: No, not at all, Your Honor. (Inaudible) but in terms of the bore hole -MR. PROUTY: THE COURT: Yes, Your Honor. -- how relevant can it be if

we're trying to find the degree or the amount or the percentile, depending on how you look at this, of cobbles? MR. PROUTY: We don't think you can. In

fact, that's been the government's argument all along because, by definition, the size of the bore hole, 2.5 inches in this case, is smaller than a cobble, which is three inches to 12 inches. in the world -THE COURT: That's not disputed factually, So there is just no way

There is just no way in the world. THE COURT: How far away is it from the We know it's not in

You give me a ball park.

the site. MR. PROUTY: Your Honor, I want to say that

it's thousands, if not tens of thousands, in yards, but I've got to say that that's not a very rigorous statement on my part. I don't mean to mislead the

Court or anything like that. THE COURT: Okay. We know it's undisputed

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11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 that it's not in the site. MR. PROUTY: Absolutely. Again, generally,

the notion was not that we're going to get these bore holes logged because we think they are going to (inaudible) what to tell you what kind of cobbles (inaudible)you are going to run into but merely to say, "We have information. with it what you want. second-guessed. You're the contractor. Do

We don't want, later, to be

We're not handing over information we So

had (inaudible), but one might argue (inaudible). take it and do with it whatever it is you think you might want to do." That's fine.

It might be of no use whatsoever.

If that's the case, all we did is waste

the paper(inaudible), but it's very clear, based on the bore halls, where they are taken, and they were not, in fact, taken at the relevance (inaudible). THE COURT: I'm not clear why it was

included in the contract. MR. PROUTY: Again, the notion -- and Mr.

Wilson explained this in his deposition that his boss, Mr. Rachel, head of the geophysical branch, said, We've got this information. We don't necessarily see

how it's relevant, but what we have is information. Perhaps there might be some way that somebody could decide that they wanted some of this stuff. Heritage Reporting Corporation (202) 628-4888 We'll be

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12 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 overinclusive and provide it, telling you that it's bore holes of this size, which you would know without knowing anything about(inaudible) cobbles, and tell you where it's been taken so you can go actually to the site, if you're curious. THE COURT: were there? MR. PROUTY: I apologize. I can tell Your Honor exactly. The last bore How many of these bore holes

It's four, Your Honor.

hole is on page 237 of the Plaintiff's appendix. THE COURT: And the purpose of this bore

hole would be to determine, for lack of a better term, the soil content, whether it's sand or gravel, or maybe you're lucky and strike oil. MR. PROUTY: They give you some information

of what's down there, to the degree that you can find that information for a hole. It's obviously limited.

Obviously, we would be tough if you're going to hit bedrock because if you hit bedrock, well, the bores will stop. You can tell that sort of thing. You can see if it's perhaps organic material, which might change the way you do your digging. You can see whether it's a mud versus clay. THE COURT: MR. PROUTY: Sure. Who knows how that might affect

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13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 what you do? THE COURT: My last question about bore hole

is, in the record, I believe there was some -- I don't remember who, forgive me -- it may have been Mr. Wilson, who said that it's relevant to the extent that this is the same geological area. MR. PROUTY: It is geologically the same

area to the degree(inaudible). THE COURT: I'm not using the right term.

The make-up would be similar, or you're not even sure of that. MR. PROUTY: I'm not even certain of that.

I could tell you that there is talk -- one of the Plaintiff's experts had said that, Look, bore holes are not going to be used for determining cobble amounts. They just are not(inaudible), and that was,

in fact, the case here. THE COURT: important, then -MR. PROUTY: THE COURT: MR. PROUTY: THE COURT: MR. PROUTY: Yes, Your Honor. -- and that's the pits. Yes, Your Honor. Can you tell me about that? Of course. Mr. Wilson Let's go on to something more

essentially went out to King Cove one morning, got a Heritage Reporting Corporation (202) 628-4888

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14 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 backhoe from the local government and dug some holes, had the backhoe operator dig the holes, and he made some specific notes on what he saw, and the notes are replicated in Test Pit Logs 1 through 5; that is, essentially used to describe Test Pit 1 -THE COURT: MR. PROUTY: THE COURT: he pick where to dig? MR. PROUTY: I think his concern was that he I'll get to that in a minute. Yes. I have it written down. How did

was worried about where bedrock was because the big expense in a project like this is going to be blasting bedrock if there is bedrock. It's one thing to scoop

up soil that is loose or even sort of consolidated, and it's quite expensive to have to blast(inaudible), and that was really what drove Mr. Wilson's determination. He saw an area of exposed bedrock. He dug

around there, and that's why those test pits were all clustered near that same corner of the actual digging area, of the actual dredge area(inaudible). In fact,

only one of them was, it turns out, was in the dredge area, within the area being dredged. What was important to him was not necessarily getting a beautiful sampling of what Heritage Reporting Corporation (202) 628-4888

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15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 effect. MR. PROUTY: Yes, sir. Now, he also you're going to find throughout the dredge area, but, frankly, if he you went out there worrying about bedrock and while there he took note of what(inaudible) because there was some he saw, which became the test pit logs which were provided (inaudible). THE COURT: Okay. He testified to that

testified that -- Mr. Hopkins was asked, Wouldn't this also be information that could be used to determine what you're going to encounter for a contractor? answered, Well, yes, sure. He

