Directv Group, Inc. v. United States

United States Court of Appeals
for the Federal Circuit
__________________________

THE DIRECTV GROUP, INC.,
Plaintiff-Appellee,
v.
UNITED STATES,
Defendant-Appellant.
__________________________

2010-5031
__________________________

Appeal from the United States Court of Federal
Claims in case no. 04-CV-1414, Judge Nancy B. Firestone.
___________________________

Decided: January 26, 2012
___________________________

ALEXANDER F. WILES, Irell & Manella LLP, of Los An-
geles, California, argued for the plaintiff-appellee. With
him on the brief was ADAM J. FLETCHER. Of counsel on
the brief was ALAN C. BROWN, Enterprise Business Law
Group LLC, of McLean, Virginia.

C. COLEMAN BIRD, Senior Trial Counsel, Commercial
Litigation Branch, Civil Division, United States Depart-
ment of Justice, of Washington, DC, argued for the defen-
dant-appellant. With him on the brief were TONY WEST,
Assistant Attorney General, JEANNE E. DAVIDSON, Direc-
tor, and KIRK T. MANHARDT, Assistant Director. Of coun-
DIRECTV GROUP v. US 2

sel on the brief was LAWRENCE S. RABYNE, Defense Con-
tract Management Agency, of Arlington Heights, Illinois.

RICHARD D. BERNSTEIN, Willkie Farr & Gallagher
LLP, of Washington, DC, for amicus curiae. With him on
the brief were ANTONIO YANEZ, JR. and FRANK M.
SCADUTO. Of counsel on the brief were CARTER G.
PHILLIPS and HOWARD STANISLAWSKI, Sidley Austin LLP,
of Washington, DC.
__________________________

Before NEWMAN, GAJARSA 1 , and MOORE, Circuit Judges.
Opinion for the court filed PER CURIAM. Opinion dissent-
ing-in-part filed by Circuit Judge GAJARSA.
PER CURIAM.
At issue in this appeal are the calculation and pay-
ment of segment closing adjustments associated with the
sale of certain business units by DIRECTV Group, Inc.
(“DIRECTV”). The United States (“Government”) appeals
the decision of the United States Court of Federal Claims
in DIRECTV Group, Inc. v. United States, 89 Fed. Cl. 302
(2009), granting summary judgment in favor of
DIRECTV. For the reasons stated below, we affirm.
BACKGROUND
This appeal relates to the application of particular ac-
counting regulations when a segment of a company is sold
and the sale includes the transfer of defined benefit
pension plans. A defined benefit pension plan is “a pen-
sion plan in which the benefits to be paid, or the basis for
determining such benefits, are established in advance and

1 Circuit Judge Gajarsa assumed senior status on
July 31, 2011.
3 DIRECTV GROUP v. US

the contributions are intended to provide the stated
benefits.” 48 C.F.R. § 31.001 (2010). In simple terms:
Defined-benefit plans guarantee fixed payments
to retired employees, leaving the company respon-
sible for ensuring that sufficient funds will be
available. Companies therefore must make as-
sumptions regarding, inter alia, the amount of
money they expect to pay in the future, and the
expected performance of the investments held by
their pension plans. Based on these assumptions,
companies determine how much money to invest
in the plan in a given period so that future liabili-
ties will be met.
Gates v. Raytheon Co., 584 F.3d 1062, 1064 (Fed. Cir.
2009).
In the case of cost-type Government contracts, the
contributions made on behalf of covered employees are
paid by the Government as a part of the cost of the con-
tracts. Id. Like contributions made by the employer-
contractor, the amount of the Government’s contributions
to the plan depends on actuarial assumptions regarding
mortality rate, employee turnover, compensation levels,
pension fund earnings, changes in values of pension fund
assets, etc. See 4 C.F.R. § 413.30(a)(1) (1978). The differ-
ences between these ex ante assumptions and actual
experience translate into actuarial gains and losses. Id.
§ 413.30(a)(3).
To achieve uniformity and consistency in the account-
ing principles followed by Government contractors, Con-
gress authorized the Cost Accounting Standards Board “to
make, promulgate, amend, and rescind cost accounting
standards and interpretations thereof . . . .” 41 U.S.C.
§ 422(f)(1). One of these standards, Original Cost Ac-
counting Standard (“CAS”) 413.50, regulated the assign-
DIRECTV GROUP v. US 4

ment of actuarial gains and losses, the valuation of the
assets of a pension fund, and the allocation of pension
costs to a contractor’s various business segments. 2 4
C.F.R. § 413.50 (1978). To prevent volatility in the
amounts of pension costs charged to the Government, that
standard also required certain pension plans to amortize
actuarial gains and losses over a fifteen year period. Id.
This amortized adjustment process fails, however,
when the segment is closed, i.e., whenever “the segment’s
contracts have become separated or closed off from the
pension costs” such that “there are no future periods in
which to adjust . . . [the] pension costs.” Allegheny Tele-
dyne, Inc. v. United States, 316 F.3d 1366, 1374 (Fed. Cir.
2003) (internal quotation omitted). In such a case, the
contractor is required to “determine the difference be-
tween the actuarial liability for the segment and the
market value of the assets allocated to the segment,” with
the difference representing “an adjustment of previously
2 To be precise, Congress empowered a “Cost-
Accounting Standards Board” to “promulgate cost-
accounting standards designed to achieve uniformity and
consistency in the cost-accounting principles followed by
defense contractors and subcontractors under Federal
contracts.” Act to Amend the Defense Production Act of
1950, Pub. L. No. 91-379, 84 Stat. 796 (1970) (codified at
50 U.S.C. § 2168 (repealed 1988)). It was this Cost-
Accounting Standards Board that initially promulgated
Original CAS 413. See Recodification of Cost Accounting
Standards Board Rules and Regulations, 57 Fed. Reg.
14148 (Apr. 17, 1992). In 1988, Congress authorized a
new “Cost Accounting Standards Board” within the Office
of the Federal Procurement Policy. Act to Amend and
Extend the Office of Federal Procurement Policy Act, Pub.
L. No. 100-679, 102 Stat. 4055, 4059-60 (1988) (codified at
41 U.S.C. § 422). The cost accounting standards promul-
gated by the original Board were recodified by the new
Board, 57 Fed. Reg. at 14148, and are found as amended
in Title 48 of the Code of Federal Regulations.
5 DIRECTV GROUP v. US

