least the contractor is likely if not actually in default i e and able to complete the work of the contract because that the criteria that they the government has to be assured that the contractor is not going to be able to complete the contract just so in your letter of notification which is a real i write this november twelfth two thousand and two letter just as your whatever it did it's that the only notification i mean what this says is the united surety has taken control of the proceeds of the construction contract is it your view that that is telling the government that the contractor is in default or to that is you have to have declared in some form to the government that there was a default or there was a likelihood of the flaw it's not enough for you to that doesn't that doesn't trigger the equitable suffocation i mean or if i'm wrong about that can you show me any case that says that just by payment of some funds to help them get off on a certain period of time that that agree that it's not the purpose the purpose of the notices to inform the government that there sure is intervening or about to intervene because the contractor is going down not that the sure he is going to be making payments here's the problem it's all the problem is your opponent twelve b six just less so for failure to state a claim in your complaint didn't i read your complaint forwards and backwards i don't find anything in your complaint indicating that you believed at the time you wrote that letter or more importantly at the time the government made payments i don't find anything in there that says clearly that you believe there was a pending default now you don't have to use discuss that with the government the magic word default but you certainly have to right so they might have some rights maybe their rights are against the contractor i mean if along the way something goes awry in the harmony or something and so they have to come up with a few thousand dollars to help the contractor the court jeffery writing on behalf of the united states the sure you still need to provide notice in two thousand and two prevents its claim today and the reason why is that the notice of default matters much more than just conveying information it actually changes the it's like being almost pregnant if they do or they can you say something less than the fall you know and so you need the magic were good but it doesn't have to be in the letter that's being sent in the american fidelity indirectly and the american fidelity case gives us a way of doing that it can reference the california civil code which was that which happened in that case which used the word default fortunately had the word default and it well and that mattered to the court because it what was it that was going to put the communication most of us though in munich a reference to the california code so let's assume for the moment that they didn't happen california code in puerto rico at this time so they should have used the word default imminent default you're on and that is it's it may not have happened today was a foregone conclusion that it's going to happen you might know something on friday night that's going to happen monday morning and it's going to be a default contract construction projects are messy  could be a week or two friday to monday may do it but maybe a couple weeks if it's going to happen and then and that's the issue because is that if the surety is in a position of having to pay the subcontractors even though there's nobody for all and that's quite a step for contracting officer to clear the fault but meanwhile the shirt is paying mining the sure it is concerned its responsibilities so it tells the government what they were told here that that under different circumstances can the surety protect its interest unless it neither because without the default the contracting officer has one choice and that's because he's faced with a contractor in an ongoing construction project that is performing the sub contractors are getting paid the work is getting performing the contracting officer is obligated under the contract to pay that contractor and unload it in a before you can change that and put some other obligation on the contracting officer so it's an obligation of the contracting officer to breach the contract in effect to be sure he needs to step in and be the contractor in the contractor shoes for purposes of completing this on the right you get your the contractor is having a hard time and so the sure he has to step in and pay him some money in the interim in the absence of the likelihood of the fall down the road you're saying that doesn't alleviate the contractor in default even though it may not be in full default if the surety is paying the subcontractors in order to keep the relationship alive the sure about placing the contractor  of the surely can make those payments and there were also it's a financial backing for the contractor without putting the contractor in default but the second part of the issue which is whether the government has an obligation because of what the surety is doing is different and it does it cop the relationship between a surety and a contractor may have many layers in this case we're pretty sure it does because if you look at the indemnity agreement which is dated one nine hundred ninety six that's about four years before the construction contracts there's a long standing relationship between these two and  they may be joined at some level closely or not but they certainly have the freedom to do what's necessary from a business standpoint to complete projects to juggle finances but that doesn't put an obligation on the government until the words if you would paid this three hundred up three hundred thousand three whatever two hundred thousand dollars the government in the absence of it to fall would have to