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The committee report language the 
court cites includes certain 1988 House 
and Senate reports. In the first place, 
this so-called legislative history is not 
history - that is, the House and Senate 
Reports the court cites with such 
authority (see maj. op. at 1374-75) 
were written after § 8118 was enacted 
in 1987, and relate to later-considered 
legislation. How the views of a later 
Congress, not contained in actual 
legislation, can be seen as amending or 
modifying prior legislative acts, is not 
explained. And, even assuming that any 
of that legislative history is relevant to 
understanding the 1987 Act, the only 
consistent thread in all of it is the 
expression of congressional irritation 
and frustration with the DoD's (or at 
least the Navy's) stubborn insistence on 
doing what Congress wanted stopped. 
Further, when examined, even the 
terms in which the language of the 1988 
Senate Report was written, heavily 
relied upon by the court to support 
its conclusion, see maj. op. at 1375, 
fail to support the court's view. The 
Report states that "this section [not 
8118 of the 1987 Act, but a later-
proposed section] not be used as the 
basis for litigating the propriety of an 
otherwise valid contract." S.Rep. No. 
100-326, at 105 (1988). Since by its 
terms a contract in direct violation of 
8118 is not "otherwise valid," the 
statement proves nothing with regard to 
8118, whether it be the 1987 version 
or the proposed 1988 version. And in 
case a court should miss that point, 
the very next sentence in the Report 
is: "Nothing in this section shall be 
construed to affect the requirements 
of section 8118 of the Department of 
Defense Appropriations Act, 1988." Id. 
3. 
The court finds further justification 
for its emasculation of the statute 
by opining that "Congress can not 
have intended to charge the contracting 
partner with adverse consequences 
depending on whether the Defense 
Department carried out the internal 
responsibilities and filed the reports 
that Congress required." Slip op. at 
1375. The response to that observation 
is that that would appear to be exactly 
what Congress intended. AT & T, one 
of the country's leading government 
contractors,7 could be expected to be 
familiar with government contracting 
laws. It is difficult to imagine that AT 
& T was unaware of the battle between 
Congress and the DoD *1383 over 
these fixed price-type contracts. At the 
least, it is not irrational for Congress 
to have assumed that a contractor, like 
AT & T, proposing to undertake a 
major R & D contract would know who 
in the DoD to contact regarding the 
requirements for the contract they were 
negotiating, and that the DoD's lawyers 
would know the relevant law. 
What the court seems to have in mind 
here, though it does not say so, is 
the rule, sometimes called the "Golden 
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Rule," that a statute should not be 
understood to call for an absurd result. 
Just as finding a statute ambiguous 
permits a court to go beyond the terms 
of the statute in searching for meaning, 
the Golden Rule permits a court to 
go beyond the apparent meaning of a 
statute when its application would be 
absurd. 
Justice Kennedy described the Rule 
thusly: 
Where 
the 
plain 
language 
of 
the 
statute 
would 
lead 
to 
"patently absurd consequences," that 
"Congress could not possibly have 
intended," we need not apply the 
language in such a fashion.... This 
exception remains a legitimate tool of 
the Judiciary, however, only as long 
as the Court acts with self-discipline 
by limiting the exception to situations 
where the result of applying the plain 
language would be, in a genuine 
sense, absurd, i.e., where it is quite 
impossible that Congress could have 
intended the result, and where the 
alleged absurdity is so clear as to be 
obvious to most anyone. 
Public Citizen v. United States Delis 
of Justice, 491 U.S. 440, 470, 109 
S.Ct. 2558, 105 L.Ed.2d 377 (1989) 
(Kennedy, J., concurring). One must 
wonder whether a statute that orders 
the DoD not to spend money in a 
wasteful way is "absurd" within the 
definition set forth by Justice Kennedy. 
Emphasizing the narrow scope of the 
absurdity exception, Justice Kennedy 
went on to note: 
Where 
it 
is clear 
that the unambiguous 
language of a statute 
embraces 
certain 
conduct, and it would 
not 
be 
patently 
absurd 
to 
apply 
the statute to such 
conduct, it does not 
foster a democratic 
exegesis for this Court 
to rummage through 
unauthoritative 
materials to consult 
the 
spirit 
of 
the 
legislation in order to 
discover an alternative 
interpretation of the 
statute with 
which 
the Court is more 
comfortable.... 
The 
problem with spirits 
is that they tend to 
reflect less the views of 
the world whence they 
come than the views of 
those who seek their 
advice. 
