on the findings below the only conclusion is that the government breached his contract and that merlin is entitled to damages the next to support hundred million dollars plus interest to set forth in his claim whether the contract language is set forth in the blanket purchase agreement which supplant that decision it cannot reconsider it if the facts to support the original bona fide need have not changed but what if it was discovered that the first administrator was unaware of the fact that had not changed but when he made the decision was fact what he said is that some of the functions were invalid was in there for forty million licenses and none of that software was used well but that's not exactly the finding of the board below the fuck the board below actually find they were used and the board states that i believe on page four of the opinion and in addition did you talk about i thought the board and that's based on information which is contained both in the blanket purchase agreement in the blanket purchase agreement in section c one point one to this is it page eight seventy of the appendix it says under c one one at the bottom of that paragraph to contractor technology was recently employed in phase one of the project and system and for an explanation as to what that means we only need to look at the point at the activision plan and the acquisition plan which that page a twelve were not used but that's contrary to the representation that the government made in a blanket purchase agreement and as the court the board below so the new officer comes in and looks at it and can't say hey these are new facts well except for the fact merlin entered into this contract based on certain expectations understanding a contractual language and now the government is saying that merlin couldn't rely on that cap contractual language and that the expectations and understanding upon which rowling entered into this contract it also had no right to enter into the contract but that that's contrary to section h temple in eight and i'll go back to that and it says that the key line is that after it says that the government has agreed to use its best efforts so long as the bona fide needs of the government continues to fit the next sentence is because of this commitment the government is receiving favorable pricing which is none the only available long as the bona fide needs of the government to need to exist right but that that that is meaningless unless the government can demonstrate that the facts have changed and the government can demonstrate that the fact have changed by saying that  they wouldn't all tie into well again i would disagree with that that that is what one of the things that mr thompson said he says that it was a change in strategy from refurbishing to replacing but that too is directly contrary to the acquisition agreement and that would be on page eight twelve twenty two of the appendix and on that page at the top of the page this is the acquisition plan that the government created prior to entering into this water systems are not replaced in a timely fashion that critical element in any replacements system is a case management system such as the siebel solution which will depend on software licenses if people use the m licenses or not acquired swiftly it will be the  progress so the intent all along was to replace the system so when the government went when it says in the agreement that it is unlikely that leases entered into will terminate before the fall lease term you're saying that when it really it is impossible to know what i'm what i'm saying is that it's not impossible to do if the government can demonstrate change back but not only change back they can't they can't go can't counter to the representations that they made  if there's a fact that was not represented then that would be different but they've represented this use and they represented the validated need based on that being in excess of five hundred million records and as the board below  the propre of language for how to interpret a contract the board says we think you have to look at the plain meaning in consideration of the contemporary circumstances under which this contract was entered into meaning must be given to all parts and you have to consider the contracting parties intent so this wasn't a case where there was a lack of due diligence on behalf of the government when it entered into this contract the government there was a prior order for the forty million licenses when the government issued a stop work order for that order in part because they weren't sure they needed the forty million licenses then that this issue arose whether they could partially terminate the government determined they couldn't partially terminate they still have to acquire these places so they revoke the sabra border but when they when they revoke the suburb or to the so we need to do two things we need to do a further study we need to do testing to see whether we actually need these licenses and so that's what they embarked on doing after february they did the market study then they negotiated the b p a and they looted the specific representation in the b then they started the testing and they started the test and they immediately remove these claims three land systems and i would suggest that the reason they removed it is because they would plan to replace them anyhow that they were subject to this because commissioning is set forth in the average ition plant but then with all that they still entered into the contract the the contracting officer at that time said there was a bonafide need based on those facts the contemporaneous circumstances at that time to enter into this contract and the cia over the next year so much additional work to make us to think compatible that they just couldn't go forward and that wasn't appreciated was it capable of being known by the first c i a o when he made his decision absolutely but for whatever reason he didn't know it he didn't appreciate it he didn't understand the next guy comes along smarter more information whatever but he figures that out and that's not my problem my problem is should the government bail out of those kinds of situations enter into a contract unless it has a bona fide need in the board below defined but if i need an immediate need in solid requirement and then the government says that birds when they make the decision in two thousand and six they say