Oasis International Waters, Inc. v. United States ( 2017 )


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  •        In the United States Court of Federal Claims
    No. 10-707C
    Filed: April 7, 2017
    Reissued: December 1, 20171
    * * * * * * * * * * * * * * *               *
    OASIS INTERNATIONAL WATERS,                 *
    INC.,                                       *
    *
    Plaintiff,              *            Trial; Contract Interpretation;
    v.                             *            Duress; Fraud; Special Plea in
    *            Fraud; False Claims Act; Anti-
    UNITED STATES,                              *            Fraud    Provision    of    the
    *            Contract Disputes Act.
    Defendant.              *
    *
    * * * * * * * * * * * * * * *
    OPINION
    Laurence Schor, Asmar, Schor & McKenna, PLLC, Washington, D.C., for plaintiff.
    With him were Susan L. Schor, Dennis C. Ehlers, David A. Edelstein, Robert D. Pratt,
    and Allison G. Geewax, Asmar, Schor & McKenna, PLLC, Washington, D.C.
    James P. Connor, Senior Trial Counsel, Commercial Litigation Branch, Civil
    Division, United States Department of Justice, Washington, D.C., for defendant. With him
    were Tanya B. Koenig, Trial Attorney, Commercial Litigation Branch, Stephen C. Tosini,
    Senior Trial Counsel, Douglas K. Mickle, Assistant Director, Commercial Litigation
    Branch, Robert E. Kirschman, Jr., Director, Commercial Litigation Branch, and Chad A.
    Readler, Acting Assistant Attorney General, Civil Division, Department of Justice.
    HORN, J.
    Plaintiff, Oasis International Waters, Inc. (Oasis), is a contractor that performed a
    bottled water contract with the United States military in Iraq during the Iraq War. Oasis is
    a Nevada corporation for which the principal place of business is in Utah. After the end of
    contract performance, plaintiff filed a certified claim with the contracting officer, which was
    denied in its entirety. Plaintiff thereafter filed a complaint in the United States Court of
    Federal Claims, and, subsequently, defendant filed fraud counterclaims against plaintiff.
    1 The court issued a series of opinions in the above captioned case on August 31, 2016,
    April 7, 2017, and November 21, 2017. In response to the court’s November 21, 2017
    Order, the parties agreed that all three opinions could be issued without redactions. After
    reviewing the opinions, the court agrees with the parties and the original opinions are
    hereby unsealed and reissued without redaction.
    A trial was held regarding plaintiff’s breach of contract claims, as well as defendant’s fraud
    counterclaims. As indicated below, in an earlier opinion in the case, the court, with the
    exception of one claim which the court deferred, and which is addressed below, denied
    defendant’s counterclaims for the Special Plea in Fraud, False Claims Act, and the anti-
    fraud provision of the Contract Disputes Act.
    FINDINGS OF FACT
    As stipulated by the parties, “[a]fter the start of the Iraq War but prior to the award
    of the contract at issue in this case, the Army procured all of its Iraq bottled water
    requirements from Turkey, Kuwait, and Jordan and shipped it by truck into Iraq and to the
    various U.S. military bases in Iraq.” United States Air Force Colonel Renee M.
    Richardson, who served as one of the contracting officers on the contract at issue in this
    case from May 2006 until October 2006,2 explained at trial that “[t]he previous approach
    was bringing bottled water in from Turkey, Jordan, and Kuwait, of course, which put
    soldiers on the road for the transportation.” As noted in the Statement of Work for the
    solicitation at issue in this case, Solicitation No. W27P4A-05-R-0002 (the solicitation):
    Up to the present time bottled water has been purchased from sources
    outside of Iraq. This practice necessitates large numbers of convoys and
    escorts to transport the bottled water from Kuwait, Jordan, and Turkey.
    Producing bottled water locally would significantly reduce the number of
    convoys required to transport water as well as reduce the likelihood of battle
    related injuries.
    The parties also stipulated that:
    On or about March 2, 2005, Maj. Vazquez, a contracting officer with Joint
    Contracting Command-Iraq (JCC-I, later Joint Contracting Command-Iraq
    Afghanistan – JCC-I/A), serving at Camp Victory, issued a Request for
    Information (RFI) “to get information on contractors capable of providing the
    following capabilities for construction of re-locatable water purifying and
    bottling facilities for distribution at several locations in Iraq. Locations will be
    identified at a later date and time. These facilities are to produce clean
    drinkable bottled water per all USDA and FDA standards and requirements.”
    The RFI generated interest from 71 vendors, and, on April 3, 2005, the government
    posted Solicitation No. W27P4A-05-R-0002.3 Proposals were due by May 3, 2005, and
    the government received 22 bids in response to the solicitation, and answered 145
    questions. A sample of the questions and answers reveals that the bidders had questions
    about the pricing, capabilities, the land to be provided in Iraq and the obligations of the
    government. For example, one part of question 33 stated: “Is our offer to give the cost per
    2In 2006, Colonel Richardson was a Lieutenant Colonel. When she testified at trial, she
    was a full Colonel. The court refers to her as Colonel Richardson in this opinion.
    3   The government issued 11 amendments to the solicitation.
    2
    liter with the personnel built in, seperate [sic] to the cost of the plant and equipment?” The
    government replied: “All Costs per liter are to be included.” Likewise, question 40 asked:
    “Start up Cost: Since the bid is predicated upon the deliverables per litre bottle of water,
    can we assume that all costs(inc personnel and equipment deployment to site) incurred
    between contract award and water production will fall upon the successful bidder?” The
    government replied: “Yes. It is up to you how you determine the cost per litre taking into
    account all costs associated with this endeavor.”
    There were a number of questions regarding the obligations of the government.
    Question 2 asked, “[i]f projected demand falls short, what are the minimum volume
    requirements? Is there a required minimum quantity the Government will procure?” The
    government responded: “There are no minimums. The minimum is zero.” Additionally,
    question 35, referring to question and answer 2, asked:
    The answer to Question #2 states that there are no minimum purchase
    quantities. This decision places an unreasonable amount of financial risk on
    the contractor, and will likely severely limit the competition for this RFP
    [Request for Proposals]. Request that the Government guarantee minimum
    purchase quantities base [sic] on the estimated quantities that appear in the
    RFP.
    The government responded:
    The levels of liters required are in the range. This is roughly the production
    per day. You might have a day where your levels are lower, however, the
    Government contract is a Firm Fixed Price not Indefinite Delivery / Indefinite
    Quantity. The Government is entering into a one year contract with three
    option years. The only thing that could prevent the basic year from occurring
    is a Government decision to Terminate for Convenience or default of the
    contractor to perform to the requirements and the Government would then
    Terminate for Default.
    One bidder questioned the potential for installment payments, asking: “Would the
    Government authorize progress or installment payments recognizing 1) the significant
    capital investment with establishing new capability and, 2) the ability to credit progress
    payments with actual deliveries?” to which the government responded that: “The first
    payment will be made once the contractor has the first plant operational and has had an
    approved first article test accepted without conditions.”
    In response to question 44, the government indicated “[t]he Government will
    provide as flat land as possible,” and regarding site conditions, the government indicated
    in the answer to question 89, the government stated that “[s]ite prep should be minimal.
    The water source has been identified and deemed to have sufficient amounts by the
    government to support the operation.” The government also noted in answer to question
    89, however, “[i]t is up to you what you do in order to meet the Government’s requirements
    and timeframe for delivery.”
    3
    One of the 22 bids was submitted by American AquaSource, Inc. (American
    AquaSource), and signed by Max Wyeth, President of American AquaSource. Attached
    to the American AquaSource proposal was a spreadsheet showing the volumes of
    production and an estimate for when each site would begin water production. American
    AquaSource’s bid assumed a price of $3.50 per case of water, or a total of
    $50,225,000.00, based on the production of 14,350,000 cases.4 At trial, Max Wyeth
    explained that he calculated the $50.225 million figure “using our average forecast of
    demand, we came up with a case number that would be produced per year, and multiplied
    that by the case cost.”5
    Major Mauricio Vazquez, who issued the RFI and answered the questions posed
    by the potential offerors, contacted Max Wyeth to clarify the proposal and to submit a
    “total cost per year for all four years and the Grand total.” Max Wyeth provided Major
    Vazquez with a base year price of $50,225,000.00 and three option year prices of
    $186,000,000.00, totaling $608,225,000.00. Max Wyeth confirmed in his correspondence
    “that the 3.50 price is the only price, regardless of the winter/summer/surge period, for all
    years within the contract.” After negotiations between Max Wyeth and Major Vazquez, in
    which Major Vazquez asked Max Wyeth to reconsider the option year prices, on May 11,
    2005, Max Wyeth submitted an amendment to the American AquaSource proposal, which
    included a revised “Summary of Pricing Schedule” with a proposed base year price of
    $50,225,000.00 and three option year prices of $112,000,000.00, for a total contract price
    of $386,225,000.00. The parties have stipulated that, “[o]ther than AquaSource’s
    proposed price, all other offerors whose proposals were found technically acceptable
    offered prices in excess of $1 Billion.”6 Major Vazquez awarded contract no. W27P4A-
    4 The court notes, however, for the basis of the estimate in the American AquaSource
    proposal, American AquaSource assumed annual production of 384 million bottles or 32
    million cases of water.
    5   Counsel for defendant confirmed during Max Wyeth’s testimony:
    Q. So, just so the record is clear, the $50.225 [million] in your proposal is based
    upon $3.50 per case?
    A. Yes.
    6 The government’s own Independent Government Cost Estimate, estimated a total base
    year cost of $149,145,842.23, or almost three times American AquaSource’s proposal for
    the base year, to construct and operate the eight water bottling facilities in Iraq. Morrell
    International, Inc., a corporation, whose Chief Executive Officer was Phil Morrell, also
    submitted a separate proposal which provided for a base year price of $899,725,000.00,
    option year prices of $831,287,500.00 per year, for a contract total of $3,393,587,500.00.
    Phil Morrell, who later became the president of Oasis, the successor contractor to
    American AquaSource, testified at trial, however, that his bid was a “bad bid,” and that he
    had intended to bid at $5.50 per case of bottled water. Phil Morrell indicated that the
    4
    05-C-0002 (the contract) to American AquaSource on May 25, 2005. The contract called
    for base year price of $50,225,000.00 and three option year prices of $112,000,000.00
    each, for a total contract price of $386,225,000.00.7 Major Vazquez signed the contract
    on behalf of the government and Max Wyeth signed on behalf of American AquaSource.
    After the contract was awarded to American AquaSource, Paul Morrell contacted
    Max Wyeth, and subsequently, in June 2005, Max Wyeth exchanged several emails with
    Phil Morrell and Dan Petsche, then the Vice President for Contracts and Compliance for
    Al-Morrell Development discussing the bottled water project.8 Paul Morrell testified that
    “[o]ur original intent with American AquaSource was to sell our assets to him, as it
    appeared that he didn't have the resources and the funding to acquire our assets, much
    less build the factories. It morphed or migrated into a partnership between Max and Phil
    and myself.” Paul Morrell explained that, initially:
    Al-Morrell Development was essentially the performance arm of the
    operation. We built the facilities. We financed them. All the employees were
    employed by Al-Morrell Development. It was basically the part of the
    organizations that really did all the performance. . . . Max's responsibility
    was to provide water bottling expertise, because Phil and I were -- had
    never built a water bottling plant prior to this.
    The original arrangement changed, because as Paul Morrell testified:
    Initially, Mr. Wyeth told us that he had the financing lined up, and he just
    needed time. He didn't have time, because the first facility had to be up --
    we're talking July, and we had basically 90 days to get the first facility up.
    So, we really didn't have time. . . . So, our understanding was he would
    continue to try to bring his financing option to the table, get money in the
    bank. In the meantime, Phil and I would self-fund this first plant so that we
    could meet the contractual deadlines. Over the course of the fall, it became
    clear that Mr. Wyeth's options were not going to come to fruition, and AMD
    [Al-Morrell Development] -- initially it was a parallel track. We were trying to
    obtain financing on behalf of AMD while we were waiting for his financing to
    request “needed to be right around $5.50 per case,” for “somewhere around the 32 million
    cases per year.”
    7The cover page to the contract listed the estimated dollar amount as “$386,225,000.00.”
    At trial, Major Vazquez testified that this amount was in error and that the amount should
    have been $50,225,000.00. Subsequently, on July 15, 2005, United States Air Force
    Major Marc A. Lopez, who served as the contracting officer on the contract from June
    2005 until September 2005, executed modification P00002 on behalf of the government,
    which changed the dollar amount from “$386,225,000.00” to “50,225,000 (NTE),”
    because “[o]nly the base year award should have been documented in the contract.”
    8Max Wyeth testified that at the time he signed this contract he had no relationship with
    Al-Morrell Development, Paul Morrell, Phil Morrell, or Paul Jeffries.
    5
    come into place. Ultimately his financing failed, and the AMD financing did
    come into place late in the year or early the next year.
    Therefore, in July 2005, Phil Morrell, Al-Morrell Development, Max Wyeth, and American
    AquaSource entered into a joint development and pre-incorporation agreement to form a
    new corporation to fulfill the contract, with the agreement reflecting that the purpose of
    American AquaSource’s contract was to “build up to six (6)[9] water bottling plants in the
    country of Iraq.” Initially, the corporation was called Iraqua, Inc., but later changed its
    name, on July 15, 2005, to Oasis.10 Subsequently, in the fall of 2005, Phil Morrell, Al-
    Morrell Development, Max Wyeth, and American AquaSource signed an addendum to
    the joint development and pre-incorporation agreement, assigning American
    AquaSource’s contract to Oasis. The addendum required Max Wyeth, of American
    AquaSource, to execute a novation agreement. The novation agreement was to be a
    modification to the contract, and ultimately was modification P00005, discussed below.
    On December 5, 2005,11 “American Aqua Source, Inc.,” “Oasis International Water, Inc.,”
    and the “United States of America” “enter[ed] into this Novation Agreement. . . as of
    August 1, 2005.” Max Wyeth, then-president of Oasis and American AquaSource, signed
    the modification on behalf of Oasis on December 2, 2005 and Colonel Brandon Montler
    signed for the military on December 5, 2005.12 The modification stated that the “purpose
    of this modification” was to reflect the novation agreement transferring all rights and
    responsibilities of the bottled water contract from American AquaSource to Oasis. The
    modification also stated that, “[a]ll other terms and conditions of the contract remain
    unchanged.”
    Paul Morrell was the Chief Executive Officer of Al-Morrell Development from
    August 15, 2005 through January 2006, and, thereafter, he served as President of Al-
    Morrell Development. Paul Morrell also was the Chief Executive Officer of Oasis from
    9 As explained below, although the contract, as executed, required eight water bottling
    plants, the contract was modified by modification P00001 to require only six water bottling
    plants.
    10 Paul Morrell testified that “Oasis was originally called Iraqua. Everybody loved that
    name except the bankers. The bankers wouldn't allow us [to] own a bank account with
    that name Iraqua on it, literally, so we changed the name to Oasis.” Paul Morrell testified
    that “Phil [Morrell] and Max [Wyeth] were owners in Oasis, and Phil and I were owners in
    Al-Morrell Development, but we made a very -- Phil and I made a very practical decision
    that if we were going to invest our funds into the business, that our company was going
    to own the assets.”
    11In 2005, Colonel Montler was a Major. When he testified at trial, he was a Colonel. The
    court refers to him as Colonel Montler in this opinion.
    12 At the time of the novation, Max Wyeth testified he was “out of the loop” and his interest
    in Oasis was eventually bought out by the Phil Morrell and Paul Morrell. Max Wyeth also
    was not involved in the completion of the bottled water plants. Oasis accepted Max
    Wyeth’s resignation as president of Oasis on January 5, 2006.
    6
    August 15, 2005 through January 2006, and, thereafter, served as President of Oasis.
    Phil Morrell was Chairman of Oasis from July 2005 through December 2012. Paul Jeffries
    served as both the Chief Executive Officer and Chief Financial Officer of Al-Morrell
    Development and Oasis. Paul Jeffries served as Chief Financial Officer of Al-Morrell
    Development and Oasis from June 2005 through January 2006, and, subsequently,
    served as Chief Executive Officer of Al-Morrell Development and Oasis from January
    2006 through 2010. Paul Jeffries was replaced as Chief Financial Officer of Al-Morrell
    Development and Oasis by Neil Vos, who served as Chief Financial Officer from February
    16, 2006 until June 2011. As noted above, Dan Petsche was the Vice President for
    Contracts and Compliance for Al-Morrell Development during initial discussions about the
    contract with Max Wyeth, and he also was the Vice President for Contracts and
    Compliance for Oasis from 2005 through October 31, 2011. At all times, Paul Morrell and
    Phil Morrell13 had a controlling interest in Oasis, and after Max Wyeth was bought out and
    resigned as president, Paul Morrell and Phil Morrell controlled 100% of Oasis.
    The Contract
    As noted above, Major Vazquez awarded contract no. W27P4A-05-C-0002 to
    American AquaSource on May 25, 2005. Item no. 0001 of the contract was “NON-
    PERSONAL SERVICS [sic]” (capitalization in original) and indicated:
    The Contractor shall provide all labor, tools, supervision, personnel,
    equipment, transportation, materials, facilities, and other essentials
    necessary to perform and sustain 8 separate and independent purified
    bottle water plants according to the 20 Mar 05 Statement of Objectives
    (SOO). Period of Performance: 25 May 05 through 24 May 06.
    The unit price was listed as “$3.50/case” for all amounts of water produced. Following the
    item no. 0001 were three items for the three option years, item no. 1001, item no. 2001,
    and item no. 3001, changing only the period of performance.14 After item nos. 0001, 1001,
    2001, and 3001, there was a summary of the pricing schedule which stated:
    SUMMARY OF PRICES FOR BASE YEAR AND THREE OPTION YEARS
    TOTAL BASE YEAR                       $50,225,000.00
    FIRST OPTION YEAR                     $112,000,000.00
    SECOND OPTION YEAR                    $112,000,000.00
    THIRD OPTION YEAR                    $112,000,000.00
    13   Phil Morrell and Paul Morrell are brothers.
    14 The similarity of the three options years after the base year is reflected in the
    typographic error of “NON-PERSONAL SERVICS” in each of the three option years.
    (capitalization in original).
    7
    GRAND TOTAL (Base Year and Three Option Years)                  $386,225,000.00
    (capitalization and emphasis in original). The period of performance was listed in the
    contract as:
    BASIC PERIOD                25 May 2005 - 24 May 2006
    OPTION PERIOD I             25 May 2006 - 24 May 2007
    OPTION PERIOD II            25 May 2007 - 24 May 2008
    OPTION PERIOD III           25 May 2008 - 24 May 2009
    (capitalization in original). The statement of objectives for the “purified bottled water
    services” contract explained:
    The purpose of this contract is to provide re-locatable purified bottled water
    capabilities at various locations throughout Iraq Area of Operations (AO).
    Contractor shall produce the amounts of bottled water as outlined in Figure
    1. Contractor shall ensure bottled water capability is able to relocate upon
    notification by the Contracting Officer (CO) due to military operational
    requirements. Bottled water capabilities shall be established in the order as
    listed in Figure 1. Actual locations will be given to the contractor that wins
    award. The contractor shall provide all the mechanical equipment required
    to produce and prepare for shipment the required amounts of bottled water.
    The first bottled water site shall be operational 120 days after the contract
    is awarded. This includes military inspection and acceptance. After contract
    award, additional bottled water sites shall be established within the
    remainder of days from contract award. A full 365 days from contract award,
    all sites will be fully operational.
    Figure 1, referenced in the statement of objectives, identified the production requirements
    at each of the bottled water facilities at different points in the year.
    LOCATION           TOTAL PRODUCTION REQUIREMENT/DAY in 1K
    Liters (winter/summer/surge)
    Location 1         75-100K liters / 101-150K liters / 151-200K liters
    Location 2         65-100K liters / 101-135K liters / 136-170K liters
    Location 3         35-55K liters / 56-75K liters / 76-100K liters
    Location 4         60-110K liters / 111-160K liters / 161-210K liters
    Location 5         60-110K liters / 111-160K liters / 161-210K liters
    Location 6         200-300K liters / 301-400K liters / 401-450K liters
    8
    Location 7         80-120K liters / 121-160K liters / 161-200K liters
    Location 8         75-110K liters / 111-150K liters / 151-190K liters
    (capitalization in original). Figure 1 contemplated three different quantity production
    requirements: winter, summer, and “surge.” Colonel Richardson testified, explaining the
    different requirements, as follows:
    [D]uring the winter, the weather was a lot more reasonable in Iraq; the highs
    were around the eighties, nineties. In the summer, temperatures got up to
    135 degrees, requiring soldiers to drink more just to stay cool and to stay
    hydrated. During surge, what that's really talking to is battle operations. Our
    soldiers wind up wearing 60, 70, 80 pounds' worth of gear and then going
    out into . . . tanks, which causes them to sweat and causes them to need
    more water.
    The tasks section of the contract instructed, in part: “The contractor shall provide
    re-locatable purified water bottling capability for producing and packaging required
    amounts of one liter bottles of water per day as outlined in Figure 1,” “Contractor shall
    provide, operate, maintain, and repair all the mechanical equipment required to
    accomplish the Government's objectives,” “Contractor shall ensure bottled water meets
    or exceeds all US Government quality standards,” and “Contractor shall operate the
    purified bottled water capabilities with enough personnel to meet the Government's
    requirements.” Regarding payment to the contractor, the invoicing section of the contract
    stated:
    Invoicing shall occur monthly. The contractor shall invoice to the Contracting
    Officer Representative (COR), by the 5th of each month, for the total of all
    liters in [sic] produced, per location, for the entire previous month. The
    CORs will prepare the DD250s and will submit them with the contractor's
    invoice to the Contracting Officer (CO), no later than the 10th of each month.
    Bottled Water Facilities
    Although the contract, as awarded, required eight bottled water facilities, on May
    26, 2005, as noted above, the day after contract award, United States Air Force
    Lieutenant Marion Knapp executed a no-cost modification P00001 on behalf of the
    government reducing the required number of water bottling facilities from eight to six. The
    six bottled water facilities were: LSA Anaconda (Anaconda), Camp Victory, Al Asad
    Airbase, Qayyarrah West (Q-West), Speicher, and Camp Taqaddum (TQ). On May 25,
    2005, Major Vazquez indicated in an email to Lieutenant Knapp and Captain Patrick
    Sturgill, who served as a “liaison” between the contractor and the military, that land would
    be provided to the contractor no later than 30 days after contract award, “to ensure no
    delay is imposed by the Government to the Contractor.” Although the answer to question
    9
    number 44 regarding the solicitation indicated that “[s]ite prep should be minimal,”
    defendant had to provide site preparation at every location except Al Asad.15
    Anaconda, the first bottled water facility, was contractually required to be
    operational by September 22, 2005. Major Lopez executed modification P00004 on
    September 18, 2005, on behalf of the government, granting a 12-day extension of the
    requirement for Anaconda’s certification until October 4, 2005. Although Anaconda began
    producing water on October 10, 2005, Anaconda was not audited and certified operational
    until December 14, 2005, after producing almost 2 million liters of water.
    Camp Victory, the second bottled water facility, was initially required to be
    operational by May 24, 2006. The military authorized land for Camp Victory on September
    4, 2005. Camp Victory was certified operational on April 7, 2006, and began producing
    bottled water on April 12, 2006. Al Asad, the third bottled water facility, was initially
    required to be operational by May 24, 2006. The military authorized land for Al Asad on
    August 22, 2005. The contractual deadline to complete Al Asad was extended to June
    30, 2006, and Al Asad was certified operational on July 24, 2006.
    Q-West, the fourth bottled water facility, was initially required to be operational by
    May 24, 2006. The military authorized land for Q-West on September 11, 2005, but on
    December 19, 2005, the military directed and authorized land at a different location for
    the Q-West plant. The contractual deadline to complete Q-West was extended to June
    30, 2006, and Q-West was certified operational on July 9, 2006. Plaintiff indicated it
    encountered challenges with the water source at Q-West. Alan Morrell16 testified that “we
    opened Q-West and started drawing from that irrigation line, we started getting turbid
    water, water so turbid that it was filled with mud and sand. And at that time, it was so
    significant that we couldn’t purify it.” As a result, “what it did is it . . . immediately fouled
    all of our [equipment] -- we didn't have an ultra filtration system there because it didn't call
    for one.” Moreover, the “ROWPU [Reverse Osmosis Water Purification Unit] was
    immediately filled with mud, and fouled. And each set of those membranes is $26,000.
    And they were ruined. And we couldn't keep them clean and operational enough to
    operate and make water there as a result.” In order to fix the problem, Alan Morrell
    testified that Oasis “purchased a Pall Aria from northern New York and we also took an
    15 In the case of Al Asad, plaintiff claims that: “Defendant refused to provide site prep at
    Al Asad, Oasis was forced in December 2005 to hire its own subcontractor to prep the
    site, which included filling borrow pits dug by the military, at a cost of $224,100,” and
    further spent “$158,110 to abate the flooding and repair the damage caused to the site,”
    as a result of the work done by another government contractor, Kellogg, Brown & Root,
    at an adjacent site.
    16 As noted above, Alan Morrell “was an Oasis consultant from late June 2005 through
    October 2005. Specifically, he was the Oasis Contract and Compliance Administrator
    from October 2005 through March 2007. He was Director of Contracts and Compliance
    from March 2007 through November 2008. He was Project Management Director from
    November 2008 through December 2009.”
    10
    additional ROWPU system that we had used at Balad [Anaconda] and recommissioned
    it, repiped and replumbed the lines at Q-West and solved the problem.”
    Speicher, the fifth bottled water facility, was initially required to be operational by
    May 24, 2006. The military authorized land for Speicher on August 13, 2005. The
    contractual deadline to complete Speicher was extended twice, finally to June 30, 2006,
    and Speicher was certified operational on June 20, 2006, and began producing bottled
    water on June 24, 2006. Initially, Oasis believed they would receive water provided by the
    government via a ROWPU. Alan Morrell testified, however, that “we opened the factory,
    we start producing, and within 48 hours, KBR [Kellogg Brown & Root] came in and just
    railed on us for consuming their ROWPU'd water. And they got -- they got their KBR
    COTR or contractor officer's representative for that site involved and they shut down our
    water.” As a result, Alan Morrell testified that:
    They’re [Oasis’ contracting officer and COSCOM (United States Corps
    Support Command)] beating us up for delivering quantities, but they're
    refusing to give us the water they're required to provide us. So, we're dealing
    with that at Speicher, and we're dealing with a lack of water delivery at Q-
    West to a level we can produce there, too, and we're all running for a
    completed amount of or quantity of water, but we can't get to it.
    As a solution, Oasis purchased from an American company a “BEV 9 reverse osmosis
    system, and in the spring of 2007, installed it, commissioned it, and began to draw well
    water.”
    Camp Taqaddum, or TQ, the sixth bottled water facility, was initially required to be
    operational by May 24, 2006. Although the military initially authorized the land for TQ on
    August 24, 2005, the military directed Oasis to use land at different locations twice, the
    second time in March 2006. The contractual deadline to complete TQ was twice
    extended, to June 30, 2006, and then to October 15, 2006. The site preparation for TQ
    was completed by July 2, 2006, and on August 11, 2006, Colonel Richardson gave
    approval for Oasis to construct the plant at TQ. TQ was completed on October 23, 2006,
    and despite Oasis requesting 40.5 days of excusable delay on September 25, 2006,
    United States Air Force Lieutenant Colonel Joel R. Fortenberry, who served as the
    contracting officer on the contract from October 2006 until early 2007, executed
    modification P00013 on behalf of the government, granting plaintiff only eight days of
    excusable delay for TQ. TQ was certified operational on October 25, 2006.
    Relevant Modifications
    During contract performance there were a series of relevant modifications to the
    contract.17 As noted above, after contract award, modification P00001 reduced the
    number of bottled water facilities from eight to six, and on July 15, 2005, Major Lopez
    executed modification P00002 on behalf of the government, which changed the dollar
    17As the parties have stipulated, 13 relevant modification were issued after the contract
    was executed.
    11
    amount from “386,225,000 (estimated)” to “50,225,000 (NTE).” Subsequently, on August
    9, 2005, Major Lopez and Max Wyeth executed modification P00003, which added a
    “NTE,” or not to exceed limitation on the quantity of water produced at each plant, and
    did not require the government to purchase any minimum number of cases produced by
    the contractor. Pursuant to modification P00003, the not to exceed “case quantity was a
    total of 14,350,000 cases of water,” and, as modified in modification P00002, the not to
    exceed price was $50,225,000.00. As explained above, modification P00004 granted a
    twelve day extension of the requirement for the certification of the Anaconda bottled water
    plant, and modification P00005 was the novation agreement.
    Modification P00006
    Prior to the execution of modification P00006, on March 27, 2006, United States
    Air Force Lieutenant Colonel James E. Davis,18 who served as the contracting officer on
    the contract from September 2005 until January 2006, sent Oasis a letter titled
    “Preliminary Notice of Government Intent to Exercise Option CLINs 1001-5, Contract
    W27P4A-05-C-0002 for $112M,” which stated: “The Government must withhold its intent
    to exercise the option,” which meant the contract would come to an end. The letter
    informed Oasis that “[t]he contracting office does not have assurance of adequate
    funding.”19 On April 3, 2006, Paul Jefferies sent Lieutenant Colonel Davis a draft proposal,
    which would form the basis of modification P00006, and included a way to include a base
    year amount of 14,350,000 cases of bottled water at $3.50 per case for a total of
    $50,225,000.00.
    Modification P00006, which was executed on April 14, 2006 by Lieutenant Colonel
    Davis and Phil Morrell, extended the base year of the contract from May 24, 2006 to
    August 15, 2006, and required that the bottled water capability be established at the six
    sites by June 30, 2006. Modification P00006 extended the contractual deadline for bottled
    water plants to be operational to June 30, 2006. According to modification P00006, the
    bottled water plants were to be operational in the following order: (1) Anaconda, (2) Camp
    Victory, (3) Speicher, (4) Q-West, (5) TQ, and (6) Al Asad.20 Modification P00006 also
    required the production of 14.35 million cases of water during the base period of the
    contract, and removed the “not to exceed” requirements established in modification
    18In 2005 and 2006, Lieutenant Colonel Davis was a Major. When he testified at trial, he
    was a Lieutenant Colonel. The court refers to him as Lieutenant Colonel Davis in this
    opinion, unless quoting from a document.
    19 Phil Morrell testified that “I told them [the government] that would be a really bad thing
    to get a letter like that, because that letter would put us in default with our banker. And
    that letter did put us in default with our banker, and it cost us $3 million to pull our -- our
    contract out of default.” Phil Morrell also testified that Oasis had “already been told that
    by Colonel Hay, that they [the government] didn’t have the funding to continue on this.”
    20 At the time modification P00006 was executed, Anaconda and Camp Victory were
    already operational.
    12
    P00003. Finally, the option years were realigned to match the extension of the base year,
    so the first option period would run from August 16, 2006 until January 15, 2007, the
    second option period would run from January 16, 2007 until January 15, 2008, and the
    third option period would run from January 16, 2008 until January 15, 2009. Modification
    P00006 also added a fourth option period that would run from January 16, 2009 until
    August 16, 2009. The amount of water in the base period, the first option period, and the
    newly added fourth option period were different than the second and third option years.
    After modification P00006 to the contract, the periods of performance, quantities of water,
    and amounts due Oasis were:21
    ITEM NO.        SCHEDULE OF SUPPLIES/                   QTY      UNIT   UNIT       AMOUNT
    SERVICES                                      PRICE
    0001        Purified bottled water (12 / 1 Liter                 CASE   $3.50
    bottles per case)
    1001        BASE Period                             14,350,000                  $50,225,000.00
    24 May 2005 to 15 August 2006
    2001        OPTION ONE                              14,285,715                  $50,000,000.00
    16 August 2006 to 15 January 2007
    3001        OPTION TWO                              32,000,000                  $112,000,000.00
    16 January 2007 to 15 January 2008
    4001        OPTION THREE                            32,000,000                  $112,000,000.00
    16 January 2008 to 15 January 2009
    5001        OPTION FOUR                             17,714,286                  $62,000,000.00
    16 January 2009 to 16 August 2009
    (capitalization in original).
    Modification P00011
    As noted above, United States Air Force Colonel Richardson served as the contracting
    officer on the contract from May 2006 until October 2006. By June 2006, Oasis personnel,
    including Paul Morrell, Phil Morrell, Alan Morrell, Paul Jeffries and Dan Petsche had
    begun negotiations with Colonel Richardson to further modify the contract. Both parties
    had financial challenges, defendant obtaining the funding to exercise the first option, and
    plaintiff, which would be in default with its lenders if the contract was terminated for
    convenience.22 Internally, Oasis considered the following proposal, as noted in an August
    1, 2006 email from Paul Morrell:
    I’ve tried a lot of complicated algorithms to try to make a solution that is
    equitable to both the Military and US. I’ve concluded that the most equitable
    approach for everyone is the following: We gat [sic] paid a flat
    $112,000,000/year just as the contract states or $9,333,333/month (5/6 th of
    21 Colonel Richardson testified that the modifications “changed the end date of option four
    from 16 August 2009 to 16 July 2009. So, it actually decreased the period of performance
    for the contractor.”
    22According to plaintiff’s post-trial brief, “[d]uring the P00011 discussions, Oasis had an
    outstanding debt of over $70 million.”
    13
    that until TQ comes online). We agree to deliver up to 32,000,000 cases per
    year in aggregate with an annual reconciliation if the actual deliveries
    exceed that amount.
    The parties discussed several options for how to proceed moving forward, and
    ultimately, on August 8, 2006, Oasis, at Colonel Richardson’s request, provided her a
    draft proposal, which was consistent with the internal Oasis proposal.23 The draft
    proposal24 indicated two options:25
    23Paul Jefferies testified at trial that “we were still being asked for significant concessions,
    beyond what was outlined that I've tried to outline here. . . . I mean to the tune of $30
    million of concessions yet beyond what's on this page.” Paul Jefferies also indicated that:
    We didn't really make an offer. The negotiations began with Paul [Morrell]
    and I sitting in a room with [Colonel] Renee [Richardson], and I believe her
    assistant was there, and they told us that they were being pushed a
    particular direction, that she would need concessions from us to pay out the
    balance of the funds owed or she would have to move in this other direction.
    24 Alan Morrell who earlier had testified about the water issues at the various plants
    indicated that regarding the lack of water at Speicher, “on modification P00011, because
    this was such a hot issue, again, part of the negotiation was a concession that we would
    sort this problem out,” and Oasis “bought another BEV 9 reverse osmosis system.” Alan
    Morrell also testified that “[p]art of the concessions that were demanded from us in
    P00011 were two site improvements to solve water issues. One was Speicher, and the
    other was Q-West.”
    25The first option contemplated modifying the contract to not build TQ, but the parties
    decided to build the TQ plant.
    14
    On August 12, 2006, Paul Morrell and Colonel Richardson executed modification P00011,
    which was generally consistent with the Option II in the draft proposal and established a
    payment structure by which Oasis would be paid $9,333,333.33 per month, independent
    of any amount of water, moving forward in the option periods. Modification P00011 also
    modified the fourth option period, ending on July 16, 2009.
    The modification explained:
    The purpose of this modification is to do the following:
    1. Provide a revised CLIN structure to reflect monthly pricing based upon
    water production capability.
    2. Replace the Contract Statement of Objectives, with Performance Work
    Statement, dated 12 August 2006, provided as Attachment 1 to this
    modification.
    15
    3. Incorporate the contractor's Quality Assurance Plan into the contract
    provided as Attachment 2 to this modification.
    4. Incorporate the List of Critical Equipment into the contract, provided as
    Attachment 3 to this modification.
    5. Insert Special Clause, titled “Equipment Leased by the Government”, into
    the Contract.
    6. Insert clause DFARS 252.232-7007, “Limitation of Government's
    Obligation” (May 2006) into the Contract.
    7. Replace Contract Section J, List of Documents, Exhibits and Other
    Attachments.
    8. Decrease the contract amount by $11,604,166.45 from $386,225,000.00
    to $374,620,833.55.
    9. Decrease the contract funded amount by $5,604,166.35 from
    $100,225,000.00 to $94,620,833.65.
    10. Change the end date of Option 4 from 16 August 2009 to 16 July 2009.
    On August 15, 2006, as part of modification P00011, Oasis submitted a final
    invoice to close out the base year in the amount of $24,542,387.00. The total amount of
    water produced in the base year was 8,705,992 cases, which translated to
    $30,470,972.00 at $3.50 per case. In addition, from the time the contract was awarded to
    the end of the base year, Oasis submitted nine invoices for payment at $3.50 per case,
    totaling approximately $23 million, which the government paid.26
    26 As reflected in the joint stipulations, and as agreed to by the parties regarding invoices
    for the base year of the contract: On December 31, 2005, Oasis submitted an invoice to
    the Government for 293,160 cases of water from Anaconda at 3.50 per case, for a total
    of $1,026,060.00. On January 31, 2006, Oasis submitted an invoice for 356,400 cases of
    water from Anaconda at $3.50 per case for a total of $1,247,400.00, and on February 28,
    2006, Oasis submitted an invoice for 508,680 cases of water from Anaconda at $3.50 a
    case, for a total of $1,780,380.00. On March 31, 2006, Oasis submitted an invoice for
    664,320 cases of water from Anaconda at $3.50 per case, for a total of $2,325,120.00.
    One month later, on April 30, 2006, Oasis submitted an invoice for 910,020 cases of water
    from Anaconda and Camp Victory at $3.50 a case, for a total of $3,185,070.00. On May
    31, 2006, Oasis submitted an invoice for 1,126,920 cases of water from Anaconda and
    Camp Victory at $3.50 a case, for a total of $3,944,220.00. On June 15, 2006, Oasis
    submitted an invoice for 1,381,140 cases of water from Anaconda and Camp Victory at
    $3.50 a case, for a total of $4,833,990.00. On July 1, 2006, Oasis submitted an invoice
    for 297,540 cases of water from Anaconda and Speicher at $3.50 a case, for a total of
    $1,041,390.00. Finally, on July 31, 2006, Oasis submitted an invoice for 1,150,900 cases
    16
    The contract ended on July 16, 2009, and Oasis performed on the contract until
    that date. Subsequently, Oasis and the government entered into a separate, follow-on
    contract regarding bottled water in Iraq. The issues in this opinion relate solely to the base
    year of the original contract.
    Certified Claim
    Prior to the filing of the certified claim, Phil Morrell sent an email to Paul Morrell
    and Paul Jeffries on August 4, 2006, with his thoughts on the contract, as follows:
    Capabilities for Time Period not Quantity
         Funding was received for purchase of water, but it [sic] the contract
    was a capabilities contract
         Should have 2 Contracts
    o Capabilities Contract
    o Product Procurement Contract
         Funding was received for Contact# _____
         Contract#____ is a capabilities contract not a procurement contract
         $50 million on the table is for capability not water procurement
    The general assumption from everybody is that the price of water in the
    CLIN is somehow associated with the price of capabilities.
    (emphasis in original). At trial, Phil Morrell explained his view of the contract:
    When I studied the contract, including when I talked to -- told Max [Wyeth]
    that he could get a progress payment, which I did tell Max, way back in the
    early days, probably a week into the -- two weeks into the contract, that he
    could get a progress payment. Based on all the historic contracting that I
    had done, and the way that I submitted my bid, the anticipation that was
    there would be, you know, progress payment capabilities, or -- in the
    contract. So, looking at Max’s bid, he had put $58 million in for what
    appeared to be the construction capabilities, and then out of the $58 million,
    based on -- and I read this somewhere, I think it was in the FAR firm fixed
    price area -- it says that you -- if it’s for equipment, then you have to deduct
    the salvage value of the equipment, and then you could bill for whatever
    that was. So, that -- I didn’t actually sit down and do the numbers because
    that’s just not what I do, but I – I suggested that we bill against the $52.25
    million or $50.225 million as capabilities.
    of water from Anaconda, Q-West, Speicher, and Camp Victory, for a total of
    $4,028,150.00.
    17
    Paul Morrell stated at trial that he agreed with Phil Morrell about the contract being
    a capabilities contract after executing modification P00011. Regarding Colonel
    Richardson’s correspondence, he testified
    she's commenting on the proposal . . . specifically, the 9.33 million per
    month for capabilities going forward, and she's saying she thinks that's a
    reasonable approach, but this is one of the first times where I hear a contract
    officer say the same thing that Phil has been saying for most of the year,
    that this is a water production capability contract. And Colonel Richardson
    goes on, through the -- post-P00011, and she's very clear that it's a water
    production capability contract and it has been all along. They've just been
    administering it as if it weren't.
    On June 20, 2008, Paul Morrell signed the certified claim, and on July 4, 2008,
    Oasis submitted its certified claim to the government. At the beginning of the certified
    claim, Paul Morrell, as President of Oasis, stated: “I certify that the claims stated herein
    are made in good faith; that the supporting data are accurate and complete to the best of
    my knowledge and belief; that the amount requested accurately reflects the Contract
    adjustment for which the contractor believes the Government is liable.” Paul Morrell also
    submitted a sworn affidavit27 in support of Oasis’ certified claim at the time he submitted
    the certified claim, in which he stated:
    During the period May 2005 to the present, I was responsible for the day-
    to-day management of Contract W27P4A-05-C-0002 (the “Contract”) and
    had responsibility for all aspects of Oasis' performance of the Contract I also
    had overall responsibility for the cost and accounting issues involving Oasis'
    performance of the Contract. This Affidavit is based on my first-hand
    knowledge, the collective corporate knowledge of Oasis and the corporate
    records of Oasis maintained in the ordinary course of business.
    The certified claim identified eight claims for which plaintiff sought payment: Claim
    1 was a “Claim for all bottled water supplied in the Contract base year, as extended to
    August 15, 2006, excluding bottled water supplied from Camp Anaconda through May,
    2006 (5,605,020 cases of bottled water),” for which plaintiff sought $19,617,570.00. Claim
    2 was a “Claim for penalty wrongfully assessed for failure to open Camp TQ on time,”
    which plaintiff ascribed “solely as a result of Government-caused delays and disruptions,”
    for which plaintiff sought $2,270,833.00. The certified claim indicated that Claim 3 was a
    “Claim for reduction in Contract consideration for first option period (August 15, 2006
    through January 15, 2007) resulting from P00011,” for which plaintiff sought
    $3,333,333.00. Claim 4 was a “Claim for water bottling capabilities services provided
    through extension of Contract base year,” and plaintiff valued Claim 4 at $11,175,063.00.
    Claim 5 sought $808,423.00 as a “Claim for cost of site improvements required,”
    specifically at Anaconda, Camp Victory, Al Asad, and TQ. Claim 6 was a “Claim for cost
    27 In addition to Paul Morrell, Neil Vos, the then-Chief Financial Officer of Oasis, Lawrence
    Schwartz, a certified public accountant, and Alan Morrell also submitted sworn affidavits
    in support of the certified claim.
    18
    of water supply improvements at Camp Speicher and Camp Qwest,” for which plaintiff
    sought $600,000.00. Claim 7 was a “Claim for other penalties assessed re: Government
    delays of TQ opening,” related to the “44 days of TQ AQL[28] penalties erroneously
    assessed to Oasis due to Government-caused delays in establishing TQ in the first Option
    Period” and was valued by plaintiff at $2,053,333.00. The plaintiff’s certified claim
    reflected a total amount claimed for the first seven claims of “$39,858,555.” Below the
    total for the first seven claims, plaintiff’s certified claim indicated: “Alternative additional
    claim for water supplied from Camp Anaconda during initial Contract base year ending
    May 2006, 3,100,972 cases of bottled water: $10,853,402.” The certified claim indicated
    the plaintiff’s view that:
    The Contract is not a model of clarity. The amount payable in the Contract
    base year is a firm, fixed-price amount of $50,225,000. . . . However, the
    Contract, as written, does not require delivery of any bottled water in the
    Contract base year. In the Contract base year, Oasis was entitled to a firm,
    fixed-fee payment of $50,225,000. The Contract provides that the entire
    payment is for water purification and water-bottling capabilities. Under the
    Contract, bottled water was a separately priced commodity to be paid for by
    the Government at the price of $3.50 per case under a separate CLN.
    (internal citations omitted).
    The certified claim was passed between, and considered by, a number of
    contracting officers and personnel, including United States Navy Lieutenant Commander
    Klingenberg, who was the contracting officer when Oasis submitted its certified claim on
    July 4, 2008, United States Air Force Major Jamie Rhone, who served as the contracting
    officer from July 2008 until January 2009, and Dean Carsello, a Joint Contracting
    Command Iraq Afghanistan (JCC-I/A) policy analyst, who was involved in reviewing the
    claim in 2008 and 2009. United States Air Force Lieutenant Colonel Kevin Hobbs29 denied
    Oasis’ certified claim in its entirety when he issued the Contracting Officer’s Final Decision
    on October 18, 2009.
    On October 18, 2010, plaintiff filed its complaint in the United States Court of
    Federal Claims. Plaintiff’s complaint alleged eight counts, and the complaint mostly tracks
    the claims raised in the certified claim, with the same dollar amounts, albeit framed as
    breaches of contract in the complaint. The first count, “Breach of Contract, and Breach
    of the Duty of Good Faith and Fair Dealing, for Failure to Pay for water TakenFrom
    [sic] Sites other than LSA Anaconda” seeks damages in the amount of
    $19,617,570.00, plus interest. (emphasis in original). The second count, “Breach of
    Contract For Improper Assessment of a Liquidated Damages Penalty Against Oasis
    for Failing to Have All Six Facilities Open by the End of the Base Year, or
    Alternatively, for Reducing the Base Year Contract Price Without Consideration,”
    28   The parties have stipulated that “AQL” is an acronym for Acceptable Quality Level.
    29 In 2009, Lieutenant Colonel Hobbs was a Major. When he testified at trial, he was a
    Lieutenant Colonel. The court refers to him as Lieutenant Colonel Hobbs in this opinion.
    19
    seeks damages in the amount of $2,270,833.00, plus interest. (emphasis in original). The
    third count, “Breach of Contract For Improper Reduction of the Option Period One
    Price Without Consideration” seeks damages in the amount of $3,333,333.00, plus
    interest. (emphasis in original). The fourth count of the complaint, “Breach of Contract
    Resulting from Government Acts and Omissions Impacting and Damaging Oasis
    During the Base Year, as Extended” seeks damages in the amount of $11,175,063.00,
    plus interest. (emphasis in original). The fifth count, “Breach of Contract Resulting
    From Government Failure to Provide Suitable Construction Sites,” seeks damages
    in the amount of $808,423.00, plus interest. (emphasis in original). Oasis’ sixth count,
    “Breach of Contract and/or Constructive Change for Failure to Provide Suitable
    Water at the Purification Facilities as Required by the Contract” seeks $600,000.00,
    plus interest. (emphasis in original). The seventh count of the complaint, “Breach of
    Contract For Unjustified Imposition of Penalties for Late Opening of TQ and/or
    Wrongful Reduction in Contract Price,” seeks $2,053,333.20 plus interest. (emphasis
    in original). Finally, the eighth count of the complaint, “Breach of Contract, and Breach
    of the Duty of Good Faith and Fair Dealing, for Failure to Pay for Water TakenFrom
    [sic] Site LSA Anaconda,” seeks damages in the amount of $10,853,402.00, plus
    interest. (emphasis in original).
    Defendant filed an answer to Oasis’ complaint on February 15, 2011, and, more
    than a year later, on April 12, 2012, filed a motion to amend the pleadings to include fraud
    counterclaims. Oasis responded to the amended answer and counterclaims on May 10,
    2012, however, on June 6, 2014, defendant moved to, again, amend its pleadings and
    filed a second amended answer and counterclaim. In the interim, during highly contested,
    and at times uncooperative, discovery the parties filed numerous motions related to
    discovery, the production of documents, how documents were maintained, how
    documents were to be produced, and in what format, and who would bear the costs,
    spoliation, whether or not various privileges applied to various documents, as well as
    motions to compel, motions to strike, and motions to quash. The court held numerous
    status conferences and hearings to try and resolve the various disputes between the
    parties, issued numerous orders, including publishing one substantive, lengthy opinion
    on attorney-client privilege and work product prior to trial. See Oasis Int’l Waters, Inc. v.
    United States, 
    110 Fed. Cl. 87
    (2013).
    The parties also filed motions for summary judgment and motions in limine in
    advance of the trial, and after trial, filed a series of lengthy post-trial briefing materials.
    The effect of the discovery disputes, and difficult relationships, resulted in discovery
    deadlines being repeatedly pushed back, and trial dates repeatedly postponed.
    Ultimately, a six week trial was held. Initially, the court issued an opinion regarding the
    fraud counterclaims raised by defendant. The court determined that, Paul Morrell, as
    signatory to the certified claim, did not have the intent to commit fraud and genuinely
    believed in his interpretation of the contract regarding what payments Oasis was entitled
    to recover under the contract. The court also found that neither Paul Morrell, nor plaintiff,
    acted recklessly when submitting plaintiff’s claims. Therefore, with the exception of Claim
    2, which the court deferred, and addresses below, the court denied defendant’s
    counterclaims for the Special Plea in Fraud, False Claims Act, and the anti-fraud provision
    20
    of the Contract Disputes Act. This opinion addresses the issues of contract interpretation,
    duress, and defendant’s remaining fraud counterclaim. The court will separately address
    plaintiff’s allegation of spoliation and damages, if any.
    DISCUSSION
    Contract Interpretation
    Initially, plaintiff argues that “[t]he Contract was a firm-fixed-price (FFP) services
    contract for water bottling ‘capability,’ pursuant to which Oasis was entitled to
    $50,225,000 in the Base Year in exchange for 12 months of performance, irrespective of
    the amount of water produced by Oasis and/or purchased by Defendant.” Plaintiff also
    contends that “[u]nder the Contract, Oasis was to be paid $3.50 per case of
    extracontractual water.” By contrast, defendant claims that “[t]he contract’s payment
    terms of $3.50 per case are clear and unambiguous.” Defendant argues that “the Court
    should enforce those terms and rule that the contract does not require the Government
    to pay Oasis separately for the cost to build the bottled-water facilities,” and pay only
    $3.50 a case for the water produced.
    “Contract interpretation starts with the language of the contract.” SUFI Network
    Servs., Inc. v. United States, 
    785 F.3d 585
    , 593 (Fed. Cir. 2015); see also Precision Pine
    & Timber, Inc. v. United States, 
    596 F.3d 817
    , 824 (Fed. Cir. 2010), cert. denied, 
    562 U.S. 1178
    (2011); Bell/Heery v. United States, 
    739 F.3d 1324
    , 1331 (Fed. Cir.), reh’g and reh’g
    en banc denied (Fed. Cir. 2014); LAI Servs., Inc. v. Gates, 
    573 F.3d 1306
    , 1314 (Fed.
    Cir.), reh’g denied (Fed. Cir. 2009); Barron Bancshares, Inc. v. United States, 
    366 F.3d 1360
    , 1375 (Fed. Cir. 2004); Foley Co. v. United States, 
    11 F.3d 1032
    , 1034 (Fed. Cir.
    1993); Nw. Title Agency, Inc. v. United States, 
    126 Fed. Cl. 55
    , 57-58 (2016) (citing Foley
    Co. v. United States, 
    11 F.3d 1032
    , 1034 (Fed. Cir. 1993)) (“The starting point for any
    contract interpretation is the plain language of the agreement.”); Beard v. United States,
    
