The Statements of Work (SOW)
There were six Statements of Work (SOW) produced between LISC and TME for the development of the non-COTS computer-based tutorials... in as many months. The dates of completion of these SOWs are as follows:
• January 14, 1991
• February 5, 1991
• March 27 (Also called a ROM)
• April 19 (a revision to March 27 ROM)
• May 9, 1991
• May 17, 1991
A synopsis of the contents of these SOWs is provided. It can be used as a guide in the analysis to follow. The course of events that has carried TME through the SOWs is rather convoluted, so an attempt is made here to present the facts with as little comment as possible. The content of the SOWs is fairly clear, however the reasons for their proliferation are somewhat arcane.
To put it as succinctly as possible, the many SOWs are a direct consequence of the misunderstanding that LISC management had of the VA's CBT/CBI requirements. To compound the problem, LISC apparently misinterpreted the fact that the VA expected the computer-based tutorials to be supplied by LISC free of charge. By the time this requirement came to light, TME had already negotiated two of the SOWs. The SOWs can be analyzed in four distinct groups, each a consequence of a decision by LISC management.
Group 1 SOW - Licensing Scheme
The genealogy of the only SOW in this group (January 14, 1991) is rooted in the murky days of the preaward LISC environment. At that time, TME's main contact with LISC was through Dave Etter, the Training Director for LISC. Before LISC's final proposal (BAFO) was submitted to the VA, it was required to list prices for Computer-Based Training for the many software packages to be included in the NOAVA program. The Computer-Based Tutorials would be a subset of the complete Computer-Based Training packages to be developed. Because no one knew the total number to be ordered of each application by the VA, TME and LISC devised a preliminary scheme to handle the development costs of so massive a project. D. Shimeck, the then subcontracting officer for LISC, worked with TME on a preliminary pricing structure that would give LISC a large discount on the price of TME's CBT products in return for our "modification" of the basic "full-blown" Computer-Based Training system... all for about $3 million dollars.
At that time, CBT meant "Computer Based Training", and the entire system was to be based on the demonstration TME created for the LTD in July of 1990. This meant that the graphic user interface would be consistent throughout, that testing and scoring would be featured, that help agents would be available, and so on. One of the several spreadsheets produced during the August time frame of 1990 is shown. Notice in the right bottom corner, a reference to "CW Engine Dvmpt (Prepayment)". Also notice the references in this spreadsheet to TME royalty, discounts, and modification costs.
The issue of ownership is what prompted TME to reject the first SOW produced by Dave Etter for January 14, 1991 (Attachment 3). By that time, after the contract had been awarded to LISC, Dave Etter had informed TME that the "full-on" training had not been quoted to the VA, so the tutorials should be priced separately. We still did not know how many applications would be needed by the VA, so we attempted to quote the work at the lowest possible price. Because we had already calculated our estimated fixed costs and variable costs (but not our break-even points), we felt that the tutorials could just barely be developed for around $600,000, as long as we could get started on the entire package as soon as possible. Attachment 4 is a copy of the spreadsheet that accompanied the January 14, 1991 SOW.
Group 2 SOW - Percentage Of Orders
By late January 1991 we had obtained preliminary figures on VA anticipated orders for the NOAVA applications from Bud Brasier, the NOAVA Business Manager for LISC. On the strength of these numbers TME countered the January 14, 1991 SOW. In the meanwhile, however, the number of tutorials that LISC identified for non-COTS development had diminished dramatically. To offset this effect, TME was very careful to determine break-even points for each product, the savings that would be passed on to LISC, and gain a clear fix on exactly what our variable and fixed costs would be based over an entire year of development. Variable costs were anticipated to roll off over time because of the ability to utilize code from already developed software.
The strategy TME evolved was to simply have LISC prepay a small percentage of the orders from the VA on the tutorials and use those funds to develop the non-COTS tutorials required. We were at that time still expected to supply a GUI (Graphic User Interface) which was the same as that demonstrated in the June 1990 LTD. On January 21, 1991 TME met with Bud Brasier to discuss our plan. He agreed that ours was a sound strategy, and the only change he suggested was the removal of any licensing fees from the spreadsheet (a carry over from the earlier price models). The February 5, 1991 SOW was a result of the negotiations to develop the tutorials on a percentage of orders basis. The total development cost for the eight tutorials was $827,697.
