Mr. Prattie. Good afternoon. You've reserved five minutes for a buttock. Okay, and I know you're well familiar with the lighting system, so the warning system will say so go ahead. Thank you, Your Honor. May it please the court. We appeal the trial for judgment in this case on three grounds. First is that the CAC or CAQ was not a CDA or contract disputes act. The second that the court's finding of breach of the CAC was not based upon the fact that faith and part of government. And third and dispositive of course is the court's finding of duress in amendment three was unsupert about the evidence before the court. You help me in reading the briefs. I'm not clear what regulation services are. I understand there's variability in the power demands when when WAPA here was not providing was not the power provider that was somebody else right. And is what do they have? They have generators that kick in when there's a particularly high need for power. Is that is that what providing regulation services is? I'll step back for a moment and be sure to figure out which really helps. There is control area that is an area which would be WAPA was responsible for the WAPA and WALC, the Western area North Carolina
. And that area is a place where you sense you can tap on to it and you have to be kept as remote to other or providing power. And the way you keep that voltage across this before is if you have a matching of the power provided and by external sources such as generators either in the water or outside of a being brought into it and power being pulled out. So you always have essentially the same amount of voltage available in a sense we have to have supplied it. But what are the regulation services? What does WAPA do when it provides regulation services? When it does essentially provides the ability to spin up power or take power down when there and how does it do that? It does that by bringing or taking on or off line its own generation sources. So the concern here was the wear and tear on the WAPA generators as a result of the considerable fluctuation and demand which was unusual as to the steel plant. Right? As Wilkins were going there is others. You have to have a capacity of bailiffs to sign for regulation. That is if you're going to have a pot you might have 80 megawatts of demand and 70th thrown on the system. You have to have the ability to sort of bring up 80 megawatts online to sort of meet that demand. So what was the difficulty in computing the costs here? Was that because their head that WAPA hadn't provided previous regulation services similar to this one? Nothing similar to that. That is nothing in the same scale. That is the WAPA had a certain size, a certain typical megawatt load upon it. And the variation of the vary about one and a half or three percent of the demand in the time generally would be a little out. And you had here was the addition of plant was so large that its demands were so large that you might have say a 30 megawatt need that all this in 100 megawatt need almost the flickering switch. But that was a scale that WAPA did not have the experience dealing with. So what costs weren't available to compute a cost based figure? Was it the cost based resulting from the wear and tear on the equipment? What are we talking about? That was sort of a one part of the problem
. It is didn't I know how this was going to affect for example the turbines that Hoover Dam which weren't being most affected by the man? Well what other components are? The other large component of cost is the capacity cost. And that is essentially how much do you have on standby? How much does it have to do with capacity that you couldn't use to sell power to other people? You can't have available for using this. So those are the two cost components? Those are the two largest cost components. Okay and at the negotiations did the contractor propose a cost based methodology? I heard about negotiations originally back in 1994. Well no I'm talking about after the original contract was entered into. The negotiations that the contractor or the search weren't conducted in good faith. Yes we would suggest that the contractor really didn't have a counter offer or kind of suggestion with the government. That is the government had several iterations. Does the contractor claim to have presented a cost based methodology at that point? The contractor claims that more stars briefs would they have said is that they would command it fruitful costs but they never would have talked about much this with offering in terms of what they are willing to do. If you look at briefs and I understand. I'm sorry as far as the briefs this before the call right now. I'm not going to forget about that for the moment. I'm talking about during the negotiations. They presented you talked to them you presented a proposal right they presented a proposal was their proposal cost based? No no. The proposal was $57,000 manager rupees and that was a freedom. They said that you feel like you can't prove anything besides the manager rupees