Id. at 473, 109 S.Ct. 2558 
citations 
omitted) 
(Kennedy, 
J., 
concurring). 8
(internal 
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American Tel. 8 Tel. Co. v. U.S., 177 F.3d 1368 (1999) 
4. 
AT & T has no rightful claim to 
another penny of public money. It 
agreed to build and sell a product to 
the Government for a fixed price. It 
performed its end of the deal, and 
delivered the goods. The Government 
likewise performed its part of the deal; 
it paid AT & T the agreed-upon price 
(actually more, as a result of negotiated 
add-ons). 
If the contract had been valid under 
governing law, AT & T would have 
no basis for claiming more money; 
our precedents are unequivocal that 
full payment *1384 under a valid 
fixed price-type contract is all to which 
a contracting party is entitled. 9 The 
risk of loss for misjudging what it 
takes to perform, or for deliberately 
underbidding, is on the contractor, not 
the Government. 10
AT & T now seeks to take advantage 
of the fact that the deal it made 
with the Government did not result 
in an enforceable contract, which it 
likely knew (and certainly should have 
known) when it proposed to enter into 
the agreement. AT & T demands more 
money for what it has been fully paid 
to do. The answer to that facially 
nonsensical demand is, in a word, "no." 
Perhaps the court thought it could not 
get there if, in accordance with the 
statute, it held the contract invalid. 
Actually, the right answer is not that 
difficult, even accepting the fact that 
there is no legally-enforceable contract 
between the parties. AT & T argues 
that, since the contract it made is 
unenforceable, it should be treated as 
having an "implied-in-fact" contract, a 
key term of which would be different 
from that to which the parties actually 
agreed. The different term would be 
that the contract would not be for a 
fixed price, but instead would be a 
cost-plus contract. That would take the 
contract outside the scope of§ 8118, and 
give AT & T a rightful claim to all the 
money for which it asks. 
That would also make nonsense out 
of the concept of an implied-in-fact 
contract. An implied-in-fact contract 
is a form of consensual contract, 
reflecting the basic requirements for 
such a contract including that of a 
meeting of the minds. It differs from 
the usual express contract only in that 
the terms, instead of being expressly 
stated by the parties, are derived from 
their conduct. Nothing here in the 
conduct of the parties suggests an 
agreement to have a cost-plus contract; 
on the contrary, the parties specifically 
stipulated to a fixed price-type contract. 
If AT & T is to have any remedy 
entitling it to more than what it has been 
paid, its claim must be based on some 
sort of equitable claim for payment for 
goods sold and delivered, a quantum 
valebat claim." Even assuming for 
discussion purposes that the Court 
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American Tel. 8 Tel. Co. v. U.S., 177 F.3d 1368 (1999) 
of Federal Claims could exercise the 
powers of a court of equity, AT & T 
has no equity on its side, and therefore 
is not entitled to the intervention of a 
court of equity. 
AT & T comes to the court with unclean 
hands. AT & T is not an innocent 
bystander being taken advantage of 
by a predator government. Both the 
Government and AT & T knew exactly 
what they *1385 were doing when they 
entered into this deal. It simply defies 
belief that AT & T was unaware of 
8118 when it purported to contract 
with the Government or was unaware 
that the Navy was proceeding with the 
contract in the manner the Navy did. 
In any event, that does not matter. The 
most that AT & T would be entitled to 
under any equitable theory is the fair 
value of the goods sold, and that value 
was agreed to by AT & T when it made 
the deal with the Navy. The goods are 
one-of-a-kind, not to be found on the 
shelf at your usual military equipment 
supermarket. There can be no better 
method for determining a fair price for 
the goods than to see what a willing 
seller would sell them for to a willing 
buyer. 
AT & T does not allege that it was 
coerced by the Government, or that 
it was caused to enter into the deal 
by fraud. It simply wants more money 
for a product it agreed to provide 
for a price that proved, according 
to AT & T, too low. An inefficient, 
wasteful, or simply ignorant contractor 
cannot foist off on the other contracting 
party the consequences of its own 
incompetence. 12 The law in a case like 
this leaves the parties where it found 
them. 13
The en banc court appears unwilling 
to give AT & T any more money 
on its so-called non-contract claim. As 
I said at the beginning, a court has 
a responsibility to arrive at the right 
result, but also an obligation to do 
no harm to the fabric of the law. A 
wrong result is an injustice to one party; 
distorting important legal principles is a 
disservice to the entire legal system. 
It is true that statutory interpretation 
does not occur in a vacuum. Words 
take meaning from the context in which 
they are used, and, when text and 
context yield genuine doubt, courts may 
seek guidance from accepted canons, 
from history, and from legislative 
purpose when it can be authoritatively 
known. In many cases, construing 
Congressionally-mandated language is 
as much an art as it is linguistic science. 
