Breach of CBT Contract Activities
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After several months of price adjustments, negotiations, and an apparently successful Sole-Source Justification , LISC had actually prepared a Materials Request on February 5, 1991 for $827,000 for TME to produce 15 non-COTS tutorials. Without warning or notice LISC abruptly suspended the negotiations and began a secret bidding process with other companies, excluding TME from that bidding. LISC had decided that they could acquire less sophisticated CBT for less cost, even though they bound TME to the older, more stringent standards. For nearly seven weeks LISC had contacted other companies for prices until it had compiled a list of potential developers who could provide them with what it called the "Volkswagen" version of the CBT. When all was ready, Clovice A. Lewis, Jr. was called into a meeting on March 22, 1991, where it was explained to him for the first time that LISC had made the decision to proceed with a different CBT interface and that TME was being given the opportunity to bid for a contract to produce them.
On March 28, 1991 Clovice issued LISC a strongly worded letter from TME's attorney, Teresa CaIdwell, warning LISC that it was in danger of breaching its First Right of Refusal and Development Rights clauses of its contract with TME. The letter was addressed to Ron Barale, the NOAVA program manager and was personally hand-delivered by Clovice to him. In a subsequent meeting held later that afternoon with Bud Braiser, Ron Barale, and Mike Kerr, Clovice offered to negotiate a more formal contract with LISC that would not so heavily favor TME. A key demand of the letter is that TME is paid the remainder of the money owed to it for the LTD in June of 1990. LISC never formally acknowledged receipt of, or responded to, the warning letter.
Mike Kerr (Contract Manager) arranged a meeting with Clovice Lewis on April 1, 1991. At that meeting Clovice was told that, since Mr. Kerr was new to LISC, and unfamiliar with TME's record, he had discovered that TME's performance at LISC was regarded as "stellar". He also said that he had gone to the Lockheed corporate legal department to get an opinion on the warning letter TME had issued the week before and on the overall status of the LISC/TME contract. He told Clovice that it was his and the legal department's opinion that LISC did not have a contract with TME, since no documents were ever signed - and added that "in all his years as a contracting officer, he had never seen a maneuver like this." Mike told Clovice that LISC has the right to negotiate with any other company for goods and services, to determine the best price for those services, and will purchase services from anyone it chooses to. Clovice asked Mr. Kerr to expedite the money owed to TME for the LTD. Clovice also gave him two documents: the January 21, 1991 development payment proposal TME gave to Bud Brasier, and a paper entitled The "TME Explainer Series". The meeting concluded with the promise that Mike would hand over the payment process to Bud Brasier, and would speed the process.
It was shortly after then that LISC embarked on a campaign apparently designed to trick TME into relinquishing its rights and nullifying its previous contract. When that attempt failed LISC endeavored to stall implementation of computer-based training with a series of Statements of Work. In the meantime LISC contacted another company called VASCO to develop the non-COTS CBT that it told TME was commercially available. The proposals from VASCO and COMWARE in response to the "Rough Order of Magnitude" bidding process reveals that TME did have reasonable prices for its CBT, in addition to ensuring better quality through consistency of interface and overall design.
A tape recording was left of Clovice's home answering machine during the middle of April where Claire Donovan admits to having created and mailed separate Statements of Work to different companies. A transcript of the recording is as follows:
Hi Clovice, this is Claire at LISC. I'm calling regarding the wrong quote that I sent to you on the 27th of March, for you to quote. It was actually a revised Statement of Work. I need to touch base because I made some errors when I sent out the ROM to all three of the people that I sent it out to, and I just want to make sure that you're not quoting off the wrong letter. Dave Etter may have given you a copy of his Statement of Work. In that case you're probably quoting off the right one. Anyway I need to clear this up. Sorry if it's caused any inconvenience. Give me a call back. I'm on 408-987-4683. Thanks Clovice. Goodbye.
The last Statement of Work between TME and LISC for non-COTS tutorials that was being negotiated was dated May 17, 1991. Negotiations were suspended abruptly in mid-air; the standard explanation for the following six months being that it was "under analysis". In the meantime TME was told that many requirements had changed in the NOAVA program. Through our attorney, Teresa Caldwell, TME repeatedly sought any revised versions of the Best and Final Offer between LISC and the VA through the Freedom of Information Act, but were never successful at acquiring the document.
It is important here to point out that TME was not paid the balance of the money it was owed on the work it did for the LTD, per its contract with LISC until June 28 of 1991. This payment was secured only after TME had written a memorandum on June 14, 1991 to Robert Putney and Ted Sieverson at LISC to recount the chronology of events leading to its submittal of the invoice on March 28 and demand the payment. The memorandum, which was signed and dated by Ron Barale, clearly documented that he was fully aware of, and agreed to the terms of the June 17, 1990 contract between TME and LISC.