determined pension costs.” 4 C.F.R. § 413.50(c)(12)
(1978). This difference is a “segment closing adjustment”
to be applied to the contract cost. In short, the Govern-
ment and contractor terminate the amortization and
adjust the outstanding pension obligations by allocating
any then-existing surplus or deficiency between them.
At issue are segment closing adjustments resulting
from DIRECTV’s sale of two segments. The first segment
closing occurred on December 17, 1997, when DIRECTV
(formerly, Hughes Electronics Corporation) completed a
spin-off of its defense business units and sold those units
to Raytheon Company (“Raytheon”). In connection with
the Raytheon transaction, the parties stipulated that
DIRECTV transferred to Raytheon $5,774,655,148 in
pension assets and $3,310,028,559 in pension liabilities,
resulting in a net transfer of $2,464,626,589 in surplus
pension assets associated with the transferred segment.
The second segment closing occurred on October 6, 2000,
when DIRECTV sold its satellite business units to The
Boeing Company (“Boeing”). In connection with that
transaction, the parties stipulated that DIRECTV trans-
ferred to Boeing $1,843,930,981 in pension assets and
$1,037,344,156 in pension liabilities, resulting in a net
transfer of $806,586,825 in surplus pension assets associ-
ated with the transferred segment. In both transactions,
DIRECTV retained a relatively small portion of the
surplus pension assets.
By letters dated August 2, 2001, and October 6, 2003,
the Government notified DIRECTV of its initial findings
that DIRECTV was in noncompliance with CAS
413.50(c)(12) based on the Raytheon and Boeing transac-
tions, respectively. In each case, DIRECTV responded
with a segment closing calculation, along with a claim for
an interpretation of contract terms under the Contract
Disputes Act of 1978. The Government issued a Contract-
DIRECTV GROUP v. US 6

ing Officer’s Final Decision and Demand for Payment
regarding the Raytheon transaction on December 12,
2003, in which it again asserted noncompliance with CAS
413.50(c)(12) and demanded payment of $68,695,891
based on the Government’s estimate of the segment
closing adjustment. A similar decision regarding the
Boeing transaction was issued on June 14, 2005, once
again asserting noncompliance with CAS 413.50(c)(12)
and demanding payment of $12,197,704.
To resolve the dispute, DIRECTV brought suit against
the Government in the United States Court of Federal
Claims. In its complaint, DIRECTV alleged that no
segment closing adjustments were required because it
transferred all of the pension plan assets and liabilities at
issue to Raytheon and Boeing. Compl. ¶¶ 39, 52.
DIRECTV therefore requested that the court “declare that
DIRECTV’s cost accounting practices are in compliance
with CAS 413 or, alternatively, that any noncompliance
has not resulted in increased costs paid by the United
States” and that DIRECTV has no liability for any seg-
ment closing adjustment in connection with the Raytheon
and Boeing transactions. Compl. at 20-21. Substantively
identical requests for relief were made by DIRECTV in its
Second Amended Complaint. The Government then filed
counterclaims for payment of the segment closing adjust-
ments at issue.
The trial court granted DIRECTV’s summary judg-
ment motion. Applying the same interpretation promul-
gated in General Electric Co. v. United States, 84 Fed. Cl.
129 (2008) (“GE II”), the trial court concluded that Origi-
nal CAS 413 mandated that any segment closing adjust-
ment was to be calculated based on the assets and
liabilities of the entire segment, including those trans-
ferred to the buyer of the segment. DIRECTV, 89 Fed. Cl.
at 306-08. The trial court rejected the Government’s
7 DIRECTV GROUP v. US

argument that, absent an express agreement with the
Government, DIRECTV could not satisfy its CAS 413
closing adjustment through cost reductions attributable to
the segment buyers. More specifically, the trial court
found that neither the Allowable Cost and Payment
clause, 48 C.F.R. § 52.216-7(h)(2), nor the Credits provi-
sion, 48 C.F.R. § 31.201-5, of the Federal Acquisition
Regulation (“FAR”) prohibited DIRECTV from taking
credit for cost reductions attributable to Boeing and
Raytheon. Id. at 308-09.
The Government conceded in its summary judgment
brief that if the segment closing adjustments were calcu-
lated in accordance with the logic expressed in GE II, the
transfers made by DIRECTV to Raytheon and Boeing
resulted in benefits to the Government—in the form of
cost reductions on contracts held by the transferees—
greater than the amount DIRECTV owed the Government
following the segment closings. Id. at 307. The trial court
also determined that the CAS authorizing legislation, 41
U.S.C. § 422(h)(3), prohibited a windfall to the Govern-
ment, as would occur if DIRECTV were required to make
a direct payment to the Government in addition to the
cost reductions already provided by Raytheon and Boeing
based on the transfer of surplus pension assets. Id. at
310. In short, the trial court concluded that the Allowable
Cost and Payment clause and the Credits provision did
not prohibit DIRECTV from satisfying its segment closing
adjustment obligations via cost reductions attributable to
Raytheon and Boeing.
The Court of Federal Claims had jurisdiction over
DIRECTV’s complaint pursuant to 41 U.S.C. § 609(a), and
over the Government’s counterclaims pursuant to 28
U.S.C. §§ 1503 and 2508. Final judgment was entered on
October 16, 2009. This court has jurisdiction over the
DIRECTV GROUP v. US 8

Government’s timely appeal pursuant to 28 U.S.C.
§ 1295(a)(3).
STANDARD OF REVIEW
This court reviews de novo a grant of summary judg-
ment by the Court of Federal Claims. Salman Ranch Ltd.
v. United States, 573 F.3d 1362, 1370 (Fed. Cir. 2009). “A
motion for summary judgment should be granted if the
pleadings, the discovery and disclosure materials on file,
and any affidavits show that there is no genuine issue as
to any material fact and that the movant is entitled to
judgment as a matter of law.” RCFC 56(c)(1). In deter-
mining whether there are genuine issues as to material
fact, “[t]he evidence of the nonmovant is to be believed,
and all justifiable inferences are to be drawn in his favor.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).
As issues of law, we review without deference the Court of
Federal Claims’s interpretation of statutes, the CAS, and
the FAR. Int’l Data Prods. Corp. v. United States, 492
F.3d 1317, 1321 (Fed. Cir. 2007); Rumsfeld v. United
Techs. Corp., 315 F.3d 1361, 1369 (Fed. Cir. 2003); United
States v. Boeing Co., 802 F.2d 1390, 1393 (Fed. Cir. 1986).
DISCUSSION
The Government raises two issues on appeal. First,
the Government argues that the trial court erred by
calculating segment closing adjustments based on the
assets and liabilities of the entire segment, rather than
only the assets and liabilities that DIRECTV retained.
Second, the Government argues that the FAR required
DIRECTV itself to pay any amount due as a segment
closing adjustment, and that cost reductions provided by
successor contractors are not an acceptable form of pay-
ment.
I.
9 DIRECTV GROUP v. US