One can look at these test

pit logs and say, I might encounter these things. But the reason for his test pits being chosen where they were and the operation he undertook was whether to look at the bedrock (inaudible). After

that, he decided, he recommended, that we use some seismic shooting, which they later did, to find out exactly where the bedrock was. THE COURT: Okay. I take it that seismic

shooting is not really relevant to this case. MR. PROUTY: Well, it is, Your Honor, and

it's relevant because it led to the Golder Report, and the Golder Report is -Heritage Reporting Corporation (202) 628-4888

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16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: MR. PROUTY: THE COURT: Can we get to that in a minute? Yes, Your Honor. I apologize, but I'm just trying

to understand the best I can. MR. PROUTY: THE COURT: clustered in one area. MR. PROUTY: Yes, Your Honor. If you look Not at all, Your Honor. Okay. Now, you said these were

at the map, you can see they are essentially in one corner of the dredge area, and, in fact, 4 out of 5 are not actually in the borders(inaudible). (Pause.) THE COURT: All right. My understanding is

Mr. Wilson reported his results in a two-page narrative entitled "Trip Report: Improvement," July 1996 -MR. PROUTY: THE COURT: He did, Your Honor. -- a test pit map location, five Small Boat Harbor

test pit logs, a selection of photographs, and only the test pit logs were included or referenced in the contract. MR. PROUTY: THE COURT: 1 through 5. MR. PROUTY: Yes, Your Honor. That's right. Okay. The test pit logs are TP-

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17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 ahead. again? MR. PROUTY: THE COURT: MR. PROUTY: Sure, Your Honor. I have this wrong. For TP-4, the first foot of the THE COURT: And I guess one of the core TP-1 says "gravel

disputes here is what this means. with few cobbles or boulders." w/cobbles and boulders." Is that right? MR. PROUTY:

TP-2 is "gravel

TP-3 is "weathered bedrock."

Yes, Your Honor.

The first

foot of TP-3 said "gravel and cobbles." THE COURT: TP-4 is "gravel," and TP-5 is

"gravel with few cobbles." MR. PROUTY: Your Honor, I would actually

say that the first foot of TP-4 said "gravel and cobbles" and after that, (inaudible). THE COURT: Okay. Could you repeat that

test pit said "gravel and cobbles," and then it depicted after that, "gravel." THE COURT: Okay. I'm skipping a little bit

The contract itself -MR. PROUTY: THE COURT: Yes, Your Honor. -- says that "geophysical data

for this area can be obtained from the Corps," and then it gives a location. Heritage Reporting Corporation (202) 628-4888

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18 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Okay. Is there a dispute whether the Wilson

two-page narrative or conclusion -- I think you call it a conclusion -- was in the locale that the contract referenced? MR. PROUTY: No, Your Honor. I'll be

straightforward, though.

Mr. Rachel's declaration He refers

says what is there, what is in that locale.

to the Golder Report, the geophysical report, for the seismic shooting. He does not refer to Mr. Wilson's.

Now, Mr. Wilson, I believe, in his deposition, said, he believed that if you were to ask for this report you would have gotten the whole report You can (inaudible) who to ask to make sure whether they had gotten this from the report, but Mr. Rachel only went so far in his declaration to say, You would definitely have gotten the Golder. THE COURT: MR. PROUTY: have gotten it. Okay, but not the Wilson Report. He doesn't say you would not

He just says that I wouldn't say you

would have gotten the Golder Report. THE COURT: MR. PROUTY: THE COURT: MR. PROUTY: THE COURT: Okay. So he is silent, then.

I'm sorry, Your Honor? He is silent. That's correct. He is not referring to it in

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19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 sense: your opinion a year. MR. PROUTY: THE COURT: MR. PROUTY: THE COURT: Precisely. Okay. Is that in dispute here?

I don't believe so, Your Honor. Let me jump ahead and just ask

Mr. Hopkins, is that in dispute? MR. HOPKINS: Your Honor, I'm not 100-

percent sure what the Court is referring to as being in the dispute skew. THE COURT: Whether the Wilson document was

available at the geophysical site. MR. HOPKINS: It is in dispute in this

It was not disclosed -THE COURT: MR. HOPKINS: THE COURT: No, no, no. I understand that.

-- or provided. Did anyone testify? Is there

evidence in the record that it was at that site? That's what I'm asking you. MR. HOPKINS: Oh, yes. The Wilson Report

definitely covers the site. any dispute -THE COURT: start over again. Okay.

I don't think there is

No, no, no.

I'm sorry.

Let me

I apologize. There is a provision in the contract

that says, generally, that "geophysical data for this Heritage Reporting Corporation (202) 628-4888

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20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 agreement. MR. HOPKINS: geophysical report. THE COURT: Okay. That's fine. I just The Golder Report was a believe. area can be found from the Corps," and he gives a particular site. MR. HOPKINS: That's referring, I believe,

to a different document, the Golder Geophysical Report, and I don't believe -THE COURT: Right now, it doesn't refer to

anything; it's just neutral. MR. HOPKINS: Here is the distinction, I

The Wilson Report was not a geophysical

report, and I don't believe there is any dispute over that fact. Mr. Wilson's written narrative report is

just a narrative summarizing his test pit investigation. It was not a geophysical report. So it's not what they call in

THE COURT:

the contract "geophysical data." MR. HOPKINS: Correct Right. THE COURT: Okay. So we're all in

wanted to make sure we're in agreement.