Because of the conflicting Information we were getting from Dave Etter at the time, TME sent a fax on June 20, 1991 to Mary Brown, the Training Coordinator at the VA. The fax was in the form of a two page survey which solicited her response to the VA requirements concerning several key issues: 1) features and functions of tutorials, 2) features and functions of self instruction computer-based training, 3) tutorial development priorities, and 4) time frame for the availability of tutorials. In every one of Ms. Brown's responses, which was faxed back to TME on June 25, 1991, it was clear that the Statements of Work TME receiving from LISC required it to develop products that were at variance with what the VA wanted, and that the VA might actually reject software produced under the SOWs had the VA received them.
On July 23, 1991, fearing that the VA had been told that TME could not or would not produce the non-COTS (May 17 was the last Statement of Work from LISC), and that the requirements for computer-based training had changed, TME sent by registered mail a package to Mary Brown, Claudia Fletcher, and William Stapleton at the VA. The package included a memorandum, the completed survey TME sent to Mary Brown on June 20, 1991, and a copy of the Azuresoft "Flight Computing Catalog ", which had a two-page full-color feature about TME's latest computer-based training software called "Wilbur's Flight School". The memorandum explained TME's contract with LISC, their apparent confusion about the VA's requirements, TME's concerns about LISC's mismanagement of the computer based training requirements, and the fact that TME had not delivered any CBT because it had not been authorized by LISC to begin. TME also requested a letter from the VA stating what its requirements are, and that TME is still regarded as the subcontractor to provide CBT/CAI for the NOAVA program. With this letter, TME could have secured separate funding for the project. TME never received a reply from the VA to its July 23, 1991 memorandum.
Throughout the Summer and Fall of 1991 LISC made plans to develop the non-COTS CBT with other companies, to develop the computer-aided instruction (CAI) internally, and essentially cut TME out of the NOAVA program altogether. This was all being done while it continued to inform the VA that TME would produce all non-COTS CBT and CBI through the Training Manual it periodically produced (with TME's desktop publication assistance), and while it told TME that the last Statement of Work from May 17, 1991 was "under analysis".
Months of delay, evasion, and inaction followed until November, 1991, when all pretense was ended. On November 11, Clovice Lewis had a meeting with Dave Etter (Training Manager) and Jeannie Llewellyn (an assistant). That was the first time he was told that LISC had abandoned development of non-COTs tutorials altogether, and would simply wait until either one of two events happened: 1) the VA specifically requests a particular non-developed tutorial or 2), a tutorial becomes commercially available which would then be offered to the VA. A document which has subsequently discovered actually demonstrates how the policy of finding commercial CBT, or ignoring the VA requirement was intended to work for LISC.
On March 4, 1992 TME was asked by Jeannie Llewellyn in a rather terse memorandum to submit a bid for the Self-Instructional software that LISC will need for the NOAVA program. The TME response was to inform her that we are under contract to provide LISC with the software and wish to exercise our First Right of Refusal privileges. This was the last correspondence between LISC and TME regarding the June 17, 1990 contract for CBT.
On March 28, 1991 Clovice issued LISC a strongly worded letter from TME's attorney, Teresa CaIdwell, warning LISC that it was in danger of breaching its First Right of Refusal and Development Rights clauses of its contract with TME. The letter was addressed to Ron Barale, the NOAVA program manager and was personally hand-delivered by Clovice to him. In a subsequent meeting held later that afternoon with Bud Braiser, Ron Barale, and Mike Kerr, Clovice offered to negotiate a more formal contract with LISC that would not so heavily favor TME. A key demand of the letter is that TME is paid the remainder of the money owed to it for the LTD in June of 1990. LISC never formally acknowledged receipt of, or responded to, the warning letter.
Mike Kerr (Contract Manager) arranged a meeting with Clovice Lewis on April 1, 1991. At that meeting Clovice was told that, since Mr. Kerr was new to LISC, and unfamiliar with TME's record, he had discovered that TME's performance at LISC was regarded as "stellar". He also said that he had gone to the Lockheed corporate legal department to get an opinion on the warning letter TME had issued the week before and on the overall status of the LISC/TME contract. He told Clovice that it was his and the legal department's opinion that LISC did not have a contract with TME, since no documents were ever signed - and added that "in all his years as a contracting officer, he had never seen a maneuver like this." Mike told Clovice that LISC has the right to negotiate with any other company for goods and services, to determine the best price for those services, and will purchase services from anyone it chooses to. Clovice asked Mr. Kerr to expedite the money owed to TME for the LTD. Clovice also gave him two documents: the January 21, 1991 development payment proposal TME gave to Bud Brasier, and a paper entitled The "TME Explainer Series". The meeting concluded with the promise that Mike would hand over the payment process to Bud Brasier, and would speed the process.
It was shortly after then that LISC embarked on a campaign apparently designed to trick TME into relinquishing its rights and nullifying its previous contract. When that attempt failed LISC endeavored to stall implementation of computer-based training with a series of Statements of Work. In the meantime LISC contacted another company called VASCO to develop the non-COTS CBT that it told TME was commercially available. The proposals from VASCO and COMWARE in response to the "Rough Order of Magnitude" bidding process reveals that TME did have reasonable prices for its CBT, in addition to ensuring better quality through consistency of interface and overall design.