. They had a notion that because they're providing more power in blocks than is required and the contract the back cost to regulation which ample evidence suggested did not and therefore the only firm absolute rate was the $57,000. What did you propel? We had several of the proposals. The first proposals were October of 1997. It was a here are some ideas we're going to talk about and notions were going to go the first meeting they had subsequent to the operational beginnings of July 1997. We're going to look at these different factors. When we came clear to you and after we get individual units information with Bureau of Reclamation is what they already didn't have it. They didn't have cost information for allows incremental determination of cost. Cost information was expected to wear in tear in the capacity. That's right. There was now the incremental information for Bureau of Reclamation that would be helpful. This could not be used in such a way. They had system wide information but that cannot be allocated to the cost to regulation. As a result, this was a lot of how it should be do a cost-based analysis and that was when in January, other alternatives were offered by Western and had civil iterations. They provided them their entity record indicating here's our thoughts please come back to us. Mr. Pregnall, let me ask you about the one one
. Staying here in the decision of the Court of Federal claims. At page J.A. 36 where the court is sort of framing the issue, it says, the contract could be breached if a cost-based methodology was not utilized by WAPA or if one of the parties failed to negotiate in good faith. Well certainly obviously that's correct in the latter point that if you don't negotiate in good faith, you breach the agreement. Yes, but what do you understand the court to be meaning when it says if a cost-based methodology was not utilized by WAPA? Well we disagree with the court's determination that a cost-based methodology was not used by WAPA but that was a breach of power factor. It was required as they attempted to sell by the breaching of their faith and the cases we've talked about in the government to negotiate in good faith and in a grimace degree like we have here say that the way you breach it is by not negotiating in good faith and all the evidence is is the WAPA thought it was approaching the cost-based methodology and another court's export said the methodology also was used by WAPA was not a cost-based methodology but that isn't mean that they were trying to do so. Nobody had really done it before in this sort of context that in fact the trial court, the science, all three experts who testified in case as saying there's no universally agreed-to-plan method of coming to an agreement here about how to do cost-based methodology. You would agree though that if in fact WAPA had cost-based methodology and it or information pertinent to formulating the cost-based methodology and either it didn't act on that or it didn't disclose it in the negotiations and so forth that that would be a breach of the obligation of proceeding good faith. I think of that information which you can leave for a lesser-circle pervilation of cost-based methodology and it intentionally would tell that that would certainly be something that we found new to basis for bad faith. Now let me ask you one other thing here. The judge also found that there was duress with respect to amendment number three, the signing of amendment number three I guess and if you lose on the issue of bad faith, yes, right. Does that mean you lose on that issue too? It does not. And the reason is because there are three components of duress. The fourth thing I've heard is the fourth thing about the spill versus fear of the world. The first is that one party acted contrary to what I want to do
. We agree that there is quite a few evidence of that because we all start to testify. We did not want to sign the amendment. The second thing is that they have no choice in the matter and that is really the part where regardless of the big faith of bad faith, the government should win on duress because there wasn't choice. The choice was don't sign this amendment according to take care of the issue or according to the cable issue. They could have kept negotiating. They could have kept negotiating or tried to follow suit. They could have said the government is able to negotiate with big faith. They reached a contract. We were going to suit. Instead, they filed a sign of amendment number three which according to take care of the requirements of section number 21 of the cap and therefore they were disposed of litigation. And then several months later they filed a suit saying we did this under duress. We didn't know what to do later. How many point is that the time they signed it, it said this proposed section 21 of the CIC and we were basically taking care of the business here at the end. Thank you Mr. Pratt. You are absolutely right
. I have a question. In Judge Braden's opinion, she mentioned in the light of the fact that WAPA did not produce or introduce WAPA cost data etc etc etc. You breached the contract. What cost data is she referring to? That is the great mystery. Because there is no cost data that was appellable by WAPA in this case. There was always a great obligation brought forth a trial and it had been placed breached in the case where that the government had held that. But there was no data that was appellable. Certainly when the exports experts said of this kind of data, this kind of information provided. But this was not the sort of cost data that anybody trusted earlier on already been the part of WAPA movement provided. You mentioned the courts expert and in the courts expert report at Joint Appendix 430. The expert says however, despite the voluminous information presented to me by the party, I have not received all of the data necessary to fully perform the ordered calculation. What data is she referring to? What she is saying is that she would like to have certain other kinds of data to perform her calculations. Unfortunately, there is no indication that such data had been resisted. For example, I do not know how much money is in my bank account right now because I do not have to die. Somebody else in my bank account said, I like to know how much they have, but I don't really have access to it. I might never knew if I had access to it
