Conclusions
NOTE: Lockheed Martin Corporation does not now own, nor is it associated with, Lockheed Integrated Solutions Company. In all instances "Lockheed" is an abbreviation for Lockheed Integrated Solutions Company. The story presented in this website is for historical and educational purposes only. It is a true account of how systemic racism operated in a corporation in the past, and an exposé of how it operates in the present.
Assertions about how the former Lockheed Integrated Solutions Company (LISC) engaged in systemic racism, fraud, and theft are based on irrefutable facts. The issues raised are troubling and, if it were not for the quality of documentation... unbelievable. An outline of the pertinant points are as follows:
1 - LISC was Unjustly Enriched from TME by means of Racism, Fraud, and Theft
From 1991 through 1996, Lockheed profited by tens of millions of dollars from groundbreaking digital technology obtained by means of fraud and theft from Technology Media Enterprises (TME), a limited liability company owned by Clovice Lewis, Jr., a 33 year-old black entrepreneur.
Specifically, Lockheed obtained lucrative contracts with the Department of Veterans Affairs (VA) by:
Lockheed issued promises and representations that TME would be awarded the sub-contracts, have right of first refusal for future Lockheed VA work, and continuing ownership of the software it developed. Based upon these promises and representations, TME provided Lockheed with specifications for and copies of TME software for the VA projects. After Lockheed had obtained TME’s specifications and software, and award of the lucrative federal contracts, Lockheed secretly initiated a search to replace TME with white owned companies, and began selling TME’s products under a Lockheed shell company, thus robbing TME of their deserved compensation.
2 - Intentional and malicious breach of all contracts with TME
There is no doubt that LISC entered into two valid and legally binding contracts with TME. It is important to note that the contracts specify that they are enforceable for the "life of the NOAVA contract". In both contracts (CBT and DMT), TME enjoyed what was termed "First Right of Refusal" and ownership of all software it developed. As regards to the Computer Based Training and On-Line Tutorials contract, the specified terms included First Right of Refusal over all CBT and On-Line Tutorials over all platforms, regardless of operating system. Significantly, it did not specify Commercial On The Shelf (COTS) or non-COTS versions of software.
The intentional and malicious nature of LISC's actions are evidenced by the following:
3 - “Contracts” Lapsed
The “contracts” TME had with Lockheed were legally binding for the period of one year, and are considered “verbal contracts” unless signed by a “formal” contract signed by both parties. The various Memorandums of Understanding and Statements of Work are not regarded as legally binding, although this is certainly an area of contention in contract law. Regardless, it is certain LISC took advantage of the youth and inexperience of TME’s young entrepreneurs of color in order to unjustly profit from their good faith efforts.
4 - Fraud Against TME
TME's reliance upon LISC's representations and promises made to it as regards to its role in the NOAVA contract, the software LISC would pay TME to develop in fulfillment of VA requirements, the business opportunities it would enjoy, and the development of the E-NUM were justified and reasonable. TME had no reason to doubt the truth of the representations and promises made by LISC. LISC's misrepresentations and fraudulent actions were clearly intended to take profits, rights, and business opportunities from TME.
LISC committed fraud against TME as evidenced by the following:
5 - Breach of Covenant of Good Faith and Fair Dealing
Aside from the more obvious assertions listed above about Breach of Contract and Fraud committed against TME, LISC also committed Breach of Covenant of Good Faith and Fair Dealing. This is most clearly demonstrated by the fact that TME had been performing desktop publishing services for LISC for two years before it created the E-NUM, which was based directly on the documentation system it employed to perform those services. LISC could not create an automated system for producing the E-NUM, despite its best efforts. When I saw that our previous business with LISC for CBT and DMT were being marginalized, I saw the E-NUM as the best opportunity to demonstrate that TME was not a threat to LISC and that the partnership between the two companies could still be mutually beneficial. Representing to both TME and to the VA that the TME E-NUM would be used for the NOAVA program, then going out of its way to sabotage a deal can only be described as vicious and cruel. Considering that LISC knowingly proceeded with an admittedly inferior E-NUM produced by a company that was located several States away, and which then was abandoned shortly afterwards, one can also describe their behavior towards TME as not only grossly unfair but also bizarre.