on page twenty and twenty nine  gathering more information even if that information was previously available and they should have been able to figure this out they can change their mind when the contractors relied on that in the contractor entered into the contract because the government represented that they had a bona fide need for the product restrictions on the government's ability when it exercises that option a as as to whether it has unfettered discretion and this particular contract does limit the second cod building to make a decision in isolation he can't make a decision isolation he has to consider the totality of the circumstances under which this contract was entered into and that's the commitment of the government to consideration for the commitment of the government in section h ten point eight has to be that the government has to demonstrate change facts otherwise otherwise it's meaningless that the bona fide need continues to exist because of this commitment the government is receiving favorable pricing what's the consideration to the contractor unless the government has to demonstrate change facts and further in this particular case both ceo's they both said the plane three land systems were brittle the legacy systems were obsolete and the other language that the board said these products can be used he avoids saying that instead he says these things like the assumptions were invalid the change in strategy the better understanding of the need and even the board below says ovaltine understanding they don't see a need of the board or the government point to any change facts that would allow the government to switch its bona fide need to terminations this contract i would suggest requires that the government demonstrate that in order to make a contrary determination in year two otherwise it makes no sense to enter into this time track and have two different people look at the same set of facts and make contrary determinations to me that would be the they please the court no one has three permanent the first being whether the board properly determined that the government's determination that it had no bona fide a need for the unlimited licenses in two thousand and seven and subsequent years was not an arbitrary and capricious determination the board properly reached that conclusion there were changed to facts in the sense that there was additional information that was acquired by the cheaper or mation office or the information the new information card was the result of this investigation an audit of the legacy systems themselves it determine that the legacy systems could not be adequately used with the unlimited licenses and achieve the government's security needs so you're just saying the other side is information was developed showing that the legacy systems never could meet the government's security needs what the government was trying to do back in two thousand five hundred is use those legacy systems with the data management tools the data management tool being these unlimited licenses and the unlimited licenses were going to integrate all of the information in the legacy systems produce a record that was true and accurate for every single person and integrated of record for each person what was determined was that the legacy systems themselves couldn't meet the government's security needs because they couldn't give you what's called user base security there would be there is no way to limit the users access to the information out there in the system any user going on to the system has access to all of the information he can't you can't restrict his access based on his role as a user and when it was determined that you couldn't meet your somebody had erred in drawing those and reaching that conclusion years ago and somebody looked at it a different way what was really the change to change is the knowledge about the the legacy systems themselves and with experience the experience that in the interim or how did they obtain this knowledge about the legacy systems and two thousand and whatever and that they didn't have earlier they did an outside audit because there wasn't adequate investigation or thought process i think the record really does not address that question the the testimony was that when the  when the c e o came on he directed that an investigation be done and that there was an outside audit of the legacy systems that revealed how they have been structured and changed over time and so now you understood what you really had and this the government really had no comprehension of comprehensive record of what it had because these systems were come brought on in the one nine hundred eighty s and then modified time and time and time again and so we really didn't have a record of what the system was so it was determined that these systems themselves could not meet the government's need for user base security a nd therefore it didn't make sense to try to have a data management tool work together with these legacy systems and then produce a a record a true and accurate record based on all the system as i understand at least of course from mr eisenberg argument which is that if assuming we're dealing with a situation where the information and conclusions were discoverable at an earlier date it's just that somebody wasn't asking the right questions or wasn't asking for an appropriate evaluation is that really a sufficiently arbitrary for purposes of a contractor who has the right to kind of rely on the fact that this an existence of a certain point and nothing has changed and therefore i ought to be able to count on the fact that i'm going to be able to exercise my option in this case the case was basically litigated based on the government having determined that it had a bona fide a need for the unlimited licenses and if there was a basis for that and that then the government reached a new decision so there was no challenge to the initial on the authorities under the administrative procedure act you don't really have to show a change in the facts and so if if there is a good reasons for making a change and the agency makes a change then you can be reasonable on the part of the agency but here in this case the agency did develop new information about the legacy systems a security needs and the implications of the legacy systems themselves that you didn't have user based security and you wouldn't have user base security even if you got this  management