. The bottom line is that Dr. Markridge said she would like to have more data, certainly. It makes more sense. We would like to have more information rather than less. But there is no indication of any of the data that she saw was ever in existence. You're saying she is not suggesting there that either North Star or the government with held cost data that either of the parties had. She is not suggesting it because it was in the agency. I guess you could look at page 158. As I understand that this is part of the amendment that is ultimately executed by the parties. I guess my first question is, is my correct about that. What is meant there by total annual costs? Total annual costs were essentially using the cost-based methodology that it developed. I mean, the coordinator said that is not a cost-based methodology, but which a lot of belief was a cost-based methodology. You would have got $1.5 million per year. That was meant by total costs. That was what it then used to drive back to what any kind of sentence would be necessary
. Well, does this, this was signed by both parties? Does this indicate that both parties thought this was a cost-based methodology? That is certainly what we've been planning all along. That by signing a minute three, this is what North Star Steel put it in software. Thank you. All right, thank you. We'll restore your full five minutes of rubble. Mr. Shabot? Yes. Is that right? Shabot? Yes. That's why we're announcing. Okay. And we'll just before you start, we'll in effect Mr. Proudi is getting an additional four minutes. So if you need that, you'll also have that on your argument. Thank you very much. I'd like to begin by sort of throwing away my notes and answering a little greater detail. Some questions asked by you with respect to what was cost-based and what was cost-based
. Before you do that, did WAPA with hull during the negotiations any cost data that your client requested? What we requested, Your Honor, was all documentation to support any calculation costs that they made during the negotiating process. They came forward with an on-time about during the negotiations. Was there evidence that during negotiations your client requested cost data which was not supplied? During the negotiations we continuously requested that they back up their, that they provide documentation for first a 20% figure and then for each of their iterations of what they call cost. I can notice they refer to this as well. No, but I, but just try to answer my question. Was there any data that existed during the negotiations that was withheld by WAPA and that your client requested? In the sense, Your Honor, that ultimately there was data upon which a cost calculation could be made the answer. What data was withheld? Basically, all of the data that went into what later became, that reaction was to currently being part of the first filing of the restrooms making for its cost. Excuse me for a transmission here. Okay, where do I find in the record testimony that existing cost data was withheld during the negotiations? You would not, because that wasn't part of our complaint, that was that they would be independent. So there's no evidence in the record that they withheld in the existing cost data during the negotiations. That's correct during the negotiations. Okay. That became a problem later because of actually the weird alleged art and art cross-cutting about the way these costs that were actually calculated and presented on the court's expert. So what's the bad faith during the negotiations that they didn't withheld any costs? Well, the bad faith during the negotiations and we have to clear which negotiations you're talking about. I'm talking about the negotiations that were done for so many of the original contract before the amendment. Before the negotiations leading up to the amendment, the bad faith there is that Western was presenting proposal after proposal after proposal that they were characterizing as cost-based
. And in fact, they were not. They were market-based. We knew them to be market-based. We knew and we told them they were market-based. We asked for any support that would counter that. It would demonstrate to us that it was cost-based. And during that call, there was no information. So is that the only is that the only contention of bad faith that they misrepresented a market-based methodology as being cost-based? They misrepresented that methodology and they refused to negotiate a cost-based methodology. The entire process here, we kept saying. Did you offer them a cost-based? Absolutely. 