    125 Fed. Cl. 148
    , 158 (2016); Eden Isle Marina, Inc. v. United States, 
    113 Fed. Cl. 372
    ,
    483–84 (2013).
    “‘“In contract interpretation, the plain and unambiguous meaning of a written
    agreement controls.’”” Arko Exec. Servs., Inc. v. United States, 
    553 F.3d 1375
    , 1379 (Fed.
    Cir. 2009) (quoting Hercules Inc. v. United States, 
    292 F.3d 1378
    , 1380–81 (Fed. Cir.),
    reh’g and reh’g en banc denied (Fed. Cir. 2002) (quoting Craft Mach. Works, Inc. v. United
    States, 
    926 F.2d 1110
    , 1113 (Fed. Cir. 1991))). “Terms must be given their plain meaning
    if the language of the contract is clear and unambiguous.” SUFI Network Servs., Inc. v.
    United States, 
    785 F.3d 585
    , 593 (Fed. Cir. 2015) (citing Coast Fed. Bank, FSB v. United
    States, 
    323 F.3d 1035
    , 1038 (Fed. Cir. 2003)); see also Canpro Investments Ltd. v. United
    States, 
    130 Fed. Cl. 320
    , 347 (2017); Beard v. United 
    States, 125 Fed. Cl. at 158
    (“If the
    contract language is unambiguous, then it must be given its plain and ordinary
    meaning . . . .”). The United States Court of Appeals for the Federal Circuit stated in
    Massie v. United States:
    In interpreting a contract, “[w]e begin with the plain language.” “We give the
    words of the agreement their ordinary meaning unless the parties mutually
    21
    intended and agreed to an alternative meaning.” In addition, “[w]e must
    interpret the contract in a manner that gives meaning to all of its provisions
    and makes sense.’”
    Massie v. United States, 
    166 F.3d 1184
    , 1189 (Fed. Cir. 1999) (quoting McAbee Constr.,
    Inc. v. United States, 
    97 F.3d 1431
    , 1435, reh’g denied and en banc suggestion declined
    (Fed. Cir. 1996); (internal citations omitted)); Jowett, Inc. v. United States, 
    234 F.3d 1365
    ,
    1368 (Fed. Cir. 2000) (quoting McAbee Constr., Inc. v. United 
    States, 97 F.3d at 1435
    and Harris v. Dep’t of Veterans Affairs, 
    142 F.3d 1463
    , 1467 (Fed. Cir. 1998)); Harris v.
    Dep’t of Veterans 
    Affairs, 142 F.3d at 1467
    ; see also Coast Professional, Inc. v. United
    States, 
    828 F.3d 1349
    , 1354 (Fed. Cir. 2016); Shell Oil Co. v. United States, 
    751 F.3d 1282
    , 1305 (Fed. Cir.), reh’g en banc denied (Fed. Cir. 2014) (noting that a contract must
    be interpreted in context, giving meaning to the document as a whole) (citing NVT Techs.,
    Inc. v. United States, 
    370 F.3d 1153
    , 1159 (Fed. Cir. 2004); Metric Constructors, Inc. v.
    Nat’l Aeronautics & Space Admin., 
    169 F.3d 747
    , 752 (Fed. Cir. 1999)); McHugh v. DLT
    Solutions, Inc., 
    618 F.3d 1375
    , 1380 (Fed. Cir. 2010); Giove v. Dep’t of Transp., 
    230 F.3d 1333
    , 1340–41 (Fed. Cir. 2000) (“In addition, we must interpret the contract in a manner
    that gives meaning to all of its provisions and makes sense. Further, business contracts
    must be construed with business sense, as they naturally would be understood by
    intelligent men of affairs.”) (citations omitted); Gould, Inc. v. United States, 
    935 F.2d 1271
    ,
    1274 (Fed. Cir. 1991) (indicating that a preferable interpretation of a contract is one that
    gives meaning to all parts of the contract rather than one that leaves a portion of the
    contract “useless, inexplicable, void, or superfluous”). A Judge of the United States Court
    of Federal Claims has explained:
    “The words of a contract are deemed to have their ordinary meaning
    appropriate to the subject matter, unless a special or unusual meaning of a
    particular term or usage was intended, and was so understood by the
    parties.” Lockheed Martin IR Imaging Sys., Inc. v. West, 
    108 F.3d 319
    , 322
    (Fed. Cir. 1997). “Under general rules of contract law we are to interpret
    provisions of a contract so as to make them consistent.” Abraham v.
    Rockwell Int'l Corp., 
    326 F.3d 1242
    , 1251 (Fed. Cir. 2003). “[A]n agreement
    is not to be read in a way that places its provisions in conflict, when it is
    reasonable to read the provisions in harmony. . . . [T]he provisions must be
    read together in order to implement the substance and purpose of the entire
    agreement.” Air–Sea Forwarders, Inc. v. United States, 
    166 F.3d 1170
    ,
    1172 (Fed. Cir. 1999). “A reasonable interpretation must assure that no
    contract provision is made inconsistent, superfluous, or redundant.” Medlin
    Const. Group, Ltd. v. Harvey, 
    449 F.3d 1195
    , 1200 (Fed. Cir. 2006) (internal
    quotation marks omitted).
    Dynetics, Inc. v. United States, 
    121 Fed. Cl. 492
    , 512 (2015); see also Marquardt Co. v.
    United States, 
    101 Fed. Cl. 265
    , 269 (2011) (“In interpreting contractual language, the
    court must give reasonable meaning to all parts of the contract and avoid rendering
    portions of the contract meaningless.” (citation omitted)).
    22
    The Federal Circuit also has indicated that “‘[t]he contract must be construed to
    effectuate its spirit and purpose giving reasonable meaning to all parts of the contract.’”
    Arko Exec. Servs., Inc. v. United 
    States, 553 F.3d at 1379
    (quoting Hercules Inc. v. United
    States, 
    292 F.3d 1378
    , 1380–81 (Fed. Cir.), reh’g and reh’g en banc denied (Fed. Cir.
    2002)); see also LAI Servs., Inc. v. 
    Gates, 573 F.3d at 1314
    ; Gardiner, Kamya & Assocs.,
    P.C. v. Jackson, 
    467 F.3d 1348
    , 1353 (Fed. Cir. 2006) (citations omitted); Medlin Constr.
    Grp., Ltd. v. Harvey, 
    449 F.3d 1195
    , 1200 (Fed. Cir. 2006) (reviewing the contract as a
    whole to determine the meaning of relevant provisions); Hunt Constr. Grp., Inc. v. United
    States, 
    281 F.3d 1369
    , 1372 (Fed. Cir. 2002) (“We begin with the plain language when
    interpreting a contract . . . . The contract must be considered as a whole and interpreted
    to effectuate its spirit and purpose, giving reasonable meaning to all parts.” (citations
    omitted)); Beard v. United 
    States, 125 Fed. Cl. at 158
    (quoting Pac. Gas & Elec. Co. v.
    United States, 
    536 F.3d 1282
    , 1288 (Fed. Cir. 2008)) (“In construing the meaning of a
    contractual provision, the court does not interpret the disputed term or phrase in isolation,
    but “construes contract terms in the context of the entire contract, avoiding any meaning
    that renders some part of the contract inoperative.”).
    It has been “‘a fundamental precept of common law that the intention of the parties
    to a contract controls its interpretation.’” Tri-Star Elecs. Int'l, Inc. v. Preci-Dip Durtal SA,
    