tool to work you still wouldn't have user base security so i think the short answer to your question is yes you could have a reasonable decision that you don't have a bona fide a need for a product based on the same set of facts but here we have a case where the agency did develop new information through an outside audit and in a comprehensive investigation and based on that new information it decided it did not have  we've learned that they don't work and new information did become available to the agency in two thousand through the outside audit that was done and based on that they concluded still with their been able to make the broad determination that it just couldn't be fixed oh well the record does not address that as i said in the that's not the the focus of the litigation the the focus of the litigation was on the new decision not on the whole decision i wanted to address the other issues that are been raised the question the other issue raised is whether the who are probably to determine if there was no breach of the warranty two things have been mentioned in the argument one is the acquisition plan and the other is the representation as of the five hundred million record records as we pointed out in our grief the assertion that they were five hundred million records was correct and that is supported in the record the acquisition plan that council has relied upon and especially today of the argument that is not part of the contract it is not something that merlin had they didn't rely upon it because they didn't have it so any statement that is made in the acquisition plan cannot be the basis for any claim of breach of warranty says the board resolve the breach of warranty claim via looking at all of the language that contains inception h point can in particular just says that the the language in h point ten point three regarding essential use had to be read together with the other paragraphs of such an  can and those paragraphs specifically state that the government will only exercise the option if it both has a bona fide a need for the product in the optional period and it has the funds of available so because it did not have a bona fide a need for the product the option was not exercise in this case and because the government had the right under the contract to not exercise the option when it didn't have a bona fide a need there can be no breach of all any warranties or any guarantees in this case and the the language of the board's opinion that we're relying upon is on pages thirty four to thirty five of the opinion where it says specifically that the language regarding essential use of the system and such an age point ten point three cannot be read in isolation from the language of the modified b p a as a whole referring to section h point town so essentially the board has interpreted this contract including the language in section h point ten point three stating that the government has a reasonable belief that it has a bona fide a need for the system and that that need will continue to exist and there was never any challenge to that assertion by my merlin there was testimony by the power of the acting c acting's chief information officer of miss martin as to the basis for her decision in the record that it was anticipated that the that the number of records would increase because of these legislative initiatives that were anticipate  the board relied on the ordinary meaning of first place which is the the language in that provision six horses the government had not replaced the unlimited licenses up and running i'm still figuring out what's going on i am informed that the agency is still trying to century take down these legacy systems are still using the legacy systems  but they are still trying to replace them and that congress i think is in the record at the time of the hearing which was in two thousand and ten that congress had appropriated funds to try to replace the legacy systems and that's that's what the agency still is continuing to do choosing the legacy systems but still trying to replace them the only other issue that's raised in the  the question of whether the agency had violated the duty to good faith and fair dealing as we pointed out in our brief that question was not raised before the board and so was not directly addressed in its decision i would point out though that in footnote twenty of the board's opinion and the board stated that there's no evidence that this was a phase which is actually there's no evidence that the government was refusing to exercise this option because it was going to get a better deal or take some other different product so we think based on that finding there's no violation of the duty of good faith and fair deal think we have your argument i think you contractor is that they have to be a change in facts and that the government found by its initial bona fide need to terminations when it entered into this contract nobody forced it to enter into the contract at that time to chose based on the contemporaneous circumstances to enter into it it had removed claims three land from the testing that started and entered into this contract before the testing was complete those are the circumstances under which the government entered into this contract and interpret the contract considering the contemporaneous circumstances the governments found by that determination they removed claim three land just because they were so brittle and they couldn't be used and there's potentially the security issue so for them to come back a year later and say the clancy lands systems that we removed have the security issues and are too brittle that's what they knew at the time that they entered into this contract in terms of the legislative drivers that were recently mentioned that that's a condition present in the contract it's not in the contract and therefore when they signed the contract it was waived even if it wasn't  unlimited you see em licenses merlin relied on that information to the extent the facts proved to be untrue that's a breach of warranty this warranty itself is a warranty that they use is essential it's not a warranty is the board below says of an expectation i'm not sure  they've wired the same product the forty million people use them licenses during the non substitution years they knew that they have to acquire those before they in the contract and they didn't make an exception and therefore it's a violation of