6 - Fraud Against the U.S. Government
LISC defrauded the U.S. Government in the following ways:
7 - Software Piracy of TME Property and Copyright Infringement
During the 1991 time period there were no commercial products that could perform the functions that the TME Desktop Management Tools could, as required by the NOAVA specifications. All Macintosh computers sold to the VA under the NOAVA contract had to have HyperCard installed... and they had to have TME's HyperCard-based Desktop Management Tools (both by TME/LISC contract requirements and VA requirements). Because LISC had underbid software costs prior to the BAFO, then pressured companies to offer their software for that reduced price, LISC expected TME to also reduce the cost of its software. TME objected because it had not recovered its development costs. When TME refused to "bundle" its Desktop Management Tools, relinquish its copying and distribution rights, its ownership rights, and reduce the cost of its software by 77% (from $212.00 to $50.00), LISC simply stole the software from TME. After April of 1992, LISC began began to shipping the TME DMT directly to the VA without TME packaging, and without paying TME.
Similarly, the TME Keyboard Helper was also pirated by LISC and sold to the VA without compensating TME.
6 - LISC and VA Conspiracy to Defraud the U.S. Government
At various times since 1991 high-ranking managers of NOAVA at the VA (including the Contracting Officer) were provided by TME with detailed information concerning the activities outlined above. Because of their gross negligence, inaction, and in the case of Stapleton and Flagg, intentional obstruction and evasion, they subsequently participated with LISC in a conspiracy to defraud the U.S. Government.
The VA was, thus, complicit in fraudulent activities with LISC are evidenced by the following:
9 - A Clear, Undeniable, and Consistent Pattern of Discrimination on the Basis of Race Against TME
If it walks like a duck and quacks like a duck.... it may not be a proper legal description, but one certainly gets a picture of what is being described. Many legal cases of discrimination have been proven because of broken promises, phone calls unreturned, flimsy excuses for delays, discontinuation of contracts in "mid-air", and rejection of low bids. In TME's case, this was just the start of our troubles.
The overwhelming question is "Why, when it was so unnecessary, so completely unreasonable, and so contrary to their own ability to fulfill the NOAVA contract requirements... did LISC do what it did?". Everything from cognitive dissonance, to lack of an ability to understand entrepreneurial business practices, to simple incompetence has been offered as explanation. A scene from the movie called Rosewood best describes the reasons for discrimination to my mind. A Southern white man explained his desire to participate in the impending mass lynching of the black people of Rosewood by telling another white man it was because a family there has a piano. Since he didn't have one, he couldn't see why they should.
In the past thirty years everyone in what was once TME has attempted to analyze what went wrong, figure out how we could have done things differently, and struggle to explain the vicious and hateful nature of LISC's actions. What LISC did to TME was nothing short of racially-motivated cruelty. The VA's involvement made it doubly so. The damage to our company resulted in much more than millions of dollars of lost business, more than the breakup of marriages, more than the loss of property, and more than the fact that our Government was badly cheated.
This experience caused us to be transformed from being young men and women of color who believe in the notion that hard work will be rewarded, that we actually do live in a nation of equal opportunity, and that justice will prevail over injustice... to people who have been proven wrong.
We rise to tell the story about a terrible wrong. We do this, not simply because we want to recover what has been stolen, but because our children have the right to believe what we once did.
1 - LISC was Unjustly Enriched from TME by means of Racism, Fraud, and Theft
From 1991 through 1996, Lockheed profited by tens of millions of dollars from groundbreaking digital technology obtained by means of fraud and theft from Technology Media Enterprises (TME), a limited liability company owned by Clovice Lewis, Jr., a 33 year-old black entrepreneur.
Specifically, Lockheed obtained lucrative contracts with the Department of Veterans Affairs (VA) by:
- utilizing TME’s digital engineering expertise
- TME’s status as a certified minority 8(a) company
- representing that TME would be contracted to provide software and services for the Nationwide Office Automation for the Veterans Administration (NOAVA)
Lockheed issued promises and representations that TME would be awarded the sub-contracts, have right of first refusal for future Lockheed VA work, and continuing ownership of the software it developed. Based upon these promises and representations, TME provided Lockheed with specifications for and copies of TME software for the VA projects. After Lockheed had obtained TME’s specifications and software, and award of the lucrative federal contracts, Lockheed secretly initiated a search to replace TME with white owned companies, and began selling TME’s products under a Lockheed shell company, thus robbing TME of their deserved compensation.
2 - Intentional and malicious breach of all contracts with TME
There is no doubt that LISC entered into two valid and legally binding contracts with TME. It is important to note that the contracts specify that they are enforceable for the "life of the NOAVA contract". In both contracts (CBT and DMT), TME enjoyed what was termed "First Right of Refusal" and ownership of all software it developed. As regards to the Computer Based Training and On-Line Tutorials contract, the specified terms included First Right of Refusal over all CBT and On-Line Tutorials over all platforms, regardless of operating system. Significantly, it did not specify Commercial On The Shelf (COTS) or non-COTS versions of software.