67,000 dollars. Did you include in that the the the wear and tear costs and the capacity cost? Yes, we did, Your Honor. There are three cost components operating. Where do I find in the record that you prepare a cost-based proposal that included those items that they refused to consider? That would be in the GDS report and submitted to the to Western and of course the negotiations and not on the top. Now, but who testified? Who testified that during the proceedings before the Court of Federal claims that your proposal was cost-based? Oh, during the test, I don't know the face that Mr. Cerefoldin was denying. Mr. Pecker also. And they testified that your proposals during the negotiations included the wear and tear and the capacity cost. They took them into consideration. We had a different approach as to whether there was wear and tear as to whether it wasn't back. So your proposals didn't include any costs for those things because you thought they shouldn't include any costs for those things. Is my understanding the testimony correctly? There was an attempt to get it in the one component. There was an attempt to get at the HEC files. But it answered my question. It wasn't the testimony that your proposals during the negotiations didn't include any costs for capacity or wear and tear because it wasn't thought to be appropriate to include those kinds of costs. That is correct for a slightly, it wasn't appropriate because our experts, both the GBS expert during the negotiations and Dr. Andrews' complainants who testified during the trial subsequently on retrospective analysis that the instantaneous response upon which the variability formula or theory was pronounced was incorrect as matter of physics. As matter of physics, the changes of the North Star plant occurred so quickly that the HEC system that Western was operating could not possibly respond in time. There's always a lag between fluctuations on the system and the ability of the HEC system to respond to it. So there was in fact, again, it was pronounced testically as an engineer at physics that the wear and tear simply did not exist because the generators could not get the signal fast enough to respond to the fluctuations that the plant was registered. They were responding to overall capacity fluctuations on the entire Western system so that even though 100 megawatts and tremendous variability of what that one-hand-gray megawatts would have with respect to the North Star plant, were locked when you looked at the entire system, they were relatively small
. Mr. Pecker also. And they testified that your proposals during the negotiations included the wear and tear and the capacity cost. They took them into consideration. We had a different approach as to whether there was wear and tear as to whether it wasn't back. So your proposals didn't include any costs for those things because you thought they shouldn't include any costs for those things. Is my understanding the testimony correctly? There was an attempt to get it in the one component. There was an attempt to get at the HEC files. But it answered my question. It wasn't the testimony that your proposals during the negotiations didn't include any costs for capacity or wear and tear because it wasn't thought to be appropriate to include those kinds of costs. That is correct for a slightly, it wasn't appropriate because our experts, both the GBS expert during the negotiations and Dr. Andrews' complainants who testified during the trial subsequently on retrospective analysis that the instantaneous response upon which the variability formula or theory was pronounced was incorrect as matter of physics. As matter of physics, the changes of the North Star plant occurred so quickly that the HEC system that Western was operating could not possibly respond in time. There's always a lag between fluctuations on the system and the ability of the HEC system to respond to it. So there was in fact, again, it was pronounced testically as an engineer at physics that the wear and tear simply did not exist because the generators could not get the signal fast enough to respond to the fluctuations that the plant was registered. They were responding to overall capacity fluctuations on the entire Western system so that even though 100 megawatts and tremendous variability of what that one-hand-gray megawatts would have with respect to the North Star plant, were locked when you looked at the entire system, they were relatively small. That again is why Dr. Barton said that to assign a variability component that North Star the Western did, which was, I think she said it was a factor of 20 in terms of a multiplier that effect, was wrong. And it just failed to recognize what from the physics standpoint was and your complaint is that the court's own expert included those two categories of costs that you think should be excluded, right? In terms of... Yes, that's one of the basics for the brass-comps. Yes, but let me ask you this, it's the same question I asked Mr. Crowdy, if you lose on the breach issue, does that mean you lose on the direct issue? In other words, if the court were to conclude, it's sort of the flip side of the question you heard me ask Mr. Crowdy, if the court were to conclude that in fact the government did not breach the contract, do you lose on the direct issue? No, no, no, no, no, I don't believe we do. I think the court, the court below, I think, was very wise and had to address the... Yes, but the law is that one of the factors of duress is coercive action on the part of the government, right? Is that correct? Is that correct? And if you take away any bad faith in the negotiations, I realize you say that's not correct, but if you remove any bad faith in the negotiations, in other words, if you say the government did enact and bad faith in negotiations, how can there be any duress in signing amendment three? Lack of... lack of good faith with respect to amendment three is only one of the three tests on the