    619 F.3d 1364
    , 1367 (Fed. Cir. 2010) (quoting Beta Sys., Inc. v. United States, 
    838 F.2d 1179
    , 1185 (Fed. Cir. 1988) (quoting Firestone Tire & Rubber Co. v. United States, 
    195 Ct. Cl. 21
    , 30, 
    444 F.2d 547
    , 551 (1971))); Alvin, Ltd. v. United States Postal Serv., 
    816 F.2d 1562
    , 1565 (Fed. Cir. 1987) (“In the case of contracts, the avowed purpose and
    primary function of the court is the ascertainment of the intent of the parties.”); see also
    Flexfab, LLC v. United States, 
    424 F.3d 1254
    , 1262 (Fed. Cir. 2005) (“[I]ntent is
    determined by looking to the contract and, if necessary, other objective evidence. In the
    absence of clear guidance from the contract language, the requisite intent on the part of
    the government can be inferred from the actions of the contracting officer. . . .”); see also
    Canpro Investments Ltd. v. United 
    States, 130 Fed. Cl. at 347
    (“Contract interpretation
    requires determining the intention of the parties.”).
    The contract, as awarded, indicated:
    The Contractor shall provide all labor, tools, supervision, personnel,
    equipment, transportation, materials, facilities, and other essentials
    necessary to perform and sustain 8[30] separate and independent purified
    bottle water plants according to the 20 Mar 05 Statement of Objectives
    (SOO). Period of Performance: 25 May 05 through 24 May 06.
    The statement of objectives for the “purified bottled water services” contract explained:
    “Bottled water capabilities shall be established in the order as listed in Figure 1. Actual
    locations will be given to the contractor that wins award. The contractor shall provide all
    the mechanical equipment required to produce and prepare for shipment the required
    amounts of bottled water.” Figure 1, referenced in the statement of objectives, identified
    30As noted above, modification P00001, issued on May 26, 2005, reduced the required
    number of water bottling facilities from eight to six.
    23
    the production requirements at each of the bottled water facilities at different points in the
    year, ranging from requiring a minimum of 75,000 liters of water a day during winter at
    location 3, to the maximum requirement of 210,000 liters of water during surge at locations
    5 and 6. The summary of prices for the base year and the three options years stated that
    total base year price was $50,225,000.00, and the unit price was listed as “$3.50/case”
    for all amounts of water produced. As awarded, the base year of the contract was May
    25, 2005 to May 24, 2006. Regarding payment, the contract provided that “[i]nvoicing
    shall occur monthly. The contractor shall invoice to the Contracting Officer Representative
    (COR), by the 5th of each month, for the total of all liters in [sic] produced, per location,
    for the entire previous month.”
    The parties view the contract differently, although both parties assert that the
    contract is unambiguous. Plaintiff claims that “Oasis’ reading is supported by the plain
    meaning of the contract, which must control if the contract is unambiguous,” and the
    defendant argues that “[t]he Contract’s payment terms of $3.50 per case are clear and
    unambiguous.” As noted above, plaintiff argues that “[t]he Contract was a firm-fixed-price
    (FFP) services contract for water bottling ‘capability,’ pursuant to which Oasis was entitled
    to $50,225,000 in the Base Year in exchange for 12 months of performance, irrespective
    of the amount of water produced by Oasis and/or purchased by Defendant.” Plaintiff also
    argues that the contract permitted “the Government to take – at no additional cost –
    bottled water from Oasis within specified quantity ranges and time periods. All water taken
    outside those ranges or periods (‘extra-contractual water’) was to be paid for separately
    at $3.50 per case.” Defendant, however, contends that “the contract is clear and
    unambiguous that the Government’s only payment obligation under the bottled-water
    contract was to pay $3.50 per case for up to 14,350,000 cases of water.”
    The court agrees with plaintiff that the contract is a firm fixed price contract. As
    indicated by plaintiff, included in the list of clauses incorporated into the contract is FAR
    52.216-1, and the text of the bottled water contract states: “52.216-1 Type of Contract.
    (Apr 1984) The Government contemplates award of a Firm Fixed Priced contract resulting
    from this solicitation.” (emphasis in original). Moreover, as noted below, in the questions
    and answers related to the solicitation, which were subsequently incorporated into the
    contract, the government explained that “the Government contract is a Firm Fixed Price
    not Indefinite Delivery / Indefinite Quantity.” At trial, Major Vazquez testified that he wrote
    the answer to this question, and had the following exchange with plaintiff’s counsel:
    [Q.] And you wrote that the contract was a firm fixed price, right?
    A. Yes.
    Q. Did you believe that to be correct at the time?
    A. Yes.
    Q. Do you believe that to be correct now?
    A. Yes.
    24
    The FAR addresses “Firm-Fixed-Price Contracts” at 48 C.F.R. § 16.202-1, and provides:
    A firm-fixed-price contract provides for a price that is not subject to any
    adjustment on the basis of the contractor's cost experience in performing
    the contract. This contract type places upon the contractor maximum risk
    and full responsibility for all costs and resulting profit or loss. It provides
    maximum incentive for the contractor to control costs and perform
    effectively and imposes a minimum administrative burden upon the
    contracting parties. The contracting officer may use a firm-fixed-price
    contract in conjunction with an award-fee incentive (see 16.404) and
    performance or delivery incentives (see 16.402–2 and 16.402–3) when the
    award fee or incentive is based solely on factors other than cost. The
    contract type remains firm-fixed-price when used with these incentives.
    48 C.F.R. 16.202-1 (2017);31 see also Zafer Taahhut Insaat ve Ticaret A.S. v. United
    States, 
    833 F.3d 1356
    , 1361 (Fed. Cir. 2016) (quoting 48 C.F.R. § 16.202-1) (“‘A firm-
    fixed price contract provides for a price that is not subject to any adjustment on the basis
    of the contractor's cost experience in performing,’ 48 C.F.R. § 16.202–1, and generally
    sets forth a fixed scope of work.”). As indicated by the Federal Circuit, “[t]he essence of
    a firm fixed-price contract is that the contractor, not the government, assumes the risk of
    unexpected costs.” Lakeshore Eng’g Servs., Inc. v. United States, 
    748 F.3d 1341
    , 1347
    (Fed. Cir. 2014). Defendant points to two exchanges of trial testimony demonstrating the
    knowing risk that plaintiff was taking, first, defendant’s counsel had the following
    exchange with Phil Morrell regarding setting up Oasis to perform the contract:
    Q. So, it was a big risk you were taking, right?
    A. Yes.
    Q. And you're a big risk-taker, aren’t you?
    A. Yes.
    Likewise, defendant’s counsel had the following exchange with Paul Jeffries about the
    inherent risk in the contract:
    Q. So, essentially Oasis was taking a risk of taking a loss in the first year
    with the opportunity to make significant profits in the following two years,
    correct?
    A. That’s correct.
    31Although the court cites to the 2017 version of the Code of Federal Regulations, this
    provision is consistent with the provision in effect during the contract award and
    performance.
    25
    Q. That was the bargain that Oasis entered into, right?
    A. That’s correct. Substantial risk for substantial gain.
    It is noteworthy that throughout the first year of the contract, plaintiff submitted nine
    invoices for various quantities of cases of water, which were paid.
    Turning to the terms of the contract, defendant contends that “the Government’s
    only payment obligation under the bottled-water contract was to pay $3.50 per case for
    up to 14,350,000 cases of water.” Plaintiff argues that “Defendant’s interpretation of the
    Contract – which was enforced on Oasis during the Base Year – required Oasis to spend
    $70 million to establish the capability to bottle water in the middle of a warzone, with no
    guarantee that Defendant would pay Oasis even one (1) dollar.” Plaintiff contends that
    “Defendant received the benefit of being able to purchase water locally at a fraction of the
    cost it had been paying previously, and Oasis received the benefit of . . . maybe selling
    water to Defendant if Defendant wanted to buy water. Such an interpretation offers no
    consideration to Oasis, and is illegal.” The plaintiff also claims that “Defendant is arguing,
    without actually saying it, that the Contract was an IDIQ, with no minimum, something
    that the FAR specifically prohibits.” The court disagrees with plaintiff’s characterization.
    As defendant noted, the military provided the land, the fuel, the water, and plaintiff
    received the benefit of ownership of the bottled water facilities. Plaintiff also was
    compensated for water produced, which is consistent with the contract. Furthermore,
    defendant has not argued that the contract was an indefinite delivery/indefinite quantity
    contract. Regarding contract development, Major Vazquez testified on cross-examination
    that “[t]he way we developed this contract was we wanted to have fixed prices throughout
    the life of the contract, whether it be the base year or any option years. And we looked at
    it at, as awarded, 0.292 cents per bottle that we requested.” Plaintiff’s counsel followed
    up this statement by Major Vazquez by asking “[s]o, the fixed price was the per liter price,”
    to which Major Vazquez answered: “The unit price, yes, sir.” Defendant points out that
    “Oasis ignores the contract’s plain terms and the testimony of both contract signatories.
    In doing so, Oasis concludes that the contract’s plain terms and the testimony of both
    contract signatories do not matter because ‘this Contract [is] a ‘firm-fixed-price’ contract.’”
    Moreover, Major Vazquez statement of the cost under the contract as 0.292 cents
    per bottle is consistent with the four CLINs of the contract representing the base year and
    the three options years. As noted above, each of four CLINs (0001, 1001, 2001, 3001),
    provided that “[t]he Contractor shall provide all labor, tools, supervision, personnel,
    equipment, transportation, materials, facilities, and other essentials necessary to perform
    and sustain 8 separate and independent purified bottle water plants according to the 20
    Mar 05 Statement of Objectives (SOO). Period of Performance. . . .” Each CLIN
    representing a contract year had subCLINs for each of the bottle water plants, with
    quantity, unit, and unit prices. For example, the base year of the contract provides:
    26
    27
    Each subCLIN refers to the “SOO” or the statement of objectives for the “purified bottled
    water services” contract, which explained:
    The purpose of this contract is to provide re-locatable purified bottled water
    capabilities at various locations throughout Iraq Area of Operations (AO).
    Contractor shall produce the amounts of bottled water as outlined in Figure
    1. Contractor shall ensure bottled water capability is able to relocate upon
    notification by the Contracting Officer (CO) due to military operational
    requirements. Bottled water capabilities shall be established in the order as
    listed in Figure 1. Actual locations will be given to the contractor that wins
    award. The contractor shall provide all the mechanical equipment required
    to produce and prepare for shipment the required amounts of bottled water.
    The first bottled water site shall be operational 120 days after the contract
    is awarded. This includes military inspection and acceptance. After contract
    award, additional bottled water sites shall be established within the
    remainder of days from contract award. A full 365 days from contract award,
    all sites will be fully operational.
    Figure 1, referenced in the statement of objectives, identified the production requirements
    at each of the bottled water facilities at different points in the year.
    LOCATION             TOTAL PRODUCTION REQUIREMENT/DAY in 1K
    Liters (winter/summer/surge)
    Location 1          75-100K liters / 101-150K liters / 151-200K liters
    Location 2          65-100K liters / 101-135K liters / 136-170K liters
    Location 3          35-55K liters / 56-75K liters / 76-100K liters
    Location 4          60-110K liters / 111-160K liters / 161-210K liters
    Location 5          60-110K liters / 111-160K liters / 161-210K liters
    Location 6          200-300K liters / 301-400K liters / 401-450K liters
    Location 7          80-120K liters / 121-160K liters / 161-200K liters
    Location 8          75-110K liters / 111-150K liters / 151-190K liters
    (capitalization in original).
    Although the amount of water requested by the government would vary by the time
    of the year and the bottled water facility, pursuant to each of the CLINs, the unit, and the
    28
    unit price was always consistent, “12/case” “Liter” “$3.50/case (.292 ea),” the contractor
    would be paid same way. The contract provided that “[t]he contractor shall invoice to the
    Contracting Officer Representative (COR), by the 5th of each month, for the total of all
    liters in [sic] produced, per location, for the entire previous month.”
    Reading the CLINs, statement of objectives, and Figure 1 together, the contractor
    was obligated to produce the bottled water as outlined in Figure 1, and, after invoicing the
    government for the water produced in each location, would be compensated at the rate
    of $3.50 per case. Although plaintiff argues that “Oasis’ reading is supported by the plain
    meaning of the contract, which must control if the contract is unambiguous,” plaintiff also
    argues that that defendant’s argument for Oasis to be paid $3.50 a case is wrong given
    that the pages of the contract with the CLIN “are obviously incomplete” because “[t]he
    entire right column (‘Amount’) on every page is blank. Second, most of the parts of pages
    3-6 that are filled out are filled out incoherently.” (internal citations omitted). Plaintiff
    contends that:
    Assuming Defendant’s theory is correct, the “QTY” column would list a
    number, the “UNIT” column would say “cases” or “liters,” the “UNIT PRICE”
    column would be “$3.50/case” or “.292/liter” (but not both), and the
    “AMOUNT” column would list the product of multiplying the number in the
    “QTY” column by the price in the “UNIT PRICE” column. That did not occur.
    (capitalization in original). The court does not share plaintiff’s concern about the
    organization of the CLIN structure. The unit price of “$3.50/case” or “.292/liter” is not
    confusing, as the unit is identified as a liter of water, and the unit price is consistent –
    either $.292 per liter or $3.50 per case - and as the CLINs also identify the quantity as
    12/case. Multiplying 12 times .292, results in $3.50. The court finds the contract as drafted
    and executed obligates the government to pay under the contract for the bottled water at
    a rate of $3.50/case.
    Furthermore, the plaintiff’s contention that the CLIN structure is “obviously
    incomplete” because the amount is left blank on every page, is not persuasive. As noted
    above, in interpreting the contract, the court considers the CLINs, Statement of
    Objectives, and Figure 1 together. The amount is left blank because the amount required
    by the government varied during the year. As indicated in the findings of fact Figure 1
    contemplated three different production requirements: winter, summer, and “surge.”
    Colonel Richardson testified, explaining the different requirements, as follows:
    [D]uring the winter, the weather was a lot more reasonable in Iraq; the highs
    were around the eighties, nineties. In the summer, temperatures got up to
    135 degrees, requiring soldiers to drink more just to stay cool and to stay
    hydrated. During surge, what that's really talking to is battle operations. Our
    soldiers wind up wearing 60, 70, 80 pounds' worth of gear and then going
    out into . . . tanks, which causes them to sweat and causes them to need
    more water.
    29
    As there was not a consistent, specific amount of bottled water for delivery required under
    the contract, it was not only logical to leave the amount blank on the CLIN structure, but
    proper.
    Plaintiff also argues that, regardless of any amounts of water to be paid at $3.50
    per case, Oasis was entitled to the “$50,225,000 firm-fixed-price Base Year Contract price
    for establishing the capability to produce water in Iraq regardless of how much water it
    produced.” Plaintiff further contends that “[t]he Contract was a firm fixed price (FFP)
    services contract for water bottling ‘capability,’ pursuant to which Oasis was entitled to
    $50,225,000 in the Base Year in exchange for 12 months of performance, irrespective of
    the amount of water produced by Oasis and/or purchased by the Government.” Plaintiff
    points to the statement of objectives, which as indicated above, begins: “The purpose of
    this contract is to provide re-locatable purified bottled water capabilities at various
    locations throughout Iraq Area of Operations (AO).” Plaintiff argues that “[t]he text of the
    Contract also shows that Oasis was being paid for a service (the establishment and
    maintaining of purified bottled water capability in Iraq), not a commodity (the water itself).”
    Plaintiff also cites to the language of the contract which states: “The contractor shall
    ensure purified bottled water capability is able to relocate upon notification by the CO”
    and “[t]he contractor shall provide own [sic] power generation to operate the bottled
    water capability.” (emphasis added by plaintiff). It is apparent to the court that the
    language of the contract refers to capability in order to enable the production of water to
    be sold to the government. The sentence immediately following “[t]he purpose of this
    contract is to provide re-locatable purified bottled water capabilities at various locations
    throughout Iraq Area of Operations (AO),” is “Contractor shall produce the amounts of
    bottled water as outlined in Figure 1.” As explained above, Figure 1 identified the
    production requirements at each of the bottled water facilities at different points in the
    year. The CLIN structure also was based on production of water, with each of the
    subCLINs identifying the quantity, unit, and unit prices for the production.
    Moreover, the statement of objectives required the “first bottled water site shall be
    operational 120 days after the contract is awarded.” Defendant argues Oasis “cannot
    explain why a contractor would not produce water in the base year when the first bottled-
    water plant was required to be completed no later than September 2005, mid-way through
    the base year.” Plaintiff argues that “[t]here is no discernable reason for why the Contract
    Period for Anaconda (CLIN 0001) would end on day 120 if there was any expectation that
    bottled water would be produced there during the base year,” and “[b]ecause Oasis’
    performance period at the first site ended on day 120, the Contract had no requirement
    for Oasis to actually operate Anaconda during the Base Year and produce bottled water.”
    Plaintiff contends that the contract was designed to bring the first plant “on line on day
    120, stop work there, and focus on establishing the capability at the remaining five (5)
    locations.” Plaintiff overlooks the requirements of the CLINs, and even for the first plant
    with the 120 day operational requirement, there still is listed a range of production with
    the amounts listed in terms of cases of water and the rate of payment. The statement of
    objectives first referencing the 120 day operational requirement also points to
    Figure 1 which as repeatedly referenced above, listed the “TOTAL PRODUCTION
    REQUIREMENT/DAY” for each plant for the various time frames (winter/summer/surge),
    including for the first bottled water plant. (capitalization in original). Moreover, plaintiff’s
    30
    reference to the 120 day period of performance refers to the “Deliveries or Performance”
    section of the contract, but as defendant argues, this “section does not relate to delivery
    of plants (as Oasis suggests), but to delivery of water.” The schedule for delivery
    information includes the heading “SHIP TO ADDRESS,” which only makes sense for the
    delivery of water, and not the bottled water plants themselves. (capitalization in original).
    Moreover, the quantity is listed as “N/A,” and if plaintiff was correct that the delivery would
    simply be the capability, the court questions why the number would not simply be one.
    Finally, both the CLINs and the “Deliveries or Performance” make no changes from year
    to year of the contract, between the base year and the option years,32 and if the nature of
    the contract was intended to be so different, capability in the base year, and production
    of water in the remaining years, the court cannot understand why the structure, pricing,
    and quantities would be consistent from year to year. The court agrees with defendant
    that the “Deliveries or Performance” refers to delivery of water.33
    The parties further disagree about the purpose of the contract. Plaintiff argues that
    prior to the Oasis Contract, Defendant was able to fulfill its water needs, but
    there was significant risk due to the need to bring the water into Iraq via
    truck convoy. Defendant’s actions leading up to this Contract make clear
    that the primary purpose of the Contract was to develop the capability to
    produce purified bottled water at U.S.-controlled locations in Iraq to avoid
    these risks.
    (internal citation and footnote omitted). Defendant responds that plaintiff is taking an
    “illogical position” to argue that establishing the capability would reduce the number of
    convoys. The court notes that Statement of Work for the solicitation stated that:
    Up to the present time bottled water has been purchased from sources
    outside of Iraq. This practice necessitates large numbers of convoys and
    escorts to transport the bottled water from Kuwait, Jordan, and Turkey.
    Producing bottled water locally would significantly reduce the number of
    convoys required to transport water as well as reduce the likelihood of battle
    related injuries.
    The court interprets the purpose of the contract as “[p]roducing bottled water,” which not
    only requires the capability to produce, but also the production of, the required bottled
    water. Only by producing water, would the demand for water from neighboring counties
    be diminished.
    The court also notes that the payment terms of the contract required an invoice
    “each month, for the total of all liters in [sic] produced, per location, for the entire previous
    32 The only exception is the contract period for the first bottled water facility is 120 days
    for the base year and 365 days for each of the option years.
    33 As discussed below, modification P00003 changed the “SHIP TO ADDRESS” location
    for the “Deliveries or Performance” from destination to origin. (capitalization in original).
    31
    month,” which is inconsistent with a payment of $50,225,000 for producing only the water
    production capability. The mechanism for payment to the plaintiff was to invoice the
    government for the bottled water actually produced in each given month is also
    inconsistent with plaintiff’s articulated understanding of completing the first bottled water
    plant, because plaintiff argued above, there was no “expectation that bottled water would
    be produced there during the base year.”
    Finally, the court turns to the questions and answers during the solicitation
    process. As the questions and answers during the solicitation process were subsequently
    incorporated into the contract, the court considers the questions and answers to reach a
    determination on contract interpretation. Both parties cite to the questions and answers
    during the solicitation process as further evidence for their respective contract
    interpretation position. Plaintiff contends that “[t]he answers to solicitation questions,
    incorporated into the Contract, further support Oasis’ contention that payment was not
    contingent on the production of any water.” As it relates to the payment terms of the
    contract, plaintiff first cites to question 9 from the questions and answers in response to
    the request for information from potential offerors, which asked, “[w]hat would be your
    proposed payment terms?” with the government answering: “Monthly. Firm Fixed Price
    Contract.”34 Defendant argues that:
    This response does not support Oasis’s contract interpretation for a number
    of reasons, First, Oasis itself understood that the firm-fixed-price in the
    contract was the unit price, $3.50 per case. Oasis’s contract interpretation
    makes even less sense when one considers the response stated that the
    contractor would be paid “monthly.” Oasis never explains how a contractor
    could be paid for a water production capability on a “monthly” basis, when
    Oasis argues that it was entitled to a one-time $50.225 million “for the
    capability alone.”
    As explained immediately above, the contract provided regarding payment terms that
    “[i]nvoicing shall occur monthly,” which would have allowed for monthly payment for water
    produced. There is no payment mechanism in the contract for a flat $50,225,000.00
    amount for establishing capability, or any indication in the contract of a payment
    mechanism for how plaintiff was to be compensated if, on the final day of the base year,
    plaintiff only had established the capability for all of the bottled-water facilities, and had
    not produced any water. As the defendant argues, “Oasis also never explains how it could
    be entitled to progress payments for the facilities themselves, when (1) the contract never
    mentions progress payments of any kind, (2) the military provided the land, (3) the military
    provided the fuel, (4) the military provided the water, and Oasis owned the facilities.”
    Absent a reference in the contract for an alternative method to compensate plaintiff, and
    consistent with the questions and answers regarding monthly invoicing, question 9 from
    34 The court notes that the plaintiff cites to question 9 from the questions and answers in
    response to the request for information for support for its view of the contract as firm fixed
    price contract, but, as indicated above, the court already has concluded that the contract
    was a firm fixed price contract.
    32
    the questions and answers relating to the monthly payment for water supports
    defendant’s interpretation of the contract.
    Plaintiff also cites to the questions and answers in response to Solicitation No.
    W27P4A-05-R-0002, and plaintiff argues, regarding question 11b, “the Military told
    offerors that they would receive payment ‘once the contractor has the first plant
    operational and has an approved first article test accepted without conditions.’ There was
    no condition that any amount of water be delivered prior to payment.” As defendant,
    correctly notes, however, “[t]he question-and-answer cited by Oasis [question 11b] says
    that ‘first payment’ will be made when the military ‘accept[s]’ water ‘without conditions.’ In
    other words, the military would pay the per-liter price for that water, not $50.225 million
    simply because the contractor produced one case of water.” (emphasis added by
    defendant, internal citations omitted). Additionally, the court notes, the original question
    asked in question 11b was regarding installment payments, as one bidder questioned the
    potential for installment payments: “Would the Government authorize progress or
    installment payments recognizing 1) the significant capital investment with establishing
    new capability and, 2) the ability to credit progress payments with actual deliveries?” to
    which the government responded that: “The first payment will be made once the
    contractor has the first plant operational and has had an approved first article test
    accepted without conditions.”
    Regarding support for its capability argument, plaintiff also points to question and
    answer 4. Question 4 states: “RFP requires 1st production capability 120 days ARO. Is it
    correct to interpret this to mean the capability for the entire 1st base requirements,
    including surge potential?” which the government answers: “120 days after contract
    award, the plant must be capable of producing up to that capacity.” The court notes that
    defendant does not challenge that 120 days after award the first plant had to be
    operational, or that under the contract the remaining bottled water facilities were to be
    established “within the remainder of days from contract award,” but cites to the
    requirement of capability at 120 days to undermine plaintiff’s theory of the contract,
    arguing that Oasis “cannot explain why a contractor would not produce water in the base
    year when the first bottled-water plant was required to be completed no later than
    September 2005, mid-way through the base year.” Indeed, nothing about the
    government’s answer indicates that plaintiff was only to establish the capability, nor would
    it explain why the base year of the contract would be for a calendar year, but only require
    the first bottled water facility to operational within 120 days and then not require any water
    produced, especially because, as explained above, Figure 1 sets out a range of
    production requirements for each of the bottled water facilities at different times of the
    year, spanning more than 120 days. The reason plaintiff appears to have cited the
    question and answer 4 would be that it uses the word “capability.”
    Plaintiff also focuses on the related questions 2 and 35 to demonstrate that the
    government was not required to purchase any water, as well as “that the contractor was
    still guaranteed payment after completing the first plant without a requirement for
    producing water.” Question 2 asked, “[i]f projected demand falls short, what are the
    minimum volume requirements? Is there a required minimum quantity the Government
    33
    will procure?” The government responded: “There are no minimums. The minimum is
    zero.” Additionally, question 35, referring to question and answer 2, asked:
    The answer to Question #2 states that there are no minimum purchase
    quantities. This decision places an unreasonable amount of financial risk on
    the contractor, and will likely severely limit the competition for this RFP
    [Request for Proposals]. Request that the Government guarantee minimum
    purchase quantities base [sic] on the estimated quantities that appear in the
    RFP.
    The government responded:
    The levels of liters required are in the range. This is roughly the production
    per day. You might have a day where your levels are lower, however, the
    Government contract is a Firm Fixed Price not Indefinite Delivery / Indefinite
    Quantity. The Government is entering into a one year contract with three
    option years. The only thing that could prevent the basic year from occurring
    is a Government decision to Terminate for Convenience or default of the
    contractor to perform to the requirements and the Government would then
    Terminate for Default.
    It is notable that the government did not respond that the government was
    guaranteeing the contractor a payment upon completion of any, or all, of the bottled water
    facilities, and then, in addition, payment for production of water. Such a statement would
    be inconsistent with the government’s stated position during contract performance and in
    litigation that the government was only paying for the production of bottled water. Indeed,
    this is defendant’s view of the questions and answers, as defendant claims, “[t]he
    military’s answers to bidder questions, for which the contract awardee acknowledged
    receipt and which Oasis’s chairman maintained a well-annotated copy, further confirms
    the clear and unambiguous terms of the contract.”35
    Defendant cites to question 33 to claim “[t]he military’s responses to bidder
    questions stated that all bidders were required to propose a per-liter price inclusive of all
    costs, including the cost to construct and operate the bottled-water facilities.” Indeed, one
    potential offeror asked in one part of question 33: “Is our offer to give the cost per liter
    with the personnel built in, seperate [sic] to the cost of the plant and equipment?” The
    government replied: “All Costs per liter are to be included.” Likewise, question 40 asked:
    “Start up Cost: Since the bid is predicated upon the deliverables per litre bottle of water,
    can we assume that all costs(inc personnel and equipment deployment to site) incurred
    between contract award and water production will fall upon the successful bidder?” The
    35 Regarding question 35, specifically, defendant argues that, “this question-and-answer
    does not remotely support Oasis’s position that it was entitled to $50.225 million without
    producing any water,” and the import of the government’s answer is that “the military may
    order no water on one particular day, but the military would generally order (and pay for)
    water within the water production ranges set forth in Figure 1 of the solicitation (and
    ultimately the contract).”
    34
    government replied: “Yes. It is up to you how you determine the cost per litre taking into
    account all costs associated with this endeavor.” The government could have indicated
    that a stand-alone payment demonstrating capability should be taken into account for
    pricing purposes, but the government’s answer points to the contractor only being paid
    for delivery of water. The defendant also points to the government’s answer to question
    47, which explained after completion, “the bottled-water plants would be the property of
    the contractor, not the Government,” to argue that the government would not receive the
    benefit of the facilities if it paid $50,225,000.00 to Oasis to demonstrate the capability to
    produce bottled water, and then, to additionally compensate Oasis for actually producing
    the bottles of water.
    In sum, the court believes that the answers provided by the government during the
    solicitation process, which were incorporated into the contract, demonstrate the
    correctness of the defendant’s position that the government’s obligation under the
    contract was solely to pay for water produced and delivered and does not demonstrate
    that the intent of the base year of the contract was to compensate Oasis $50,225,000.00
    for demonstrating the capability to produce bottled water, and then, to additionally
    compensate the contractor for producing the requested bottles of water. Therefore, the
    court believes that the terms of the contract are unambiguous that the contract only
    obligated the government to pay plaintiff for cases of water. See Arko Exec. Servs. v.
    United 
    Sates, 553 F.3d at 1379
    .
    Although the court believes the terms are not ambiguous, and, as noted above,
    the parties both assert that the terms of the contract are clear, out of an abundance of
    caution the court examines the intentions of the parties when they executed the contract.
    Defendant argues that “[e]ven if the Court concludes that the contract is ambiguous, there
    is a mountain of extrinsic evidence confirming that the contract permitted a base year
    payment of $3.50 per case only, and not $50.225 million, plus $3.50 per case, as Oasis
    now contends.” Plaintiff argues that “[i]n the event that the Court finds the contract to be
    ambiguous on these basic terms, the extrinsic evidence also supports Oasis’
    understanding.”
    As explained by the United States Court of Appeals for the Federal Circuit, “[w]hen
    the contract's language is unambiguous it must be given its ‘plain and ordinary’ meaning
    and the court may not look to extrinsic evidence to interpret its provisions.” TEG–
    Paradigm Envtl., Inc. v. United States, 
    465 F.3d 1329
    , 1338 (Fed. Cir. 2006); Barron
    Bancshares, Inc. v. United States, 
    366 F.3d 1360
    , 1375 (Fed. Cir. 2004) (“If the terms of
    a contract are clear and unambiguous, they must be given their plain meaning—extrinsic
    evidence is inadmissible to interpret them.”); see also Precision Pine & Timber, Inc. v.
    United 
    States, 596 F.3d at 824
    . In TEG–Paradigm, the Federal Circuit also noted that
    “[a]lthough extrinsic evidence may not be used to interpret an unambiguous contract
    provision, we have looked to it to confirm that the parties intended for the term to have its
    plain and ordinary meaning.” TEG–Paradigm Envtl., Inc. v. United 
    States, 465 F.3d at 1338
    ; see also Shell Oil Co. v. United 
    States, 751 F.3d at 1296
    . By contrast, “[w]hen a
    provision in a contract is susceptible to more than one reasonable interpretation, it is
    ambiguous, and we may then resort to extrinsic evidence to resolve the ambiguity. We
    utilize extrinsic evidence to derive a construction that effectuates the parties' intent at the
    35
    time they executed the contract.” TEG–Paradigm Envtl., Inc. v. United 
    States, 465 F.3d at 1338
    (citations omitted).
    “Generally, the plain language of a contract controls; however, language that is
    reasonably susceptible to more than one interpretation, where ‘each [interpretation] . . .
    is found to be consistent with the contract language,’ may be considered ambiguous.”
    Marquardt Co. v. United 
    States, 101 Fed. Cl. at 268
    (quoting Cmty. Heating & Plumbing
    Co. v. Kelso, 
    987 F.2d 1575
    , 1579 (Fed. Cir. 1993)); see also Metric Constructors, Inc. v.
    Nat’l Aeronautics & Space 
    Admin., 169 F.3d at 751
    (“When a contract is susceptible to
    more than one reasonable interpretation, it contains an ambiguity.”). The United States
    Court of Appeals for the Federal Circuit has stated that, “[t]o show an ambiguity [in
    contract language,] it is not enough that the parties differ in their respective interpretations
    of a contract term.” NVT Techs., Inc. v. United States, 
    370 F.3d 1153
    , 1159 (Fed. Cir.
    2004); see also Bell/Heery v. United States, 
    106 Fed. Cl. 300
    , 309 (2012), aff’d, 
    739 F.3d 1324
    , reh’g and reh’g en banc denied (Fed. Cir. 2014). In order to demonstrate ambiguity,
    the interpretations offered by both parties “must fall within a ‘zone of reasonableness.’”
    