Very well.

That was a point of some confusion to me, anyway. The Golder Report; why don't you summarize that issue? Heritage Reporting Corporation (202) 628-4888

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21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. PROUTY: Golder and Associates was

essentially a was essentially hired by the Corps of (inaudible) engineers to produce that produced a seismic profile of the dredge area of (inaudible), and they did that, I believe, by using blasting (inaudible) basically which would tell you how deep what they called the "basement" is, where you change from the overlying sediment, and it gets harder. That

report told you how deep essentially the bedrock was, and it also told you more. The part we thought was

important was it took those (inaudible) its results and melds them with Mr. Wilson's results, and that can be found on page -- the whole report itself can be found on page 51 of the government's appendix. The part that sort of melds what they found with what Mr. Wilson found, you'll find at page 54 of the government's appendix under the area "Geological Interpretation and Expected Material Base." In there,

they talk about what you found with the seismics was that the overlying sediment, the stuff that would have wound up being dredged, was coarse-grained materials with gravel and some cobbles and boulders which exist throughout the dredge area it said this (inaudible). This signature that the seismics were showing is typical of coarse-grained sediments Heritage Reporting Corporation (202) 628-4888

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22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 it? deposited to in a high energy (inaudible) the environment. This interpretation is consistent with

test pit data on the southwest end of the site which show mostly gravel with some cobbles and boulders in the upper ten feet (inaudible). The seismic signature

from these upper sediments is uniform, and it was observed on the seismic records across the site, suggesting that coarse-grained sediments, consisting mostly of sand and gravel with some cobbles and boulders, exist throughout the site. THE COURT: Now, you said there was a

reference to the Wilson Report. MR. PROUTY: Well, essentially, it talks

about a the test pits case. THE COURT: MR. PROUTY: Okay. This information is consistent

with the test pit data in the southwest end of the site(inaudible). That's the sort of reference to what It doesn't say that they

Mr. Wilson said (inaudible).

had the report, but they had the test pit data. THE COURT: conclusion -MR. PROUTY: THE COURT: Yes, Your Honor. -- how would you characterize In the Wilson Report, a two-page

When I say "conclusion," I'm not characterizing Heritage Reporting Corporation (202) 628-4888

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23 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 it. MR. PROUTY: THE COURT: I understand. Okay. It also used the term Is that correct? I think, when

"some cobbles and boulders." MR. PROUTY:

Yes, Your Honor.

you actually read the Wilson Report, and by "Wilson Report," I'm taking about this two-page document -THE COURT: MR. PROUTY: Yes. -- I think you will see that

it's very consistent with what was said in the Golder Report and materially no different, in our view, than what in what was referred to as the "test pit logs" It merely (inaudible) summarized that. THE COURT: Okay. Now that I've cleared

that up, I would like to switch topics for a second. MR. PROUTY: THE COURT: Yes, Your Honor. I'll do that just to make sure

that we're on the same boat here. I was interested in the effect of FAR 52.236-3, which is sort of the standard, I guess, boilerplate form that's stuck into these types of contracts, and exactly how we would interpret that, because the Court has a duty to interpret it. So (a)

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24 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 nature and location of the work." skip down. The contractor also acknowledges that it has satisfied itself as to the character, quality, and quantity of surface and subsurface materials were obstacles encountered insofar as this information is reasonably ascertainable from -- I'm going to put an (a) inspection of the site; (b) including all exploratory work done by the government, as well as drawings and specifications made part of this contract. So from its inspection and from the work I'm going to go

that the government has done, is how I read that. Then it goes on with what could be considered exculpatory: "Any failure of the

contractor to take action described to destroy the knowledge in this paragraph will not relieve the contractor from the responsibility of estimating properly a difficulty in cost (inaudible). I want to skip to (b): "The government

assumes no responsibility for any provisions or interpretations made by the contractor based on misinformation made available by the government, nor does the government assume responsibility for any understanding reached or representation made concerning additions which can affect the work by any Heritage Reporting Corporation (202) 628-4888

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25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 clause? Heritage Reporting Corporation (202) 628-4888 madness. MR. PROUTY: THE COURT: Mr. Hopkins here. I'm sure. (Inaudible.) of its officers or agents for the execution of this contract unless that understanding represented is expressly stated in the contract." Okay. That last part, which was also in

part (inaudible) exculpatory -- let me ask it this way. Is this contract fully integrated? MR. PROUTY: THE COURT: Yes, I believe so. Okay, because that certainly

would work as a partial integration. MR. PROUTY: THE COURT: That's important. MR. PROUTY: I must say, until you asked the Yes, Your Honor. But it is fully integrated.

question, I had not actually thought about that issue. I see no reason to believe that it is not integrated(inaudible). THE COURT: MR. PROUTY: THE COURT: That's not good. I'm sorry, Your Honor. No. There is a method to my

Let me try to get the advice of

I'm sorry for jumping around.