We turn to the Government’s first argument that the
trial court erred in calculating segment closing adjust-
ments based on the surplus pension assets of an entire
segment, rather than just those assets retained by
DIRECTV. See DIRECTV, 89 Fed. Cl. at 305 (citing GE
II, 84 Fed. Cl. at 131). Original CAS 413.50(c)(12), the
regulatory authority on which the segment closing ad-
justments at issue are based, uses the word “segment”
nine times:
If a segment is closed, the contractor shall deter-
mine the difference between the actuarial liability
for the segment and the market value of the as-
sets allocated to the segment, irrespective of
whether or not the pension plan is terminated.
The determination of the actuarial liability shall
give consideration to any requirements imposed
by agencies of the United States Government. In
computing the market value of assets for the
segment, if the contractor has not already allo-
cated assets to the segment, such an allocation
shall be made in accordance with the require-
ments of paragraph (c)(5)(i) and (ii) of this section.
The market value of the assets allocated to the
segment shall be the segment’s proportionate
share of the total market value of the assets of the
pension fund. The calculation of the difference be-
tween the market value of the assets and the ac-
tuarial liability shall be made as of the date of the
event (e.g., contract termination) that caused the
closing of the segment. If such a date cannot be
readily determined, or if its use can result in an
inequitable calculation, the contracting parties
shall agree on an appropriate date. The difference
between the market value of the assets and the
actuarial liability for the segment represents an
DIRECTV GROUP v. US 10

adjustment of previously-determined pension
costs.
4 C.F.R. 413.50(c)(12) (1978) (emphases added). Other
than the introductory phrase, which triggers application
of the provision “if a segment is closed,” each use of the
word “segment” is preceded by the definite article “the,”
and none is modified by language suggesting less than a
full segment. See id. Such is the case with the operative
language: “The difference between the market value of
the assets and the actuarial liability for the segment
represents an adjustment . . . .” Id. (emphasis added).
This use of a definite article, without other limitation as
to quantity, necessarily describes an entire segment. See
Shum v. Intel Corp., 629 F.3d 1360, 1367 (Fed. Cir. 2010).
We therefore conclude that Original CAS 413.50(c)(12)
requires a segment closing adjustment based on the
applicable assets and liabilities of the entire segment at
issue.
Subsequent changes to CAS 413 support this conclu-
sion. In 1995, the Board substantially amended Original
CAS 413. See Cost Accounting Standards, 60 Fed. Reg.
16,534 (Mar. 30, 1995) (codified at 48 C.F.R. pts. 9903,
9904 (1996)). Among the changes was the addition of a
provision governing partial transfers of pension assets
and liabilities:
If a segment is closed due to a sale or other trans-
fer of ownership to a successor in interest in the
contracts of the segment and all of the pension
plan assets and actual accrued liabilities pertain-
ing to the closed segment are transferred to the
successor segment, then no adjustment amount
pursuant to this paragraph (c)(12) is required. If
only some of the pension plan assets and actuarial
accrued liabilities of the closed segment are trans-
11 DIRECTV GROUP v. US

ferred, then the adjustment amount required un-
der this paragraph (c)(12) shall be determined
based on the pension plan assets and actuarial ac-
crued liabilities remaining with the contractor. In
either case, the effect of the transferred assets and
liabilities is carried forward and recognized in the
accounting for pension cost at the successor con-
tractor.
Id. at 16,552 (codified at 48 C.F.R. § 9904.413-50(c)(12)(v)
(1996)) (emphasis added). Thus, rather than requiring an
adjustment based on “the assets and the actuarial liabil-
ity for the segment,” 4 C.F.R. 413.50(c)(12) (1978) (empha-
sis added), Revised CAS 413 requires that the adjustment
be “based on the pension plan assets and actuarial ac-
crued liabilities remaining with the contractor,” 48 C.F.R.
§ 9904.413-50(c)(12)(v) (1996) (emphasis added). We
presume that when the Board acted to make this change,
it meant for the amendment to have real and substantial
effect. See Stone v. INS, 514 U.S. 386, 397 (1995) (“When
Congress acts to amend a statute, we presume it intends
its amendment to have real and substantial effect.”).
In Allegheny Teledyne, 316 F.3d at 1380, we found it
“illogical to say all the additional text of the [1995]
amendment simply ‘clarified’ rights that already existed,
especially in light of the several clear changes made to the
segment closing provision.” We see no reason to deviate
from that conclusion here. Accordingly, we affirm the
trial court’s conclusion that Original CAS 413.50(c)(12)
requires the segment closing adjustment to be based on
the applicable assets and liabilities of the entire segment.
II.
Having determined the pool of assets and liabilities on
which the segment closing adjustment is based, we turn
next to how a surplus, if any, may be recouped by the
DIRECTV GROUP v. US 12

Government. Although the CAS governs allocability, i.e.,
what portions of a cost are assigned to a particular seg-
ment or contract, the FAR generally governs whether a
party may apply or recover that cost. See, e.g., Boeing N.
Am., Inc. v. Roche, 298 F.3d 1274, 1280-81 (Fed. Cir.
2002). On appeal, the Government claims that certain
FAR provisions—the Allowable Cost and Payment clause,
48 C.F.R. § 52.216-7(h)(2), and the Credits provision, 48
C.F.R. § 31.201-5—prohibit DIRECTV from satisfying its
liability for segment closing adjustments via cost reduc-
tions attributable to the pension assets transferred to
Raytheon and Boeing as successor contractors.
Since its promulgation in 1983, the Allowable Cost
and Payment clause has provided, in relevant part:
The Contractor shall pay to the Government any
refunds, rebates, credits, or other amounts (in-
cluding interest, if any) accruing to or received by
the Contractor or any assignee under this con-
tract, to the extent that those amounts are prop-
erly allocable to costs for which the Contractor has
been reimbursed by the Government.
48 C.F.R. § 52.216-7(h)(2) (2010); see also Establishing the
Federal Acquisition Regulation, 48 Fed. Reg. 42102,
42512 (Sept. 19, 1983). This clause must be inserted in
all cost-reimbursement contracts. 48 C.F.R. § 16.307(a)(1)
(2010). The clause requires “the Contractor,” in this case
DIRECTV, to pay the Government any amount owed.
That obligation is implemented by the Credits provision,
48 C.F.R. § 31.201-5, which governs the acceptable forms
of payment. See Allegheny Teledyne, 316 F.3d at 1370
n.4. The Credits Clause, 48 C.F.R. § 31.201-5, states:
The applicable portion of any income, rebate, al-
lowance, or other credit relating to any allowable
cost and received by or accruing to the contractor
13 DIRECTV GROUP v. US