    Id. (quoting Metric
    Constructors, Inc. v. Nat’l Aeronautics & Space 
    Admin., 169 F.3d at 751
    ). The Federal Circuit elaborated: “To incorporate extrinsic material, a contract must
    use language that leaves no relevant ‘ambiguity about the identity of the document being
    referenced, nor any reasonable doubt about the fact that the referenced document is
    being incorporated into the contract.’” Lakeshore Eng’g Servs., Inc. v. United 
    States, 748 F.3d at 1347
    (quoting Northrop Grumman Info. Tech., Inc. v. United States, 
    535 F.3d 1339
    , 1344 (Fed. Cir. 2008)).
    Because an ambiguous or uncertain writing sometimes only can be understood
    upon consideration of the surrounding circumstances, courts may rely on extrinsic
    evidence to interpret an ambiguous contract clause. See Cruz-Martinez v. Dep’t of
    Homeland Sec., 
    410 F.3d 1366
    , 1371 (Fed. Cir. 2005) (“‘[M]eaning can almost never be
    plain except in a context.’” (quoting Restatement (Second) of Contracts § 212, cmt. b
    (1981))); Barron Bancshares, Inc. v. United 
    States, 366 F.3d at 1375
    (holding that
    extrinsic evidence is permissible to interpret an ambiguous contract); Sylvania Elec.
    Prods., Inc. v. United States, 126, 
    458 F.2d 994
    , 1005, 
    198 Ct. Cl. 106
    (1972); Mata v.
    United States, 
    114 Fed. Cl. 736
    , 746 (2014) (“If a contract is ambiguous, the court may
    rely on extrinsic evidence to discern the parties’ intent.”); Commonwealth Edison Co. v.
    United States, 
    56 Fed. Cl. 652
    , 662 (2003). “Courts may not resort to extrinsic evidence
    ‘to create an ambiguity where a contract was not reasonably susceptible of differing
    interpretations at the time of contracting.’” Shell Oil Co. v. United 
    States, 751 F.3d at 1304
    (quoting Metric Constructors, Inc. v. Nat’l Aeronautics & Space 
    Admin., 169 F.3d at 752
    ).
    There are limitations, however, on the use of extrinsic evidence. Extrinsic evidence “may
    not be used ‘to justify reading a term into an agreement that is not found there.’” Warren
    v. Office of Pers. Mgmt., 
    407 F.3d 1309
    , 1314 (Fed. Cir. 2005) (quoting Fox v. Office of
    Pers. Mgmt., 
    100 F.3d 141
    , 145 (Fed. Cir. 1996)); see also Holland v. United States, 
    621 F.3d 1366
    , 1378 (Fed. Cir.), reh’g and reh’g en banc denied (Fed. Cir.), cert. denied, 
    565 U.S. 928
    (2011). “Only in the event of an ambiguity may [the court] examine extrinsic or
    parol evidence.” Bell BCI Co. v. United States, 
    570 F.3d 1337
    , 1341 (Fed. Cir.), reh’g and
    reh’g en banc denied (Fed. Cir. 2009); McAbee Constr., Inc. v. United 
    States, 97 F.3d at 1434
    (“[E]xtrinsic evidence . . . should not be used to introduce an ambiguity where none
    36
    exists." (quoting Interwest Constr. v. Brown, 
    29 F.3d 611
    , 615 (Fed. Cir. 1994)); K-Con
    Bldg. Sys., Inc. v. United States, 
    107 Fed. Cl. 571
    , 600 (2012). “The parol evidence rule
    provides a further limitation on the use of extrinsic evidence in interpreting contracts.
    Under the parol evidence rule, extrinsic evidence pre-dating a written agreement may not
    be used ‘to add to or otherwise modify the terms of a written agreement in instances
    where the written agreement has been adopted by the parties as an expression of their
    final understanding.’” TEG-Paradigm Envtl., Inc. v. United 
    States, 465 F.3d at 1338
    -39
    (quoting Barron Bancshares, Inc. v. United 
    States, 366 F.3d at 1375
    ). The court,
    therefore, first must ascertain whether the language at issue was ambiguous. See NVT
    Techs., Inc. v. United States, 
    54 Fed. Cl. 330
    , 335 (2002) (finding that the threshold
    question is whether the document in question contains ambiguous language), aff’d, 
    370 F.3d 1153
    (Fed. Cir. 2004); Bell BCI Co. v. United 
    States, 570 F.3d at 1341
    . As noted by
    the Federal Circuit, “[w]hen faced with an ambiguous contract, we ‘construe its language
    to effect the parties' intent at the time they executed the [contract].’” Metropolitan Area
    Transit, Inc. v. Nicholson, 
    463 F.3d 1256
    , 1260 (Fed. Cir. 2006) (quoting Dureiko v. United
    States, 
    209 F.3d 1345
    , 1358 (Fed. Cir. 2000)).
    The court first turns to the testimony of the signatories to the contract to examine
    the parties’ intentions of the payment terms of the contract. Max Wyeth, the president of
    American AquaSource when it was awarded the original contract and the original
    signatory to the contract, testified that he based the $50,225,000.00 figure in the base
    year by “using our average forecast of demand, we came up with a case number that
    would be produced per year, and multiplied that by the case cost,” which was “[t]he
    number of cases times $3.50.” Max Wyeth further testified that the $50,225,000.00 was
    a “gross revenue figure,” calculated on the cases to be produced and sold at $3.50 per
    case. The American AquaSource proposal included spreadsheets showing the volumes
    of production and an estimate for when each site would begin water production, the bid
    assumed a price of $3.50 per case of water, or a total of $50,225,000.00, based on the
    production of 14,350,000 cases.36 At trial, Max Wyeth explained how he understood the
    contractor was to be compensated under the contract:
    Q. And when you signed the contract, what was your understanding as to
    how the contractor would be paid under this contract?
    A. On a monthly basis for the amount of water delivered.
    Q. At what price?
    A. $3.50 a case.
    Q. Did you believe under this contract that the Government was required to
    pay for the costs to construct facilities and $3.50 per case?
    36The court notes the original basis of estimate in the American AquaSource proposal
    assumed annual production of 384 million bottles or 32 million cases of water.
    37
    A. No.
    Counsel for defendant emphasized during Max Wyeth’s testimony: “So, just so the record
    is clear, the $50.225 million in your proposal is based upon $3.50 per case?” to which
    Max Wyeth replied: “Yes.” Again, during his testimony, Max Wyeth had the following
    exchange with defendant’s counsel:
    [Q.] [W]hat was the contractual unit price under the agreement?
    A. The unit price was 0.292 per liter or $3.50 a case of 12.
    Q. And was that consistent with your understanding of how you would be
    paid under the contract as the contractor?
    A. Yes.
    Q. And was that the totality of what you would be paid under the contract
    was $3.50 per case?
    A. Yes.
    Q. Do you believe you had a meeting of the minds with Major Vazquez
    regarding the payment terms of the contract?
    A. Yes.
    Q. What do you believe that meeting of the minds was with respect to the
    payment terms?
    A. Simply that the water produced and delivered would be paid for in the
    following month.
    Q. And what is the per case price for all of the base year and all of the option
    years?
    A. $3.50 a case.
    Major Vazquez, the signatory on behalf of the government, in response to the
    question: “What was your understanding of the contract price per case for the base year?”
    testified that “[i]t was $3.50 per case.” Major Vazquez also responded to defendant’s
    counsel’s question: “Based on your understanding, would the Government pay $50.225
    million for the facilities and then an additional $3.50 a case for every case of water
    produced?” “No.” Regarding the pricing schedule, defendant’s counsel and Major
    Vazquez had the following exchange:
    [Q.] The total base year is how much?
    38
    A. $50,225,000.
    Q. And I know I've kind of asked you before, but who came up with that
    number?
    A. Mr. Wyeth.
    Q. And how was the Government going to pay AquaSource in the base year
    of the contract if AquaSource were to win the award?
    A. We would pay them like any other of the vendors that proposed. Once
    the first article passed and production began, we would pay based off the
    invoice, the number of liters that were requested and were received by the
    Government in that previous month.
    Q. Would the Government pay $50.225 million to the successful awardee
    just to make the facilities operational?
    A. No, they would not.
    Major Vazquez also answered defendant’s counsel’s question: “Do you believe you had
    a meeting of the minds with Mr. Wyeth on this contract?” “Yes, I do.”37 The court notes
    37Despite both of their sworn testimony at trial, plaintiff argues that Major Vazquez and
    Max Wyeth “did not have a meeting of the minds,” contending that “[w]hile Maj. Vazquez
    and Max Wyeth may have both espoused the same contractual interpretation at trial, their
    testimony was inconsistent with their contemporaneous actions and was unreliable at
    best.” For example, plaintiff, citing to the trial transcript, states:
    Maj. Vazquez’s testimony at trial also was evasive when he was questioned
    regarding the actions he took that were inconsistent with his testimony:
    Q. So, this contract, as awarded, was it a firm fixed price contract?
    A. It was a fixed price contract.
    Q. Was it a firm fixed price contract?
    A. I believe I just answered that. It was a fixed price contract.
    This is the sort of testimony individuals offer when they are trying to be tricky
    and avoid being completely forthright. Moreover, his testimony was wrong,
    as a “fixed price” contract is not the same as a “firm fixed price” contract.
    (emphasis in trial transcript added by plaintiff; citation omitted). The court believes plaintiff
    is parsing words and reading far too much into Major Vazquez’s answers at trial.
    Furthermore, the court has agreed with plaintiff that the contract was firm fixed price
    39
    that in its previous decision on the fraud counterclaims, the court indicated regarding Max
    Wyeth’s testimony that:
    Oasis did not exist as a corporation when Mr. Wyeth was awarded the
    contract on behalf of American AquaSource. Mr. Wyeth testified that when
    he signed the American AquaSource contract he had no relationship with
    Al-Morrell Development or with Paul Morrell or Phil Morrell. Given the
    evolution of the contract, including fundamental changes to the contract,
    especially after modifications P00006 and P00011, the reduction from the
    number of bottled water plants from eight to six, and on site difficulties
    encountered during contract performance, the court does not afford Max
    Wyeth’s views as to whether or not Oasis submitted a fraudulent claim in
    the 2008 certified claim much weight
    Max Wyeth’s testimony, however, is relevant to the contract, as awarded, when reaching
    a determination on contract interpretation. Max Wyeth was the architect of the proposed
    and accepted pricing schedule, the $50,225,000.00 base year amount and how the
    contract would be paid. Although he left Oasis in 2005, and did not have much awareness
    of the certified claim process, or even modification P00006 and modification P00011, he
    was involved in and aware of the formation of the contract and the documents he signed.
    Max Wyeth’s testimony, and the contemporaneous documentation, therefore, are
    relevant and court affords his views on the contract formation due consideration. As
    indicated by a Judge of the United States Court of Federal Claims, looking to the purpose
    of contract interpretation is “to determine the intent of the parties at the time that the
    contract was made; this controls the contract’s interpretation.” Ahrens v. United States,
    
    62 Fed. Cl. 664
    , 669 (2004) (citing Safeco Credit v. United States, 
    44 Fed. Cl. 406
    , 419
    (1999)). Given Max Wyeth’s and Major Vazquez’s testimony, the court believes the above
    discussion supports the court’s conclusion that the contract obligated the government to
    pay plaintiff $3.50 for each case of water, and not $50,225,000.00 to establish the
    capability to produce water, as well as $3.50 a case of water.
    Much of the documentation the parties point to as extrinsic evidence occurred later
    in time than the date of the execution of the contract.38 Indeed, numerous exhibits cited
    to by the parties relate to events after the execution of modification P00006 and
    modification P00011, which as the court noted in the earlier opinion, “dramatically
    reshaped the terms of the contract.” Although plaintiff claims that “P00011 and the
    Contracting Officer’s Memorandum for Record completely support Oasis’ contract
    position,” information on the conduct of the parties after the execution of the modifications
    offers the court less guidance as to the intent of the parties at the time the contract was
    executed and, in fact, could give a misleading impression. Likewise, the plaintiff’s
    contract. Plaintiff also asserts, without support, that “Max Wyeth’s lack of basic
    government contracts knowledge is a fatal flaw to Defendant’s argument.”
    38 Of note is Phil Morrell’s August 4, 2006 email to Paul Morrell and Paul Jeffries regarding
    his view of the contact, referenced above, which stated in part, “Funding was received for
    purchase of water, but it [sic] the contract was a capabilities contract,” and
    “Contract#____ is a capabilities contract not a procurement contract.”
    40
    argument that “[t]he Final Decision on Oasis’ claim, signed by then-Contracting Officer
    Maj. Kevin Hobbs, fully supports Oasis’ position,” is similarly unhelpful, as it was issued
    on October 18, 2009, more than four years after the contract was executed, and more
    than three years after modification P00011 was executed.39
    The court, however, does briefly address two documents from July 2005, first,
    plaintiff’s July 2005 memorandum to investors. Defendant argues that “[s]tarting in July
    2005 and continuing throughout the base year of the contract, Oasis routinely projected
    its revenues from the bottled-water contract,” and “[i]n each such case, Oasis projected
    revenue at $3.50 per case only, and never projected any revenue for the cost to build the
    facilities or to make the facilities operational.” In response, plaintiff claims that “Oasis’
    revenue projections were almost exclusively a representation of what it was told the
    Contract entitled it to receive in payment. The early AAS [American AquaSource] and
    Iraqua spreadsheets, which were created by Max Wyeth, were widely inaccurate and
    were inconsistent with Defendant’s theory of the Contract.”
    The court notes that in July 2005 memorandum, under the heading “revenue
    projections” “[t]he company projects revenues to be $50 million in the total base year,
    $112 million in the first option year, and $112 million a year in the subsequent 2nd and 3rd
    option years, for a total of $386 million in sales revenues over 4 years.” Unless the plaintiff
    anticipated delivering zero water to the government in the base year, it appears the
    plaintiff communicated to its investors it would be paid for cases of water produced totaling
    $50 million. Likewise, the “project costs & details” states:
    The engagement calls for the supply of all labor, tools, supervision,
    personnel, equipment, transportation, materials, facilities, and other
    essentials necessary to perform and sustain 8 separate and independent
    purified bottle water plants according to the 20 Mar 05 Statement of
    39 Moreover, the court finds many of the later in time arguments red herrings, and in some
    cases, misrepresentations. For example, plaintiff contends that, regarding the contracting
    officer’s final decision, “Lt. Col. Hobbs rejected Defendant’s fabricated interpretation of
    the Contract, as demonstrated by the fact that the term ‘$3.50’ is not mentioned once in
    the final decision.” The court notes, however, that the contracting officer’s final decision
    denied plaintiff’s claims in full, and regarding the contracting officer’s final decision’s view
    of the contract, the decision states, in part:
    One can only conclude that while the Government was not obligated to
    purchase any water during the base year, the intent was clearly to purchase
    at least some water from any of the sites if it was available. It must also be
    assumed, because the Government did not create a separate CLIN for the
    construction of the bottled water facilities itself, that it was the Governments
    [sic] intent for the $50,225,000 to cover the cost of constructing all of the
    bottled water facilities and the water itself.
    41
    Objectives (SOO) at a price of $3.50 per liter bottle, with a period of
    performance from May 2005 through May 2009.
    No mention is made of a $50,225,000.00 payment to plaintiff in addition to the $3.50
    figure. Additionally, a July 2005 email from Phil Morel to Max Wyeth, with copies to,
    among others, Paul Morrell, included a spreadsheet which was a four year projection,
    and included a projection for case per year and the gross revenues, and each case
    assumed 12 liters of water at $3.50 per case. For the first year, the projections assume
    14,500,000 cases of water, the projected revenue was $50,750,000.00, and for the
    remaining years, the projections assume 32,500,000 cases of water and projected
    revenues of $113,750,000.00 40 The “cost of goods” for the first year assumes a total of
    174,000,000 bottles, or 12 bottles per case, times 32,500,000 cases, and total costs of
    goods of $12,118,520.00. The projections, subtract the total costs of goods of
    $12,118,520.00 from the projected revenue of $50,750,000.00 for a gross profit of
    $38,631,480.00. Although plaintiff argues that “[t]hese statements are descriptive of how
    the company was operating, which is the primary driving purpose of an investment
    document,” and posits, “[m]oreover, the early statements were done at a time when Oasis
    had not really gotten into the Contract in detail and seen the myriad of issues the Contract
    had,” nowhere in the detailed projections is a there a line item for an additional
    $50,225,000.00 payment to the contractor, lending further support for the court’s
    conclusion that the contract was structured for the government to pay plaintiff $3.50 a
    case of water, and not $50,225,000.00 to establish the capability to produce water as well
    as $3.50 a case of water.
    The court also takes note of modification P00003, executed by Major Lopez and
    Max Wyeth on August 9, 2005, close in time to the July 2005 documents discussed
    immediately above. Modification P00003, added a “not to exceed” limitation on the
    quantity of water produced at each plant, and did not require the government to purchase
    any minimum number of cases produced by the contractor. Pursuant to modification
    P00003, the “not to exceed” “case quantity was a total of 14,350,000 cases of water,”
    and, as modified in modification P00002, the “not to exceed” price was $50,225,000.00.41
    The court notes that dividing the “50,225,000 (NTE),” added in modification P00002 by
    the not to exceed 14,350,000 cases of water added to contract by modification P00003,
    reflects $3.50 a case, consistent with the defendant’s view of contract interpretation. This
    40As the projections assumed 14,500,000 cases of water for the first year and 32,500,000
    cases of water for the remaining years, the projected revenues are slightly higher than
    the amounts listed in the contract which assumed production of 14,350,000 cases of
    water in the base year and 32,000,000 cases of water for the remaining years after
    modification P00003 was executed.
    41 As indicated above, the cover page to the contract stated the dollar amount as
    “386,225,000 (estimated).” At trial, Major Vazquez testified that this was amount was in
    error and that the amount should have been $50,225,000.00, and, on July 15, 2005, Major
    Lopez executed modification P00002 on behalf of the government, which changed the
    dollar amount from “$386,225,000 (estimated)” to “50,225,000 (NTE),” because “[o]nly
    the base year award should have been documented in the contract.”
    42
    is also consistent with the projections referenced above, and nowhere is there support of
    plaintiff view that plaintiff could receive the “50,225,000 (NTE)” for creating the capability
    and then be paid for additional, “extracontractual water.” The testimony of the signatories
    to the contract, as well as the documents produced near in time to the execution of the
    contract support the defendant’s view of the contract, and that the parties’ intended for
    the contract to compensate plaintiff only for the bottled water produced, and that plaintiff
    derived its revenue projections based on that the same assumption.
    As the court refers to the change to the contract as a result of modification P00003,
    the court addresses plaintiff’s contention that modification P00003 was not a valid
    modification, as it lacked consideration and, even if it was a valid modification, Oasis was
    never bound by modification P00003. Plaintiff first argues that “P00003 is invalid for lack
    of consideration” because “P00003 introduced into the Contract for the first time a
    requirement for Oasis to produce up to 14,350,000 case [sic] of water in exchange for the
    $50,225,000 Base Year value of the Contract. Defendant, on the other hand, still
    committed to purchasing zero (0) cases of water under the Contract, eliminating any
    guaranteed payment sum to Oasis.” Defendant, on the other hand, contends that the
    “contractor received consideration for modification P00003 and it is valid.”
    As noted above, on August 9, 2005, Major Lopez and Max Wyeth executed
    modification P00003 which added a “not to exceed” limitation on the quantity of water
    produced at each plant, and the “not to exceed” total was 14,350,000 cases of water. As
    noted by defendant, “Oasis was not even involved in the P00003 negotiation, as the
    modification was signed by Mr. Wyeth on behalf of AquaSource.” As indicated at trial,
    Max Wyeth, in response to the question, “this is modification number 3. You willingly
    signed this modification?” testified: “Yes.” Moreover, defendant argues that “the
    consideration for P00003 is plain on its face: it placed a ‘not to exceed’ at each bottled-
    water location.” Although modification P00003 did not require the government to purchase
    any minimum number of cases produced by the contractor, the court agrees with
    defendant that the contractor received consideration in the form of not being required to
    produce more than the identified maximum amount for each bottled water facility, offering
    the contractor certainty for each plant, and allowing the contractor to plan accordingly.
    After modification P00003 was executed, the base year of the contract reflected the total
    amount each plant was obligated to produce:
    43
    In addition, modification P00003 changed the SHIP TO ADDRESS location for the
    information schedule for the “Deliveries or Performance” referenced above. Modification
    P00003 changed the SHIP TO ADDRESS from destination to origin. (capitalization in
    original). Regarding this change, Dan Petsche explained:
    A. We did want it to be origin instead of destination, because we didn’t want
    it to be destination. I – you’re correct.
    44
    Q. Okay. So, in JX 103,[42] you state that the contractor wants it to be origin?
    A. Right, right, right.
    Q. And this change was implemented in P00003, correct?
    A. Yes, it was.
    The court does not weigh how valuable the consideration was to the contractor, only if
    the contractor received any consideration, as explained by a Judge of the United States
    Court of Federal Claims in Axion Corp.:
    In determining whether there was consideration, courts look to the language
    of the contract modifications. McLain Plumbing & Elec. Serv., Inc. v. United
    States, 
    30 Fed. Cl. 70
    , 81 (1993) (“[T]he contract modification represents
    the best source of evidence regarding intent.”). Courts do not evaluate the
    adequacy of consideration, only the existence of consideration.
    Axion Corp. v. United States, 
    68 Fed. Cl. 468
    , 476 (2005); see also La Gloria Oil and Gas
    Co. v. United States, 
    72 Fed. Cl. 544
    , 573 (2006), aff’d in part, rev’d in part,
    ConocoPhillips v. United States, 
    501 F.3d 1374
    (Fed. Cir. 2007). The court concludes
    that the plaintiff was provided consideration for executing modification P00003, in the form
    of a definite “NTE” for each location and the change of location of delivery, and, therefore,
    modification P00003 was a valid modification.
    Second, plaintiff argues that “P00003 was invalidated by P00005,” because
    “[u]nder the plain language of the novation agreement (signed by Defendant and
    incorporated by P00005) Oasis was never bound by P00003.” Defendant argues that
    “[t]he novation agreement did not void bilateral modification P00003.” As noted above, in
    July 2005, Phil Morrell, Al-Morrell Development, Max Wyeth, and American AquaSource
    entered into a joint development and pre-incorporation agreement to form a new
    corporation to fulfill the contract, which became Oasis. Subsequently, in the fall of 2005,
    Phil Morrell, Al-Morrell Development, Max Wyeth, and American AquaSource signed an
    addendum to the joint development and pre-incorporation agreement, assigning
    American AquaSource’s contract to Oasis. The addendum required Max Wyeth, of
    42   Joint exhibit 103 states, in part:
    Dan brought up the fact the there was not FOB [Freight on Board]
    designation within the contract (Destination or Origin). It is in our best
    interests liability wise and payment wise for it to be Origin as if KBR [Kellogg,
    Brown & Root] or whomever is delegated to pick the water up from our
    facility did not pick it up on a daily basis, it would sit and no payment would
    be made. With an origin designation, we would basically get paid as it came
    off the line and it is palleted.
    45
    American AquaSource, to execute a novation agreement. The novation agreement was
    to be a modification to American AquaSource’s contract with the government. The
    novation agreement became modification P00005. On December 2, 2005, Max Wyeth,
    then-president of Oasis and American AquaSource, signed the modification on behalf of
    Oasis, and on December 5, 2005, Colonel Montler signed for the military. Modification
    P00005 stated that the “purpose of this modification” was to “reflect the novation
    agreement transferring all rights and responsibilities of contract W27P4A-05-C-0002 from
    American Aqua Source Inc to Oasis International Water Inc in accordance with the
    attached novation agreement dated August 1, 2005.” The modification also stated that,
    “[a]ll other terms and conditions of the contract remain unchanged.”
    Plaintiff contends that because the effective date of the novation agreement was
    August 1, 2005, and modification P00003 was executed on August 9, 2005, Oasis only
    agreed to ratify “all previous actions” taken by American AquaSource prior to August 1,
    2005. Plaintiff points to the language of the novation agreement that defines contracts,
    and states in part:
    The term “the Contracts,” as used in this Agreement, means the above
    Contracts and purchase orders and all other contract and purchase orders,
    including all modifications, made between the Government and the
    Transferor before the effective date of this Agreement (whether or not
    performance and payment have been completed and releases executed of
    the Government or the Transferor has any remaining rights, duties, or
    obligations under the Contracts and purchase orders).
    (emphasis in original). The novation agreement also provides that the “Transferee has
    assumed all obligations and liabilities of the Transferor under the Contracts by virtue of
    the above transfer,” and that the “Transferee ratifies all previous actions taken by the
    Transferor with respect to the Contracts, with the same force and effect as if the action
    had been taken by the Transferee.”43
    As discussed at trial, and based on the record before the court, the signatories to
    the modification appear to have intended that Oasis be bound by modification P00003.
    Colonel Montler, who signed on behalf of the government, had the following exchange
    with defendant’s counsel at trial:
    [Q.] [W]hat was the purpose of Modification P00005?
    A. This modification -- it's just affecting the transfer of all the rights and
    responsibilities of the contractor from American AquaSource to Oasis.
    Nothing else got changed, and I don't see that I added Section -- the
    novation agreement wasn't added to Section J, so it's not even an
    attachment to the contract at this point.
    43   The “Transferor” was American AquaSource and the “Transferee” was Oasis.
    46
    Q. Did the modification have any other purpose, other than to novate the
    contract?
    A. No. All other terms and conditions of the contract remain unchanged.
    Max Wyeth, who signed on behalf of American AquaSource and Oasis, similarly
    explained to defendant’s counsel:
    Q. Why is it dated August 1, 2005, do you know?
    A. Probably when it was created.
    Q. And was the intent of this modification to invalidate any previous
    modifications?
    A. No, it was a continuation of our intent . . . when we started our
    partnership.
    Q. What was the purpose of the novation agreement?
    A. To transfer the contract.
    Q. Transfer the contract from who to who?
    A. From American AquaSource to Oasis.44
    Furthermore, as noted by defendant, “both Oasis and the military operated as if
    modification P00003 was a valid modification throughout performance of the contract,” as
    explained at trial, including Alan Morrell’s exchange with defendant’s counsel:
    Q. And at this time [December 2005], Oasis believed that modification
    number 3 was valid, right?
    A. At this time, it was the only CLIN structure we had, and yes, we believed
    that that was what we had access to, yes.
    Q. And just so we're clear, you believe -- Oasis believed that modification 3
    was valid at that time, correct?
    A. At that time we did.
    At trial Phil Morrell also responded to defendant’s counsel’s question on cross-
    examination, “Oasis appropriately relied on Modifications P00001, P00003, and P00006
    in setting up the plants, right?” by answering: “Yes.” The clearest evidence that Oasis
    44Max Wyeth also explained, in response to the question: “Why is it dated August 1,
    2005, do you know?” “Probably when it was created.”
    47
    operated as though modification P00003 was a valid modification, might be the December
    6, 2005 letter Oasis sent to the military, the day after the Max Wyeth signed modification
    P00005, which stated in part:
    The JCC-I Contract requires the Contractor to make very substantial up-
    front investments, in the estimated amount of some $46 million, to set-up
    six re-locatable water purification and bottling plants at sites on military
    bases in Iraq, and contemplates that the Contractor will recoup such
    investment through the firm fixed unit prices for produced purified bottle
    water in accordance with SOO Figure 1 and the Contract Schedule (Contr.
    Section B), both as revised by Mod P00003.[45]
    In addition to referring to the changes in modification P00003, the letter reflects the
    defendant’s view of the interpretation of the contract. The court, therefore, believes that
    the novation agreement, as part of modification P00005 intended to include modification
    P00003, and did not exclude it. The court agrees with defendant that P00003 was a valid
    modification to the original contract, and modification P00005 did not invalid modification
    P00003.
    Duress
    In addition to asserting that modification P00003 is invalid, plaintiff argues that
    modification P00006 and modification P00011 are invalid due to duress by the
    government. Regarding duress, plaintiff argues that “[d]uring the Base Year, Oasis’
    principles [sic] repeatedly found themselves on the brink of bankruptcy. Defendant
    knowingly pushed Oasis to the brink of bankruptcy by deliberately misinterpreting the
    Contract and withholding or threatening to withhold payments Oasis was due.” Plaintiff
    claims that the Army used “the leverage created by its maladministration of the Contract
    to coerce valuable concessions from Oasis that Oasis did not want to concede and should
    not have been forced to concede.” In response, defendant states that “Oasis resorts to
    accusations that two different military contracting officers, United States Air Force
    Colonels Renee Richardson and James Davis, took advantage of Oasis’ alleged
    ‘economic duress’ to force Oasis into bilateral modifications,” and argues that “[t]here is
    not a shred of evidence supporting Oasis’s economic duress claim and a mountain of
    evidence contradicting it, not the least of which is the $100 million profit enjoyed by Oasis
    under the contract.”46
    45   The December 6, 2005 letter also stated:
    [T]he Contract, as issued, requires the Contractor, once first article approval
    by the Government has been obtained at each site, to produce, and the
    Government to pay for, purified bottle water in quantities within the minimum
    and maximum daily quantities specified for the respective Winter or
    Summer season at the respective sites in SOO Figure 1, as amended by
    Mod P00003. . . .
    46   Defendant also argues that plaintiff “wants to retain the benefits that it received in
    48
    The United States Court of Appeals for the Federal Circuit has indicated that “[t]o
    render a contract unenforceable for duress, a party must establish (1) that it involuntarily
    accepted the other party's terms, (2) that circumstances permitted no other alternative,
    and (3) that such circumstances were the result of the other party's coercive acts.”
    N. Star Steel Co. v. United States, 
    477 F.3d 1324
    , 1334 (Fed. Cir. 2007) (citing Rumsfeld
    v. Freedom NY, Inc., 
    329 F.3d 1320
    , 1329 (Fed. Cir. 2003)); see also Dureiko v. United
    