Note:
It is very important to realize that during this time TME was still expected to create products which would have been in absolute compliance with the VA's requirements for GUI, consistent controls, testing, help agents, and stand-alone operation.
Group 3 SOW - LISC Must Provide Tutorials Free To The VA
By February 15, LISC had apparently decided not to offer the TME-style graphic user interface to the Veteran's Administration for the non-COTS tutorials it was to provide. TME was told that the then new subcontracting officer, Mike Kerr, needed time to be appraised about the latest SOW agreement. In a series of SOWs issued to other vendors between mid-February and mid-March (a process from which TME was purposely excluded) LISC had sought bids on a far less sophisticated, cheaper interface. In the meanwhile, TME was put off by constant revisions to the February 5 list of tutorials and other excuses for inaction. At no time during this period did LISC management indicate to TME that it desired a reduction in cost or lessened functionality of the tutorials. Ironically TME had actually developed and marketed during that time a lower-cost version of its GUI for " Wilbur's Flight School". This product met all the VA requirements and was easily available for NOAVA use. Ron Barale was provided with a free version of "Wilbur's Flight School" at the time.
In the late afternoon of March 22, 1991, a meeting was held between Claire Donovan, Shirley Nicholl, Dave Etter, and Clovice Lewis. At that meeting Clovice was informed that LISC did not desire production of the "Cadillac" design that TME was capable of creating and that they decided to include other vendors in a bidding process to determine who would supply a non-GUI product for the remainder of the non-COTS tutorials. The reasons sited for this astounding change was that LISC had misinterpreted the VA's requirements and subsequently realized it had to provide non-COTS tutorials free of charge to the VA, and that there was simply not enough money budgeted to the Training department for this activity.
On March 28, 1991 TME delivered a letter from our attorney to Ron Barale, NOAVA Program Manager, warning him that if LISC persisted with its plans it would be in breach of our contract with them. The letter also restated for LISC the terms of that contract. In a meeting held later that same afternoon between Ron Barale, Bud Brasier, Clovice Lewis, and Mike Kerr, Bud Brasier (the NOAVA Business Manager) was unwilling to recognize the contract between LISC and TME. His high degree of agitation during that meeting was remarkable. Braiser behaved as if he had been personally attacked!
In a letter which was dated March 27, postmarked March 26, but which was received on April 5, LISC requested a Rough Order of Magnitude (ROM) quotation per what it indicated was a "revised SOW". The first March 27 letter to TME is available, as well as TME's April 15 response. On April 15, just when Clovice personally delivered the response to Claire Donovan, she informed him that the "wrong" letter, one of "several versions" had been sent to TME. She gave Clovice Lewis the correct letter, also dated March 27, which TME responded to on April 19, 1991.
Group 4 SOW - LISC Selects TME Over Other Vendors
By May 9, 1991, LISC had once again concluded that TME could deliver the best quality at the best price for non-COTS tutorials, and offered TME yet another SOW. Further negotiations with Dave Etter resulted in the May 17, 1991 SOW. The May 17 SOW was the last proposed SOW between LISC and TME. The specifications for the non-COTS tutorials it calls for would result in products which would not meet the VA's requirements.
TME's repeated attempts to get an answer on when the tutorials would be started on the non-COTS tutorial development were met with delay and evasion. Bud Brasier ignored phone calls and E-Mail on the subject, and when finally contacted, his response was that he did not "understand" Dave Etter's analysis of the tutorial requirements, or the SOW, and was waiting for more information. Dave Etter informed TME that all the paperwork had been done, that his analysis was thorough and unambiguous, that all that needed to be done was for Bud Brasier to sign a Materials Request, and that he (Dave) would be glad to talk to Bud when he wants to talk to him. LISC never executed the May 9 Statement of Work.