shall be credited to the Government either as a
cost reduction or by cash refund. See 31.205-
6(j)(4) for rules related to refund or credit to the
Government upon termination of an overfunded
defined-benefit pension plan.
The Government argues that the original contractor,
DIRECTV in this case, must pay by “cost reduction or by
cash refund” that originates with DIRECTV, not a succes-
sor contractor. It argues that a “refund” can only neces-
sarily be of amounts paid to DIRECTV, or it would not be
a refund. Therefore, it contends that any cost reduction
must also come directly from DIRECTV because the terms
“refund” and “reduction” are used interchangeably in the
Credits Clause. The Government also notes that the
Credits Clause refers to 48 C.F.R. § 31.205-6(j)(4) which
requires the contractor that terminates a pension plan to
make a payment directly to the Government. The Gov-
ernment further argues that the Allowable Cost and
Payment Clause of the FAR also applies to the DIRECTV
contract and requires that “the Contractor shall pay to
the Government any refunds . . .” 48 C.F.R. § 52.216-
7(h)(2) (1998). It argues that the Court of Federal Claims’
interpretation of the Credits Clause contradicts the plain
meaning of this provision.
DIRECTV responds that the Credits Clause does not
preclude use of cost savings from a successor contractor to
pay a segment closing adjustment. It argues that the
words “refund” and “cost reduction” are separated by an
“or” in the Credits Clause and that even if a refund would
have to come from the original contractor, a cost reduction
does not. It contends that the reference to § 31.205-6(j)(4)
is irrelevant because it refers to termination of a pension
plan. The pension plan was not terminated; it was trans-
ferred to a successor contractor.
DIRECTV GROUP v. US 14

We agree with the Court of Federal Claims that
DIRECTV may rely on the cost reductions to the Govern-
ment that occurred based on DIRECTV’s transfer of
pension assets to successor contractors. We are not
persuaded by the Government’s argument that the men-
tion of the word “refund” in the Credits Clause requires
that all payment come directly from the original contrac-
tor, DIRECTV in this case. The Credits Clause allows for
repayment by either “a cost reduction or a cash refund.”
Even if the word “refund” is limited only to payment by
the originally paid contractor—an issue we do not de-
cide—this case is about a “cost reduction.” There is
nothing in the language of the Credits Clause that re-
quires this “cost reduction” to be so limited. In the in-
stant case, DIRECTV transferred pension assets to
successor contractors that allowed the Government to
reap the benefits it was entitled to had the transfer never
taken place. This is certainly a cost reduction. As the
obligated contractor, DIRECTV caused these cost reduc-
tions by transferring the pension assets. The Government
cannot collect the segment closing adjustment for a sec-
ond time simply because these cost reductions occurred as
part of a successor contract. This type of payment is
allowed by the plain language of the Credits Clause.
Thus, we hold that the Credits Clause allows for payment
by way of cost reductions that occur due to the transfer of
pension assets to a successor contractor. 3

3 The dissent is incorrect in its dramatic assertion
that we create a “continuous vortex where the Govern-
ment can be forced to recover its increased costs from any
person.” Dissent at 8. The cost reductions in this case are
the direct result of DIRECTV’s transfer of the pension
assets. The pension continued as if there was never any
change in contractors. We are not holding that any cost
reductions unrelated to the original contractor and the
pension transfer could be used to satisfy the debts.
15 DIRECTV GROUP v. US

The Government does not dispute that because of the
transfer of pension asset surpluses from DIRECTV to
Raytheon and Boeing, the Government received more
savings from the successor contracts than DIRECTV
would owe the Government absent such transfer.
DIRECTV, 89 Fed. Cl. at 307. The Government does not
adequately explain how its proposal for additional pay-
ment from DIRECTV avoids providing a prohibited wind-
fall to the Government. The Court of Federal Claims
correctly held that such a windfall is prohibited by the
CAS statute. See 41 U.S.C. § 422(h)(3) (“In no case shall
the Government recover costs greater than the increased
cost . . . to the Government, in the aggregate, on the
relevant contracts subject to the price adjustment, unless
the contractor made a change in its cost accounting prac-
tices of which it was aware or should have been aware at
the time of the price negotiation and which it failed to
disclose to the Government.”); GE II, 84 Fed. Cl. at 148.
The trial court correctly concluded that under the cir-
cumstances here, “where the undisputed evidence demon-
strates that the Government received the value of
DIRECTV’s CAS 413 segment closing obligation through
a cost reduction from the successor contractors, the exis-
tence of a Government agreement in which the Govern-
ment protected its interest in the pension asset surplus
through a novation agreement or other means is not
material.” DIRECTV, 90 Fed. Cl. at 311. The Credits
Clause cannot require double payment. See id. at 309.
The CAS regulations further support the trial court’s
holding, stating that the Government may recover its
segment closing adjustment through “any . . . suitable
technique.” 48 C.F.R. § 9903.306(f).
We are not persuaded by the Government’s argu-
ments regarding the second sentence of the Credits
Clause which states “[s]ee 31.205-6(j)(4) for rules related
DIRECTV GROUP v. US 16

