Stealing our Desktop Management Tools (DMT) Software
|
As with the Computer-Based Training, the Desktop Management Tools that TME provided for LISC were created at their request. Between June and November of 1990 TME provided LISC with prices for the DMT. Clovice Lewis worked closely with the Software Procurement Officer, Beth Mayer, to arrive at a cost for the DMT software. These tools (Scratchpad, Phonebook, Calculator) were all separate software applications designed to run under Apple Computer's HyperCard in a seamless integrated graphical user environment. The environment was designed to be expandable to accommodate updated tools that TME would develop in the future.
After the award of the NOAVA contract TME discovered that LISC had bundled all of the DMT into one product and had lowered the combined price from $212.00 to $66.89 as an offering to the VA through the NOAVA Usage Manual (NUM). We brought this error to the attention of several people at LISC; most notably, Shirley Wen and Bruce Penske. We were told not to worry because over half the prices quoted were wrong, and that the TME DMT would be corrected along with them. A new contracting officer joined LISC around July 1991 named Barbara Kursteiner. Barbara told TME she had discovered that the technique used by the then Deputy Manager of the NOAVA program, Bud Brasier, for most smaller vendors was to cut their prices roughly in half for the final Best and Final Offer LISC submitted to the VA in November of 1990. When the contract was awarded Mr. Brasier then pressured the companies to lower their prices by threatening to remove them from the NOAVA program if they did not comply. Apparently, most did not do so, thereby putting LISC in the position of having to make up the price difference in many cases. In a series of meetings Clovice and Alwyn Lewis had with Ms. Kursteiner we detailed for her the relationship between TME and LISC as regards the DMT. She told us that there was still considerable confusion about how our DMT were priced and asked for a memorandum from TME to clear the matter. We obliged with a memorandum dated September 12, 1991. Ms. Kursteiner's response from Jim Janssen was that LISC did not intend to provide TME with any development costs, and was still interested in lowering the DMT overall prices. During October 1991, TME was meeting with LISC in an attempt to come to an understanding for a Software Licensing Agreement (SLA). The sticking points were the price of the DMT and the fact that they were sold as "bundled". The solution proposed by Ms. Kursteiner was for TME to look into producing a new set of tools, thereby allowing LISC to offer the entire package to the VA at a lower price. TME told her that we'd like to see more sales of our existing DMT at the present price before we commit to providing more functionality for yet less cost. We agreed to eventually produce a new version of the DMT to take advantage of Apple's System 7.0 and HyperCard 2.0 expanded capabilities in the future. Since System 7.0 was not even approved for use in the NOAVA program, we told her that TME would continue to sell the original Hypercard 1.2.5 version of the DMT. The Software License Agreement between TME and LISC was marked, edited, and then returned unsigned to Ms. Kursteiner in late October of 1991. We mutually agreed to table the agreement pending further developments with the status of System 7.0 and TME's possible development of a replacement for the current DMT. Because LISC by then was receiving orders from the VA, TME agreed to change the version 1.0 DMT software so that It was bundled to reflect the description in the NUM. LISC agreed to pay $212.00 for all three bundled tools. Eleven orders for the DMT were filled by TME in September of 1991 per this agreement. Note that the "Remarks" section of the first two Purchase Order state "T's and C's of NOAVA 3F, 19 and LISC SLA to be negotiated." Since TME was still negotiating with LISC on the Software License Agreement, we considered the documents attached stating the Terms and Conditions of the sale of the DMT to LISC to be informational and non-binding. This was further evidenced by the fact that TME never provided LISC with a master copy of our DMT. Note that Exhibit C to both Purchase Orders (Software License) would grant LISC a worldwide, non-exclusive license to reproduce, etc. the DMT on a perpetual basis, that it would maintain a copy of the software on site for delivery, and that LISC would issue a monthly purchase order reflecting the number of copies made. TME did not agree to these terms, since they are at odds with our previous arrangements with LISC. On November 8, 1991 Clovice received a letter from Barbara Kursteiner asking for a radical reduction of prices for TME products. The letter claimed that LISC has received "a significant VA demand for the NOAVA products", although it did not hazard a guess as to how many copies of TME DMT software the VA would purchase. The letter goes on to say that LISC NOAVA "targets for a 80% price discount for Commercial List Price". TME was admonished to provide the information no later than November 20, 1991. TME told Ms. Kursteiner that we would not lower the prices, since we do not have an agreement with LISC on anything but the original price for the DMT (as evidenced by Purchase Order Documents DMPO-0001 and 0002). Interestingly, it was not until November 27 that TME received word from engineering that they had performed compatibility tests on System 7.0. On April 21, 1992 TME received another order for our Desktop Management Tools. In this instance the remarks section states "Ts and C's of NOAVA 3F and SLA apply." The notation about negotiations had obviously been omitted. Also gone was the $212.00 price - this being replaced by $50.00. Also missing from the Purchase Order were any Terms and Conditions, or any Software Licensing Agreement. TME delivered the DMT by registered, return mail with the following notation on the invoice pointing out the mistake in the purchase price. "A mistake has been made in the Purchase Order for this product (See Attachment) regarding its price. Lockheed part number L5001348 is for version 1.0 of the TME Desktop Management Tools. The price for version 1.0 is $212.00." At 9:15 am on April 30, 1992 Barbara Kursteiner called and left a recording on Clovice Lewis' home answering machine requesting two free "evaluation" copies of the DTM for an upcoming demonstration to be made in Washington D.C. A transcript of the recording is as follows: Good morning Clovice, this is Barbara Kurstiener at Lockheed Integrated Solutions Company in Santa Clara. It's Tuesday, April 30 about 9:15. Clovice, if you have a minute, would you please call me. I'd like to ask you to furnish us at no cost and material basis copies of your software for a demonstration of a NOAVA solution in Washington which is to come about very soon. If you could call me at area code 408-987-4698, I'd appreciate it. Thanks very much Clovice, bye. Clovice informed Ms. Kursteiner on that day that TME was not willing to provide LISC with another copy of the DMT until the dispute over prices could be settled.
After that communication LISC apparently decided not to continue negotiations with TME. Since LISC already had a copy of the TME DMT software, and the operations manual, after April of 1992, they began to ship copies of it to the VA without TME packaging. They changed the name on Purchase Orders to "Technology Media Interprises" (instead of Technology Media Enterprises), and had the Purchase Orders made to the attention of a LISC office. This way, when VA personnel ordered the DMT those orders would go to LISC... not directly to TME. In turn, LISC would order from TME, for a short time, roughly one DMT for every ten it sold. TME discovered this procedure when Barbara Kursteiner erroneously sent a purchase order intended for internal use to TME instead. TME does not know how many copies of its DMT program have been sold to the VA since April of 1992. |
|
They changed the name on Purchase Orders to "Technology Media Interprises" (instead of Technology Media Enterprises), and had the Purchase Orders made to the attention of a LISC office.