Do you know if there is an integration

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26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. HOPKINS: Your Honor, I do not. I have

not looked specifically to see if the contract has what would be considered an integration clause. MR. PROUTY: THE COURT: It may. Probably there is, but that

affects what I'm going to say. MR. Hopkins PROUTY: THE COURT: Yes, Your Honor.

Would you agree that all of this

FAR is pretty broad in its interpretation, and it's exculpating the government that, I guess, cases since Foster have sort of construed this very, pretty narrowly? MR. PROUTY: I think the cases since Foster

have construed it narrowly, to some degree, but I think that the better way of looking at it is that there are a number of elements of a differing-siteconditions claim that require the contractor to act reasonably. THE COURT: MR. PROUTY: Yes. That's the key word.

And I believe that those cases,

integrating the work reasonably into the requirements from the contractor, are ones that have taken what's now FAR and begun to apply them to other preexisting type one differing-site-conditions cases; that is, for example, in Wheat's Weeks Dredging, one of the actual Heritage Reporting Corporation (202) 628-4888

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27 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 six elements under the differing-site-conditions cases is cited in our motion, the fifth one: "The actual

conditions were not reasonably foreseeable." That would, again, sort of be bringing in some of what we've got in the FAR. The contractor has

to be satisfied that he has reasonably acted and has actually satisfied himself. There must be a

reasonable reliance on what he says, and I think that the Comptrol discussion of affirmative representation is required, and a type one differing site condition reflecting in (inaudible) you can point to many ways. the The concern that the FAR has is hard to say, but

the government is a warrantee of all kinds of things by virtue of giving you these test pit logs, et cetera. What we're saying is, here is the information, and we would rather you draw a conclusion from it yourself. Unless we actually tell you

something else, unless we affirmatively tell you otherwise let's (inaudible) figure out the why's. We're not going to be held to a type one(inaudible) differing-site-condition case. So I believe that when you look at Comptrol, in particular, but it's not just Comptrol; it's also in P.J. Matthew, the affirmative representation's Heritage Reporting Corporation (202) 628-4888

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28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 requirements really fit in nicely, I believe, with the FAR's requirement that the discussion is about the warranties the government is and is not making by providing what it has(inaudible). THE COURT: I hope I didn't --

What I'm driving at is that we

could read this FAR pretty strictly as an exculpatory clause, and the Court, at least starting from Foster, said, no, we're not going to do that because we want -- part of the FARs, and the law of site(inaudible) investigation would have changed it, was to create an incentive for contractors to prevent cost overruns, and the contractor would reveal problems, and the government would reveal problems. So you put in all sorts of disincentives. So the courts have stressed reasonableness. So, for instance, the courts have said the contractor will be charged with the information contained in data furnished as part of the docket, and that's one issue, exactly what's part of the docket -- I'll get to that in a minute -- and if they don't, as part of the contract, Randa Madison, a Federal Circuit case in 2001, held against the contractor for not reviewing(inaudible). case ...(inaudible). MR. PROUTY: That's right, Your Honor. It is their duty to review a

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29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 THE COURT: But then again, the courts have

said that if it's not in the docket, there is no duty to inspect documents. MR. PROUTY: First of all, there is no duty

to inspect documents that are not -- there is no separate duty, apart from the notion of acting reasonably and making reasonable determinations -THE COURT: You know where I'm heading at.

What I'm heading at is, if a provision says one can look in New York City for certain information that may be there, or can be there, is that considered part of the contract, or do you have to specifically list? MR. PROUTY: I think Randa Madison doesn't

stand for requiring for (inaudible) a specific listing of, I've got this document dated this date. Randa

Madison is not the only case on point I'm pointing to. There is also (inaudible) Dauden as well. I believe

that, even in Comptrol, where they are discussing the patent (inaudible) ambiguity issue, which is far afield, but I'll show you how this ties in. They

didn't talk about how it's improper not to -- they cited a case which said it was wrong for the plaintiff not to look at data being used in the(inaudible) possession of the Corps. It all goes to, we know

there is data possession because we told you there is Heritage Reporting Corporation (202) 628-4888

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30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 data in our possession(inaudible). THE COURT: How would you square those two Clearly, if the contractor

concepts, rules of law?

said it may be a new exhibit, there would be no duty. Correct? MR. PROUTY: THE COURT: I think that's correct. But if they knew, I mean,

(inaudible) acknowledge it otherwise. MR. PROUTY: geophysical data. But it said, "We have

It may be obtained from us a The only way to read that

(inaudible) that we have."

sentence about the geophysical data, the "may," is that it doesn't say, "We might have geophysical data." It says, "Geophysical data may be obtained from us." THE COURT: The (inaudible) contract said

"can," "can be obtained," not "may." MR. PROUTY: However, -THE COURT Mr. Prouty: still permissible. MR. PROUTY: give it to you. It basically says, we won't Nevertheless, it's (Inaudible), yes (inaudible).

I think that it would not have been

mentioned that geophysical data may be obtained if there were no such data. Why would you say, "Geophysical data may be Heritage Reporting Corporation (202) 628-4888

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31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 obtained," when you don't actually have use of the data? You might as well say, "Anything else you might

ask for we'll obtain for you(inaudible). THE COURT: One of the strong arguments the Why would you put

government makes is exactly that: it in?