The intentional and malicious nature of LISC's actions are evidenced by the following:
- The "Poison Bullet" - Mike Kerr's campaign to trick TME into relinquishing its rights and nullifying its previous contract.
- Desktop Management Tools Dispute - LISC's unwillingness to abide by the ownership terms and conditions in the disputed Software Licensing Agreement and their unauthorized selling of the Desktop Management Tools for $50 instead of $212.
- Unconscionable Actions - LISC never honored the First Right of Refusal clause of TME's contracts. They have never ordered a single CBT or Tutorial from TME. After stealing the Desktop Management Tools from TME, LISC continued to sell it to the VA without compensating TME. TME's First Right of Refusal clause was therefore violated every time LISC sold a non-TME developed CBT/CBI application or On-Line Tutorial of any kind to the VA. They used their position as the prime contractor and the controller of all software and hardware sold under the NOAVA contract to intentionally and systematically deny TME's participation in that contract.
3 - “Contracts” Lapsed
The “contracts” TME had with Lockheed were legally binding for the period of one year, and are considered “verbal contracts” unless signed by a “formal” contract signed by both parties. The various Memorandums of Understanding and Statements of Work are not regarded as legally binding, although this is certainly an area of contention in contract law. Regardless, it is certain LISC took advantage of the youth and inexperience of TME’s young entrepreneurs of color in order to unjustly profit from their good faith efforts.
4 - Fraud Against TME
TME's reliance upon LISC's representations and promises made to it as regards to its role in the NOAVA contract, the software LISC would pay TME to develop in fulfillment of VA requirements, the business opportunities it would enjoy, and the development of the E-NUM were justified and reasonable. TME had no reason to doubt the truth of the representations and promises made by LISC. LISC's misrepresentations and fraudulent actions were clearly intended to take profits, rights, and business opportunities from TME.
LISC committed fraud against TME as evidenced by the following:
- Secret Bidding Process - Secret bidding was done to circumvent LISC's CBT contracts with TME after a "Sole Source Justification" and the February 5, 1991 Materials Request for $827,000 was rescinded by LISC.
- Bogus Statements of Work - Since January of 1991, no less than six Statements of Work were produced by LISC. These SOWs ranged from having LISC subsidize TME for development of non-COTS Graphic User Interface (GUI) Computer-Based Tutorials with the same Interface created for the 1990 LTD (which the VA would purchase), to the development of "greatly simplified" tutorials (which would be given to the VA), and which would not meet the VA's stated requirements for GUI, help agents, etc.
- Misrepresentations About Non-COTS Requirements - Throughout the Summer and Fall of 1991 LISC made plans to develop most of 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 TME that the last Statement of Work from May 17, 1991 was "under analysis".
- E-NUM Procurement Process - After TME developed the E-NUM, LISC paid for plane fare and accommodations for me (Clovice Lewis) to demonstrate the TME E-NUM on December 6, 1991 to the VA in Washington D.C. While I was there, Todd Hoffman (LISC's Deputy Manager) clearly represented TME to the VA as the company, which in partnership with LISC, would provide them with the E-NUM solution. After my return from Washington LISC then embarked on a quest to replace TME with a company called TMS. The fraudulent process used to do so is representative of the blatant deception that LISC employed in its dealings with TME.
5 - Breach of Covenant of Good Faith and Fair Dealing
Aside from the more obvious assertions listed above about Breach of Contract and Fraud committed against TME, LISC also committed Breach of Covenant of Good Faith and Fair Dealing. This is most clearly demonstrated by the fact that TME had been performing desktop publishing services for LISC for two years before it created the E-NUM, which was based directly on the documentation system it employed to perform those services. LISC could not create an automated system for producing the E-NUM, despite its best efforts. When I saw that our previous business with LISC for CBT and DMT were being marginalized, I saw the E-NUM as the best opportunity to demonstrate that TME was not a threat to LISC and that the partnership between the two companies could still be mutually beneficial. Representing to both TME and to the VA that the TME E-NUM would be used for the NOAVA program, then going out of its way to sabotage a deal can only be described as vicious and cruel. Considering that LISC knowingly proceeded with an admittedly inferior E-NUM produced by a company that was located several States away, and which then was abandoned shortly afterwards, one can also describe their behavior towards TME as not only grossly unfair but also bizarre.