But it is not an art in which the picture 
that emerges is without constraints, or 
is limited only by the imagination of the 
artist. 
There is an established methodology 
that courts employ in construing 
statutes. As the quoted excerpts 
from the Supreme Court show, the 
methodology is well-recognized, even 
if judges do not always agree on how 
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much weight to give to its various parts 
in a given case. 14 The methodology 
is designed to provide guidance 
*1386 for the exercise of judicial 
self-discipline, the self-discipline that 
produces principled decisions. 
This court has in the past expressly 
recognized the governing principles: 
"A statute is by definition the 
law to be followed—not disregarded, 
effectively 
repealed, 
rewritten, or 
overruled 
(unless 
unconstitutional) 
—in 
the federal courts," In re 
Mark Indus., 751 F.2d 1219, 1224 
(Fed.Cir.1984), and recently reiterated 
the point: "This court is empowered to 
rewrite neither statutes nor regulations, 
however unwise, nor does it have the 
information base nor expertise to do so 
effectively," Newport News Shipbuilding 
& Dry Dock Co. v. Garrett, 6 F.3d 1547, 
1558 (Fed.Cir.1993). 
In sum, since the statute before us is not 
ambiguous and its application to the 
case would not require an absurd result, 
there is neither reason nor justification 
for reaching beyond the statute to 
legislative history or supposed purpose 
in order to find a different answer. 
Further, what little known legislative 
history there is I find inapposite and 
unpersuasive. Accordingly, I believe it 
is our duty to apply the statute as it has 
been given to us by Congress. 
Thus, my answers to the questions 
certified are: (1) yes, the contract is 
null, void, and necessarily invalid, as 
the Court of Federal Claims correctly 
concluded; and (2) no, AT & T is 
not entitled to any equitable or other 
remedy on the facts presented, even if 
the Court of Federal Claims had power 
to grant such a remedy. I respectfully 
dissent from the court's contrary view. 
All Citations 
177 F.3d 1368 
Footnotes 
* 
Circuit Judges Rich and Michel did not participate in this decision. 
1 
2 
1 
The panel decision of the Federal Circuit, reported at American Tot & Tel. Co. v. United States, 124 F.3d 
1471 (Fed.Cir.1997), was vacated and withdrawn, 136 F.3d 793 (Fed.Cir.1998). The decision of the Court of 
Federal Claims is reported at 32 Fed.Cl. 672 (1995), and the certification for interlocutory appeal is reported 
at 33 Fed.Cl. 540 (1995). On this rehearing amicus briefs were filed by the Federal Circuit Bar Association 
and by the Electronic Industries Alliance and Aerospace Industries Association of America. 
The dissenting opinion would hold the fully performed AT & T/Navy contract void ab initio, stating that the 
purpose of § 8118 was to "prevent contracts with the United States in contravention of its terms". However, 
Congress' stated concern was to curb the Navy's use of fixed price R & D contracting so as to "maintain 
the government's credibility as a reliable business partner: H.R. Conf. Rep. No. 100-498 at 623 (Dec. 22, 
1987), not to bar essential defense procurement. The dissent's proposed nullification of this fully performed 
contract would do little for "the government's credibility as a reliable business partner: 
A similar reaction was eloquently expressed by Chief Judge Joseph of the Oregon Court of Appeals in an 
award to his colleagues. See Western Communications, Inc. v. Deschutes County, 100 Or.App. 706, 788 
P.2d 1013, 1017 (Or.App.1990) (Joseph, C.J., dissenting-In-part, concurring-in-part). 
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2 
CI. Rust v. Sullivan, 500 U.S. 173, 111 S.Ct. 1759, 114 L.Ed.2d 233 (1991) (construing the phrase -method 
of family planning" in an Act appropriating funds to the Department of Health and Human Services. subject 
to a proviso that stated: "None of the funds appropriated under this subchapter shall be used in programs 
where abortion is a method of family planning."). 
3 
See Omnibus Consolidated Rescissions and Appropriations Act of 1996, Pub.L. No. 104-134, 110 Stat. 
1321-298. 
4 
Judge Wald dissented. She did not disagree with the court's understanding of the consequences of 
noncompliance with the statute, but dissented on the grounds that the state official's letter was "the functional 
equivalent" of a governor's letter. See Harbor Gateway, 167 F.3d at 607 (Wald, J., dissenting). 