to refund or credit to the Government upon termination of
an overfunded defined-benefit pension plan.” The facts of
this case do not amount to a “termination” of a pension
plan. This is a transfer and, thus, the rules regarding
termination do not apply. If a contractor truly terminates
a pension plan, then it is clear that only that contractor
can pay any closing adjustment—there are no future
periods with a successor contractor for the Government to
reap the rewards of any surplus. However, when a con-
tractor transfers a pension, the Government continues to
collect the benefits that it was entitled to had the pension
never changed hands. Thus, the rules regarding pension
“termination” are irrelevant to our analysis and the Court
of Federal Claims was correct to hold that the Credits
Clause allows payment of the segment closing adjustment
through cost reductions that are the direct result of the
transfer of pension surplus assets to a successor contrac-
tor. 4
Strangely, the dissent in a complex web of interpreta-
tion reaches a result that neither party advocates. It
performs an exhaustive historical analysis of the Credits
Clause to arrive at a result that the Government—the
beneficiary of the dissent’s proposed resolution—calls
“absurd.” Appellant’s Br. 58. Under the logic of the
dissent, any retained pension asset amounts to a “termi-
nation” of the pension under 48 C.F.R. § 31.205-6(j)(4).
This means that if DIRECTV retained $1.00 of a $1B
pension, then the pension has been “terminated” and that
4 Contrary to the protests of the dissent, our deci-
sion in this section does not contradict the logic of Section
I of this opinion. Dissent at 6. In Section I, we deter-
mined that the term “segment” means a single segment,
not a portion of a segment. In this section, we hold that
the reference to “contractor” may refer to a subsequent
contractor if a pension is transferred. These are two
logically and grammatically distinct inquiries.
17 DIRECTV GROUP v. US

the relevant regulations require that refunds be paid by
DIRECTV alone. Based on our analysis in Section I,
unless the Government expressly agreed to the transfer of
the other $999,999,999.00, DIRECTV would be liable for a
segment closing adjustment on the full $1B, even though
the subsequent contractor continued the pension with all
future amortized adjustments. In this case, for example,
the dissent’s construction would lead to double recovery
by the Government of $273M—once in the form of a
segment closing adjustment and again in the amortized
adjustments by the subsequent contractor. It is not
surprising that neither party requests this outrageous
result.
The Court of Federal Claims correctly determined
that DIRECTV’s segment closing obligations could be
satisfied by the cost savings realized by the Government
in the successor contracts. Further, the Government
concedes that, under this analysis, it is not entitled any
further payments. DIRECTV, 89 Fed. Cl. at 307. Thus,
we affirm.
AFFIRMED
 United States Court of Appeals
for the Federal Circuit
__________________________

THE DIRECTV GROUP, INC.,
Plaintiff-Appellee,
v.
UNITED STATES,
Defendant-Appellant.
__________________________

2010-5031
__________________________

Appeal from the United States Court of Federal
Claims in case no. 04-CV-1414, Judge Nancy B. Firestone.
__________________________

GAJARSA, Circuit Judge, concurring-in-part and dissent-
ing-in-part.
I join Part I of the majority opinion with the under-
standing that Original CAS 413.50 is applied pursuant to
a stipulation by the parties. Unfortunately, the majority
fails to apply the appropriate textual interpretation of the
statute and regulations at issue in Part II. The majority
thereby obtains an outcome-driven result that is contrary
to the CASB authorizing legislation and the FAR, is
contrary to Supreme Court precedent regarding the
interpretation of statutory and regulatory texts, and is
not supported by the factual record. The majority is
complicating the legal analysis. The issue is rather
straightforward. Namely, when the United States has
contributed to a surplus of a defined benefit plan, does it
DIRECTV GROUP v. US 2

have a right and discretion to determine how it can claim
the overpayment? From this latest installment of the
misnamed “national policy of fairness to contractors,”
England v. Contel Adv. Sys., Inc., 384 F.3d 1372, 1383
(Fed. Cir. 2004) (Newman, J., dissenting), I respectfully
dissent.
In my judgment, the majority makes three fundamen-
tal errors in Part II of its opinion. First, the majority fails
to interpret the regulations at issue in light of the CASB
authorizing legislation, 41 U.S.C. § 422, which requires
that contract price adjustments “be made, where applica-
ble, on relevant contracts between the United States and
the contractor.” (emphasis added). The simple and
straight-forward import of that language is that cost
adjustments must be made on contracts between the
Government and the contractor who overcharged the
Government, i.e. DIRECTV. Moreover, the requirement
that the adjustment be made on “relevant contracts”
raises a factual question that cannot be resolved on the
record before us and, therefore, remand is appropriate.
Second, to the degree that Section 422(h) is ambiguous,
the majority selectively misreads interpretive regulations
that give discretion in the manner of recognizing cost
impacts but that explicitly require the Government and
the contractor to agree on the manner selected. See 48
C.F.R. § 9903.306. Instead of forcing the Government to
accept a cost reduction from third parties, it should be
given the opportunity to determine whether it should
obtain a refund from the contractors. Although the Gov-
ernment admits that it will benefit from lower pension
payments in the future under the majority’s holding, it
should be the Government’s determination what compen-
sation it receives when a segment is closed. Finally, the
majority ignores changes to the Credits provision, 48
C.F.R. § 31.201-5, as well as the plain text of 48 C.F.R.
3 DIRECTV GROUP v. US

§ 31.205-6(j)(4), both of which shed important light on
who may provide the cost reductions at issue. I treat each
of these errors in turn.
I.
This case implicates two provisions of the CASB au-
thorizing legislation. Section 422(h)(1) requires that
contractors agree to a “contract price adjustment” when,
as is the case here, they change their cost accounting
practices or fail to comply with the standards promul-
gated by the Board:
The Board shall promulgate rules and regulations
for the implementation of cost accounting stan-
dards promulgated or interpreted under subsec-
tion (f) of this section. Such regulations shall be
incorporated into the Federal Acquisition Regula-
tion and shall require contractors and subcontrac-
tors as a condition of contracting with the United
States to . . . (B) agree to a contract price adjust-
ment, with interest, for any increased costs paid to
such contractor or subcontractor by the United
States by reason of a change in the contractor’s or
subcontractor’s cost accounting practices or by
reason of a failure by the contractor or subcon-
tractor to comply with applicable cost accounting
standards.
41 U.S.C. § 422(h)(1) (emphasis added). 1 The contract
price adjustment is limited, however, by Section 422(h)(3),
which states:

1 While this appeal was pending, 41 U.S.C § 422
was repealed and recodified. See Act of Jan. 4, 2011, Pub.
L. No. 111-350, § 3, 124 Stat. 3677, 3695-700. 41 U.S.C.
§ 422(h)(1) was recodified with minor changes in phrase-
ology at 41 U.S.C. § 1502(f)(2). The changes were not
DIRECTV GROUP v. US 4