6 - Fraud Against the U.S. Government
LISC defrauded the U.S. Government in the following ways:
- Best and Final Offer (BAFO): Computer Based Training - TME was represented prominently in the BAFO as the company to provide the non-COTS CBT/CBI and solution for all software to be delivered for the NOAVA contract. Note that this was done only after extensive consultations with TME regarding its capabilities and LISC's promise to fund development of the CBT software. It should be noted that the contract between TME and LISC does not include a COTS provision. TME was comfortable with the provisions of the BAFO, since it had a separate, First Right of Refusal clause with LISC. Software it did not want to develop would be allowed to LISC's discretion. It is now clear that LISC did not intend to utilize TME in this capacity because not even one CBT/CBI product was ever ordered by LISC.
- Best and Final Offer (BAFO): Desktop Management Tools for Macintosh Computers - TME was represented prominently in the BAFO as the company to provide the Desktop Management Tools solution for all Macintosh computers to be delivered for the NOAVA contract. Note that this was done only after extensive consultations with TME regarding its capabilities and LISC's promise to purchase the DMT software. Even though LISC eventually ordered the DMT from TME, it sold many more than it paid TME for, and it committed Fraud against the U.S. Government by not allowing TME to develop improvements to the DMT software. TME does not know how many of its DMT software was sold to the VA. Since nearly all of the copies were pirated from TME, LISC furthered its fraudulent activities against the government.
- Best and Final Offer (BAFO): Keyboard Helper for Macintosh Computers - TME was represented prominently in the BAFO as the company to provide the Keyboard Helper solution for all Macintosh computers to be delivered to disabled users for the NOAVA contract. Note that this was done only after extensive consultations with TME regarding its capabilities and LISC's promise to purchase the Keyboard Helper software. It is now clear that LISC did not intend to utilize TME in this capacity because only one CBT/CBI product was ever ordered by LISC in support of the NOAVA program. This program could also have been pirated and sold to the VA for a time. I am not certain if this is the case.
- Misrepresentations About Computer Based Training -This was done in the following manner:
- LISC told the VA that TME was unable to deliver the CBT portion of the NOAVA contract (because it discovered we were a minority company that was unable to perform the engineering) during the time that it was creating the series of Statements of Work designed to stall TME and,
- that LISC sought a waiver or reduction of CBT requirements during that time based upon those claims. The extraordinary action TME took on July 23, 1991 to send the VA information to the contrary was prompted by the reports of certain individuals at LISC who were sympathetic the TME and by other evidence TME uncovered to support these claims. Documents were discovered that actually show how the policy of finding commercial CBT, or ignoring the VA requirement was planned by LISC.
- Misrepresentation Regarding the E-NUM - The NOAVA contract between LISC and the Veterans Administration specifically stated that an electronic version of the Contract Usage Manual was to be made available to the VA within 60 days of the award of the contract. Initially, LISC produced (with TME's assistance) a hard copy printed manual, then the MicroSoft Word files of the NUM. Lockheed represented to the VA that it would use something it referred to as the "Configurator" to automatically generate the electronic version of the Contract Usage Manual. LISC continually failed in its in-house attempts to create its "Configurator". When TME produced what it called the E-NUM its performance was vastly superior to anything LISC could produce. It was custom built by TME to be automatically generated from the NOAVA Usage Manual. In fact, it was the "Configurator" LISC had promised, but could not deliver to the VA. When I was sent by LISC to demonstrate the E-NUM, both TME and the VA had every reason to believe that TME was to provide the E-NUM solution. Because LISC subsequently provided an inferior E-NUM developed by another company, it committed fraud against the U.S. Government because it falsely represented TME as the software provider.
7 - Software Piracy of TME Property and Copyright Infringement
During the 1991 time period there were no commercial products that could perform the functions that the TME Desktop Management Tools could, as required by the NOAVA specifications. All Macintosh computers sold to the VA under the NOAVA contract had to have HyperCard installed... and they had to have TME's HyperCard-based Desktop Management Tools (both by TME/LISC contract requirements and VA requirements). Because LISC had underbid software costs prior to the BAFO, then pressured companies to offer their software for that reduced price, LISC expected TME to also reduce the cost of its software. TME objected because it had not recovered its development costs. When TME refused to "bundle" its Desktop Management Tools, relinquish its copying and distribution rights, its ownership rights, and reduce the cost of its software by 77% (from $212.00 to $50.00), LISC simply stole the software from TME. After April of 1992, LISC began began to shipping the TME DMT directly to the VA without TME packaging, and without paying TME.