Wouldn't a reasonable contractor -- a light

would go off when he is talking. MR. PROUTY: I think so. I think the idea

is that there have been many cases where you didn't actually go into specific detail. A 10-page report,

whatever, a 28-page (inaudible) document showing X, Y, and Z would be okay because he says, "We have additional documents. may." If you want to look at them you And that is

Would you like to look at them?"

precisely what happened here. No reasonable contractor could look at that and parse it and say, "You know, I'm not really sure if they have it or don't. it"(inaudible). I'm not going to ask for

A reasonable person would certainly I think that even

be alerted by that kind of issue.

an unreasonable person would could have looked at this data and known (inaudible) that there was this (inaudible). THE COURT: I guess it's Black letter law

that a "reasonable contractor," as opposed to a Heritage Reporting Corporation (202) 628-4888

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32 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 tide. question. underwater? MR. PROUTY: THE COURT: No, Your Honor. They are not underwater. "reasonable person," that it interprets the data as a contractor, not as an expert. MR. PROUTY: THE COURT: Yes. Let me ask another factual

When the test pits are done, are they

MR. PROUTY: It is basically(Inaudible) low Drove the John Deere out there. I believe that

there may have been water at the bottom of the pit(inaudible). issue. I must say, I'm sketchy on that

But the tides actually expose a large, large, I believe, if

large portion of the dredge area.

memory serves, you get 30 up top when the dredge area is exposed. It's a larger amount number. The Plaintiffs did their own

THE COURT: testifying. MR. PROUTY: THE COURT:

Yes, they did. The case law seems to indicate

that it may be reasonable for a prospective bidder to do his own site testing, but it is not fatal if he does not(inaudible). MR. PROUTY: Your Honor. Heritage Reporting Corporation (202) 628-4888 I think that's circumstantial,

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33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 apologize. THE COURT: Depending on the data, but I'll

get to that in a second, exactly what the contract says. You know, the key issue here is how to interpret the word "few" and what that means in the contract terms. We're, in a sense, lucky that the

Federal Circuit is a restatement court(inaudible) of the Court. So I double-checked to make sure that I So what I did was I

didn't veer from your statement.

just Xeroxed your statement, reread it, and then reread the case, and I thought it was pretty interesting in the sense -- let me ask it this way. In interpreting the contract, your argument, as I understand it, is that the term "few" is vague. MR. PROUTY: We think that as far as

numbers, as far as telling us what percentage -THE COURT: Let me interrupt you. I

Let me rephrase that.

What does the Court Really basic

do when it interprets the contract? stuff. MR. PROUTY:

Well, it reads the contract,

and it gives words the meaning that they are normally given, unless it's a special case or a special circumstance where you would expect it's a term of art, that seeks and I seek to reconcile those terms, Heritage Reporting Corporation (202) 628-4888

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34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 which it if I can, with the rest of the contract. If

there might be, some you have to look at the context Some of you have got your staff (inaudible) the contract, but essentially it starts off with the bare words (inaudible). THE COURT: That was a huge change in the There was a huge debate in

first restatement itself.

the early 20th century, and it was resolved, between Wilson and the Court. So the first restatement, I

understand, followed both Williston(inaudible). First, the Court looks at the claim, and then if it's ambiguous, then it goes to extrinsic evidence tools. to do that. The Court then said, no, we ought not

One ought to be able to look at

everything and determine the extrinsic evidence, but you start with the plain meaning and see if something contradicts it. That's where the integration clause

comes in, because sometimes there are problems with the parole evidence rule, and that's why I mentioned that. But the problem is, what meaning prevails? The restatement and the courts, in following the Corbin and the (inaudible) restatement, have come up with sort of structured rules of what the Court ought to follow. Of course, one of them, I've already Heritage Reporting Corporation (202) 628-4888

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35 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 mentioned -- I'm reading from 202, the restatement: "Words and other conduct are interpreted in light of all circumstances, and if the purpose of the parties is ascertainable, it is given great weight." And then 203 stands for(inaudible) a preference interpretation (inaudible). and I'm reading from (b): This is 203,

"Express terms are given

greater weight than course of performance (inaudible). Course of performance is given a greater weight than course of dealing or use of the trade. Course of

dealing is given greater weight than usage of trade. Specific terms and exact terms are given greater weight than in the general language." You all know the rule about construing, if it is an ambiguity, construing against the draftsman (inaudible), if it's ambiguous. And then 209 deals with integrating agreements, and 212 is interpretation of integrated agreements. For our purposes, the question of

interpretation of an integrated agreement is to be determined by the trier of fact. And then 219 is usage, what is usage; customary (inaudible) practice. I'm going to skip to 222, which is uses of trait, trait usage, and I want to get to that, as to Heritage Reporting Corporation (202) 628-4888

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36 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 whether the contracting officer's determination of this was some specific language to have meant something under the ASTM standards, whether it fits under this rule, because I don't think it does, but we'll get to that. Given all of that, let me turn to what the contract says. It's a good place to start. It says:

"Exploration logs for the area to be dredged and excavated are enclosed in Appendix A." becomes part of the contract. But here is the interesting part. what follows right after. It says: Here is So Appendix A

"Incidental So the

sunken logs, boulders, rocks, and snags...."