Any contract price adjustment undertaken pursu-
ant to paragraph (1)(B) shall be made, where ap-
plicable, on relevant contracts between the United
States and the contractor that are subject to the
cost accounting standards so as to protect the
United States from payment, in the aggregate, of
increased costs (as defined by the Board). In no
case shall the Government recover costs greater
than the increased cost (as defined by the Board) to
the Government, in the aggregate, on the relevant
contracts subject to the price adjustment, unless
the contractor made a change in its cost account-
ing practices of which it was aware or should have
been aware at the time of the price negotiation
and which it failed to disclose to the Government.
Id. § 422(h)(3) (emphases added). 2
In interpreting these provisions, we must begin with
the plain language of the statute. “If the intent of Con-
gress is clear, that is the end of the matter; for the court,
as well as [an] agency, must give effect to the unambigu-
ously expressed intent of Congress.” Chevron U.S.A. Inc.
v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-43
(1984). But it is well established that “[i]f . . . Congress
has not directly addressed the precise question at issue,
the court does not simply impose its own construction on
the statute . . . .” Id. at 843. “Rather, if the statute is
silent or ambiguous with respect to the specific issue, the
question for the court is whether the [answer of the
agency charged with implementing the statute] is based

intended to substantively alter the original statute. Id.
§§ 2, 6; see also H.R. Rep. No. 111-42, at 3 (“This bill is
intended to restate existing law without substantive
change.”).
2 41 U.S.C. § 422(h)(3) was recodified at 41 U.S.C.
§ 1503(b).
5 DIRECTV GROUP v. US

on a permissible construction of the statute.” Id. More-
over, “[i]f the agency interpretation is not in conflict with
the plain language of the statute, deference is due [to that
interpretation].” Nat’l R.R. Passenger Corp. v. Boston &
Me. Corp., 503 U.S. 407, 417 (1992).
A.
Section 422 is unambiguous with regard to the party
responsible for making the required contract price ad-
justment. Section 422(h)(1), which creates the obligation
for a contract price adjustment, requires that a contractor
“agree to a contract price adjustment . . . for any increased
costs paid to such contractor or subcontractor by the
United States.” As a matter of elementary grammar, the
statute’s use of “such” is a demonstrative adjective, and it
must refer to a clear antecedent. See Zuni Pub. Sch. Dist.
No. 99 v. Dep’t of Educ., 550 U.S. 81, 94 (2007) (explaining
that use of “such” indicates a specific antecedent); Gates &
Fox Co. v. OSHA, 790 F.2d 154, 156 (D.C. Cir. 1986)
(Scalia, J.) (same). Applied here, the reference to “such
contractor” must be read to link the party responsible for
the contract price adjustment to the specific contractor to
whom the Government paid increased costs.
The numerous references to “the contractor” in the
statute are similarly unambiguous. Section 422(h)(1)
requires a contract price adjustment in response to “a
change in the contractor’s or subcontractor’s cost account-
ing practices” or if “the contractor or subcontractor [fails]
to comply with applicable cost accounting standards.”
Likewise, the provision limiting that cost adjustment,
Section 422(h)(3), requires that the contract price adjust-
ment be made on “relevant contracts between the United
States and the contractor.” Indeed, each use of the word
“contractor” in Section 422(h)(3) is prefaced by the defi-
nite article “the.” This use of a definite article raises an
DIRECTV GROUP v. US 6

extraordinarily strong inference that a specific contractor
is referenced. See, e.g., Work v. McAlester-Edwards Coal
Co., 262 U.S. 200, 208 (1923). As the United States Court
of Appeals for the District of Columbia Circuit explained:
It is a rule of law well established that the definite
article “the” particularizes the subject which it
precedes. It is a word of limitation as opposed to
the indefinite or generalizing force of “a” or “an.”
Am. Bus Ass’n v. Slater, 231 F.3d 1, 4-5 (D.C. Cir. 2000)
(quotation marks omitted). We have cited that rule to
hold that the phrase “the use” in 35 U.S.C. § 271(e)(2)(A)
must be interpreted to mean a specific use, i.e., “the use
for which the FDA has granted an NDA.” Warner-
Lambert Co. v. Apotex Corp., 316 F.3d 1348, 1356 (Fed.
Cir. 2003). And I would apply the rule here: the statutory
references to “the contractor” must be read to burden the
specific contractor that overcharged the Government,
namely DIRECTV, with the obligation to make the con-
tract price adjustment. Not only is the majority’s con-
trary conclusion inconsistent with basic grammatical and
interpretive rules, it is inconsistent with their reliance on
those rules in Part I to interpret references to “the seg-
ment.”
My conclusion is further confirmed by the statute’s
requirement that the contract price adjustment be made
on “relevant contracts between the contractor and the
United States.” 41 U.S.C. § 422(h)(3). Congress did not
authorize adjustments by any contractor or on any con-
tract; the adjustments must be on a specific subset of
contracts—“relevant contracts”—between the contractor
and the United States. That requirement raises addi-
tional hurdles to recovering the adjustment on contracts
between Raytheon or Boeing, on the one hand, and the
United States, on the other.
7 DIRECTV GROUP v. US

For example, the Government’s consent was pre-
sumably necessary in order for DIRECTV to transfer open
contracts to Boeing and Raytheon. See 41 U.S.C. § 15; 3 cf.
ITT Gilfillan, Inc. v. United States, 471 F.2d 1382, 1384
(Ct. Cl. 1973) (describing a transfer via novation between
the United States and a successor contractor); Gen. Elec.
Co. v. United States, 84 Fed. Cl. 129, 134-36 (2008) (de-
scribing an “Advance Agreement” between the United
States and a successor contractor). But if that consent
established a novation, the resulting contracts do not
have “the contractor” who overcharged the Government as
a party. Indeed, such contracts would be entirely new and
distinct from those between DIRECTV and the United
States. See, e.g., Restatement (Second) of Contracts § 280.
The requirement that price adjustments be made on
“relevant contracts” also raises issues far more significant
than the formalistic effect of a novation. The contracts on
which Raytheon and Boeing provided price adjustments
are not in the record, and the trial court made no findings
as to the nature of those contracts. The majority thus has
no basis for concluding that the claimed reductions were
provided on “relevant contracts” as the statute requires.
Were the reductions provided on novated contracts, which
are at least arguably “relevant”? Were they provided on
different contracts with the same federal agency? Or did
Boeing and Raytheon provide price reductions on con-
tracts involving entirely different agencies? One would be
hard-pressed to argue that contracts involving different
projects or different agencies satisfy the statutory re-
quirement that price adjustments be made on “relevant
contracts.” Thus, remand is necessary to complete the
factual record. Beyond the majority’s misreading of who