A tape recording was left of Clovice's home answering machine during the middle of April where Claire Donovan admits to having created and mailed separate Statements of Work to different companies. A transcript of the recording is as follows:
Hi Clovice, this is Claire at LISC. I'm calling regarding the wrong quote that I sent to you on the 27th of March, for you to quote. It was actually a revised Statement of Work. I need to touch base because I made some errors when I sent out the ROM to all three of the people that I sent it out to, and I just want to make sure that you're not quoting off the wrong letter. Dave Etter may have given you a copy of his Statement of Work. In that case you're probably quoting off the right one. Anyway I need to clear this up. Sorry if it's caused any inconvenience. Give me a call back. I'm on 408-987-4683. Thanks Clovice. Goodbye.
The last Statement of Work between TME and LISC for non-COTS tutorials that was being negotiated was dated May 17, 1991. Negotiations were suspended abruptly in mid-air; the standard explanation for the following six months being that it was "under analysis". In the meantime TME was told that many requirements had changed in the NOAVA program. Through our attorney, Teresa Caldwell, TME repeatedly sought any revised versions of the Best and Final Offer between LISC and the VA through the Freedom of Information Act, but were never successful at acquiring the document.
It is important here to point out that TME was not paid the balance of the money it was owed on the work it did for the LTD, per its contract with LISC until June 28 of 1991. This payment was secured only after TME had written a memorandum on June 14, 1991 to Robert Putney and Ted Sieverson at LISC to recount the chronology of events leading to its submittal of the invoice on March 28 and demand the payment. The memorandum, which was signed and dated by Ron Barale, clearly documented that he was fully aware of, and agreed to the terms of the June 17, 1990 contract between TME and LISC.
Because of the conflicting Information we were getting from Dave Etter at the time, TME sent a fax on June 20, 1991 to Mary Brown, the Training Coordinator at the VA. The fax was in the form of a two page survey which solicited her response to the VA requirements concerning several key issues: 1) features and functions of tutorials, 2) features and functions of self instruction computer-based training, 3) tutorial development priorities, and 4) time frame for the availability of tutorials. In every one of Ms. Brown's responses, which was faxed back to TME on June 25, 1991, it was clear that the Statements of Work TME receiving from LISC required it to develop products that were at variance with what the VA wanted, and that the VA might actually reject software produced under the SOWs had the VA received them.
On July 23, 1991, fearing that the VA had been told that TME could not or would not produce the non-COTS (May 17 was the last Statement of Work from LISC), and that the requirements for computer-based training had changed, TME sent by registered mail a package to Mary Brown, Claudia Fletcher, and William Stapleton at the VA. The package included a memorandum, the completed survey TME sent to Mary Brown on June 20, 1991, and a copy of the Azuresoft "Flight Computing Catalog ", which had a two-page full-color feature about TME's latest computer-based training software called "Wilbur's Flight School". The memorandum explained TME's contract with LISC, their apparent confusion about the VA's requirements, TME's concerns about LISC's mismanagement of the computer based training requirements, and the fact that TME had not delivered any CBT because it had not been authorized by LISC to begin. TME also requested a letter from the VA stating what its requirements are, and that TME is still regarded as the subcontractor to provide CBT/CAI for the NOAVA program. With this letter, TME could have secured separate funding for the project. TME never received a reply from the VA to its July 23, 1991 memorandum.
Throughout the Summer and Fall of 1991 LISC made plans to develop the non-COTS CBT with other companies, to develop the computer-aided instruction (CAI) internally, and essentially cut TME out of the NOAVA program altogether. This was all being done while it continued to inform the VA that TME would produce all non-COTS CBT and CBI through the Training Manual it periodically produced (with TME's desktop publication assistance), and while it told TME that the last Statement of Work from May 17, 1991 was "under analysis".
Months of delay, evasion, and inaction followed until November, 1991, when all pretense was ended. On November 11, Clovice Lewis had a meeting with Dave Etter (Training Manager) and Jeannie Llewellyn (an assistant). That was the first time he was told that LISC had abandoned development of non-COTs tutorials altogether, and would simply wait until either one of two events happened: 1) the VA specifically requests a particular non-developed tutorial or 2), a tutorial becomes commercially available which would then be offered to the VA. A document which has subsequently discovered actually demonstrates how the policy of finding commercial CBT, or ignoring the VA requirement was intended to work for LISC.
On March 4, 1992 TME was asked by Jeannie Llewellyn in a rather terse memorandum to submit a bid for the Self-Instructional software that LISC will need for the NOAVA program. The TME response was to inform her that we are under contract to provide LISC with the software and wish to exercise our First Right of Refusal privileges. This was the last correspondence between LISC and TME regarding the June 17, 1990 contract for CBT.