question I had in my mind was, what does "incidental" modify? Is it just sunken logs or boulders? Or does

If it modifies boulders, that seems to support the Plaintiff's position. goes on and says: I think it does because it then

"... and other miscellaneous debris

from harbor and fishing operation should be expected." So if you read this, "Incidental sunken logs, boulders, rocks, and snags, and other miscellaneous debris from harbor and fishing operation should be expected," a reasonable person reading this would say, "Well, there they are incidental. I should

expect incidental snags, rocks, boulders, et cetera" Heritage Reporting Corporation (202) 628-4888

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37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 govern: Then it goes on -- something that might "Geophysical data from this area can be

obtained --" "can," not "may" "-- from the Corps at that location." Report. But let's just look at what's contained in the logs, just the plain meaning, given this second sense, but it's about incidental (inaudible). Why should the Court apply "few" as something less than many? MR. PROUTY: I guess the question is, it's Then we had to look at the Golder

just a wrong a relative term(inaudible) not to be considered in a contract. If I were to say, there are

-- a few people in D.C. got the flu -THE COURT: MR. PROUTY: in D.C. got the flu -THE COURT: that's the one. MR. PROUTY: That was the one that I used. -- or were the Marines. I think Pardon? If I were to say, a few people

But that was the few, the proud, and there's 170,000. That's a large number. THE COURT: Let me explain why I don't think Any term

that argument works, with all due respect.

that one uses, a definition, that is a numerical or a Heritage Reporting Corporation (202) 628-4888

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38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 quantitative term is, by definition, relative (inaudible). That doesn't mean it's vague.

For instance, let's look the Marine exhibit. It means "less than many" in the context of 300 million Americans. MR. PROUTY: The point being, though, that

it is vague in terms of specifying an exact percentage, and that's where the real departure from the plaintiff and (inaudible) for the government (inaudible). THE COURT: Ah, okay. You're trying to bill

the contracting officer. MR. PROUTY: I wouldn't necessarily say I'm

trying to bill the contracting officer, but what I am saying is that -THE COURT: What's your job?

MR. PROUTY: To do justice. However, I would suggest that "few" is not given any kind of percentage, by any definition, except for ASTM. The

only definition that anybody espoused in any source whatsoever that actually puts(inaudible) a quantifiable number. THE COURT: Yes, but as I said before, and I

went to the restatement in the case law involving that, and I looked at that, when you apply magic Heritage Reporting Corporation (202) 628-4888

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39 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 words, terms of art, and trade usage terms. just say what it says. First of all, the ASTM standard doesn't talk about cobbles or boulders. applied to graveling. MR. PROUTY: Actually, Your Honor, the term It It's the term that's Let me

is essentially applied to silts and gravels. applies to more than just gravel but also -THE COURT: MR. PROUTY: "nonoversized." Okay. Silts --

-- but what they would call

Oversized materials are defined as They essentially said that if

cobbles and boulders.

you're going to use these adjectival descriptersions - "a few," "trace," et cetera -- here the word "few" means an extra five or 10 percent; "trace" means -THE COURT: I do recall that, but here is

the conundrum, the rock and the hard place the government is in. In the first instance, we're

applying a reasonable contractor, and then you're having me apply very narrow terms of art. I can only

apply narrow terms of art -- this is 222, "Usage of Trade." A "use of trade" is usage having such

regularity observance in a place, location and trade(inaudible) as to justify an expectation that it will be observed with respect to a particular Heritage Reporting Corporation (202) 628-4888

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40 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 agreement." Then it goes on: "It may include a system

of rules regularly observed, even though particular rules are changed from time to time." A great example

would be accounting books, and, of course, having dealt with GAAP and RAAP (inaudible) specifically. Okay. Number 2 is "Existence of scope and

the use of trade are determined as a question of fact. If usages embodied in the written trade code are somewhat (inaudible) interpretation of the (inaudible) is determined by the court as a question of law." not sure we have a code. Apparently, the Court is going to have to make a determination whether trade usage is appropriate here, and it doesn't seem to literally fit, and I don't have anything here on record -- or do I? -- that says, using this term in this situation, which doesn't seem to fit, rises to the level of regularity, observance, and a place, location, of trade. MR. PROUTY: Where we can find the notion I'm

that we should go to the ASTM, and that is in the document where we used terms like cobbles and boulders, and (inaudible) cobble, boulder, we're now having (inaudible) to this case. Your rock

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41 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 (inaudible) cobble 12 inches, or a boulder is 12 inches or greater. they use for gravel. Those are, of course, the terms They would not know that

"gravel" is defined as being between this size and that size or by itself, and these are the terms that suffuse past performance because we're talking about very specific sorts of things (inaudible). THE COURT: argument is. That's not what the government's

The government's argument -- correct me

if I'm wrong -- is a percentage argument, is it not? That's what makes this ambiguous. MR. PROUTY: The basic argument is that the

only place that anybody in the world, anybody says a few isn't a certain percent as the ASTM. It certainly

does not say so in any dictionaries or the definitions that were seized upon by Plaintiff, and because of that, unless you know the ASTM definition, which we gladly probably do, and, in fact, just be clear, even though the ASTM says that "few," et cetera, should be used for undersized particles, and these is no oversized ones. In one of his examples, it uses the adjective "trace" with boulders(inaudible). In that

same example, of course, it also says "X percent extras like cobbles, (inaudible), boulders, but, Heritage Reporting Corporation (202) 628-4888