. That again is why Dr. Barton said that to assign a variability component that North Star the Western did, which was, I think she said it was a factor of 20 in terms of a multiplier that effect, was wrong. And it just failed to recognize what from the physics standpoint was and your complaint is that the court's own expert included those two categories of costs that you think should be excluded, right? In terms of... Yes, that's one of the basics for the brass-comps. Yes, but let me ask you this, it's the same question I asked Mr. Crowdy, if you lose on the breach issue, does that mean you lose on the direct issue? In other words, if the court were to conclude, it's sort of the flip side of the question you heard me ask Mr. Crowdy, if the court were to conclude that in fact the government did not breach the contract, do you lose on the direct issue? No, no, no, no, no, I don't believe we do. I think the court, the court below, I think, was very wise and had to address the... Yes, but the law is that one of the factors of duress is coercive action on the part of the government, right? Is that correct? Is that correct? And if you take away any bad faith in the negotiations, I realize you say that's not correct, but if you remove any bad faith in the negotiations, in other words, if you say the government did enact and bad faith in negotiations, how can there be any duress in signing amendment three? Lack of... lack of good faith with respect to amendment three is only one of the three tests on the... Well, yeah, but you got to meet them all. You got to meet all three. My point is, I understand that you say there was bad faith. I'm just trying to really get to... It sees to me the key issue here is the breach, because if we could... if we could include that the Court of the Federal claims was correct, then you're in a strong position on the duress. If on the other hand, we conclude that the Court of Federal claims aired on the breach, I think you were out of luck on the duress. There were multiple breaches, you know, there was first the breach to not breach..
... Well, yeah, but you got to meet them all. You got to meet all three. My point is, I understand that you say there was bad faith. I'm just trying to really get to... It sees to me the key issue here is the breach, because if we could... if we could include that the Court of the Federal claims was correct, then you're in a strong position on the duress. If on the other hand, we conclude that the Court of Federal claims aired on the breach, I think you were out of luck on the duress. There were multiple breaches, you know, there was first the breach to not breach... to not apply a cost-based methodology. That's what the Court of Federal claim is now. That's correct. And with respect to that, I think the Court was quite correct in concluding that you did not need a lack of good faith with duress as respect to that. It was a matter of respect. Her expert testified to that. Her expert testified to that. Her label was just testified to that. Their expert didn't even contest. Well, we're setting the contract. Where's the contract? Require use of a cost-based methodology. What language? It says it requires the parties to negotiate in good faith. A cost-based methodology. But that doesn't mean that they have to use a cost-based methodology, does it? I think that's certainly what the intent is. Clearly, Mr. Potential, you're on a right way to negotiate a good faith, a cost-based methodology, if they weren't going to use the cost-based methodology
. to not apply a cost-based methodology. That's what the Court of Federal claim is now. That's correct. And with respect to that, I think the Court was quite correct in concluding that you did not need a lack of good faith with duress as respect to that. It was a matter of respect. Her expert testified to that. Her expert testified to that. Her label was just testified to that. Their expert didn't even contest. Well, we're setting the contract. Where's the contract? Require use of a cost-based methodology. What language? It says it requires the parties to negotiate in good faith. A cost-based methodology. But that doesn't mean that they have to use a cost-based methodology, does it? I think that's certainly what the intent is. Clearly, Mr. Potential, you're on a right way to negotiate a good faith, a cost-based methodology, if they weren't going to use the cost-based methodology. If it was clear going into this, that the 20% figure was not a cost-based methodology. It was a number that the government admits was derived from calculating market replacement costs, which they would never occur. So your argument is the government had an obligation to present a cost-based methodology, and if it couldn't do it, it would have been breached to the contract. That's correct. That's correct. And it was possible to do it, as ultimately was proven to be the case. They were doing it for more or less simultaneously with negotiating this contract. And when we came around to negotiating amendment number three, the argument where the suggestion was made earlier here, amendment number three