• January 14, 1991
• February 5, 1991
• March 27 (Also called a ROM)
• April 19 (a revision to March 27 ROM)
• May 9, 1991
• May 17, 1991
A synopsis of the contents of these SOWs is provided. It can be used as a guide in the analysis to follow. The course of events that has carried TME through the SOWs is rather convoluted, so an attempt is made here to present the facts with as little comment as possible. The content of the SOWs is fairly clear, however the reasons for their proliferation are somewhat arcane.
To put it as succinctly as possible, the many SOWs are a direct consequence of the misunderstanding that LISC management had of the VA's CBT/CBI requirements. To compound the problem, LISC apparently misinterpreted the fact that the VA expected the computer-based tutorials to be supplied by LISC free of charge. By the time this requirement came to light, TME had already negotiated two of the SOWs. The SOWs can be analyzed in four distinct groups, each a consequence of a decision by LISC management.
Group 1 SOW - Licensing Scheme
The genealogy of the only SOW in this group (January 14, 1991) is rooted in the murky days of the preaward LISC environment. At that time, TME's main contact with LISC was through Dave Etter, the Training Director for LISC. Before LISC's final proposal (BAFO) was submitted to the VA, it was required to list prices for Computer-Based Training for the many software packages to be included in the NOAVA program. The Computer-Based Tutorials would be a subset of the complete Computer-Based Training packages to be developed. Because no one knew the total number to be ordered of each application by the VA, TME and LISC devised a preliminary scheme to handle the development costs of so massive a project. D. Shimeck, the then subcontracting officer for LISC, worked with TME on a preliminary pricing structure that would give LISC a large discount on the price of TME's CBT products in return for our "modification" of the basic "full-blown" Computer-Based Training system... all for about $3 million dollars.
At that time, CBT meant "Computer Based Training", and the entire system was to be based on the demonstration TME created for the LTD in July of 1990. This meant that the graphic user interface would be consistent throughout, that testing and scoring would be featured, that help agents would be available, and so on. One of the several spreadsheets produced during the August time frame of 1990 is shown. Notice in the right bottom corner, a reference to "CW Engine Dvmpt (Prepayment)". Also notice the references in this spreadsheet to TME royalty, discounts, and modification costs.
The issue of ownership is what prompted TME to reject the first SOW produced by Dave Etter for January 14, 1991 (Attachment 3). By that time, after the contract had been awarded to LISC, Dave Etter had informed TME that the "full-on" training had not been quoted to the VA, so the tutorials should be priced separately. We still did not know how many applications would be needed by the VA, so we attempted to quote the work at the lowest possible price. Because we had already calculated our estimated fixed costs and variable costs (but not our break-even points), we felt that the tutorials could just barely be developed for around $600,000, as long as we could get started on the entire package as soon as possible. Attachment 4 is a copy of the spreadsheet that accompanied the January 14, 1991 SOW.
Group 2 SOW - Percentage Of Orders
By late January 1991 we had obtained preliminary figures on VA anticipated orders for the NOAVA applications from Bud Brasier, the NOAVA Business Manager for LISC. On the strength of these numbers TME countered the January 14, 1991 SOW. In the meanwhile, however, the number of tutorials that LISC identified for non-COTS development had diminished dramatically. To offset this effect, TME was very careful to determine break-even points for each product, the savings that would be passed on to LISC, and gain a clear fix on exactly what our variable and fixed costs would be based over an entire year of development. Variable costs were anticipated to roll off over time because of the ability to utilize code from already developed software.
The strategy TME evolved was to simply have LISC prepay a small percentage of the orders from the VA on the tutorials and use those funds to develop the non-COTS tutorials required. We were at that time still expected to supply a GUI (Graphic User Interface) which was the same as that demonstrated in the June 1990 LTD. On January 21, 1991 TME met with Bud Brasier to discuss our plan. He agreed that ours was a sound strategy, and the only change he suggested was the removal of any licensing fees from the spreadsheet (a carry over from the earlier price models). The February 5, 1991 SOW was a result of the negotiations to develop the tutorials on a percentage of orders basis. The total development cost for the eight tutorials was $827,697.