3 § 15 was recodified at the same time as § 422 at
41 U.S.C. § 6305. Pub. L. No. 111-350, § 3.
DIRECTV GROUP v. US 8

is responsible for any price adjustment, the majority
conveniently ignores the “relevant contracts” requirement
and its attendant factual inquiry, and focuses on the
Government’s concession, ex poste, that it received more
savings from the successor contracts than DIRECTV
would owe the Government absent such a transfer.
Majority Op. at 15.
The majority identifies no limit to its logic. It be-
comes a continuous vortex where the Government can be
forced to recover its increased costs from any person, on
any contract, and in any form—regardless of the terms of
the original contract—so long as the Government’s recov-
ery is “caused by” the original contractor and a contrary
finding would result in what the majority deems a “wind-
fall.” 4 In my judgment, 41 U.S.C. § 422(h)(3) cannot be
read to create such a fait accompli defense when a con-
tractor acts without the Government’s agreement. That is
particularly true where, as here, the Government argues
that it had little or no contemporaneous knowledge of the
claimed cost reductions and there is no record evidence to
the contrary.
On appeal, the Government specifically argued that it
did not agree to recover its excess costs through cost
reductions provided by Boeing and Raytheon. Gov’t Br.
32-34, 47-49. Indeed, the Government states that “there
is no evidence in the record that [Boeing and Raytheon]
ever sent an invoice or told the Government at any time
how much pension costs [the Government] was allegedly
saving,” Reply Br. 14, and that the cost reductions at
issue were provided “officiously,” Gov’t Br. 42 n.6. More-
over, the trial court specifically found that DIRECTV “did
not present any evidence regarding the role the

4 Notably, the term “windfall” appears nowhere in
the statue or the CAS.
9 DIRECTV GROUP v. US

[G]overnment played in either reviewing or approving the
subject sales from DIRECTV to Raytheon or Boeing.”
DIRECTV Grp., Inc. v. United States, 89 Fed. Cl. 302, 307
(2009). Given that the record contains no evidence re-
garding the Government’s agreement vel non, I would
vacate the grant of summary judgment and remand for
trial on that issue.
B.
In support of its position, the majority cites—partially
and selectively—48 C.F.R. § 9903.306(f). Majority Op. at
15. That provision states, in full:
Whether cost impact is recognized by modifying a
single contract, several but not all contracts, or all
contracts, or any other suitable technique, is a
contract administration matter. The Cost Ac-
counting Standards rules do not in any way re-
strict the capacity of the parties to select the
method by which the cost impact attributable to a
change in cost accounting practice is recognized.
48 C.F.R. § 9903.306(f) (2010) (emphases added). Notably
absent from the majority’s opinion is Paragraph (e) of the
same section:
An adjustment to the contract price or of cost al-
lowances pursuant to the Cost Accounting Stan-
dards clause at 9903.201–4(a) may not be required
when a change in cost accounting practices or a
failure to follow Standards or cost accounting
practices is estimated to result in increased costs
being paid under a particular contract by the
United States. This circumstance may arise when
a contractor is performing two or more covered
contracts, and the change or failure affects all
such contracts. The change or failure may in-
DIRECTV GROUP v. US 10

crease the cost paid under one or more of the con-
tracts, while decreasing the cost paid under one or
more of the contracts. In such case, the Govern-
ment will not require price adjustment for any in-
creased costs paid by the United States, so long as
the cost decreases under one or more contracts are
at least equal to the increased cost under the
other affected contracts, provided that the contrac-
tor and the affected contracting officers agree on
the method by which the price adjustments are to
be made for all affected contracts. In this situa-
tion, the contracting agencies would, of course, re-
quire an adjustment of the contract price or cost
allowances, as appropriate, to the extent that the
increases under certain contracts were not offset
by the decreases under the remaining contracts.
Id. § 9903.306(e) (emphasis added). Paragraph (a)(4)(ii) of
the cross-referenced Cost Accounting Standards Clause,
48 C.F.R. § 9903.201-4(a) similarly requires a contractor
to “[n]egotiate with the Contracting Officer to determine
the terms and conditions under which a change may be
made to a cost accounting practice . . . .” While I agree
that these regulations shed light on the matter at issue,
they do not support the majority’s position. I also agree
that these regulatory provisions provide contracting
officers with broad discretion to agree to alternative
methods of recouping overcharges. 5 But the references to

5 Independent of the discretion recognized in 48
C.F.R. § 9903.306, we have long-recognized that—absent
a clear statutory or regulatory limit to their authority—
contracting officers have broad discretion in the admini-
stration of contracts under their supervision. PAI Corp. v.
United States, 614 F.3d 1347, 1351 (Fed. Cir. 2010); LDG
Timber Enters., Inc. v. Glickman, 114 F.3d 1140, 1143
(Fed. Cir. 1997) (distinguishing Fed. Crop Ins. Corp. v.
Merrill, 332 U.S. 380 (1947)). Included in that discretion
11 DIRECTV GROUP v. US

“contract administration matter” and “the capacity of the
parties to select” in Paragraph (f) indicate that the Gov-
ernment must actually agree to the method selected, and
Paragraph (e) states so explicitly.
Section 422(h) is silent on the manner in which the
contractor can agree to a price adjustment and the man-
ner in which the Government can recover increased costs
from contractors. I believe 48 C.F.R. § 9903.306 is enti-
tled to Chevron deference because it fills a legislative gap
on those issues, is reasonable, and—properly inter-
preted—requires that the Government agree to the spe-
cific method of recovering overcharges by the contractor.
However, summary judgment is inappropriate in this case
because there is no evidence that the Government agreed
to the cost reductions instead of a refund.
II.
In support of its holding, the majority focuses its
analysis on two FAR provisions: the Allowable Cost and
Payment Clause and the Credits Clause. Doing so is
misleading. Even if the FAR were to support the major-
ity’s holding, that support must yield vis-à-vis the CAS, at
least on the question as to which contracts a particular
cost is assigned. See Kearfott Guidance & Navigation
Corp. v. Rumsfeld, 320 F.3d 1369, 1375 (Fed. Cir. 2003)
(“When there is a conflict between FAR and CAS over

is the authority to waive provisions meant to protect the
Government. D & H Distrib. Co. v. United States, 102
F.3d 542, 546 (Fed. Cir. 1996). Thus, even in the absence
of regulations affirmatively granting discretion, I would
recognize the power of contracting officers to waive the
“relevant contracts” requirement. The Government
argues that no such waiver was provided; that argument
raises a question of fact that would preclude summary
judgment.
DIRECTV GROUP v. US 12