    States, 209 F.3d at 1358
    ; Employers Ins. of Wausau v. United States, 
    764 F.2d 1572
    ,
    1576 (Fed. Cir. 1985) (quoting Fruhauf Southwest Garment Co. v. United States, 111 F.
    Supp. 945, 
    126 Ct. Cl. 51
    , 62 (1953) (“[T]he requirements to establish duress are
    exacting. Three elements must be found: ‘(1) that one side involuntarily accepted the
    terms of another; (2) that circumstances permitted no other alternative; and (3) that said
    circumstances were the result of coercive acts of the opposite party.’”)); Starr Int’l Co. v.
    United States, 
    106 Fed. Cl. 50
    , 77, recons. denied (2012); IMS Engineers-Architects, P.C.
    v. United States, 
    92 Fed. Cl. 52
    , 66 (2010); Aboo v. United States, 
    86 Fed. Cl. 618
    , 632,
    aff’d, 347 F. App’x 581 (Fed. Cir. 2009). “Duress occurs when a party involuntarily accepts
    another party's terms because the circumstances permitted no alternative and such
    circumstances were the result of the other party's coercive acts.” Pew Forest Prods. v.
    United States, 
    105 Fed. Cl. 59
    , 67 (2012) (citing N. Star Steel Co. v. United 
    States, 477 F.3d at 1334
    ). As noted by a Judge of the United States Court of Federal Claims, “[t]his
    Court's jurisprudence has shown that the bar for establishing duress is a high one.” Starr
    Int’l Co. v. United 
    States, 106 Fed. Cl. at 77
    .
    Plaintiff claims that “Oasis has demonstrated each of the three requirements for
    duress,” defendant, by contrast, argues that “plaintiff’s duress claims should be roundly
    rejected because there is not a shred of evidence supporting Oasis’s attempts to walk
    away from its contractual commitments,” and that “Oasis falls far short of establishing a
    single element of economic duress, let alone all three.”
    a. Involuntary Acceptance
    As indicated above, for a duress claim to be successful, a plaintiff must first
    establish that “it involuntarily accepted the other party's terms . . . .” N. Star Steel Co. v.
    United 
    States, 477 F.3d at 1334
    . Regarding the first element, involuntary acceptance,
    defendant argues, plaintiff “never explains why it did not sign the modification[s] under
    protest.” At trial, Phil Morrell in response to the question, “you did not indicate anywhere
    on Modification P00006 that you were signing the agreement under pro -- under protest,
    right?” testified: “I didn’t indicate it, no.” Oasis concedes that “[w]hile Defendant is correct
    P00011, but undo the portions that it now contends are not in its best interest,” noting that
    Oasis does not claim that it should have been paid $3.50 per case for all
    water delivered after August 2006; rather, Oasis was satisfied to receive the
    $9.3 million a month. Nor does Oasis offer to return the more than $24
    million check it received as part of the P00011 negotiations. Rather, as Paul
    Morrell testified, Oasis wants to keep the benefits of P00011, but invalidate
    the portions with which it now disagrees.
    49
    that neither P00006 nor P00011 contains a provision saying that the modification was
    under duress, there is no requirement to include such a statement in order for a contractor
    to later seek to invalidate the modification.” Plaintiff contends that “the logical fallacy in
    Defendant’s argument is that it assumes a contractor could be coerced into signing a
    modification under duress, but would then have the negotiating power to insist that the
    modification include language saying it was under duress. That ignores human nature.”
    Instead, plaintiff argues “the only way to determine whether Oasis involuntarily accepted
    P00006 and P00011 is to consider the underlying facts surrounding them, and those facts
    demonstrate that Oasis did not want either modification.”
    First, the court notes that in a situation in which a party indicates that it may not
    want a modification, another form of a contract change, or is facing financial difficulties,
    those facts alone are not necessarily an indication that, if a modification is executed,
    duress must have been involved. Moreover, as numerous cases demonstrate, a plaintiff
    which believes it is signing a contract or modification under duress can, in fact, sign under
    protest to indicate it is executing the agreement unwillingly. In North Star Steel Co. v.
    United States, the North Star Steel Company had alleged a breach of contract between
    the Arizona Electric Power Cooperative Inc. (AEPCO) and the United States Department
    of Energy's Western Area Power Administration (WAPA), with “North Star being an
    acknowledged third party beneficiary of the contract.” N. Star Steel Co. v. United 
    States, 477 F.3d at 1325
    . The Consolidated Arrangements Contract (CAC) was entered into on
    August 17, 1994, between WAPA and AEPCO for the benefit of North Star. As explained
    by the Federal Circuit,
    WAPA, however, had technical concerns about being able to provide
    regulating services to meet North Star's load requirements. For this reason,
    WAPA negotiated for a provision in the CAC that the regulating services to
    be provided to North Star would be made and paid for pursuant to an ad
    hoc methodology utilizing an in-kind energy payment, which would be in
    addition to the FERC-approved transmission rate schedule.
    
    Id. at 1327-28
    (footnote omitted). The CAC provided that the parties “shall jointly establish
    an appropriate cost-based methodology to review, evaluate, and periodically, if
    necessary, adjust the percentage associated with the In–Kind Energy payment.” 
    Id. at 1328.
    “In spite of their inability to reach agreement within the first year of normal
    operations, WAPA, North Star, and AEPCO continued to negotiate with respect to a new
    methodology. On June 3, 1999, a meeting took place to discuss WAPA's proposal to add
    Amendment No. 3 to the CAC . . . entitled ‘Modification of Section 14 of the Original
    Contract (Control Area and Regulating Services’)).” 
    Id. at 1329.
    As noted by the Federal
    Circuit, “[o]n July 29, 1999, North Star authorized AEPCO to accept Amendment No. 3
    and to amend the CAC under protest.” 
    Id. In its
    analysis, the Federal Circuit stated:
    “Turning to the issue of duress, the government recognizes that North Star agreed to
    Amendment No. 3 under protest, thereby apparently involuntarily accepting WAPA's
    terms,” 
    id. at 1333,
    and explained that “it is undisputed that AEPCO signed Amendment
    No. 3 under protest, which satisfies the first prong of the duress test. . . .” 
    Id. at 1334.
    This
    is especially notable, since as discussed below, the Federal Circuit ultimately determined
    50
    that “the court's findings of fact do not support a determination of duress. The reason is
    that the third prong of the test—that the circumstances which North Star faced were the
    result of WAPA's coercive acts—was not met.” 
    Id. (footnote omitted).
    The North Star case is not alone. In Systems Technology Associates, Inc. v. United
    States, 
    699 F.2d 1383
    (Fed. Cir. 1983), the plaintiff, Systems Technology Associates, Inc.
    (STA) entered into a contract with the Environmental Protection Agency on August 15,
    1974, which was subsequently terminated for default. See 
    id. at 1384.
    The termination
    for default was converted to a termination for convenience by the United States
    Department of the Interior Board of Contract Appeals which required the government to
    equitably adjust the Systems Technology plaintiff’s contract. As explained by the Federal
    Circuit:
    On February 14, 1978, the parties met and STA suggested that the
    settlement be on a “total cost” basis. STA submitted a termination
    settlement proposal. In evaluating that proposal, a Government auditor
    requested and was denied access to STA's books on June 5, 1978. The
    parties met and discussed their disagreements over the use of the total cost
    basis methodology, favored by the Government, and over Government
    access to STA's books. Subsequently, STA resubmitted its claim, protesting
    the Government's insistence on a total cost basis settlement and agreeing
    under protest to make cost records available to Government auditors. The
    auditors, however, insisted on using STA's job cost ledgers. STA again
    protested. The auditors finally concluded that, because of STA's failure to
    make the job cost ledgers available, the field audit office could not render
    an opinion on STA's settlement proposal. This dispute over methodology
    and access to the job cost ledgers continued until October 4, 1978, when
    STA submitted under protest a settlement proposal prepared on a total cost
    basis and allowed the auditors access to its job cost ledgers.
    
    Id. at 1384-85
    (footnotes omitted). Even though the plaintiff in Systems Technology did
    contemporaneously protest the government action, like in North Star, the Federal Circuit
    ultimately concluded that “[t]he contractor has failed to establish facts constituting duress
    under the applicable standards of duress.” 
    Id. at 1390.
    Therefore, contrary to Oasis’
    contention, it is possible to protest the government’s action, and later raise a claim of
    duress. Moreover, these cases demonstrate that in addition to a plaintiff having to timely
    protest, depending on the facts presented, the party must be able to demonstrate duress,
    in fact, occurred.
    The only precedential case on this issue that plaintiff addresses is the Court of
    Claims case of Louisiana-Pac. Corp. v. United States, 
    656 F.2d 650
    , 
    228 Ct. Cl. 363
    (1981). In Louisiana-Pac. Corp., the plaintiff had a third party agreement with the Northern
    Timber Company in which plaintiff assumed the benefits and responsibilities of Northern
    Timber Company’s timber sale contract with the Forest Service of the United States
    Department of Agriculture. See 
    id. at 651.
    The Court of Claims noted that “before plaintiff
    had cut any trees, the Forest Service mailed plaintiff a proposed bilateral modification of
    51
    the contract which reduced the volume established in the original contract,” to which
    plaintiff submitted a counterproposal to the Assistant Regional Forester. 
    Id. The Forest
    Service responded that the counteroffer was “not acceptable” and “the Forest Service
    stated its refusal ‘to accept any modification by Louisiana-Pacific signed under protest or
    with qualification,’” and finally that “unless the Forest Service’s modification of the contract
    was signed ‘as presented,’ it would ‘cancel the sale’ and terminate the contract. 
    Id. at 651-52.
    On April 25, 1974, without written protest or reservation of any rights, plaintiff
    signed and returned the Forest Service's Agreement to Modify Contract.” 
    Id. at 652.
    Plaintiff argues this case is not relevant because it was based on “a motion for summary
    judgment that did not actually decide the issue of duress, let alone reject the duress
    claim.” The court agrees that the Court of Claims did not specifically reach the issue in
    Louisiana-Pac. Corp., noting instead that “plaintiff says duress upon it renders the
    modification void. If so, there was no accord and satisfaction or waiver which defendant
    relies upon. Thus, there is presented a disputed question of fact we cannot resolve on the
    pending motions.” 
    Id. Nonetheless, the
    court’s discussion of duress is instructive:
    Plaintiff tells us that it needed lumber, which was getting scarce, so it agreed
    to the modification although it did not want to do so. This does not
    necessarily demonstrate duress. There may have been alternatives.
    Plaintiff perhaps could have sought other timber sources or it could have
    stood its ground and sued for breach in 1974 instead of in 1979. See Murphy
    v. United States, 
    209 Ct. Cl. 352
    (1976) (plaintiff held not to have resigned
    his position under duress where threatened with an investigation he could
    have contested). We do not intimate that suit would be a reasonable
    alternative in every case. However, by signing the modification without
    protest at the time, defendant argues that plaintiff waived its rights and by
    accord and satisfaction made a considered business judgment that it would
    rather proceed under a modified contract than to sue for breach. Plaintiff
    appears to want it both ways the benefits of the modified contract and
    damages for breach as well. If plaintiff is correct in its approach to this
    problem, it is hard to imagine how a contract modification could ever stand
    where it was accepted with reluctance. Years afterward, as here, a party
    could come in claiming duress and great uncertainty would thus attend
    contract law. We have no doubt but that plaintiff did not like the modified
    contract to which the Forest Service asked it to agree, but agree it did.
    Louisiana-Pac. Corp. v. United 
    States, 656 F.2d at 652-53
    , 228 Ct. Cl. at 367-68. Although
    the posture of the above captioned case and the Louisiana-Pac. Corp. are very different,
    the dicta in Louisiana-Pac. Corp. is logical and convincing. Although plaintiff argues that
    the assumption that a contractor could be coerced into signing a modification under
    duress, but would then have the negotiating power to insist that the modification include
    language saying it was under duress” “ignores human nature,” it can just as easily be
    argued that it would be human nature for a contractor who was unhappy with the outcome
    of a contract modification to later cry duress to undo the bargained result. The failure of
    plaintiff in the above captioned case to contemporaneously protest either modification,
    moreover, makes the court initially skeptical of plaintiff’s claims that the modifications
    52
    were involuntarily accepted by plaintiff. What most undermines plaintiff’s argument
    regarding its claim that a contractor under duress would not have the power to insist on
    protest language, is plaintiff’s own behavior during contract performance in response to
    the government’s request for a waiver of plaintiff’s claims. At trial, Paul Jeffries had the
    following exchanges on direct examination:
    Q. Did the Government ask for waivers of claims regularly from Oasis?
    A. Yes, they did.
    Q. To the best of your knowledge, starting at P00006, did Oasis ever sign
    a waiver of claims?
    A. To the best of my knowledge, no.
    ...
    Q. Do you recall if Oasis signed a waiver of additional claims at the time of
    P00011?
    A. We were requested to and we did not.
    Q. And why didn't you sign that waiver of additional claims?
    A. Because we believed that there would be claims arising from this
    transaction and potentially previous ones.
    Regarding the defendant’s request for a waiver of claims, plaintiff apparently had the
    ability to resist the government’s request, but plaintiff claims it lacked all ability to indicate
    it was protesting the modifications as executed.
    Defendant also contends “Oasis proposed both modifications to the military that it
    now claims were the result of economic duress,” (emphasis in original), noting that “Oasis
    proposed P00006 to the military,” and “[a]s with P00006, Oasis suggested major portions
    of modification P000011 [sic].” Oasis counters that “[w]hat Oasis labeled a ‘proposal’ was
    in reality a ‘counter proposal.’ However, even if it were a proposal, the mistake Defendant
    makes is assuming that because something was a ‘proposal,’ the idea was both
    generated by Oasis and something Oasis objectively wanted.” Oasis contends that “[a]
    party under duress may very well make a proposal in order to avoid a much worse
    outcome. That does not mean the initial proposal was not coerced . . . . Simply proposing
    a modification does not demonstrate that the party actually wanted the modification.”
    Although the court notes that a Judge of the Court of Federal Claims has indicated, “[a]s
    for the first element [of duress], the plaintiff presents no evidence to support the
    involuntary acceptance of the terms of the modification. In fact, the evidence
    demonstrates the opposite because the plaintiff, not the defendant, sought and then
    proposed a recovery schedule.” McLain Plumbing & Elec. Serv., Inc. v. United States, 30
    