indicates that this is compliance with section 21. That's not true at all. So Mr. Shabold, you agree then with the Court of Federal Claims, which this is it, I'm looking at 57 through 58 of the Joint Appendix, the decision. The Court of Federal Claims says, in light of the fact that WAPA did not produce or introduce WAPA cost data to establish whether its regulatory services to North Star were out were cost-based. And two, expert testimony confirmed WAPA did not establish a rate of regulatory services that was cost-based. So you're saying the Court of Federal Claims there is saying the government didn't act in bad faith and breached the contract because it didn't produce cost-based data and it didn't establish a cost-based rate. That's correct. But now where does not there have to be though a finding that there was in fact such cost-based data that was not disclosed? I mean because I think Judge Dyke is correct
. If it was clear going into this, that the 20% figure was not a cost-based methodology. It was a number that the government admits was derived from calculating market replacement costs, which they would never occur. So your argument is the government had an obligation to present a cost-based methodology, and if it couldn't do it, it would have been breached to the contract. That's correct. That's correct. And it was possible to do it, as ultimately was proven to be the case. They were doing it for more or less simultaneously with negotiating this contract. And when we came around to negotiating amendment number three, the argument where the suggestion was made earlier here, amendment number three indicates that this is compliance with section 21. That's not true at all. So Mr. Shabold, you agree then with the Court of Federal Claims, which this is it, I'm looking at 57 through 58 of the Joint Appendix, the decision. The Court of Federal Claims says, in light of the fact that WAPA did not produce or introduce WAPA cost data to establish whether its regulatory services to North Star were out were cost-based. And two, expert testimony confirmed WAPA did not establish a rate of regulatory services that was cost-based. So you're saying the Court of Federal Claims there is saying the government didn't act in bad faith and breached the contract because it didn't produce cost-based data and it didn't establish a cost-based rate. That's correct. But now where does not there have to be though a finding that there was in fact such cost-based data that was not disclosed? I mean because I think Judge Dyke is correct. He points out the fact that the parties had to negotiate a, the idea was we'll try to negotiate a cost-based methodology for the follow-on year, okay, or the follow-on period. And what the Court of Federal Claims seems to be saying is the government breached that because it didn't present any cost-based data and it didn't use a cost-based methodology. But if in fact it couldn't or it couldn't come up with it in good faith, doesn't have to be some finding here that evidence was intentionally withheld or that there was data that wasn't withheld. If they're trying to come up with it and they can't, that's not bad faith. Unless the answer is as most claimants testified that there in fact were no extensive costs incurred? Yeah, but that's that's that's all expulse fact. I mean that's that's expert testimony after the fact. I mean the government had an expert that came in and said X. The other side had an expert that came in and said Y assuming they all testified honestly to the best of their expertise. That doesn't mean that during the period of the contract the government or North Star was acting in bad faith. This was a tough cookie. You know nobody this was uncharted territory. It looked to me like a case where the parties you know they negotiated firmly and they just couldn't work out a deal. Well, you're our first off there. There are dozens of these most real countries. They oppose the same that the physics of each plant is the same throughout the country. Other utilities are capable of calculating whether or not this has to be a fact
. He points out the fact that the parties had to negotiate a, the idea was we'll try to negotiate a cost-based methodology for the follow-on year, okay, or the follow-on period. And what the Court of Federal Claims seems to be saying is the government breached that because it didn't present any cost-based data and it didn't use a cost-based methodology. But if in fact it couldn't or it couldn't come up with it in good faith, doesn't have to be some finding here that evidence was intentionally withheld or that there was data that wasn't withheld. If they're trying to come up with it and they can't, that's not bad faith. Unless the answer is as most claimants testified that there in fact were no extensive costs incurred? Yeah, but that's that's that's all expulse fact. I mean that's that's expert testimony after the fact. I mean the government had an expert that came in and said X. The other side had an expert that came in and said Y assuming they all testified honestly to the best of their expertise. That doesn't mean that during the period of the contract the government or North Star was acting in bad faith. This was a tough cookie. You know nobody this was uncharted territory. It looked to me like a case where the parties you know they negotiated firmly and they just couldn't work out a deal. Well, you're our first