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42 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 nevertheless, this remains a case where we see that there is not really such a prohibition against using an adjective to describe the occurrence of things, such as boulders and cobbles (inaudible). obviously, ASTM itself did so. But our point is that the only place in the world that there is an application of percentages to "few" is in the ASTM. THE COURT: So it is cited -Are you going by inference? I'm So,

not sure I understand that it would apply to cobbles because it doesn't literally apply to cobbles, does it? MR. PROUTY: But the ASTM says that you If

could these adjectives to describe fine materials. you mean X percentage (inaudible). THE COURT: further than that. You would have to go one step

Assuming that's true, wouldn't you

have to say that a reasonable contractor would follow this? Is that always the case? Surely, there will be

contracts like this court has dealt with(inaudible). MR. PROUTY: Reasonable contractors are very

familiar with these terms and geotechnical terms, which use the ASTM to determine (inaudible) because they have to read these reports(inaudible). Heritage Reporting Corporation (202) 628-4888 In order

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43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 streets. THE COURT: Yes, and a cobblestone has a to understand what a cobble is, that definition is not in the Random House Dictionary. THE COURT: MR. PROUTY: THE COURT: MR. PROUTY: THE COURT: MR. PROUTY: Oh? I believe so. I live in Old Town. I'm sorry? I live in Old Town Alexandria. Yes, Your Honor, of cobbled That is a --

particular meaning, which is not that dissimilar, since the 16th century. MR. PROUTY: I am not so certain that a

reasonable contractor would understand cobble stones to have that same meaning, based on our experience with the streets. THE COURT: No, no. It does have sort of a

general -- that's the origin. MR. PROUTY: THE COURT: MR. PROUTY: Your Honor has got cobble -It's a small stone. But, again, the size of the

stone actually is important because over three inches would cause problems with Clogging and the grizzly screen (inaudible). But the point is, when you're

talking about cobbles, boulders, sands, and gravels in Heritage Reporting Corporation (202) 628-4888

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44 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 a test pit log, you're talking about specific things. These are the kinds of materials we encountered, and these are the amounts that we have found that are actually described the case. THE COURT: Okay. There used to be a show,

when I was old enough to watch, "The $64,000 Question." (Inaudible.) MR. PROUTY: THE COURT: Okay. So, with inflation, it's Where in the record is About Not trade usage.

probably $64 million now. support for your example?

That's what's really bothering the Court. MR. PROUTY: I believe, because I know that

I was reviewing the deposition of Mr. Brown, which is in the government's appendix, and if you look at pages 27 and 28 of the appendix, actually going through to 29, there is a discussion of what the ASTM is by Mr. Brown Martin. It's a widely used guide on page 27,

the Sorrels investigation, and the question was, "And is it an industry standard?" THE COURT: "Yes."

I'm just surprised that since

the Corps does scores of these type of contracts, that there is not more evidence concerning this. And I don't know how to read this (Inaudible.) Here is what the contracting officer Heritage Reporting Corporation (202) 628-4888

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45 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 concluded. Soil description of the logs were

(Inaudible) in accordance with ASTM Specification 2488-9. Per the standard, the words "with cobbles" or

"with cobbles and boulders" are to be used if a field sample contains any cobbles and(inaudible) boulders. The standard also includes the option to provide a (inaudible) percentage. it? MR. PROUTY: (Inaudible) it doesn't say The adjectival That's not true, though, is

directly that "few" is to be used.

descriptions to be used are "cobbles and boulders," although it is used in assuming that it applies to the example it used with boulders(inaudible). you're correct, Your Honor. But I think

You're correct that the

ASTM does not say that you have the option of using an adjective to describe boulders or cobbles(inaudible). THE COURT: So we have evidence in the

record that would somehow construe, by implication, I suppose, that it does apply to cobbles and boulders, and that would have to be the industry standard(inaudible), and you're basing all of that for Mr. Brown. MR. PROUTY: THE COURT: is Celotex. Well -Remember, the guidance to this

It's a summary judgment motion.

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46 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. PROUTY: THE COURT: I understand, Your Honor. Is that enough to create a

material issue of fact? MR. PROUTY: I would suggest not, Your

Honor, because, again, Mr. Brown does cite ASTM as the industry standard, and there is nothing else out there that points to any number at all in relation to the word "few"(inaudible). I would suggest that, even

though the contracting officer hung her hat on the ASTM, the government is not doing so in its motion for summary judgment. We're noting that, yes, the ASTM actually is the only place you'll find this (inaudible), which makes it unreasonable -- if you're going to start guessing about what percentages are and doing the calculations that the Plaintiff was doing, at the very least, you should have looked at the one place where(inaudible) actually any kind of number associated with the word "few" at all. But by virtue

of "few" being such an elastic term, and as Mr. Brown said, "It could be two percent, or it could be 20 percent. I don't know," and this is why we have a

dictionary, which, frankly, doesn't help much either. The point is, because "few" is such an elastic term, it encompasses such a broad spectrum -Heritage Reporting Corporation (202) 628-4888

