Court Opinion

ID: 9495072
Source: CourtListenerOpinion
Date Created: 2023-08-05 15:53:42.100311+00
Date Added: 2024-06-11T17:56:47.098498
License: Public Domain

BRYSON, Circuit Judge,
dissenting.
I respectfully dissent. In my view, the information that Aerojet failed to provide to the government did not constitute “cost or pricing data” and therefore did not fall within the purview of the Truth in Negotiations Act (“TINA”), 10 U.S.C. § 2306a.
It is important to note what is not in dispute in this case. First, the Board of Contract Appeals held that Aerojet was not aware of the contents of the nitroe-thane bids in its locked bid box, and the government does not challenge that finding. Second, the Board held that it was entirely lawful for Aerojet to keep the nitroethane bids sealed until after the negotiations with the Air Force were com-*1333píete, and the government does not now challenge that legal conclusion. Third, the Board found that the government “has not pointed to any evidence showing that Ae-rojet manipulated [its sealed bid procedures] to avoid its disclosure obligations under TINA,” and the government has not pointed to any basis for reaching a contrary conclusion. Finally, the parties agree that the bids on nitroethane were “price in effect” bids, i.e., the price quoted in the bids was not binding on the bidding party, but merely indicative of the current price of the commodity, which would be subject to further change depending on fluctuations in the market price.
In light of these undisputed facts, it is hard to fathom why the mere fact that Aerojet had sought and obtained bids for nitroethane should be regarded as “cost or pricing data” within the meaning of TINA. The government witnesses who testified before the Board said that the government relied on price quotations from August 1989 and would have negotiated a lower price for the contract if it had known that Aerojet had lower quotations for nitroe-thane. Significantly, however, they did not testify that the government would have changed its position if it had known that Aerojet had unopened bids for nitroethane at a price unknown to either Aerojet or the government. Their testimony that they would have used lower cost data to negotiate a lower contract price, on which the majority relies, is therefore entirely irrelevant, as the disclosure at issue in this case was not a disclosure of lower cost data. Moreover, the government was aware that Aerojet would be soliciting bids for nitroe-thane during the weeks before it would be needed. As the Board noted, the parties stipulated that the August 1989 price proposal stated that purchase orders for ni-troethane would be solicited eight to ten weeks before the chemical was needed, and government witnesses testified, that they knew that price quotations would be obtained during that period.
Because Aerojet did not know what the bids were, it did not have superior knowledge to the government in that regard. Moreover, because the bids were “price in effect” bids, the price set forth in the bid documents would not have been binding in any event. The government’s evidence thus does not support a finding that knowledge of the mere existence of the bids would have had a significant effect on price negotiations. 10 U.S.C. § 2306a(h)(l).
Neither the Board of Contract Appeals nor the court today points to evidence supporting the government’s contention that the mere existence of the unopened bids was the sort of information .that “a prudent buyer or seller would reasonably expect to affect price negotiations significantly.” 10 U.S.C. § 2306a(h)(l). The majority states that in light of the volatility of the market for nitroethane, “[t]he mere existence of more recent nitroethane bids would potentially alter the expectations during negotiations.” With respect, I do not follow the majority’s reasoning. The majority acknowledges that “Aerojet and the United States may well have followed the chemical price trends,” and the Board made no finding that the government was unaware of the volatility of the market, for nitroethane. Assuming that both parties knew that the price for nitroe-thane changed over time and that the price Aerojet would have to pay might well change from , the price quoted in August 1989, it is hard to understand why the government would be disadvantaged by not knowing that during the course of negotiations Aerojet had obtained bids for nitroethane at a price unknown to either Aerojet or the government.
The majority asserts that Aerojet “may well have had expectations about the contents of [the] sealed bids” and that *1334“[b]ased on those expectations, Aerojet may have sought more diligently to close negotiations before the scheduled opening of the sealed bids or may have sought to delay negotiations until after the scheduled opening.” But this is pure speculation. The Board made no finding that Aerojet had any expectations as to the likely bid price, and the Board explicitly noted that the government had not offered any evidence that Aerojet had manipulated the sealed bid procedure to avoid its disclosure obligations.
How would Aerojet’s position be any different if, rather than soliciting bids for nitroethane during negotiations with the government, it had decided during the course of negotiations to postpone soliciting nitroethane bids until immediately after concluding those negotiations? Surely Aerojet’s intention to obtain new price information after the contract was formed would not be “cost or pricing data” within the meaning of TINA. If that is so, I am at a loss to understand why the fact that Aerojet solicited bids during negotiations that were not opened until after formation of the contract is any different.