5 
As my colleagues know, I spent some years of my life as a sea-going officer in the U.S. Navy; it is not easy 
for me to be critical of the Service, but the facts are what they are. 
6 
The concurring opinion stays within established statutory interpretation principles by attempting to redefine 
the scope of § 8118. Unfortunately, for the reasons well-explicated in the opinion of the court majority, the 
attempt to have this contract escape the clutches of § 8118 fails. 
7 
For the year 1987, AT & T was listed as 15th among the Top 100 Federal Contractors, with 
1,438 procurement actions worth something over $2 billion. See Federal Procurement Data Center, 
Govemmentwide Information Systems Division, MVS. GSA, Central Office, Top 100 Federal Contractors 
14 (Jan. 25, 1988). AT & T was 16th in 1988. See Federal Procurement Data Center, Governmentwide 
Information Systems Division, MVS, GSA, Central Office, Top 100 Federal Contractors 14 (Feb. 2, 1989). 
8 
Justice Rehnquist expressed the same sentiment in United Steelworkers of America v. Weber, 443 U.S. 193, 
254, 99 S.Ct. 2721, 61 L.Ed.2d 480 (1979) (Rehnquist, J., dissenting) (-Finding the desired result hopelessly 
foreclosed by these conventional sources, the Court turns to a third source —the 'spirit' of the Act. But close 
examination of what the Court proffers as the spirit of the act reveals it as the spirit animating the present 
majority, not the 88th Congress."). 
9 
See, e.g., Loral Corp. v. United States, 193 Ct.CI. 473, 434 F.2d 1328, 1330 (1970) ("Mho type of contracts 
in question are firm fixed-price contracts and once the price was agreed upon, that price remains fixed and 
it is not subject to further negotiation, unless otherwise provided in the contract.'); see also 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 the contract."); cf. ITT Fed. Servs. Corp. v. Widnall, 132 
F.3d 1448, 1451 (Fed.Cir.1997) (holding that ITT was not entitled to recovery of normal severance costs 
because in a firm, fixed-price contract situation, the contractor assumes responsibility for all such costs that 
may be incurred). 
10 
See, e.g., ITT, 132 F.3d at 1451 (Fed.Cir.1997) (agreeing with the ASBCA that in a firm fixed-price contract 
situation, the contractor "assumes maximum risk and full responsibility for all such costs that may be 
incurred"); see also 48 C.F.R. § 16.202-1 (placing upon the contractor "maximum risk and full responsibility 
for all costs and resulting profit or loss"); 
Emerald Maintenance, Inc. v. United States, 925 F.2d 1425, 
1430 (Fed.Cir.1991) (noting that the risk of loss was on the contractor who "should not be compensated for 
incurring added expenses resulting from assuming that risk"). 
11 
An action for goods sold and delivered, "founded on an implied assumpsit or promise, on the part of the 
defendant, to pay the plaintiff as much as the goods were reasonably worth." Black's Law Dictionary 1244 
(6th ed.1990). 
12 
It should be obvious that, just as AT & T could not claim additional payment for goods for which it has 
been fully paid, it could not claim ownership of the goods for purposes of recovering them, for example, in a 
replevin action. A suggestion to the contrary could not be taken seriously. Even if the law would contemplate 
it, it is hard to imagine a major American contractor, whose fiscal lifeblood comes in substantial measure 
from contracts with the United States Government, even thinking about replevying a secret government 
weapon for resale elsewhere. Money is one thing; fiscal suicide is another. 
13 
See, e.g., Keystone Driller Co. v. General Excavator Co., 290 U.S. 240, 245, 54 S.Ct. 146, 78 L.Ed. 293 
(1933) ("A court of equity acts only when and as conscience commands; and, if the conduct of the plaintiff 
be offensive to the dictates of natural justice, then, whatever may be the rights he possesses, ... he will be 
held remediless in a court of equity." (internal quotations omitted) (quoting Deweese v. Reinhard, 165 U.S. 
386, 390, 17 S.Ct. 340, 41 L.Ed. 757 (1897))). 
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14 
The methodology of statutory interpretation, with all its ramifications, has become one of the darlings of 
academic discourse, and is offered as a proper subject of study in many of the leading law schools, taught 
from modem-day casebooks. See, e.g., William D. Popkin, Materials On Legislation: Political Language and 
the Political Process (Found Press 2d ed.1997); William Eskridge & Philip Frickey, Cases and Materials 
on Legislation—Statutes and the Creation of Public Policy (West Pub. Co.2d ed.1995); Abner Mikva & Eric 
Lane, Legislative Process (Little, Brown 1995). 
End of Document 
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