Similarly, the TME Keyboard Helper was also pirated by LISC and sold to the VA without compensating TME.
6 - LISC and VA Conspiracy to Defraud the U.S. Government
At various times since 1991 high-ranking managers of NOAVA at the VA (including the Contracting Officer) were provided by TME with detailed information concerning the activities outlined above. Because of their gross negligence, inaction, and in the case of Stapleton and Flagg, intentional obstruction and evasion, they subsequently participated with LISC in a conspiracy to defraud the U.S. Government.
The VA was, thus, complicit in fraudulent activities with LISC are evidenced by the following:
- VA Complicity in CBT Fraud - The VA allowed LISC to provide it with non-COTs CBT software that was not demonstrated at the July, 1990 LTD. Furthermore, it allowed LISC to offer products that do not meet the standards set out in the November 13, 1990 Best and Final Offer for the NOAVA Program. TME's repeated attempts to gain clarification on these points from the VA were been met with no response.
- Cover-up Regarding The CBT - The VA was aware of the problems that LISC was having with managing the NOAVA contract as early as November 1991. The Contracting Officer, William Stapleton was quoted in an article that appeared in the VA Times that there were "... significant problems with LISC compliance with NOAVA requirements." The July 23, 1991 memorandum sent to William Stapleton and others, explained in great detail about TME's contract with LISC, their 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 contracted by LISC to do so. Along with the mailing was 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". This offered irrefutable proof that, contrary to what LISC had told the VA, TME was, indeed capable of providing it with the same sophisticated CBT it saw demonstrated at the LTD only the year earlier.
- Cover-up Regarding the E-NUM - On August 6, 1992, TME sent another registered and certified mailing to both William Stapleton and Larry Flagg at the VA. This mailing was initiated by the news that, after months of delay, LISC and TMS had finally delivered a prototype of the E-NUM for evaluation purposes to the VA. The mailing contained a cover letter and an exhaustively detailed and thoroughly annotated account of the fraudulent process LISC employed to acquire and produce the E-NUM. Stapleton took the extraordinary action of denying the delivery of the mailing to both himself and Larry Flagg many months after the E-NUM was protested by TME (giving TMS enough time to mend any problems with it), even though it is proven that the documents did arrive at the intended VA facility. Because of the fact that the August 6, 1992 documents clearly charge fraud and discrimination, the VA has unmistakably implicated itself as a party to these actions.
- Other Violations - Because no one at the VA ever responded to any of TME's allegations they could not be trusted. We felt helpless to fight alone against the multi-billion dollar company that Lockheed is. Without the help of the VA to force LISC to comply with its own regulations we felt defeated. VA personnel violated the Violation of the Federal False Claims Act and the VA's Federal Acquisition Regulations.
9 - A Clear, Undeniable, and Consistent Pattern of Discrimination on the Basis of Race Against TME
If it walks like a duck and quacks like a duck.... it may not be a proper legal description, but one certainly gets a picture of what is being described. Many legal cases of discrimination have been proven because of broken promises, phone calls unreturned, flimsy excuses for delays, discontinuation of contracts in "mid-air", and rejection of low bids. In TME's case, this was just the start of our troubles.
The overwhelming question is "Why, when it was so unnecessary, so completely unreasonable, and so contrary to their own ability to fulfill the NOAVA contract requirements... did LISC do what it did?". Everything from cognitive dissonance, to lack of an ability to understand entrepreneurial business practices, to simple incompetence has been offered as explanation. A scene from the movie called Rosewood best describes the reasons for discrimination to my mind. A Southern white man explained his desire to participate in the impending mass lynching of the black people of Rosewood by telling another white man it was because a family there has a piano. Since he didn't have one, he couldn't see why they should.
In the past thirty years everyone in what was once TME has attempted to analyze what went wrong, figure out how we could have done things differently, and struggle to explain the vicious and hateful nature of LISC's actions. What LISC did to TME was nothing short of racially-motivated cruelty. The VA's involvement made it doubly so. The damage to our company resulted in much more than millions of dollars of lost business, more than the breakup of marriages, more than the loss of property, and more than the fact that our Government was badly cheated.
This experience caused us to be transformed from being young men and women of color who believe in the notion that hard work will be rewarded, that we actually do live in a nation of equal opportunity, and that justice will prevail over injustice... to people who have been proven wrong.
We rise to tell the story about a terrible wrong. We do this, not simply because we want to recover what has been stolen, but because our children have the right to believe what we once did.