double pay it have to be paying the contractor were to zero in the absence and share it so the government would be obligated to pay double the amount of any contract vets write in would be right you're just with different parties to government still be here because it would have breached the contract to the contractor to pay a performing contractor the amount that was o not the kind of thing that doesn't make sense in an ongoing construction project because for two reasons one the kind of the government's not in your stakeholder in that circumstance and certainly from a practical standpoint we can say ok get the guys off the roof we're going to go to court  but the government has a compelling interest in money of construction projects for while it's ongoing and as long as we're in that circumstance the government needs to have the ability to follow the not do anything but fall the concert will certainly follow the contract  company looks like it may be coming bank and will not be able to complete its contract and therefore we quest that payments be made jointly  construction is still out there performing the work and paying its contracts it is there's no independent default i mean does the scenario you suggest is that the bankruptcy is going to prevent self post from continuing to perform that may or may not be the case but from the contracting officers perspective unless the surety has declared a default and is stepping in to the shoes of the contractor all he has is that contractor he has to still deal with the contractor and pay that kind of no obligation on the government to inqui really almost certainly would but no there's no obligation because the surety is still standing in the wings and unwilling to take on that obligation hasn't used the magic word to fall he simply indicated all the conditions that constitute the fall your argument is you can tell us all you want to about what's happening on the ground but unless you declare it to fall in those words as a girl that's right and but i think in real life it gets a little more complicated than that because the contracting officer if the contractor is in fact in default and he's aware of it ok he's the contractor you're in default you don't have to give notice of something the government's already done well we're not there and that instructed this to contact the hearing yes would a reasonable contracting officer on behalf of the government think something was going on asking the fox howard the chickens doing today well you're out of the chickens had chimed in we had we know that mr manka had that letter in that the information about the sub contractors if he believes that they were being paid there's nothing and the government might or might not have made it seems to me a choice between based on certain objective criteria but without inquiry f inquiry it seems very strange to just proceed not quite as business as usual but it one direction rather than the other how does that fit in why in fact was one instruction accepted there was no notice of the four like gather in that letter either know your credit there was no notice of default in the contract or wasn't into fault at this period of time so the contracting officer was still in the same situation where you had to continue to deal with this contractor and if the work was progressing to pay that contractor and that's what he did in this circumstance what he didn't have in march of two thousand and three was a notice of default from the surety that would have given given him the ability to do anything other than what he did so working title's the government to decide that they're going to protect the lender rather than the surety well i'm not sure that's what happened in this case what the the record shows is that the contracting officer inquired not of the lender but of the serious question is in fact whether the contracting officer was on notice that there were issues because it's a surety who is paying the subcontractors not the lender and we put the keys to that door in the hands of the s attempting to protect themselves based on how this law firm on your position evolves well perhaps i don't think that's what is going to happen here i think the opposite is true what what we're looking at from the perspective of the government is how to how do we get these construction projects done what the surety was doing here was saying we want the money they're citing to this assignment which we contend is not valid but they're saying we want the money but we don't want the obligation we're going to continue with what we were doing before but we're not going to take over in a commit to complete this project by declaring our principal in default and that's all the government needed was to know that somebody is in the shoes of that contractor besides that contractor and that in march of two thousand and three at least that it there are there are no the this is not a case in which we have unsophisticated players and these players are certainly know the law they can take the steps they need to take to protect themselves surely should be made again but they want to make a well on the course of a construction project which is a messy undertaking sure you may want to pay subcontractors or fun for the contractor without declaring the contractor in default so that it doesn't take on the additional obligations and essentially let the contractor out from under its obligations and so the surety protects it can protect itself if it so chooses saying the share it has no obligation to complete the contract it is a default it though should befall it absolutely does have a obligation to complete well it has to has choices but one of those certainly is to complete the contract or to pay for the completion of the contract yes ok now mr burrus and taro didn't say for the rebuttal time but if you need a minute or two