off there. There are dozens of these most real countries. They oppose the same that the physics of each plant is the same throughout the country. Other utilities are capable of calculating whether or not this has to be a fact. But you see the court of federal claims didn't make a finding. The court of federal claims didn't. Neither you know the government challenges the court's findings, leaving aside the damages issue that you cross appeal. But on the breach issue nobody challenges the court's findings and there's no finding in there as far as I can tell that the government intentionally withheld something or didn't come forward with material that it had or acted with animus. There's none of that and that's I think what you need to have of breach of the obligation to negotiate in good faith. But you're all right. Again, I think the way she divides the decision was that separates those issues out. The negotiation of the good faith obligation is with respect to what occurred in the reinforced design amendment three. It has nothing to do with whether or not we were ever charged the cost-based rate to begin. Are you saying then that the government would breach this contract simply by not producing a cost-based methodology independent of any showing a bad faith? Yes, Your Honor, because it was in fact capable coming up with a cost-based methodology. Well then your thing is bad faith. But I mean if it can't she didn't find that it could she just said I mean with the perspective of first finding the breach the failure to provide a cost-based rate that's correct she did not make the but that's what she had to find. I don't believe that that's what aviation contractors garbage. Yeah, but the only way you can breach this agreement the only way either north star or the government could breach this agreement is to negotiate in bad faith and there's not a finding here that either north star or the government negotiated in bad faith in the effort to try and arrive the cost-based methodology. I believe there's definitely that finding with respect to what she says that she says that she equates not presenting it with bad faith. Oh I think she finds much more than the failure of presenting evidence here
. But you see the court of federal claims didn't make a finding. The court of federal claims didn't. Neither you know the government challenges the court's findings, leaving aside the damages issue that you cross appeal. But on the breach issue nobody challenges the court's findings and there's no finding in there as far as I can tell that the government intentionally withheld something or didn't come forward with material that it had or acted with animus. There's none of that and that's I think what you need to have of breach of the obligation to negotiate in good faith. But you're all right. Again, I think the way she divides the decision was that separates those issues out. The negotiation of the good faith obligation is with respect to what occurred in the reinforced design amendment three. It has nothing to do with whether or not we were ever charged the cost-based rate to begin. Are you saying then that the government would breach this contract simply by not producing a cost-based methodology independent of any showing a bad faith? Yes, Your Honor, because it was in fact capable coming up with a cost-based methodology. Well then your thing is bad faith. But I mean if it can't she didn't find that it could she just said I mean with the perspective of first finding the breach the failure to provide a cost-based rate that's correct she did not make the but that's what she had to find. I don't believe that that's what aviation contractors garbage. Yeah, but the only way you can breach this agreement the only way either north star or the government could breach this agreement is to negotiate in bad faith and there's not a finding here that either north star or the government negotiated in bad faith in the effort to try and arrive the cost-based methodology. I believe there's definitely that finding with respect to what she says that she says that she equates not presenting it with bad faith. Oh I think she finds much more than the failure of presenting evidence here. Where? And take a look at that's the difficulty that I have. In that section for a period. Right before I think it's in the discussion of chain 58 to 59 where she's discussing how there was no other alternative. Yeah, but that doesn't talk about negotiating the good thing. Now we're getting the direct issue. But I mean this isn't I mean I don't see here what I mean I kept looking for the critical finding that the government acted in bad faith by withholding information or not presenting information that had or so forth and I don't see it in here or acted with animus. This just looked like a case of tough negotiations and they didn't work out. There was more going on here you're on right kind of think you have to look at the entire opinion. You have you have a an interim amendment random for roasted real estate saying by the way we know that this 20% figure has nothing to do with cost even though we put it that way we've got a amendment from the heavy negotiating team. She didn't point to that is finding bad faith. I mean you know look you can go through files and these were tough negotiations but there's no finding here of bad faith. Well again I believe that on the totality of the decision is what you