    53 Fed. Cl. 70
    , 83 (1993). Therefore, the court agrees that, even if Oasis proposed the
    modification, that does not evidence per se that plaintiff signed the modifications without
    duress. Therefore, the court examines the circumstances of both modification P00006
    and modification P00011 to determine if either was signed under duress.
    Modification P00006
    As noted above, the base year of the contract was scheduled to end on May 24,
    2006. On March 8, 2006, contract specialist William Moxham sent Oasis an email which
    said in part:
    It was apparent at the last meeting that OIWI [Oasis] had a copy of the
    modification that I had prepared in draft for the previous Contracting Officer
    (Brandon Montier). I understand you [sic] company's misgiving about
    extending the contract but the fact is that without some sort of extension the
    FY 05 funding amount will go away and your contract value will drop from
    $386,225,000 to in the neighborhood of $341,000,000. As we approach mid
    March it is also looking like OIWI is going to be far from the mark with regard
    to the 24 May 2006 completion. So far OIWI has only delivered 1,158,240
    bottles of water out of 14,350,000 for the base period.
    ...
    Right at the moment you owe us dates when your plants are estimated to
    be on line and a rough approximation of how much water you will have
    delivered or available for delivery before 24 May 2005. We hope if you don't
    agree with the modification that at some point in the near future you are
    going to have a counter proposal that we can reach some arrangement on.
    Paul Morrell sent an internal email to Oasis personnel on March 10, 2006, in which he
    indicated:
    Attached are the dates to give Moxham - they are slightly different than the
    ones I circulated yesterday based upon where the commitments coming out
    of Italy. They are conservative and certainly NOT the dates we will be
    driving to internally. We'll need to take the bullet now to move the dates but
    we should (we damn well better!!) exceed the expectations we are setting
    now so we don't do this same battle day after day. I've also suggested
    moving the completion date to 8/15/06 to consume the entire $50mm. I
    agree with Moxham that we should remove the line item clins to allow
    money to flow between locations. Get a draft amendment together with
    Moxham and distribute it for consideration.
    The same date, March 10, 2006, Oasis sent the military a proposal, with the subject
    “Response and counter to JCC-I/A P00006” which indicated:
    54
    Following up to referenced draft P00006, and per our conversations
    regarding "actual" projected operational dates, first product delivery dates,
    as well as Montier 13JAN06 proposed draft CLIN restructuring for
    maximizing Base Year Period funding allocation, we are responding to and
    countering same prior to our scheduled meeting regarding same on
    Saturday 11MAR06 at 1000 in the JCC-I/A PARC Forces offices located on
    Camp Victory.
    The proposal stated:
    We have been very forthcoming with JCC-I about these delays and have in
    the past discussed several resolutions and methods of recovering from this
    and restructuring the Schedule of Supplies/Services, part of which is
    included within referenced P00006 draft and extending the Base Year
    Period to 31AUG06 (see P00006, CLIN 0001AA) that would allow both
    Oasis and the Government the leverage of maximizing deliveries and
    utilization of allocated funding within the Base Year Period.
    In a March 14, 2006 email, Paul Morrell explained to Alan Morrell, Paul Jefferies, Phil
    Morrell and Dan Petsche that regarding any modification to the base year contract, “[j]ust
    to emphasize – the extension is for their benefit – not ours. I’m not interested in giving
    them anything for it beyond what we have already committed.” Plaintiff also cites as
    evidence that Oasis did not want the modifications a March 9, 2006 email from Dan
    Petsche to Lieutenant Colonel Davis which noted that “[w]e understand and appreciate
    the Governments [sic] desire to maximize and leverage the base period and subsequent
    option period funding appropriated and we firmly believe that there is a way to that end
    that would be a win-win for both the Government and Oasis.” After discussions with the
    government, Oasis sent a counterproposal on April 3, 2006. The counterproposal stated:
    Major Davis,
    Oasis International Waters, Inc. acknowledges and we are in receipt of
    modification P00006 of referenced. Further we understand the Military's
    challenge with funding Option Period One as originally proposed in our
    contact. [sic]
    Our goal is to accommodate the Military's 2006 fiscal year funding
    challenges without significantly changing the risk & cost recovery profile of
    the contract and impacting the unit price of water to the military, and as such
    we summit [sic] this proposal with no cost changes pending the approval of
    our financing partner, we believe a positive response from the military will
    assist with this approval. Therefore we are responding as follows:
    1. Please change Standard Form 30 (REV 10-83), Block 8 to reflect correct
    company name, Oasis International Waters, Inc.
    55
    2. With respect to the period of performances to schedule(s) reflected per
    P00006 Continuation Sheet, herein referred to as Item 1:
    (a) we DISAGREE with proposed and counter per the
    schedule that follows:
    (b) In addition with both the base year and CLIN 2001
    OPTION ONE is hereby exercised upon approval of P00006,
    [OASIS’ PROPOSED SCHEDULE REMOVED]
    3. Item 2, Removal of Summary of Pricing Schedule Page 7 of 18, -
    AGREED.
    4. Item 3, Section C, Page 9 of 18, Statement of Objectives, Paragraph 3.1
    (NOTE) Remove note and add "The Contractor shall operate the plant in
    accordance with the management SOP provided as attachment 01 to this
    statement of objectives". - Although we agree with removal of current
    Paragraph 3.1, we did not receive Attachment 01 SOP in. Please
    forward for our review of cost, technical, and/or schedule impact.
    5. Item 4, Section C, Page 9 of 18, Statement of Objectives, Paragraph 3.1
    (Figure 1) - AGREED.
    6. Item 5, Section C, Page 10 of 18, Statement of Objectives, Paragraph
    4.5.3 & 4.5.4 deletion - AGREED.
    7. Item 6, Section C, Page 10of18, Statement of Objectives, Paragraph 4.6
    revision Oasis is able to provide a single side access pallet measuring
    45" x 37 after current pallets and pallet raw material inventories are
    depleted.
    8. Item 7, Section C, Page 9 of 18, Statement of Objectives, Paragraph 6.3
    revision - AGREED, excluding TQ which is dependent upon military
    assistance to finish preparing the land. Date to be determined.
    9. Item 8, Section C, Page 9 of 18, Statement of Objectives, Paragraph 8,
    -
    AGREED upon the condition of Government acceptance of Item 1,
    Continuation Sheet.
    10. Item 9, Section F, Page 17 of 18, Deliveries or Performance. -
    AGREED, upon the condition that the delivery point for the water
    remains at origin or FOB Oasis Water plant.
    11. Item 10, Section G, Page 18 of 18, Contract Administration Data. -
    56
    AGREED.
    12. Item 11, Modification of FAR 52.217-9 Option to Extend the Term of the
    Contract, as prescribed in 17.208(g), insert a clause substantially the same
    as the following:
    Option to Extend the Term of the Contract (MAR 2000)
    (a) The Government may extend the term of this contract by written notice
    to the Contractor within 30 days; provided that the Government gives the
    Contractor a preliminary written notice of intent to extend at least 90 days
    before the contract expires. The preliminary notice does not commit the
    Government to an extension.
    (b) If the Government exercises this option, the extended contract shall be
    considered to include this option clause.
    (c) The total duration of this contract, including the exercise of any options
    under this clause, shall not exceed 54 (months).
    Due to lead-times for raw materials required and logistical challenges
    from open ports to the operational sites, we DISAGREE with the
    leadtimes reflected within paragraph (a) and counter propose with the
    Government providing a 90 day written notice to extend and at least
    120 days written notice of intent to extend.
    Alternatively the Military may agree to reimburse Oasis for excess raw
    materials needed to ensure steady supply of water.
    We remain available to conclude these negotiations promptly.
    (capitalization and emphasis in original).
    As noted above, the April 3, 2006 proposal from Paul Jeffries formed the basis of
    modification P00006, and contained a way to include a base year amount of 14,350,000
    cases of bottled water at $3.50 per case for a total of $50,225,000.00. Modification
    P00006, which was executed on April 14, 2006 by Lieutenant Colonel Davis and Phil
    Morrell, extended the base year of the contract from May 24, 2006 to August 15, 2006,
    and required that the bottled water capability be established at all six sites by June 30,
    2006. Therefore, modification P00006 extended the contractual deadline for bottled water
    plants to be operational to June 30, 2006. According to modification P00006, the bottled
    water plants were to be operational in the following order: (1) Anaconda, (2) Camp Victory,
    (3) Speicher, (4) Q-West, (5) TQ, and (6) Al Asad.47 Modification P00006 also required
    47 At the time modification P00006 was executed, Anaconda and Camp Victory were
    already operational.
    57
    the production of 14.35 million cases of water during the base period of the contract, and
    removed the “not to exceed” requirements established in modification P00003. Finally,
    the option years were realigned to match the extension of the base year, so the first option
    period would run from August 16, 2006 until January 15, 2007, the second option period
    would run from January 16, 2007 until January 15, 2008, and the third option period would
    run from January 16, 2008 until January 15, 2009. Modification P00006 also added a
    fourth option period that would run from January 16, 2009 until August 16, 2009. The
    amount of water in the base period, the first option period, and the newly added fourth
    option period were different than the second and third option years.
    At trial, Paul Jeffries, testified that Oasis had agreed to modification P00006 and
    in response to the question “you as CEO believe that Oasis was bound by the terms of
    modification number 6, right?” he answered: “Yes, we intended to execute accordingly.”
    Paul Jeffries indicated that he did not protest or indicate that the P00006 was signed
    under duress. Paul Jeffries also indicated that “from the time it [P00006] was signed, I
    operated as though it was valid, going forward.” During his trial testimony, Phil Morrell,
    also admitting he did not lodge a protest regarding modification 00006 after he signed the
    modification, and stated: “Well, I knew I was being coerced into signing it, no question
    about it.”
    Modification P00011
    Although modification P00006 was executed in April of 2006, by June of 2006,
    Oasis and Colonel Richardson, then the contracting officer, began negotiations to modify
    the contract further. Paul Jeffries testified that:
    The negotiations began with Paul and I sitting in a room with Renee, and I
    believe her assistant was there, and they told us that they were being
    pushed a particular direction, that she would need concessions from us to
    pay out the balance of the funds owed or she would have to move in this
    other direction. Paul quickly and generously made an offer that I thought he
    thought would solve this, put it to bed quickly. So, he said, look, I'll just give
    you an extra million cases of water as a concession and let's move forward,
    and the response that we got was, that's great, thank you, now what else
    do you have?
    Oasis considered a number of proposals, as noted in an internal August 1, 2006 email
    from Paul Morrell:
    I’ve tried a lot of complicated algorithms to try to make a solution that is
    equitable to both the Military and US. I’ve concluded that the most equitable
    approach for everyone is the following: We gat [sic] paid a flat
    $112,000,000/year just as the contract states or $9,333,333/month (5/6th of
    that until TQ comes online). We agree to deliver up to 32,000,000 cases per
    year in aggregate with an annual reconciliation if the actual deliveries
    exceed that amount.
    58
    After further discussions and consideration of several options for how to proceed moving
    forward, ultimately, on August 8, 2006, Oasis, at Colonel Richardson’s request, provided
    her a draft proposal, which was consistent with the internal Oasis proposal. The draft
    proposal indicated two options:48
    Regarding the proposed deal, option II, that formed the basis of modification
    P00011, Paul Jeffries, in an August 9, 2006 email to Paul Morrell and Phil Morrell stated:
    “Im [sic] having a little indigestion over the increase in requested water, but overall I feel
    we are at 99% of everything we hoped for and with clarity and cash flow to make it
    manageable.” At trial, Paul Jeffries, in response to the question, “[t]hat was what you
    thought at the time?” answered: “Yes. Well, that's what I wrote here. Keeping in mind that
    the goal was to get a $24 million check and a renewal. That is the 99 percent of what
    we're talking about.” Paul Jeffries also testified that “we were still being asked for
    48The first option contemplated modifying the contract to not build TQ, but the parties
    decided to build the TQ plant.
    59
    significant concessions, beyond what was outlined that I've tried to outline here. . . . I
    mean to the tune of $30 million of concessions yet beyond what's on this page.”
    On August 12, 2006, Paul Morrell and Colonel Richardson executed modification
    P00011, which was generally consistent with the draft proposal and established a
    payment structure by which Oasis would be paid $9,333,333.33 per month, independent
    of any amount of water, moving forward in the option periods. The day modification
    P00011 was executed, Paul Jeffries sent an email to a representative of Oasis’ financier
    and indicated “I believe this modification is a significant win for us. [sic] clarifies our service
    status, improves cash flow and many military deliverables.” At trial, Paul Jeffries, in
    response to the question, “[t]hat’s what you believed at the time, right?” answered: “I did.
    Significant in that we're still in business, yeah. And that it did make good modifications to
    the contract going forward.” Also at trial, in response to the government’s question, “And
    you, as CEO, operated with the assumption that modification 11 was a valid modification,
    correct?” Paul Jeffries testified, “[w]e lived by the conditions of P00011, yes.”
    The day modification P00011 was executed, Phil Morrell emailed Colonel
    Richardson, and copied numerous individuals at Oasis and the Army, indicating:
    I would like to express my personal appreciation to all, for the hard work you
    have done to bring clarity to this contract. I believe it now better represents
    what we all had in mind when we undertook the project. Once again, within
    our corporate culture, we have looked for and found the solution which
    brings about the ethical win-win attitude we continuously try to drive.[49]
    49Defendant takes note of Phil Morrell’s email to Dan Petsche on July 15, 2005, regarding
    the general approach to the contract:
    There are 2 requirements in my philosophy which makes me successful in
    getting the contract closed in the way that is most beneficial for all involved.
    1. “the one who cares the least wins”. I would like to win this, but a half win
    is not good enough. in lew of the fact that we have experience in country
    and with this type of contract, we have learned that we can do the best job
    possible and still be robed of our future through political channels. This will
    not end up in a win scenario. in reality I can only say we have a win if the
    first years contract is a win. If we loose the contract after the first year then
    you need to understand WE LOOSE IT ALL based on the contract that is
    currently in position. That means it would have been better for us as a
    company to have lost it today in negotiation than lost in a year after we are
    $10-$15,000,000 upside down. As my friend you I don't want to be having
    a conversation 1 year from now saying we just couldn't figure out how to
    make this a win-win contract. We are not asking for a win-loose contract we
    are asking for a win-win contract. We know the solution for a win-win
    contract and noone should be offended or upset in any way by asking them
    to write the win-win contract. which leads me to #2
    60
    At trial, Phil Morrell testified regarding his email, “this was a very stressful time for
    everybody involved. This email was an attempt by me to prop everybody back up and get
    everybody feeling okay about things again. This was not some email that -- some legal
    email that I'm saying that everything worked out perfectly.” Phil Morrell did, however,
    testify in response to the question: “And you believed at the time that P00011 was a win-
    win deal?” “Yes, absolutely.”
    Ultimately, the court agrees with defendant, which in its reply brief states, “it does
    not matter which party first proposed the modification. Both parties submitted proposals,
    counter-proposals, and negotiated each aspect of the modification before coming to an
    agreement and signing a bilateral modification.” The back and forth process between the
    parties resulted in modifications which did not achieve everything either side wanted. The
    fact that plaintiff did not receive their desired result from the modifications does not prove
    that either modification P00006 or modification P00011 were executed under duress. The
    court fails to find the evidence in the record that the plaintiff involuntarily signed the
    modifications. Although the failure to demonstrate involuntary acceptance is fatal to
    plaintiff’s duress claim, the court, nonetheless, examines the other two elements of the
    duress framework.
    b. No Other Alternative
    Related to the concept of involuntarily acceptance, is the second prong of the
    duress analysis, that circumstances permitted plaintiff no other alternative than accepting
    the two modifications, when executing modification P00006 and modification P00011.
    Defendant argues that “Oasis also produced no evidence regarding the second prong
    necessary for economic duress, that it had no other alternatives than to sign P00006 and
    P00011.” Indeed, the government argues that Oasis had alternatives to signing the
    modifications, stating “[o]f the many alternatives, Oasis was free to: (1) not propose
    P00006 and P00011; (2) not sign P00006 or P00011; (3) propose alternative terms to
    modify the contract other than those it agreed to in P00006 and P00011; or (4) stop
    performance under the contract and accept the contractual consequences.” In response,
    Oasis contends that “[d]efendant’s argument that Oasis had alternative options is
    superficial and ignores the facts of the case. Instead of actually addressing the plausibility
    of the ‘alternatives’ it proposes, Defendant simply cuts and pastes generic case law of
    where other courts have held that other contractors had other options.”
    Plaintiff contends that “Oasis did not want either proposal, but was forced to
    propose something in order to avoid financial ruin.” Plaintiff also states, regarding the
    argument it could have proposed alternative terms, “[t]he final modifications that were
    2. The definition of diplomacy: this is when you tell someone to go to hell
    and they truly enjoy the trip and appreciate your suggestion for them to take
    the trip. I trust your ability to fix this contract. . . . If we loose the contract in
    a year from now the military will also loose so lets protect them from
    themselves. Lets change the loose-loose contract to a win-win contract.
    (capitalization in original; spelling in original).
    61
    agreed to were the only option on the table, and Defendant has no argument that anything
    substantively better existed.” Plaintiff argues that “[d]efendant makes no attempt to
    suggest that there were alternative modification terms that would have been acceptable
    to Defendant – let alone that those terms would have been substantively better and
    presented no evidence to supports [sic] its assertions,” but that alone does not support
    Oasis’ position that there were no available alternatives. Most notably, plaintiff concedes
    that “[d]efendant is correct that sometimes it is a viable alternative to stop performance
    and pursue legal remedies,” but argues that “[i]f Oasis had stopped performance and
    accepted the contractual consequences, the company would have gone out of business
    and the Morrells would have lost everything.” Defendant notes “[t]he crux of Oasis’s
    economic duress claim is that it may have been ‘bankrupt[ed]’ had it not entered into
    P00006 and P00011.” (trial citations omitted). At trial, Phil Morrell testified that “P00006
    was the only way I could pull it out of default, and it was the only thing that Montler would
    offer us to -- to move on to the next level of this contract. So, this pulled me out of default
    with my banker. I didn't have a choice. I had to pull the contract out of default.” In its briefs,
    plaintiff contends that “Oasis was underwater at the time of P00006 and P00011 and was
    on the verge of bankruptcy from March-August 15, 2006.”
    The court notes that the joint exhibits introduced at trial demonstrate that Oasis’
    audited financial statements reflected a profit for 2006, the year both modification P00006
    and modification P00011 were executed, as the combined net earnings listed a profit of
    $19,284,023.00 for 2006.50 The combined statements of owners’ equity also
    demonstrates that “Al-Morrell Development, LLC Members’ Equity” net earnings for 2006
    were $19,284,023.00, the same as the combined net earnings for Al-Morrell
    Development, LLC and Oasis. Plaintiff addresses the consolidated statements, by stating,
    “[f]irst, looking at Oasis’ 2006 financial report ignores $12-15 million financial outlay Oasis
    made in 2005 to build Anaconda, mobilize, and order equipment for the other plants. Due
    to the fact that Defendant only paid Oasis approximately $1 million in 2005, Oasis already
    entered 2006 heavily in the red.” Plaintiff also contends that “[s]econd, Oasis’ financial
    situation was substantially different in December 2006 than it was in April 2006 (P00006)
    and August 2006 (P00011). Year to date, Defendant had only paid Oasis around $11
    million through March 2006, and around $23 million through August 2006,” and argues
    that $90,000,000.00 in revenue for 2006 came from after modification P00011 was
    50 The court notes that Oasis’ audited financial statements also reflected a profit for 2007
    and 2008, the two years after the modifications were executed. The 2007 Oasis’ audited
    financial statements indicated a net profit of $14,674,848.00 and the 2008 Oasis’ audited
    financial statements indicated a net profit of $26,129,285.00. Although defendant points
    to the profitability of the later years of the contract, indicating Oasis made $100 million in
    profit under the bottled-water contract, which represents more than 25 percent of the
    $381,081,443 million paid to Oasis over the four-year contract,” and argues “Oasis also
    concedes that the contract was profitable,” to prove that Oasis did not execute the
    modification under duress, the court only considers the financial status of Oasis as it
    existed when modification P00006 and modification P00011 were executed.
    62
    executed.51 Oasis also contends that “the ‘net earnings’ is akin to operating profit (gross
    revenue minus operating costs) and does not account for the $70 million investment
    Oasis made in the plants or the debt payments due. As such, Oasis still owed tens of
    millions to its financial lenders at the end of 2006.” Therefore, plaintiff alleges that “Oasis
    was underwater at the time of P00006 and P00011 and was on the verge of bankruptcy
    from March-August 15, 2006.” Even if plaintiff is correct, none of the above proves that
    Oasis was on the “verge of bankruptcy,” or that plaintiff was coerced into signing
    modification P00006 and modification P00011 or had no alternative but to do so.
    Defendant also points to the testimony of Paul Jeffries regarding the risk Oasis took on
    initially in order to potentially be profitable in the latter years of the contract:
    Q. So, essentially Oasis was taking a risk of taking a loss in the first year
    with the opportunity to make significant profits in the following two years,
    correct?
    A. That’s correct.
    Q. That was the bargain that Oasis entered into, right?
    A. That’s correct. Substantial risk for substantial gain.
    Paul Jeffries, prior to the above quoted testimony, testified that Oasis was motivated to
    continue the contract
    [b]ecause we still -- we had all debt and no revenue, right? We were just
    starting to produce revenue at a couple of the sites. We were building. We
    had committed the better portion of $60 million in capital expenses that were
    moving -- either were in-country or were moving toward country, and if they
    didn't renew the contract, we would have no opportunity to recover a large
    portion of those dollars. It would bankrupt the company first, Paul and Phil
    second, and it would be devastating financially for us.
    Alan Morrell testified that modification P00011 was executed “under duress, but I'll tell
    you what, when you get a check for $47 million and you're a company that's on the verge
    of bankruptcy, you're going to be relieved.” Phil Morrell testified regarding modification
    P00011, it was accomplished “on threat of shutting the contract down, not funding the
    next period, the personal bankruptcy I had talked about.” Defendant argues that “Oasis
    proffered no evidence that it suffered any financial loss, much less financial loss that could
    justify an economic duress claim. For example, Oasis did not introduce any evidence that
    it was on the verge of bankruptcy, nor did it introduce any evidence regarding the financial
    condition of its owners, Paul Morrell and Phil Morrell.” (emphasis in original). The court
    finds the testimony of plaintiff’s witnesses on this subject to be conclusory and only about
    51 The court notes that, if plaintiff was millions of dollars in debt before modification
    P00006 and modification P00011 were executed, and if plaintiff earned $90,000,000.00
    in revenue in 2006 after modification P00011 was executed, it does not appear that
    plaintiff suffered as a result of the modifications, or was forced to accept an unfair bargain.
    63
    the probability of, or even the possibility of, bankruptcy. Defendant notes that:
    Oasis introduced no evidence regarding the (1) value of the “homes” Oasis
    claims Paul Morrell and Phil Morrell were “on the edge of losing,”[52] (2) the
    amount of money in the Morrells’ various bank accounts, (3) the value of
    their investments, including stocks, bonds, and real estate investments, and
    (4) the value of the other companies owned by the Morrells, including Al-
    Morrell Development and Diatect, a company owned by Phil Morrell.
    In fact, only in the trial testimony of the principals of Oasis did they allege the precarious
    state of their financial status, but their testimony did not include supporting documentation
    for the record.
    In IMS Engineers, a Judge of the United States Court of Federal Claims also
    considered a duress claim when the support for the duress claim was not fully
    documented. The duress allegation in IMS Engineers arose from a settlement agreement
    between the plaintiff and the Army Corps of Engineers. The plaintiff had been awarded a
    contact in 1991 as a subcontractor to the United States Small Business Administration,
    but in 1996, the Corps “moved to terminate plaintiff's contract with a March 25, 1996
    notice to the SBA.” IMS Engineers-Architects, P.C. v. United 
    States, 92 Fed. Cl. at 61
    .
    The IMS Engineers court noted that:
    In October 1996 the parties held in-person settlement negotiations, during
    which the Corps continued to question plaintiff's claims. Plaintiff had lost its
    records and provided no documentation of its expenses. . . . The Corps’s
    records of the parties’ settlement negotiations document the Corps's tough
    negotiating position. Contracting Officer Ryals and Contracting Specialist
    Jean Petty, negotiating for the Corps, disputed Mr. Singh's calculations of
    employee salaries and accumulated interest. Ms. Petty also indicated that
    any work that plaintiff performed without first having received a notice to
    proceed or a Corps-approved work plan had been at plaintiff's risk.
    
    Id. at 62.
    “Ultimately, after Mr. Ryals reiterated to Mr. Singh that ‘without financial records,
    a settlement was very difficult,’ Mr. Singh and the Corps agreed on October 30, 1996, to
    settle for $499,999.00. Mr. Ryals later recorded his conclusion that ‘[t]he settlement
    represents a fair and reasonable conclusion to this contract and all parties are satisfied
    with its outcome.’” 
    Id. at 63
    (footnote and internal references omitted). Plaintiff
    subsequently filed suit in the United States Court of Federal Claims seeking to set aside
    the release. See 
    id. at 56.
    In discussing the plaintiff’s duress allegations, the IMS
    Engineers court acknowledged that:
    The Corps’s contract administration was irregular, and the Corps officials
    knew that was the case. However, the credible testimony of the Corps's fact
    52Plaintiff’s counsel argued in its initial post-trial brief that had Oasis suffered a 45 million
    dollar loss, “Paul and Phil are operating with no safety net, knowing that they are on the
    edge of losing their homes.”
    64
    witnesses overcomes Mr. Singh’s charge of economic duress. As was
    revealed at trial, plaintiff's evidence of financial distress was weak. Letters
    from Mr. Singh dated November 28, 1994, and December 8, 1994, amount
    to no more than unsubstantiated pleas for relief. The Corps understood that
    the transfer of Contract 0004 from plaintiff would occasion a loss of work.
    Nevertheless, plaintiff never has been able to document its claimed losses.
    
    Id. at 66-67
    (footnote and internal references omitted). The IMS Engineers court
    concluded that:
    The Corps’s administration and transfer of Contract 0004 may have resulted
    in financial loss, and these circumstances led to plaintiff's dissatisfaction
    with both the Corps and the parties’ settlement. Nevertheless, the court
    cannot disregard plaintiff’s release on the basis that the Corps was aware
    that plaintiff had suffered a loss due to the transfer of work under Contract
    0004 and the subsequent termination of Contract 0004. The release was
    received by the Corps pursuant to the parties’ settlement, which was
    negotiated at arms-length and was economically reasonable. Plaintiff did
    not produce evidence to document its loss, to approximate a reasonable
    calculation of loss absent records, or to show that the Corps coerced a
    settlement that only partially compensated plaintiff for plaintiff's December
    23, 1996 release.
    
    Id. at 69.
    Likewise, the plaintiff in the above captioned case alleges that it was on the
    “verge of bankruptcy” and that the Oasis’ principals “could have lost everything including
    their lives.” Plaintiff did not introduce any supporting evidence to that effect, nor was the
    testimony elicited by plaintiff’s counsel during the trial adequate to support such a claim.
    Moreover, plaintiff has not documented its financial condition or the economic condition
    of Paul Morrell or Phil Morrell that would have resulted in their personal bankruptcy,
    making it difficult for plaintiff to prove that it had no alternative but to sign the modifications.
    Nor has the plaintiff demonstrated that the discussions and negotiations between plaintiff
    and the government did not allow for choices on the part of plaintiff.
    c. Wrongful Act
    Regarding the third element of duress, a coercive, wrongful act by the government,
    Oasis claims that “Defendant created, contributed to, and otherwise exacerbated the
    financial condition of Oasis, which ultimately required Oasis to sign P00006 and P00011.”
    The defendant responds that “Oasis produced no evidence – none – to support its
    accusations that the military officers, all of whom were serving this country in a war zone
    at the time, acted wrongfully.” As noted by a Judge of the United States Court of Federal
    Claims in Starr International,
    [t]o substantiate a claim of duress, a plaintiff “must go beyond the mere
    showing of a reluctance to accept and of financial embarrassment. There
    must be a showing of acts on the part of the defendant which produced
    65
    these two factors.” Fruhauf [Sw. Garment Co. v. United States], 126 Ct. Cl.
    [51,] 52, 
    111 F. Supp. 945
    [1953)]. In other words, “[t]he assertion of duress
    must be proven to have been the result of the defendant's conduct and not
    by the plaintiff's necessities.” 
    Id. Starr Int’l
    Co. v. United 
    States, 106 Fed. Cl. at 77
    . As indicated by the United States Court
    of Appeals for the Federal Circuit in North Star, “‘coercion requires a showing that the
    Government's action was wrongful, i.e., “(1) illegal, (2) a breach of an express provision
    of the contract without a good-faith belief that the action was permissible under the
    contract, or (3) a breach of the implied covenant of good faith and fair dealing.”’” N. Star
    Steel Co. v. United 
    States, 477 F.3d at 1334
    (quoting N. Star Steel Co. v. United States,
    
    69 Fed. Cl. 672
    , 721 (2005) (quoting Rumsfeld v. Freedom NY, 
    Inc., 329 F.3d at 1330
    ));53
    see also IMS Engineers-Architects, P.C. v. United 
    States, 92 Fed. Cl. at 66
    ; Aboo v.
    United 
    States, 86 Fed. Cl. at 632
    . A Judge of the United States Court of Federal Claims
    has explained that “[t]o invalidate contract modifications on the ground of economic
    duress, the contractor must show that government coercion was the cause of the
    contractor’s financial distress and that the Government employed extra-contractual
    means to effect this distress.” Vicari v. United States, 
    47 Fed. Cl. 353
    , 360 (2000); see
    also Henderson Cnty. Drainage Dist. No. 3 v. United States, 
    53 Fed. Cl. 48
    , 56 (2007)
    (quoting Vicari v. United 
    States, 47 Fed. Cl. at 360
    ) (“Plaintiff ‘must show that government
    coercion was the cause of the . . . financial distress. . . .’ Economic conditions and financial
    concerns alone are not enough.”). As noted by the Federal Circuit in Rumsfeld, “an act
    can be coercive without being illegal. Government coercion may be supported by a finding
    that the government engaged in wrongful acts by violating the contract without a good-
    faith belief that its actions were justified or by violating the covenant of good faith and fair
    dealing implicit in every contract.” Rumsfeld v. Freedom NY, 
    Inc., 329 F.3d at 1330
    ; Starr
    Int’l Co. v. United 
    States, 106 Fed. Cl. at 77
    (“A coercive act is one that is ‘wrongful,’ but
    need not be illegal.”). As explained in Systems Technology Associates, Inc. v. United
    States, “[a]n act the Government is empowered to take under law, regulation, or contract
    may nonetheless support a claim of duress if the act violates notions of fair dealing by
    virtue of its coercive effect.” Sys. Tech. Assocs., Inc. v. United 
    States, 699 F.2d at 1387
    -
    88.
    A Judge of the United States Court of Federal Claims also has observed that
    “[a]bsent wrongful conduct, economic pressure and the threat of considerable financial
    loss do not constitute duress.” IMS Engineers-Architects, P.C. v. United States, 92 Fed.
    Cl. at 66 (citing Sys. Tech. Assocs., Inc. v. United 
    States, 699 F.2d at 1387
    –88). As
    53 Oasis quotes the earlier decision of Systems Technology Associates, Inc. v. United
    States, for the proposition that the cases of Court of Claims “have done away with the
    requirement of an illegal act, focusing instead on the coercive nature of the act as
    dispositive of its ‘wrongfulness,’” Sys. Tech. Assocs., Inc. v. United 
    States, 699 F.2d at 1387
    , and argues “[t]his approach has focused more on the extent to which the will of the
    contractor has been overridden, rather than on the lawfulness of the coercive act.” The
    court notes that North Star, decided after System Technology, still provides that one way
    to prove a wrongful act is demonstrate the government’s conduct was illegal. See N. Star
    Steel Co. v. United 
    States, 477 F.3d at 1334
    .
    66
    explained in a decision from the United States Court of Claims:
    “Economic duress may not be implied merely from the making of a hard
    bargain.” Aircraft Associates & Mfg. Co., Inc. v. United States, 
    357 F.2d 373
    ,
    378, 
    174 Ct. Cl. 886
    , 896 (1966). The mere stress of business conditions
    will not constitute duress where the defendant was not responsible for the
    conditions. Fruhauf Southwest Garment Co. v. United 
    States, 111 F. Supp. at 951
    , 126 Ct. Cl. at 62. “Some wrongful conduct must be shown, to shift
    to defendant the responsibility for bargains made by plaintiff under the
    stress of financial necessity.” La Crosse Garment Mfg. Co. v. United States,
    