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47 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 argument. a narrower spectrum, actually, if you use ASTM, but, otherwise, we would expect to get a broad spectrum. We would say that that is not an affirmative representation which gets you there as far as the type one differing site condition (inaudible). THE COURT: I understand the government's

I still think, from the government's point

of view, that it would create a material issue of fact because the Plaintiff's argument, as I understand it, is that you apply the plain meaning, which is not vague. It has a specific meaning, "a few." When you

apply it to the facts of the case, it is reasonable to construe that they could have used the type of dredging that they want(inaudible). MR. PROUTY: Your Honor, there is a specific There is

meaning which doesn't give you percentages.

a definition in the dictionary (inaudible), but that definition cannot yield percentages. Plaintiff has said that if -THE COURT: That would only -- I'm sorry to And again, the

interrupt you -- the percentage would only come into play if the Court would apply trade usage. not? MR. PROUTY: Well, no, because Plaintiff is Would it

saying that the percentages for what was important to Heritage Reporting Corporation (202) 628-4888

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48 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 it in determining what equipment to use was the term "few". came (inaudible) use of the term "the equipment" because if they had known, as they have said in their motion and their amended (inaudible) complaint, if they had known the percentage was between five and 10 percent, there would have been a site condition which would not have allowed them to use the dredge. THE COURT: Okay. That may be true, but one

would argue, from their point of view, that five to 10 percent is putting into effect the word "few" in the Merriam Webster Dictionary. To them, it means less

and may mean even what's workable for them, five to 10 percent. Let me suggest a contract distinction between interpretation and construction. "Interpretation" is the meaning of a phrase, and "construction" is how it will apply here. I think

what the government is arguing is construction, that it's vague because when you apply it, it's elastic. That's the term you used. That's construction, but

that doesn't mean there is no meaning to it. MR. PROUTY: Well, Your Honor, indeed, the

meaning could be simply (inaudible) between two and 20 percent. That's a specific meaning, but it's a Heritage Reporting Corporation (202) 628-4888

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49 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 apologize. THE COURT: Court's fault. Why, in interpreting the word "few," would the Court have to use a percentile definition, unless it was trade usage. that. Heritage Reporting Corporation (202) 628-4888 I can understand you can argue No, no, no, no. It's the step here. MR. PROUTY: Yes, Your Honor, and I meaning that gives you big error bars. THE COURT: MR. PROUTY: THE COURT: Maybe. And that's the point. You're not going to construe

that against the government, the draft. MR. PROUTY: No, Your Honor, because what

we're telling you, what we've told the Plaintiff, is that there are big error bars because you've used the word "few." When you get "few," that tells you that What it tells Mr.

it's not 7.98 percent or .254 percent.

you is that it is in this sort of grab bag area. Brown said he didn't know if he meant two or 20 percent. THE COURT: MR. PROUTY: THE COURT:

Here is what I'm not following. Yes. Okay. I'm trying to go step by

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50 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MR. PROUTY: The reason why the percentile

definition is important is because that shows, if you're making a Type 1, differing-site-condition claim, Plaintiff has to show that the things described in the contract documents departed materially from what they actually encountered, a material departure, and what we arguably know is the percentages of cobbles actually encountered. THE COURT: So, in order to -I agree with that

Absolutely.

100 percent, but the starting point is the meaning of the word "few." You're going to have to define that

to determine if you varied from it when you actually -MR. PROUTY: THE COURT: Right. And so the definitional point on

the interpretation, not the instruction; why would we apply percentages? MR. PROUTY: Because I almost want to say

this is like quantum (inaudible) this is like a point in physics where you don't know these. Things are

indeterminate until you actually apply them, things actually happen. THE COURT: uncertainty principle? MR. PROUTY: I don't want to go bananas on We're dealing with Heizenberg's

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51 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 that, Your Honor, but the point is that the term "few," again, remains elastic in the interpretation. The interpretation, not just a construction, the interpretation is "few" is a broad, broad grab bag of natural percentages. That definition can run a What does that mean? One out of 20; is that

spectrum of amounts, not many. Compared to what? (inaudible). few? THE COURT:

So what you're arguing, and

maybe this is a good argument, is that since you're dealing with a qualitative term, just like the hypothetical you gave in your brief I could hypothetically give you (inaudible), if I said you have to deal with a hundred and seventy thousand out of 300 million (inaudible), you would say that "few" is an appropriate word, but you're saying that a reasonable contractor would interpret that "few" in terms of a percentage. MR. PROUTY: Yes, we have to. You have to

understand that, in his mind when it considered what was being represented by the word "few" in this context (inaudible), you would have to think of it as an apportion, some sort of apportion of the test pit (inaudible). I would consider other things as well,

but among the things that are considered when it said Heritage Reporting Corporation (202) 628-4888

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52 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the word "few" in proportion to other things, it is few. (inaudible), we have to be in proportion to the

rest of things (inaudible). THE COURT: I would maintain that that still

goes to construction, but that's not the end of the matter because the question is whether there is a latent ambiguity that could possibly go to construction because you look at it, and say, okay, I know, as a reasonable contractor, that 10 to 20 percent, is what I they can live with. it should ring a bell when I see it. argument. MR. PROU