allocability, the CAS regulation governs.”). However, the
FAR also does not support the majority’s result.
I agree that, as with the CAS authorizing legislation,
the Credits Clause has consistently burdened “the Con-
tractor,” in this case DIRECTV, with the obligation of
paying the Government any amount owed. Majority Op.
at 12. But the majority then finds that the Credit
Clause’s authorization for payment via a “cost reduction”
permits DIRECTV to force the Government to accept a
cost reduction provided by a third party, i.e. Boeing and
Raytheon. Id. at 14. Not only is that result an erroneous
reading of the Credits provision and contrary to the CAS
authorizing statute, it requires the majority to ignore the
plain language of 48 C.F.R. § 31.205-6(j)(4).
The Credits provision does not directly specify who
must provide a cost reduction or cash refund. It does,
however, provide guidance. The reference in the Credits
provision to a “refund” necessarily implicates the recipient
of the funds, i.e., the contractor, and the reference to a
“cost reduction” as an alternative to a “refund” implies
that both should originate from the same source. See
United States v. Stevens, 130 S.Ct. 1577, 1588 (2010)
(applying the doctrine of noscitur a sociis). Whatever
ambiguity remains is resolved by Section 31.205-6(j)(4).
The version of that provision in effect from September 20,
1989, through December 28, 1998, states that whenever
“[pension] assets are constructively received by it for any
reason, the contractor shall make a refund or give a credit
to the Government for its equitable share.” 48 C.F.R.
§ 31.205-6(j)(4) (1990) (emphasis added). In this case,
DIRECTV received assets from the pension funds in
question, and Section 31.205-6(j)(4) mandates that “the
contractor,” i.e., DIRECTV, “make a refund or give a
credit to the Government for its equitable share.”
13 DIRECTV GROUP v. US

The majority’s blasé indifference to the plain language
of § 31.205-6(j)(4), which applies whenever “[pension plan]
assets are constructively received by [a contractor] for any
reason,” is apparently attributable to that provision
appearing under the heading “Termination of defined
benefit pension plans.” See Majority Op. at 15-16. The
majority plainly errs to the degree it impermissibly ig-
nores the text of § 31.205-6(j)(4) based on the provision’s
heading. See, e.g., Intel Corp. v. Advanced Micro Devices,
542 U.S. 241, 256 (2004) (stating that the caption cannot
undo or limit the plain text of a statute). And the regula-
tory history of that provision makes clear that its cover-
age extends beyond pension plan terminations; indeed,
the originally proposed language was specifically broad-
ened so as to bring “any reversions to contractors of pen-
sion fund assets” within its scope. 54 Fed. Reg. at 34751
(emphasis added). Because DIRECTV retained pension
surplus in this case, it has constructively received surplus
assets and section 31.205-6(j)(4) requires DIRECTV to
give a cost reduction or refund to the Government.
The result is no different if the majority instead relies
on the Credit Clause’s cross-reference to Section 31.205-
6(j)(4) “for rules related to refund or credit to the Gov-
ernment upon termination of an overfunded defined
benefit pension plan” because “the words of a statute
must be read in their context and with a view to their
place in the overall statutory scheme.” FDA v. Brown &
Williamson Tobacco Corp., 529 U.S. 120, 132 (2000)
(citation omitted). The same rule applies to the construc-
tion of regulations. Reflectone, Inc. v. Dalton, 60 F.3d
1572, 1577 (Fed. Cir. 1995) (en banc). Consistent with
that rule, an imprecise cross-reference in the Credits
provision cannot be read to negate the applicability of
Section 31.205-6(j)(4) in situations plainly covered by its
text. Indeed, post-1998 versions of the Credits provision
DIRECTV GROUP v. US 14

remedy the imprecision, and cross-reference Section
31.205-6(j)(4) “for rules governing refund or credit to the
Government associated with pension adjustments and
asset reversions.” 63 Fed. Reg. at 58597 (emphasis
added).
Thus, neither the CAS nor the FAR allow DIRECTV
to escape its obligation to pay. Of course, the Government
was free to agree to a different arrangement, but that is
not what the majority holds. It forces the Government to
take what the contractor gives it.
III.
In condoning DIRECTV’s fait accompli defense, the
majority entirely neglects that contracts are at issue. The
Government contracted for specific goods and services
from a specific party, in exchange for payment of costs
according to a specified formula. The contracts, along
with the FAR and the CAS provisions incorporated
therein, specified how cost adjustments should be made
and from whom those adjustments could be recovered.
The majority claims I argue for an “absurd result”. See
Majority Op. at 16. However, there is nothing absurd
about holding a party to a contract and requiring them to
pay when the contract says they must. DIRECTV sold a
segment that included an overfunded pension fund. The
sale price most certainly was increased to reflect the
excess funds contained in the pension, most of which are
available to the purchaser in the event the fund is termi-
nated in the future. Thus, DIRECTV received more for
the sale of the segment than it would have had the pen-
sion not been overfunded. A portion of that increased sale
price is owed to the Government. The fact that Boeing
and Raytheon will supposedly charge the Government
less in the future is irrelevant to the fact that DIRECTV
15 DIRECTV GROUP v. US

has avoided its obligations under the contract to the
potential detriment of the taxpayers.
This court has long recognized that “[t]he need for
mutual fair dealing is no less required in contracts to
which the [G]overnment is a party, than in any other
commercial arrangement.” Maxima Corp. v. United
States, 847 F.2d 1549, 1556 (Fed. Cir. 1988) (Newman, J.).
Over and above the plain text of the statute and regula-
tions at issue, as well as the maxim that “[m]en must turn
square corners when they deal with the Government,”
Rock Island v. United States, 254 U.S. 141, 143 (1920)
(Holmes, J.), fundamental fairness dictates that the
Government should not be forced to accept price adjust-
ments on contracts except those for which it bargained.
CONCLUSION
Despite the myriad of interpretive rules available for
guidance, see Karl Llewellyn, Remarks on the Theory of
Appellate Decision, 3 Vand. L. Rev. 395, 401-06 (1950),
the thrusts and parries of the classic canons—not to
mention the rules of English grammar—proved inade-
quate to reach the result sought by the majority. Because
the majority fails to apply these rules, I respectfully
dissent.