guys conclude. But to follow up on what Judge Charles is discussing I mean clearly it's no specific finding of bad faith in connection with the section of the opinion dealing with the breach. So then if we look to the section dealing with duress the court refers to the three rumve weld factors the third of which is circumstances where the result of another party's coercive actions and she makes reference to the fact that the coercive action requires a showing of a breach contract without a good faith belief etc etc and then when it comes to this in the discussion in the opinion on that factor which is item c on page 48 of her opinion simply says that the amendment was not cost based. It doesn't say it was the result of bad faith negotiations or the where the government failed to come forth with a cost based proposal enacted in bad faith simply says it wasn't cost based. So again even in the duress section where there is a passing reference to good faith there is no finding that the government acted in bad faith so aren't we left with the total absence of any finding anywhere in the opinion even looking at the opinion in its entirety on that critical point and it's no bad faith no breach
. Where? And take a look at that's the difficulty that I have. In that section for a period. Right before I think it's in the discussion of chain 58 to 59 where she's discussing how there was no other alternative. Yeah, but that doesn't talk about negotiating the good thing. Now we're getting the direct issue. But I mean this isn't I mean I don't see here what I mean I kept looking for the critical finding that the government acted in bad faith by withholding information or not presenting information that had or so forth and I don't see it in here or acted with animus. This just looked like a case of tough negotiations and they didn't work out. There was more going on here you're on right kind of think you have to look at the entire opinion. You have you have a an interim amendment random for roasted real estate saying by the way we know that this 20% figure has nothing to do with cost even though we put it that way we've got a amendment from the heavy negotiating team. She didn't point to that is finding bad faith. I mean you know look you can go through files and these were tough negotiations but there's no finding here of bad faith. Well again I believe that on the totality of the decision is what you guys conclude. But to follow up on what Judge Charles is discussing I mean clearly it's no specific finding of bad faith in connection with the section of the opinion dealing with the breach. So then if we look to the section dealing with duress the court refers to the three rumve weld factors the third of which is circumstances where the result of another party's coercive actions and she makes reference to the fact that the coercive action requires a showing of a breach contract without a good faith belief etc etc and then when it comes to this in the discussion in the opinion on that factor which is item c on page 48 of her opinion simply says that the amendment was not cost based. It doesn't say it was the result of bad faith negotiations or the where the government failed to come forth with a cost based proposal enacted in bad faith simply says it wasn't cost based. So again even in the duress section where there is a passing reference to good faith there is no finding that the government acted in bad faith so aren't we left with the total absence of any finding anywhere in the opinion even looking at the opinion in its entirety on that critical point and it's no bad faith no breach. You're on again I think there's an extraceance standards set up in the contract with respect to the cost based rate which does not require bad faith. Bad faith does become an issue in this respect to whether or not but it's only one of three components as to whether or not amendment number three was only a two of your thank you mr. Shabba mr. Prattie you have your rebuttal I don't know. The first one really the initiative is just to go right out about the notion that a walk was part of the core with the cost based methodology is really you look at essentially 21 of the CACC the cap that actually did not do walkings with the cost point. It's a part of the child's role in establishing and there's no additional to my or that there was a cost based methodology. I'll let you propose during the negotiations by no chance. We're not saying we're talking about faith but it's really I want that I do very good faith during the best it could be postings and counter postings and thinking about the best evidence it had to dress matters. That's sort of Dr. Bart which later got additional information from the parties that is not provided during the negotiations but as a result of the regulations now requested by me to use and nobody thought for example that the capacity factor of people to get was necessary for determination of what a cost based methodology that he used Dr. Bart which was unique in doing this and a lot of support for using a different way of doing things but I just think the government's not anticipating something that an expert can use is sort of not a nice factor. Because we're not going to go back there is a breach pilot government and the call reports that are being done by the shooting of the first group. Thank you. Thank you Mr. Prattie. Thank you Mr
. Shabbat. The case is submitted