    432 F.2d 1377
    , 1382, 
    193 Ct. Cl. 168
    , 177 (1970). It is not duress to threaten
    to make good faith use of the remedies prescribed under a contract. “A party
    is always entitled to say that if his offer is not accepted, he will avail himself
    of his legal rights; it is only the threat of a wrongful or unlawful act that may
    constitute duress. Such a threat will amount to duress only if it is sufficient
    to overpower the will of the other party and prevent the free exercise of his
    will.”
    Johnson, Drake & Piper, Inc. v. United States, 
    531 F.2d 1037
    , 1042-43, 
    209 Ct. Cl. 313
    (1976) (quoting Beatty v. United States, 
    168 F. Supp. 204
    , 206-07, 
    144 Ct. Cl. 203
    , 206
    (1958)); see also Metcalf Constr. Co., Inc. v. United States, 
    102 Fed. Cl. 334
    , 347 (2011)
    (quoting Rumsfeld v. Freedom NY, 
    Inc., 329 F.3d at 1330
    (quoting Johnson, Drake &
    Piper, Inc. v. United 
    States, 531 F.2d at 1042
    , 
    209 Ct. Cl. 313
    (“‘“[E]conomic pressure
    and even the threat of considerable financial loss are not duress.”’”))); IMS Engineers-
    Architects, P.C. v. United 
    States, 92 Fed. Cl. at 66
    .
    Initially, the court notes, as discussed above, without much, if any, support, Oasis
    claims that “Oasis was underwater at the time of P00006 and P00011 and was on the
    verge of bankruptcy from March-August 15, 2006.” Defendant, regarding the wrongful act
    prong of the duress analysis, argues that “[e]ven if Oasis could substantiate its claim that
    it was in a difficult financial position when it signed P00006 and P00011, Oasis’s economic
    duress claim still fails.” As noted above, “[a]bsent wrongful conduct, economic pressure
    and the threat of considerable financial loss do not constitute duress.” IMS Engineers-
    Architects, P.C. v. United 
    States, 92 Fed. Cl. at 66
    ; see also Metcalf Constr. Co., Inc. v.
    United 
    States, 102 Fed. Cl. at 347
    (quoting Rumsfeld v. Freedom NY, 
    Inc., 329 F.3d at 1330
    (quoting Johnson, Drake & Piper, Inc. v. United 
    States, 531 F.2d at 1042
    , 209 Ct.
    Cl. 313 (“‘“[E]conomic pressure and even the threat of considerable financial loss are not
    duress.”’”)).
    Moreover, defendant argues that the source of economic peril, if it existed at all,
    was plaintiff’s lender, and not the government. Defendant notes that “Oasis is attempting
    to invalidate agreements it made with the Government because of financial pressure
    placed upon it by MSD [Michael S. Dell]. But Oasis’s disagreements with MSD have
    nothing to do with the Government.” (emphasis in original). As the court indicated above,
    “[t]o invalidate contract modifications on the ground of economic duress, the contractor
    must show that government coercion was the cause of the contractor’s financial distress
    67
    and that the Government employed extra-contractual means to effect this distress.” Vicari
    v. United 
    States, 47 Fed. Cl. at 360
    ; see also Henderson Cnty. Drainage Dist. No. 3 v.
    United 
    States, 53 Fed. Cl. at 56
    . As explained during the trial, it was plaintiff’s decision to
    use MSD as a lender, and the government did not require Oasis to use MSD as a
    condition of the modifications. In response to the government’s question: “But that was
    Oasis’s choice to enter into that agreement with MSD, right?” Paul Jeffries answered “[i]t
    was.” Similarly, Alan Morrell had the following exchange on cross-examination:
    [Q.] The Government didn’t force Oasis to enter into that agreement, right,
    with MSD?
    A. No, they did not.
    Q. So, it was Oasis willingly undertook that contractual obligation, right?
    A. Yes, we did.
    In response, plaintiff claims that “Oasis acknowledges that financial peril is a
    necessary but not sole condition of economic duress.” Instead, “Oasis is arguing that
    Defendant’s wrongful conduct combined with the possibility of financial ruin, constitutes
    duress.” As discussed above, Phil Morrell testified that he had no choice but to accept
    modification P00006. Plaintiff argues, “[i]n fact, P00006 was the only way he could get
    Oasis out of default on its loan agreement and was the only option the Government
    offered to continue the Contract.” Although defendant agrees that plaintiff’s witnesses
    testified that Oasis would be in default of their financing agreement if the Government did
    not execute the option years under the contract,54 defendant notes that “Oasis knew full
    well that the Government was not required to execute the option periods.” In response to
    the question: “And you understood the Government in its sole discretion can either
    exercise an option or not exercise an option, correct?” Paul Jeffries answered “Yes.”55
    Moreover, when asked on cross-examination: “It was Oasis’ decision to agree to financial
    terms that included a provision for default if the Government were not to exercise an
    option,” Paul Morrell testified “That’s correct.” Therefore it was a provision in Oasis’
    contract with its financial backer that was the source of Oasis’ economic pressure. In the
    court’s view, the government was not the cause of Oasis’ distress. Even if the government
    used that leverage to gain a more favorable agreement for the modifications, that alone
    54   In fact, defendant’s counsel had the following exchange with Alan Morrell:
    Q. So, assuming that that is in the agreement, Oasis willingly entered into
    a contract with an investor that it would go into default if the Government
    didn't exercise its first option period, true?
    A. It’s risky, isn’t it? Yes, it’s true.
    55Separately, when asked on cross-examination: “Oasis was not assured that the
    Government would exercise that option when it entered into agreement with MSD, right?”
    Paul Jeffries answered: “No, we were not.”
    68
    does not prove duress or coercive wrongdoing. In affirming the trial court’s decision in
    Peters v. United States, the Federal Circuit reasoned:
    The trial judge discussed in adequate detail the reasons why the facts of
    this case did not establish economic distress or coercion, and there is no
    need to repeat that discussion. In brief, he correctly concluded that the
    government did not act improperly in insisting upon a formal modification of
    the contract that required Peters to pay more for the timber; that the “serious
    financial and time pressures” that Peters then faced “as a result of the
    contract requirements . . . was not due to wrongful or improper conduct by
    the Government [but] was pressure generated from the contract
    situation” . . . Peters had not shown that in the circumstances of this case
    his signing of the modification agreement was the result of economic duress
    or coercion.
    Peters v. United States, 
    694 F.2d 687
    , 694 (Fed. Cir. 1982) (first omission in original);
    see also Asberry v. Postal Serv., 
    692 F.2d 1378
    , 1381 (Fed. Cir. 1982); McLain Plumbing
    & Elec. Serv., Inc. v. United 
    States, 30 Fed. Cl. at 82
    .
    In Systems Technology, discussed above, the court noted that the Systems
    Technology plaintiff argued that “the Government was aware of, had caused, and had
    used the contractor's precarious financial condition to coerce a settlement,” and the court
    noted that “STA's precarious financial condition is well documented in the record and was
    recognized by the Government.” Sys. Tech. Assocs., Inc. v. United 
    States, 699 F.2d at 1389
    . Nonetheless, the Federal Circuit determined “STA, however, does no more than
    assert causation and the Government's coercive use of the circumstances to secure a
    settlement. The record is totally devoid of proof of either count.” 
    Id. Even if
    the government
    in the above captioned case was aware of the difficult position Oasis was in as a result of
    its lender, this alone does not demonstrate that Oasis was coerced by the government to
    execute the modifications.
    Plaintiff also claims that “Oasis’ economic duress claims largely stem from a
    pattern of contractual breaches by Defendant that began shortly after Contract award and
    continued up to and throughout the entire Base Year. Defendant had no good faith basis
    to breach the contract in these ways. . . .” Specifically, plaintiff claims that “Defendant
    forced on Oasis a contractual interpretation it knew or should have known was incorrect,”
    and alleges that “Defendant’s knowingly baseless interpretation of the Contract and
    failure to award contractually sufficient land on time had crippled Oasis financially.” As
    determined above, the defendant, not the plaintiff, understood the correct interpretation
    of the contract, therefore, the court disagrees with plaintiff that “Defendant forced on
    Oasis a contractual interpretation it knew or should have known was incorrect.” Nor does
    the court conclude that pattern of contractual breaches by defendant resulted in the
    wrongful conduct that plaintiff alleges gave rise to the duress, because the “pattern of
    contractual breaches” plaintiff believes occurred stem from plaintiff’s view of the contract.
    Plaintiff claims that defendant
    69
    knowingly putting Oasis into default by sending the notice of intent not to
    renew. While standing alone, and despite its not being required by the
    Contract, such an action might not constitute duress, in this case it does
    because Defendant’s action (sending the letter) had more drastic results
    due to Defendant’s prior wrongful pattern of withholding and threatening to
    withhold money. Here, Oasis’ situation would not have been as bad if the
    Government had paid the entire Base Year firm fixed price; but because it
    was threatening to simply end the contract having paid Oasis only 10% of
    that amount, the entire personal assets of the Morrell brothers were on the
    line.
    Holding aside that plaintiff has not demonstrated that “the entire personal assets of the
    Morrell brothers were on the line,” as plaintiff admits, the notice not to renew in and of
    itself would not constitute duress. As explained above, on March 27, 2006, the contracting
    officer, sent Oasis a letter titled “Preliminary Notice of Government Intent to Exercise
    Option CLINs 1001-5, Contract W27P4A-05-C-0002 for $112M,” which stated: “The
    Government must withhold its intent to exercise the option,” and informed Oasis that “[t]he
    contracting office does not have assurance of adequate funding.” As determined above,
    Oasis knew that the military was not obligated to exercise an option period. Regarding
    the remainder of plaintiff’s argument, that Oasis would not have been in financial distress
    if had paid the entire Base Year firm fixed price; because the government’s obligation
    under the contract was only to pay for bottled water produced, it was never obligated to
    make a $50,225,000.00 payment at the time the March 27, 2006 letter was sent.
    Plaintiff also views the “wrongful conduct” of the contracting officers through the
    prism of its own interpretation of the contract, arguing that government “repeatedly
    threatened to withhold money it knew Oasis was due.” At trial, however, Lieutenant
    Colonel Davis indicated that his understanding of the contract while he was the
    contracting officer was the one that the government has taken during this case. In
    response to the question, “Lieutenant Colonel Davis, what did you understand the unit
    price in this CLIN structure to be?” he answered, “$3.50 a case.” Plaintiff claims that
    Col. Richardson similarly threatened to withhold money she knew Oasis
    was already owed,” arguing that “Oasis asked Col. Richardson how it
    should go about invoicing at the end of the year for the balance of the
    $50,225,000 Base Year price. Oasis had previously discussed with Col.
    Richardson Phil Morrell’s interpretation that Oasis was entitled to be paid
    both for the capability and the water, and Col. Richardson told Oasis that
    was a non-starter.
    (internal reference removed). Plaintiff’s argument, however, is again premised on
    plaintiff’s interpretation of the payment obligations of the contract. On cross-examination,
    Colonel Richardson indicated that “the CLIN structure clearly says I give you a case of
    water, you give me a $3.50.”56
    56 The court notes, regarding plaintiff’s assertion that Oasis had discussed Phil Morrell’s
    interpretation, Colonel Richardson testified she was not informed of plaintiff’s
    70
    Plaintiff also contends that the defendant’s failure to adequately provide plaintiff
    land for the construction of the bottled water facilities was an example of the wrongful
    conduct of the defendant. Even this argument, however, is related to plaintiff’s
    interpretation of the contract. Oasis explains:
    The Government’s late delivery of land and assignment of non-Compliant
    land was a problem, but it would not have been an insurmountable problem
    but for Defendant’s insistence on only paying for water. But, in the context
    of the Defendant’s position that it would only pay for water and that any
    unused portion of the base year funds would disappear at the end of the
    Base Year, Defendant’s delay in assigning usable land was a dire threat to
    Oasis’ continued viability, since Oasis would need all the time it could get
    to produce enough water to “earn” its Base Year Payment.[57]
    (footnote omitted). The court determined above, that the defendant was correct about the
    interpretation of the contract, then the late delivery of land was not an “insurmountable
    problem,” and therefore, would not have been, in and of itself, the basis of wrongful
    conduct that would rise to coercion. The plaintiff’s argument that “Defendant’s position
    that it would only pay for water,” is, as has been repeatedly stated in this opinion, the
    correct interpretation of the contract in the court’s view. Moreover, one of the purpose of
    modification P00006 was to extend the deadlines for the plants to be operational, and
    addressed the defendant’s delays in providing the land for the locations of the plants.
    In addition, plaintiff argues that:
    A central part of the dispute in this case is whether Oasis was entitled to be
    paid for establishing the capability to produce water, actually producing
    water, or both. However, at a minimum, Oasis had to be paid for either
    water or capability. As a result of Defendant’s contractual interpretation and
    maladministration of the Contract, for a substantial portion of the Base Year,
    Defendant was denying Oasis payment for either. Defendant refused to take
    all of the water Oasis produced and directed Oasis to slow production to a
    level below those in Figure 1 of the Contract.
    (emphasis in original). Citing to plaintiff’s trial exhibit 1166, the defendant argues that “the
    military did not ‘shut down’ Oasis’s water production; it merely directed that water
    interpretation of the contract. In response to the question from defendant’s counsel: “Just
    so the record's clear, did anyone at Oasis ever tell you that they believed they were to get
    $50.225 million plus $3.50 a case?” Colonel Richardson testified: “Absolutely not, sir.”
    57 Plaintiff, in a footnote, notes that “[o]f Oasis’s entire claim, only Count 5 ($808,423) is
    directly related to issues with the land provided by the Defendant. The Defendant’s land
    delays are also relevant to count 7, which seeks reimbursement of a delay penalty
    imposed by the Defendant.” (emphasis in original).
    71
    production rates at one of Oasis’s six plants be reduced from surge production rates to
    winter production rates.” Indeed, the email which is plaintiff’s exhibit 1166, from
    Lieutenant Colonel Davis requested that Oasis “align production of bottled water at
    Bottled Water Facility #6, Camp Victory to be in accordance with winter production of
    250,000 liters of water per day as stated in Fig 1 of the contract.”58 Nonetheless, Oasis
    contends that “Oasis was producing and Defendant was not paying,” noting that prior to
    executing modification P00011, “Oasis had approximately two (2) million cases of water
    sitting at its plants that Defendant would not allow Oasis to deliver,” and “[s]uch a
    withholding had a crippling effect on Oasis, as it represented approximately one-third (1/3)
    of Oasis’ entire revenue stream in the entire Base Year to that point.” 59 The court notes,
    however, that the military did accept all cases of water produced by Oasis, as indicated
    in the parties joint stipulations, and as acknowledged by Phil Morrell at trial, as he
    responded to the government’s question on cross-examination: “Oasis did submit
    58As indicated above, the statement of objectives for the contract included production
    requirements for the bottled water facilities, which was labeled Figure 1:
    LOCATION             TOTAL PRODUCTION REQUIREMENT/DAY in 1K
    Liters (winter/summer/surge)
    Location 1          75-100K liters / 101-150K liters / 151-200K liters
    Location 2          65-100K liters / 101-135K liters / 136-170K liters
    Location 3          35-55K liters / 56-75K liters / 76-100K liters
    Location 4          60-110K liters / 111-160K liters / 161-210K liters
    Location 5          60-110K liters / 111-160K liters / 161-210K liters
    Location 6          200-300K liters / 301-400K liters / 401-450K liters
    Location 7          80-120K liters / 121-160K liters / 161-200K liters
    Location 8          75-110K liters / 111-150K liters / 151-190K liters
    (capitalization in original).
    59Defendant points out that plaintiff failed “to mention that, in June 2006, it invoiced (and
    was paid) for $2,962,050 for 846,300 cases of water ‘on hand’ at Plant Victory that Oasis
    had produced but the Government had not yet accepted.”
    72
    invoices for bottled water during the base period and the Government paid every single
    one of them, right?” by answering: “Correct.”60
    In North Star, the Federal Circuit reasoned that “[f]or the third prong of economic
    duress to have been met in this case, the circumstances which North Star confronted
    must have resulted from WAPA's coercive acts,” and “[t]he third prong is not met because
    there was no wrongful action by the government.” N. Star Steel Co. v. United 
    States, 477 F.3d at 1334
    . The same applies to the plaintiff’s case before this court, there is no
    coercive, wrongful act by the military that Oasis can credibly point to during the
    negotiations for the modifications that forced Oasis to execute the modifications under
    duress. Although Oasis has asserted that a number of the actions taken by the military
    during the negotiations for the two modifications, and during contract performance, many
    of plaintiff’s claims stem from plaintiff’s interpretation of the contract, which the court has
    concluded is not correct. As plaintiff has acknowledged in its arguments above, absent
    an incorrect interpretation of the contract by the defendant, the remaining issues identified
    by plaintiff do not rise to the level of coercion that would justify a finding of economic
    duress, and, therefore, invalidate modification P00006 and modification P00011. Plaintiff,
    therefore, has not proven that the government committed a wrongful act.61
    60On cross-examination, Paul Morrell had the following exchange with defendant’s
    counsel:
    [A.] My recollection is that we had 3 or 4 million cases of water that we had
    produced during the base year that were still sitting on our yards that had
    not been taken delivery of, so -- and we could only invoice after they had
    been delivered. Now, I may be wrong in that assumption, but that's my
    recollection.
    Q. The Government paid the invoices, though, right?
    A. They paid the invoices that we submitted to them with the exception of
    that July 31st. I don't recall for sure if they did.
    61The court notes that the plaintiff spent considerable time in its post-trial briefs arguing
    that the burden of proof to be applied to duress is not a clear and convincing evidence
    standard, but rather the preponderance of the evidence standard. For example plaintiff
    argues that “Defendant asserts without any legal support that the clear and convincing
    evidence standard applies to all duress cases.” Plaintiff argues that:
    The burden of proof here is the ‘preponderance of the evidence’ standard.
    Courts sometimes use the words ‘exacting’ when describing the elements
    of duress, but not when describing the burden of proving duress. Thus,
    cases stating that ‘the requirements to establish duress are exacting’ merely
    denote the specificity with which a contractor must prove the three elements
    of duress by a preponderance of the evidence.
    73
    In addition, defendant notes that the “[b]ilateral modifications P00006 and P00011
    were executed in April and August 2006, respectively, yet Oasis did not raise its economic
    duress claims until it submitted its claim in July 2008, more than two years after P00006
    and just less than two years after P00011.” Therefore, defendant argues that “[b]ecause
    Oasis: (1) operated as if P00006 and P00011 were valid contractual modifications; and
    (2) waited approximately two years to challenge the validity of those modifications, Oasis
    has forfeited the right to invalidate those bilateral agreements.” (citing VKK Corp. v. Nat’l
    Football League, 
    244 F.3d 114
    , 123 (2d Cir. 2001) and Loral Corp. v. United States, 
    193 Ct. Cl. 473
    , 481-82 (1970)). Plaintiff argues that “[d]efendant makes no effort to explain
    why one year (or even two years) was too long. The fact that Oasis waited a year in and
    of itself means nothing,” especially because “[t]hroughout 2007, Oasis was still heavily
    underwater and highly dependent on Defendant for its financial solvency.” Plaintiff also
    argues that “[t]he fact that Oasis operated as if the modifications were valid is similarly
    irrelevant, as that is the case anytime a party waits to allege duress.” The plaintiff
    continues, “[i]f the Court believes that Oasis was coerced into signing P00006 and
    P00011, then Oasis was justified in waiting a year to raise the issue of duress.” The court,
    however, has determined that Oasis did not execute modification P00006 and
    modification P00011 under economic duress. Moreover, regarding the delay, plaintiff
    seemingly offers no argument, other than the amount of time Oasis waited is irrelevant.
    As indicated by the United States Court of Claims “a telling indication that no duress was
    practiced is [a] long delay before plaintiff spoke out and claimed duress.” Johnson, Drake
    & Piper, Inc. v. United 
    States, 531 F.2d at 1042
    , 
    209 Ct. Cl. 313
    ; see also IMS Engineers-
    Architects, P.C. v. United 
    States, 92 Fed. Cl. at 68-69
    .
    In McLain Plumbing & Electrical Service, Inc. v. United States, a Judge of the
    United States Court of Federal Claims determined that “plaintiff demonstrates no
    Government conduct representing coercion, the plaintiff further fails the basic requirement
    of proving economic duress.” McLain Plumbing & Elec. Serv., Inc. v. United 
    States, 30 Fed. Cl. at 83
    . The McLain plaintiff had argued that by virtue of the Veterans
    Administration demand to terminate plaintiff’s original subcontractor in favor of another
    subcontractor, or face default termination “the contractor had no choice but to accept the
    terms of reinstatement (post default) in order to avoid a disastrous default termination
    which would serve to cripple any government contractor. Secondly, there was no
    alternative for McLain, simply stated, McLain could default its subcontractor or be
    defaulted.” 
    Id. The McLain
    court furthermore, agreed with the McLain defendant that “the
    fourteen month delay in asserting coercion certainly detracts from the plaintiff's assertions
    of economic duress.” 
    Id. Likewise, as
    explained by the court in IMS Engineers-Architects,
    P.C. v. United States, “plaintiff first complained of duress in its June 21, 2000 REA, which
    was submitted approximately three-and-one-half years after the Corps allegedly coerced
    the parties' settlement and plaintiff's release. Plaintiff's delay in claiming duress gives
    credence to Mr. Ryals's testimony regarding the parties’ good-faith negotiations and Mr.
    (emphasis in original). As the plaintiff has failed to prove any of the elements of economic
    duress, either under the preponderance of the evidence standard or the clear and
    convincing evidence standard, it does not matter which standard applies in order to reach
    a decision in the above captioned case.
    74
    Singh's satisfaction with the $499,999.00 settlement.” IMS Engineers-Architects, P.C. v.
    United 
    States, 92 Fed. Cl. at 69
    (internal citation omitted). In the above captioned case,
    Colonel Richardson testified at trial:
    [Q.] Did anyone at Oasis ever tell you that they believed Modification
    Number 6 was invalid?
    A. No, sir.
    Q. Did anyone at Oasis ever tell you that they were coerced into signing this
    document?
    A. No, sir.
    Q. Did anyone at Oasis ever tell you that they only signed this contract
    because of duress?
    A. No, sir.
    Q. Did anyone at Oasis ever tell you that they believed any modification was
    invalid for any reason?
    A. No, sir.
    This was corroborated by Paul Jeffries’ testimony on cross-examination:
    Q. You never communicated to any Government representative that this
    modification is invalid because of coercion, you never said that to anyone
    on the Government side?
    A. Not in -- I'm sure we didn’t communicate that until -- until we filed a claim.
    We did tell them -- there was no ambiguity about our dissatisfaction with
    them extending the base year, or with chopping up our annual renewals,
    because they couldn't fund a contract they had let. It’s the U.S. Government.
    Although the court does not assert the length of time plaintiff waited to raise its duress
    claim is dispositive, it certainly does not provide support for plaintiff’s view that it executed
    the modifications under duress. In sum, plaintiff cannot meet the established high bar for
    establishing duress. See Starr Int’l Co. v. United 
    States, 106 Fed. Cl. at 77
    ; see also
    Employers Ins. of Wausau v. United 
    States, 764 F.2d at 1576
    . Therefore, plaintiff has not
    demonstrated that it executed modification P00006 or modification P00011 under
    economic duress. The modifications are valid.
    Fraud Counterclaim for Claim 2
    75
    In an earlier opinion in the above captioned case, and as noted above, the court,
    with the exception of one fraud counterclaim, which the court deferred, denied
    defendant’s counterclaims for the Special Plea in Fraud, False Claims Act, and the anti-
    fraud provision of the Contract Disputes Act. As explained in the conclusion of the court’s
    earlier opinion, “as established above, Paul Morrell, as signatory to the certified claim, did
    not have the intention to commit fraud and genuinely believed in his interpretation of the
    contract regarding what payments Oasis was entitled to recover under the contract. Nor
    did plaintiff act recklessly when submitting its claims.” The court, however, deferred the
    counterclaims for Claim 2. As explained in the Special Plea in Fraud portion of the earlier
    opinion: “Because the court has deferred the issues of contract interpretation and
    economic duress, the court likewise, at this time, defers the resolution of the counterclaim
    pursuant to the Special Plea in Fraud for Claim 2.” The court did the same with the
    counterclaim for Claim 2 for the False Claims Act, stating “[a]s indicated above, the court
    has deferred Claim 2 for Special Plea in Fraud purposes, and does the same for Claim 2
    as it relates to the False Claims Act,” as well as with the counterclaim for the anti-fraud
    provision of the Contract Disputes Act, stating “[a]s indicated above, the court deferred
    Claim 2 for Special Plea in Fraud and False Claims Act purposes, and does the same for
    Claim 2 as it relates to the anti-fraud provision of the Contract Disputes Act.” As the court
    has now found in favor of defendant’s interpretation of the contract, and has not found
    economic duress, the court now addresses Claim 2 of the defendant’s counterclaims for
    the Special Plea in Fraud, False Claims Act, and the anti-fraud provision of the Contract
    Disputes Act.
    As indicated above, on June 20, 2008, Paul Morrell, on behalf of Oasis signed the
    certified claim, and on July 4, 2008, Oasis submitted its certified claim to the government.
    Claim 2 in the certified claim was a “Claim for penalty wrongfully assessed for failure to
    open Camp TQ [Camp Taqaddum] on time,” which plaintiff states was “solely as a result
    of Government-caused delays and disruptions,” and for which plaintiff sought
    $2,270,833.00. Defendant contends that:
    Count two, which seeks $2.2 million relating to TQ, stems entirely from
    Oasis’s attempts to invalidate P00011 through a claim of economic duress.
    As part of P00011, the Government paid Oasis $24 million, which included
    $5.5 million for TQ, a plant that Oasis still had not yet completed by August
    2006. The claimed $2.2 million corresponds to one-sixth of the $50.225
    million, minus the $5.5 million that the Government paid to Oasis for TQ as
    part of the P00011 negotiations. Even though Oasis voluntarily agreed to
    P00011, which closed out the base year, Oasis seeks an additional $2.2
    million for TQ in its certified claim.
    (internal citations omitted). Plaintiff argues that “the Court should disregard Defendant’s
    ‘fraudulent duress’ interpretation,” arguing that “[w]ith regard to Defendant’s new
    ‘fraudulent duress’ argument related to Count 2, Defendant argues that fraudulent duress
    is not a new theory, but instead additional evidence to support its claim that Oasis’
    contractual interpretation is frivolous.” Oasis also argues that “Defendant’s argument
    essentially boils down to the fact that it really likes its duress defense,” and plaintiff states
    76
    that “the Court should disregard Defendant’s ‘fraudulent duress’ interpretation.”62
    Defendant argues that “because Oasis’s contract interpretation is implausible in light of
    the unambiguous terms of the contract and all extrinsic evidence, count two constitutes
    fraud.”
    As the court explained in the court’s earlier opinion, for the majority of the parties’
    briefing, the parties do not differentiate between the various fraud statutes and generally
    only discuss “fraud.” The same is true for the counterclaim for Claim 2. Nonetheless, the
    court briefly reiterates the standard for each fraud statute and analyzes each counterclaim
    for Claim 2 separately.
    Special Plea in Fraud
    The defendant’s second amended answer and counterclaim asserts that:
    Oasis attempted to practice fraud against the United States in the proof,
    statement, establishment, or allowance of the portions of the claim identified
    in the paragraphs above [in the defendant’s second amended answer and
    counterclaim]. In particular, Oasis submitted at least one certified claim with
    the intent to cause the Government to pay Oasis amounts to which it knows
    it is not entitled.
    As more fully explained in the court’s earlier opinion, the Special Plea in Fraud
    statute provides:
    A claim against the United States shall be forfeited to the United States by
    any person who corruptly practices or attempts to practice any fraud against
    the United States in the proof, statement, establishment, or allowance
    thereof.
    In such cases the United States Court of Federal Claims shall specifically
    find such fraud or attempt and render judgment of forfeiture.
    62  Plaintiff also argues that “Defendant’s fraudulent duress argument is particularly
    pernicious, given that Defendant admittedly destroyed the email accounts of the very
    witnesses Oasis is claiming coerced the company.” For support, plaintiff cites to the joint
    stipulation that “[o]ther than the .pst file of Major Vazquez (which he personally retained),
    the Government did not find (and therefore could not search for responsive documents),
    the Iraq.centcom.mil domain email accounts of any potential witnesses in this case.” As
    indicated above, the court has deferred spoliation until after the court considered the fraud
    counterclaims and contract interpretation. As the court determines below that there was
    no fraud committed by Paul Morrell or Oasis, the court does not need to consider if any
    potential spoliation occurred regarding the fraud counterclaim for Claim 2. Furthermore,
    the court does not accept plaintiff’s characterization of the joint stipulation as defendant
    having “destroyed the email accounts,” nor that the defendant admitted doing so.
    77
    28 U.S.C. § 2514 (2006); see also Kellogg Brown & Root Servs., Inc. v. United States,
    