Note:
It is very important to realize that during this time TME was still expected to create products which would have been in absolute compliance with the VA's requirements for GUI, consistent controls, testing, help agents, and stand-alone operation.
Group 3 SOW - LISC Must Provide Tutorials Free To The VA
By February 15, LISC had apparently decided not to offer the TME-style graphic user interface to the Veteran's Administration for the non-COTS tutorials it was to provide. TME was told that the then new subcontracting officer, Mike Kerr, needed time to be appraised about the latest SOW agreement. In a series of SOWs issued to other vendors between mid-February and mid-March (a process from which TME was purposely excluded) LISC had sought bids on a far less sophisticated, cheaper interface. In the meanwhile, TME was put off by constant revisions to the February 5 list of tutorials and other excuses for inaction. At no time during this period did LISC management indicate to TME that it desired a reduction in cost or lessened functionality of the tutorials. Ironically TME had actually developed and marketed during that time a lower-cost version of its GUI for " Wilbur's Flight School". This product met all the VA requirements and was easily available for NOAVA use. Ron Barale was provided with a free version of "Wilbur's Flight School" at the time.
In the late afternoon of March 22, 1991, a meeting was held between Claire Donovan, Shirley Nicholl, Dave Etter, and Clovice Lewis. At that meeting Clovice was informed that LISC did not desire production of the "Cadillac" design that TME was capable of creating and that they decided to include other vendors in a bidding process to determine who would supply a non-GUI product for the remainder of the non-COTS tutorials. The reasons sited for this astounding change was that LISC had misinterpreted the VA's requirements and subsequently realized it had to provide non-COTS tutorials free of charge to the VA, and that there was simply not enough money budgeted to the Training department for this activity.
On March 28, 1991 TME delivered a letter from our attorney to Ron Barale, NOAVA Program Manager, warning him that if LISC persisted with its plans it would be in breach of our contract with them. The letter also restated for LISC the terms of that contract. In a meeting held later that same afternoon between Ron Barale, Bud Brasier, Clovice Lewis, and Mike Kerr, Bud Brasier (the NOAVA Business Manager) was unwilling to recognize the contract between LISC and TME. His high degree of agitation during that meeting was remarkable. Braiser behaved as if he had been personally attacked!
In a letter which was dated March 27, postmarked March 26, but which was received on April 5, LISC requested a Rough Order of Magnitude (ROM) quotation per what it indicated was a "revised SOW". The first March 27 letter to TME is available, as well as TME's April 15 response. On April 15, just when Clovice personally delivered the response to Claire Donovan, she informed him that the "wrong" letter, one of "several versions" had been sent to TME. She gave Clovice Lewis the correct letter, also dated March 27, which TME responded to on April 19, 1991.
Group 4 SOW - LISC Selects TME Over Other Vendors
By May 9, 1991, LISC had once again concluded that TME could deliver the best quality at the best price for non-COTS tutorials, and offered TME yet another SOW. Further negotiations with Dave Etter resulted in the May 17, 1991 SOW. The May 17 SOW was the last proposed SOW between LISC and TME. The specifications for the non-COTS tutorials it calls for would result in products which would not meet the VA's requirements.
TME's repeated attempts to get an answer on when the tutorials would be started on the non-COTS tutorial development were met with delay and evasion. Bud Brasier ignored phone calls and E-Mail on the subject, and when finally contacted, his response was that he did not "understand" Dave Etter's analysis of the tutorial requirements, or the SOW, and was waiting for more information. Dave Etter informed TME that all the paperwork had been done, that his analysis was thorough and unambiguous, that all that needed to be done was for Bud Brasier to sign a Materials Request, and that he (Dave) would be glad to talk to Bud when he wants to talk to him. LISC never executed the May 9 Statement of Work.
The content of the SOWs is fairly clear, however the reasons for their proliferation are somewhat arcane.