    728 F.3d 1348
    , 1365 (Fed. Cir. 2013), reh’g denied, 563 F. App’x 769 (Fed. Cir.), cert.
    denied, 
    135 S. Ct. 167
    (2014). In Kellogg Brown & Root, the United States Court of
    Appeals for the Federal Circuit unequivocally held that “[o]n its face, the statute is limited
    to those circumstances where the Government proves fraud ‘in the proof, statement,
    establishment or allowance’ of a claim not in the execution of a contract.” 
    Id. at 1366
    (footnote omitted).
    Defendant alleges that “count two is premised upon Oasis’s claim that it was
    entitled to be paid $50.225 million just to make the facilities ‘capable’ of producing water.”
    Oasis stated in the certified claim that, “[w]hile Oasis delivered some bottled water during
    the Contract base year, Oasis invoiced the Government for that water and the
    Government paid those invoices. The primary deliverable item in the Contract base year
    is water purification and water-bottling capabilities.” (emphasis in original). The certified
    claim made plain plaintiff’s view that:
    Oasis provided water-bottling capability services for an additional 2.67
    months when the Contract base year was extended to August 15, 2006,
    due to Government delays and breaches of contract. As explained in 6.0
    paragraph 33, Oasis is entitled to a payment of $11,175,063 for the water-
    bottling capability services provided during the extended Contract base-
    year performance.
    In discussing modification P00011, the certified claim stated:
    Through P00011, Oasis was paid $23,411,780 for the 6,689,080 cases of
    bottled water delivered through July 2006 and $24,542,387 for delivery of
    water-bottling capabilities in the Contract base year. Accordingly, Oasis
    submitted an invoice in the amount of $24,542,387 for delivering water-
    bottling capabilities to the Government on August 15, 2006, and the invoice
    was paid. The net effect of P00011 was: 1) to reduce the Contract
    consideration for delivering purified water-bottling capability by $25,682,613
    from $50,225,000 to $24,542,387; 2) to provide the Government all water
    produced, on hold and deliverable as of August 15, 2006, without paying
    Oasis any consideration, thereby damaging Oasis in the amount of
    $7,059,192 (2,016,912 cases x $3.50); and 3) to pay nothing for water-
    bottling capabilities for the period May 26, 2006, through August 15, 2006,
    which cost Oasis $11,170,061.
    (internal citations omitted).
    As explained above, the court noted plaintiff’s view that “[t]he Contract was a firm-
    fixed-price (FFP) services contract for water bottling ‘capability,’ pursuant to which Oasis
    was entitled to $50,225,000 in the Base Year in exchange for 12 months of performance,
    irrespective of the amount of water produced by Oasis and/or purchased by Defendant.”
    Likewise, the court noted the defendant’s view that “the Court should enforce those terms
    78
    and rule that the contract does not require the Government to pay Oasis separately for
    the cost to build the bottled-water facilities.” The court agreed with defendant’s position
    that the government’s obligation under the contract was solely to pay for water produced
    and does not demonstrate that the intent of the base year of the contract was to
    compensate plaintiff $50,225,000.00 to establish the capability to produce bottled water,
    and then, to additionally compensate the contractor for bottled water produced. Therefore,
    finding the defendant’s interpretation of the contract was correct, the court determined
    that the terms of the contract are unambiguous that the contract obligated the government
    to pay plaintiff $3.50 a case of water, up to 14,350,000 cases of water for a total potential
    obligation of $50,225,000.00.
    After concluding that the contract was unambiguous, out of an abundance of
    caution, the court examined the intentions of the parties when they executed the contract,
    and determined that the testimony of the signatories to the contract, as well as the
    documents produced near to the execution of the contract, supports the defendant’s view
    of the contract, and that the parties intended for the contract to compensate plaintiff only
    for the bottled water produced. As noted above, defendant argues regarding Claim 2,
    “because Oasis’s contract interpretation is implausible in light of the unambiguous terms
    of the contract and all extrinsic evidence, count two constitutes fraud.” As explained in the
    court’s previous opinion:
    In sum, the Oasis certified claim, and the affidavits of the Oasis personnel,
    including Paul Morrell, articulate a clear theory of plaintiff’s claims. The
    certified claim alone is over fifty pages and provides specific calculations
    and details of how Oasis formed its views of the contract. This is significant,
    because as demonstrated at the trial and in the record before this court,
    defendant’s witnesses and even some of plaintiff’s witnesses, did not all
    share plaintiff’s contractual view included in the certified claim. It was,
    therefore, incumbent upon Oasis to clearly articulate its theory of recovery
    in its certified claim. The court agrees with plaintiff that “Oasis’ claim clearly
    and openly stated the basis for the claim, including the contractual
    interpretation that the Government now alleges to be fraudulent.”
    As it relates to Claim 2, although the court has determined that it was the defendant, and
    not the plaintiff, who had the proper interpretation of the contract, as the court explained
    in the court’s prior opinion:
    Even if the rationale behind the plaintiff’s theory is incorrect, the court
    agrees that, within the framework articulated by plaintiff in the certified
    claim, and as testified to at trial by Phil Morrell, and especially, Paul Morrell,
    who signed the certified claim, the certified claim was not an attempt to
    double bill the government; the certified claim was an attempt to recover on
    plaintiff’s capabilities theory of the contract. The court had considerable
    opportunity to hear testimony, and observe, Paul Morrell, in particular,
    during the trial. Although there are two differing theories of contract
    interpretation before the court . . . the court is convinced, after sitting through
    79
    the trial and reviewing the evidence in the record, that the certified claim
    was presented in good faith and without the requisite intent to defraud.
    Much like the court’s conclusion that the certified claim was submitted in good faith, the
    court believes that the plaintiff offered a good faith position regarding contract
    interpretation in the certified claim.63 Although the court found against plaintiff’s contract
    interpretation position, that determination does not demonstrate that the plaintiff’s
    interpretation was implausible or submitted without merit. Moreover, nothing about the
    court’s analysis of the contract interpretation undermines the court’s previous
    observations about Paul Morrell or that the certified claim was presented in good faith
    and without the requisite intent to defraud.
    Furthermore, it is understandable that Paul Morell, the signatory of the certified
    claim, evolved his views on the meaning of the contract over time. Paul Morrell, in fact,
    testified his view of the contract changed over time and that he eventually concluded that
    interactions with the government made “it more clear to me that Phil had been correct all
    along. This is not about water. This is about capabilities, which is what Phil's been
    maintaining all along.” The court notes that, as documented above with regard to the
    extrinsic evidence, Max Wyeth, and not Phil Morrell or Paul Morrell, was the architect of
    the pricing schedule in the contract, as, moreover, was the signatory of the contract. Paul
    Morrell’s understanding of the contract was informed by events after the contract had
    been signed and performance of the contract had began when Oasis first became
    involved with American AquaSource and Max Wyeth. Likewise, in the previous opinion
    the court concluded that “Paul Morrell signed the certified claim and plaintiff’s position
    that ‘[d]efendant provides nothing to contradict Paul Morrell’s sworn testimony that his
    opinion and understanding evolved and he changed his mind, and that the right amount
    was claimed’ remains true.” The same is true for the Claim 2.
    Turning to duress, the court believes that the defendant goes too far to suggest:
    Oasis fabricated accusations of duress against military personnel who were
    serving in Iraq in its attempt to invalidate bilateral modifications P00006 and
    P00011. Oasis formulated its baseless coercion claims to support its efforts
    to obtain double payment from the military. Oasis’s proposal, acceptance,
    and performance under P00006 and P00011 demonstrate that its double-
    63 As explained in the court’s earlier opinion, plaintiff has a convoluted, alternative
    explanation of its claims, and indicated at closing argument that “Counts 1, 2 and 8 seek
    the difference between capability and water and what the government actually paid us in
    the base year, which is $47,954,167. We tried to allocate the difference, which is $32
    million and change, amongst counts 1, 2 and 8, which are the things that we believe were
    taken from us.” Plaintiff’s counsel continued: “Counts 1 and 8 seek water payments.
    Count 2 seeks the difference between $50 million and $47 million. We thought the $47
    million was capability, which is why count 2 is $2 million and counts 1 and 8 are $30
    million.” As the court previously indicated that it did not believe that plaintiff committed
    fraud for Claim 1 or Claim 8, the court does not need to address plaintiff’s allocation theory
    for Claim 2.
    80
    billing claims are false and unsupported. While the military’s contracting
    officers were focused on ensuring a safe and reliable water supply for the
    troops, Oasis accused those same officers of coercion solely to justify its
    baseless certified claim.
    In its reply brief, defendant reiterates: “Accordingly, our argument that Oasis fabricated
    its economic duress is not a ‘new theory’ of fraud for count two, but simply more evidence
    that Oasis’s contract interpretation is frivolous – which is the basis for our assertion of
    fraud on count two.” As explained above, the plaintiff claimed that “Oasis has
    demonstrated each of the three requirements for duress,” and defendant, by contrast,
    argued that “plaintiff’s duress claims should be roundly rejected because there is not a
    shred of evidence supporting Oasis’s attempts to walk away from its contractual
    commitments,” and that “Oasis falls far short of establishing a single element of economic
    duress, let alone all three.” As concluded above, plaintiff did not demonstrate that Oasis
    executed either modification P00006 or modification P00011 under duress, and plaintiff
    was unable to demonstrate that Oasis involuntarily accepted the modifications, had no
    alternative but to accept the modifications, or that the government committed a coercive,
    wrongful act that resulted in Oasis signing modification P00006 or modification P00011.
    Despite these determinations, the court did not, and does not, conclude that the
    failure to prove duress would provide the basis of a fraud claim under the Special Plea in
    Fraud statute. Defendant’s argument for fraud is based on its view that plaintiff put forth
    a “baseless economic duress claim.” The court, however, does not believe the economic
    duress arguments were entirely baseless. Nor did the court conclude that plaintiff
    “fabricated” its claims, and, thereby, committed fraud. The court, after carefully
    considering the evidence in the case, as well as the parties’ legal arguments, agreed with
    the defendant that the modifications were not executed under duress. This finding,
    however, is insufficient to meet the requirements of the Special Plea in Fraud statute,
    especially considering the court’s earlier determinations regarding the sincerity of Paul
    Morrell’s testimony or that the certified claim was presented in good faith and without the
    requisite intent to defraud. The defendant’s Special Plea in Fraud counterclaim for Claim
    2, therefore, is dismissed.
    False Claims Act
    As the court wrote in the earlier opinion, the False Claims Act, 31 U.S.C. § 3729
    (2012),64 provides:
    64 The False Claims Act was amended in 2009. See Fraud Enforcement and Recovery
    Act of 2009, Pub. L. No. 111–21, § 4(a), 123 Stat. 1617, 1621. The amendments are
    treated “as if enacted on June 7, 2008, and apply to all claims under the False Claims Act
    (31 U.S.C. 3729 et seq.) that are pending on or after that date.” 
    Id. § 4(f),
    123 Stat. at
    1625; see also AEY, Inc. v. United States, 
    114 Fed. Cl. 619
    , 633 (2014) (“The amended
    provision, 31 U.S.C. § 3729(a)(1)(B), took effect as if enacted on June 7, 2008 and applies
    to all claims under the False Claims Act that were pending on or after that date.”). As
    explained in August 31, 2016 opinion, Oasis submitted its certified claim on July 4, 2008,
    81
    (a) Liability for certain acts.--
    (1) In general.--Subject to paragraph (2), any person who--
    (A) knowingly presents, or causes to be presented, a false or fraudulent
    claim for payment or approval;
    (B) knowingly makes, uses, or causes to be made or used, a false record
    or statement material to a false or fraudulent claim;
    (C) conspires to commit a violation of subparagraph (A), (B), (D), (E), (F),
    or (G);
    (D) has possession, custody, or control of property or money used, or to be
    used, by the Government and knowingly delivers, or causes to be delivered,
    less than all of that money or property;
    (E) is authorized to make or deliver a document certifying receipt of property
    used, or to be used, by the Government and, intending to defraud the
    Government, makes or delivers the receipt without completely knowing that
    the information on the receipt is true;
    (F) knowingly buys, or receives as a pledge of an obligation or debt, public
    property from an officer or employee of the Government, or a member of
    the Armed Forces, who lawfully may not sell or pledge property; or
    (G) knowingly makes, uses, or causes to be made or used, a false record
    or statement material to an obligation to pay or transmit money or property
    to the Government, or knowingly conceals or knowingly and improperly
    avoids or decreases an obligation to pay or transmit money or property to
    the Government,
    is liable to the United States Government for a civil penalty of not less than
    $5,000 and not more than $10,000, as adjusted by the Federal Civil
    Penalties Inflation Adjustment Act of 1990 (28 U.S.C. 2461 note; Public Law
    104-410), plus 3 times the amount of damages which the Government
    sustains because of the act of that person.
    ...
    (b) Definitions.--For purposes of this section--
    (1) the terms “knowing” and “knowingly” --
    and Lieutenant Colonel Hobbs denied Oasis’ certified claim in its entirety on October 18,
    2009.
    82
    (A) mean that a person, with respect to information--
    (i) has actual knowledge of the information;
    (ii) acts in deliberate ignorance of the truth or falsity of the information; or
    (iii) acts in reckless disregard of the truth or falsity of the information; and
    (B) require no proof of specific intent to defraud;
    (2) the term “claim”--
    (A) means any request or demand, whether under a contract or otherwise,
    for money or property and whether or not the United States has title to the
    money or property, that--
    (i) is presented to an officer, employee, or agent of the United States; or
    (ii) is made to a contractor, grantee, or other recipient, if the money or
    property is to be spent or used on the Government's behalf or to advance a
    Government program or interest, and if the United States Government--
    (I) provides or has provided any portion of the money or property requested
    or demanded; or
    (II) will reimburse such contractor, grantee, or other recipient for any portion
    of the money or property which is requested or demanded . . . .
    31 U.S.C. § 3729. The term “claim” is defined in the False Claims Act as:
    (A) means any request or demand, whether under a contract or otherwise,
    for money or property and whether or not the United States has title to the
    money or property, that--
    (i) is presented to an officer, employee, or agent of the United States; or
    (ii) is made to a contractor, grantee, or other recipient, if the money or
    property is to be spent or used on the Government's behalf or to advance a
    Government program or interest, and if the United States Government--
    (I) provides or has provided any portion of the money or property requested
    or demanded; or
    (II) will reimburse such contractor, grantee, or other recipient for any portion
    of the money or property which is requested or demanded; and
    83
    (B) does not include requests or demands for money or property that the
    Government has paid to an individual as compensation for Federal
    employment or as an income subsidy with no restrictions on that individual's
    use of the money or property;
    31 U.S.C. § 3729(c). The False Claims Act also states:
    (1) the terms “knowing” and “knowingly” --
    (A) mean that a person, with respect to information--
    (i) has actual knowledge of the information;
    (ii) acts in deliberate ignorance of the truth or falsity of the information; or
    (iii) acts in reckless disregard of the truth or falsity of the information; and
    (B) require no proof of specific intent to defraud;
    31 U.S.C. § 3729(b) (2012). Congress rejected requiring a specific intent to defraud under
    the False Claims Act. See 31 U.S.C. § 3729(b). Instead, Congress adopted a knowing
    standard, defined as “actual knowledge” of the falsity, acting in “deliberate ignorance of
    the truth or falsity,” or acting in “reckless disregard of the truth or falsity.” 
    Id. In the
    court’s earlier opinion, the court concluded that:
    The government has not demonstrated that the plaintiff’s interpretation
    should be considered “false statements,” nor has the government
    demonstrated that Oasis had “actual knowledge” of the falsity, was acting
    “in deliberate ignorance of the truth or falsity,” or was acting “in reckless
    disregard of the truth or falsity.” See 31 U.S.C. § 3729(b). Because the court
    finds that defendant has not demonstrated that plaintiff had knowledge that
    its claims were false or fraudulent, and had no intention to induce “wrongful
    payment,” United States v. 
    Rivera, 55 F.3d at 709
    , Oasis is not liable under
    the False Claims Act. As indicated above, the court believes that the
    testimony of the Paul Morrell and Phil Morrell was sincere. There was no
    indication in their testimony at trial of any intention or steps taken to defraud
    the government. As the parties do not raise stand-alone arguments related
    solely to the False Claims Act, the court determines, for the reasons
    articulated above, the government has not proven a violation of the False
    Claims Act, even under the preponderance of the evidence standard.
    The court concludes that same applies to the counterclaim for Claim 2. The government
    did not raise any separate arguments for the False Claims Act regarding Claim 2. In its
    briefs, defendant only states that “Oasis is liable under the False Claims Act for the same
    84
    reasons that its claim must be rejected under the Special Plea in Fraud.” As the court has
    concluded that defendant has not demonstrated fraud under the Special Plea in Fraud
    statute, defendant’s False Claims Act counterclaim for Claim 2, therefore, also is
    dismissed.65
    Contract Disputes Act
    Defendant argues that “[i]n addition to forfeiting its claim under the Special Plea in
    Fraud, because Oasis submitted a fraudulent certified claim under the Contract Disputes
    Act, it owes the United States damages equal to the unsupported amount of its claim.”
    Defendant claims that “Oasis has selected its own penalty, as Contract Disputes Act fraud
    damages are self-defining. Oasis itself selected the magnitude of its fraud and must reap
    the consequences. ”
    The court’s previous opinion explained that the anti-fraud provision of the Contract
    Disputes Act, 41 U.S.C. § 604 (now 41 U.S.C. § 7103(c)(2) (2012)) provides:
    If a contractor is unable to support any part of his claim and it is determined
    that such inability is attributable to misrepresentation of fact or fraud on the
    part of the contractor, he shall be liable to the Government for an amount
    equal to such unsupported part of the claim in addition to all costs to the
    Government attributable to the cost of reviewing said part of his claim.
    41 U.S.C. § 604.66 The Contract Disputes Act, at 41 U.S.C. § 605(c)(1) (2006) (now 41
    65 The court notes that the preponderance of the evidence standard of proof is applicable
    to the False Claims Act, as well as to the Contract Disputes Act, as compared to the “clear
    and convincing” standard that applies to proof under the Special Plea in Fraud statute.
    See UMC Elecs. Co. v. United States, 
    249 F.3d 1337
    , 1338-39 (Fed. Cir. 2001) (“The
    government must prove a violation of the Contract Disputes Act and False Claims Act by
    a preponderance of the evidence. Under the Special Plea in Fraud, the government must
    prove its allegations by clear and convincing evidence.” (citing Commercial Contractors,
    Inc. v. United States, 
    154 F.3d 1357
    , 1362 (Fed. Cir.), reh’g denied (Fed. Cir. 1998))).
    The court believes that defendant has not met its burden to prove its fraud claims for
    Claim 2 under either standard of proof.
    66 The language of the anti-fraud provision of the Contract Disputes Act was slightly
    altered when it was recodified in 2011 at 41 U.S.C. § 7103(c)(2). See Veridyne Corp. v.
    United States, 
    758 F.3d 1371
    , 1380 (Fed. Cir.), reh’g and reh’g en banc denied (Fed. Cir.
    2014). The current language of the provision now states:
    If a contractor is unable to support any part of the contractor’s claim and it
    is determined that the inability is attributable to a misrepresentation of fact
    or fraud by the contractor, then the contractor is liable to the Federal
    Government for an amount equal to the unsupported part of the claim plus
    85
    U.S.C. § 7103(b)(1)), requires for a certification of a claim in excess of $100,000.00,
    the contractor shall certify that the claim is made in good faith, that the
    supporting data are accurate and complete to the best of his knowledge and
    belief, that the amount requested accurately reflects the contract
    adjustment for which the contractor believes the government is liable, and
    that the certifier is duly authorized to certify the claim on behalf of the
    contractor.
    41 U.S.C. § 605(c)(1); see Trafalgar House Constr., Inc. v. United States, 
    73 Fed. Cl. 675
    , 693 (2006) (“The primary purpose of this certification is to prevent the submission of
    fraudulent claims.”), aff’d, 274 F. App’x 898 (Fed. Cir. 2008). The Contract Disputes Act
    at 41 U.S.C. § 605(c)(7), requires that “[t]he certification required by paragraph (1) may
    be executed by any person duly authorized to bind the contractor with respect to the
    claim.” 41 U.S.C. § 605(c)(7) (now 41 U.S.C. § 7103(b)(2)).
    The United States Court of Appeals for the Federal Circuit indicated “[t]he Contract
    Disputes Act requires that an authorized corporate official certify that ‘the claim is made
    in good faith, that the supporting data are accurate and complete to the best of his
    knowledge and belief, [and] that the amount requested accurately reflects the contract
    adjustment for which the contractor believes the government is liable.’” Veridyne Corp. v.
    United 
    States, 758 F.3d at 1380
    (quoting 41 U.S.C. § 605(c)(1) (recodified at 41 U.S.C.
    § 7103(b)(1)(A)-(D)). As noted by the trial court in Veridyne, citing to 41 U.S.C.
    § 7103(c)(2), “[a]lthough the anti-fraud provision contains no express requirement that the
    costs must be ‘reasonable,’ it presumes that defendant actually has incurred the claimed
    costs of review.” Veridyne Corp. v. United States, 
    107 Fed. Cl. 752
    , 767 (2012), aff’d in
    part, rev’d in part, 
    758 F.3d 1371
    (Fed. Cir.), reh’g and reh’g en banc denied (Fed. Cir.
    2014).
    As noted in the court’s earlier opinion, defendant argues in its second amended
    answer and counterclaim, regarding the anti-fraud provision of the Contract Disputes Act,
    Oasis “is liable to the United States pursuant to the Contract Disputes Act, 41 U.S.C.
    § 7103, for the amount of such unsupported claims, $44,516,868, plus the Government’s
    costs attributable to reviewing such claims.” In its post-trial briefs, defendant submitted
    the following chart for the amount of penalties it alleges are owed by plaintiff under the
    Contract Disputes Act:
    Count Description                                                       Amount
    1       Bottled water already paid for during base period from        $19,617,570
    sites other than Anaconda (5,605,020 cases)
    2       TQ allegedly unpaid mobilization fee                          $2,270,833
    all of the Federal Government’s costs attributable to reviewing the
    unsupported part of the claim.
    41 U.S.C. § 7103(c)(2).
    86
    4        Extrapolated monthly “mobilization fee” based on alleged      $11,175,063
    firm fixed base year “mobilization fee” of $50.225 million
    6        Camp Speicher and Q-West improvements already                 $600,000
    reimbursed by military as part of modification P00011
    8        Bottled water already paid for through May 24, 2006,          $10,853,402
    from Anaconda (3,100,972 cases)
    Total Amount of False and Fraudulent Claim                    $44,516,868
    For support, defendant claims that:
    As demonstrated above, counts one, two, four, six, and eight, are
    unsupported in their entirety. Counts one and eight attempt to compel
    payment of more than $30 million dollars for bottled water for which the
    military had already paid. Count six also seeks payment of the same
    $600,000 a second time. Counts four seeks costs never incurred, and count
    two stems from Oasis’s baseless economic duress claim and its frivolous
    contract interpretation.
    As explained in the court’s earlier decision, “[d]efendant offers no new arguments
    specific to the antifraud provision of the Contract Disputes Act that have not been
    addressed above, except for the chart for the amount of penalties.” The same is true for
    the Claim 2. Regarding Claim 2, the defendant merely relies on its belief that Oasis has
    a “frivolous contract interpretation” and, therefore, put forth a “baseless economic duress
    claim.” As explained above, although the court found against the plaintiff regarding its
    interpretation of the contract and with respect to its duress claims. As evidenced by the
    court’s lengthy discussion above addressing both contract interpretation and economic
    duress, however, the court does not believe plaintiff’s theories as certified in the claim
    rise to the level of frivolous, and, are instead based on a possible, albeit incorrect theory
    of the case. Furthermore, the court, in the prior opinion, determined that:
    The fundamental changes in manner in which plaintiff performed the
    contract for the government in the base year, including how it was
    compensated for the water produced, and continued to perform after the
    base year was complete, allows for plaintiff’s certified claim to be a bona
    fide one, and not fraudulent either under the plaintiff’s or defendant’s
    interpretation of the contract. Defendant has failed to prove fraud. As
    demonstrated above, plaintiff’s intent was not to make a claim that was
    intended to deceive or mislead the government. Therefore, the court
    concludes that defendant has failed to demonstrate a violation of the anti-
    fraud provision of the Contract Disputes Act.
    Again, the same logic applies to the fraud counterclaim for Claim 2. As with the prior
    counterclaims, Paul Morrell, as the signatory of Oasis’ certified claim, believed in the
    theory and merits of the certified claim submitted. Likewise, the court’s earlier opinion the
    court concluded that “Paul Morrell signed the certified claim and plaintiff’s position that
    ‘[d]efendant provides nothing to contradict Paul Morrell’s sworn testimony that his opinion
    87
    and understanding evolved and changed his mind, and that the right amount was claimed’
    remains true.” The same is true for the Claim 2, and, as explained above, Paul Morrell
    inherited the contract from American AquaSource and Max Wyeth. As he was not the
    signatory to the contract, it is understandable that his views on the contract may have
    changed over time. Therefore, defendant has failed to prove that Oasis knowingly
    submitted a fraudulent claim for Claim 2, and Oasis is not liable under the anti-fraud
    provision of the Contract Disputes Act for Claim 2.
    CONCLUSION
    For the reasons explained above, the court concludes that defendant’s
    interpretation of the contract, requiring the government to pay only for bottled water
    produced, is correct. In addition, plaintiff has not demonstrated that Oasis executed either
    modification P00006 or modification P00011 under duress. Moreover, even though
    plaintiff’s interpretation of the contract was incorrect, and the claims of economic duress
    have been found to be unsupported, plaintiff did not intend to perpetrate a fraud on the
    government when Oasis submitted its certified claim. Rather Paul Morrell, as signatory to
    the certified claim, did not have the intention to commit fraud and genuinely believed in
    his interpretation of the contract when he submitted the certified claim. Defendant’s
    counterclaim regarding Claim 2 is DENIED.
    IT IS SO ORDERED.
    s/Marian Blank Horn
    MARIAN BLANK HORN
    Judge
    88
    

Document Info

Docket Number: 10-707

Judges: Marian Blank Horn

Filed Date: 12/1/2017

Precedential Status: Precedential

Modified Date: 12/4/2017

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