Kirkpatrick v. White
| Citation | 351 F.Supp.2d 1261 |
| Decision Date | 12 August 2004 |
| Docket Number | No. CIV.A.01-JEO-2942-NE.,CIV.A.01-JEO-2942-NE. |
| Parties | Wallace E. KIRKPATRICK, Stephen J. Kirkpatrick, and Dese Research, Inc., Plaintiffs, v. Thomas E. WHITE, Secretary of the Army and Daniel V. Wright, Brigadier General, United States Army Suspension and Debarment Official, Defendants. |
| Court | U.S. District Court — Northern District of Alabama |
F A Flowers, III, Mark M Lawson, Burr & Forman LLP, Henry Frohsin, W P Hahn, Baker Donelson Bearman Caldwell & Berkowitz PC, Birmingham, AL, Howell Roger Riggs, Huntsville, AL, for Wallace E Kirkpatrick, Stephen J Kirkpatrick, Dese Research, Inc., plaintiffs.
Alice H Martin, U.S. Attorney, James G Gann, III, U.S. Attorney's Office, Birmingham, AL, Scott E Reid, Samuel W Morris, U.S. Army Litigation Center, Office of the Judge Advocate General, Arlington, VA, for Thomas E White, Jr, Secretary of the Army, Daniel V Wright, Brigadier General, United States Army Suspension and Debarment Official, defendants.
This case is before the court on the plaintiffs' "Motion for Additional Relief" (doc. 89) and the defendants' "Motion to Strike Extra-Record Evidence, Opposition to Plaintiffs' Motion for Additional Relief, and Motion for Summary Judgment" (doc. 91). In their motion, the plaintiffs request that the court grant relief additional to that provided in its September 27, 2002, Memorandum Opinion (doc. 84).1 The defendants oppose the motion and ask that the court strike the "extra-record" evidence that is offered in support of the plaintiffs' motion.
Plaintiff DESE Research, Inc. ("DESE"), is a research and engineering consulting firm specializing in the areas of defense, energy, space, and the environment. Wallace E. Kirkpatrick is the CEO and President of DESE, Stephen Kirkpatrick is the Senior Vice President of DESE. On July 14, 1997, the United States Army Space and Missile Defense Command awarded the plaintiffs a cost contract (DASG 60-97-C-0054). The contract was for the development of software for the Image Enhancement System follow-on effort in support of the Kinetic Energy Anti-Satellite (KE ASAT) Weapons System Program. Steve Tiwari ("Tiwari") was the Army's Program manager for the contract. DESE requested and received approval to issue a cost-plus-fixed-fee subcontract to Titan Corporation ("Titan"). James T. Hackett ("Hackett") was assigned to work by Titan on the contract with DESE.
In September 1999, the Defense Contract Audit Agency audited the plaintiffs' contract and found that DESE had claimed costs that appeared to be for "lobbying" efforts and for other activities outside the scope of the contract. The information was provided to the U.S. Army Criminal Investigation Command ("CID").
CID immediately began an investigation into the allegations of "lobbying" and that the costs for the same were improperly charged to the contract. CID obtained various documents during its investigation, including the "Titan Activity Report" and "Trip Report" which were prepared by Hackett and submitted to DESE in support of billings that were ultimately submitted to the Army. The purportedly improper conduct and billings were identified by the Army from the plaintiffs' documentation. Specifically, the improper conduct purportedly was evidenced in the documentation that Titan submitted in support of its original billings to DESE, which were the basis of DESE's submission of billings to the government.
CID coordinated its investigation with the Army's Procurement Fraud Division ("PFD"), which is responsible for coordinating and monitoring criminal, civil, contractual, and administrative remedies in significant cases alleging fraud and corruption in Army contracts. See 32 C.F.R. § 516.60.
On May 29, 2001, PFD issued show cause letters to DESE and Wallace Kirkpatrick concerning possible violations of 18 U.S.C. § 19143 and FAR § 31.205.22(a). A letter was also sent to Tiwari. The letters requested that the plaintiffs respond to the allegations before PFD made any recommendation to the suspension authority. Through various contacts, counsel for the plaintiffs4 received a second, more specific show cause letter stating that DESE and Kirkpatrick engaged in lobbying activities with appropriated funds in violation of FAR § 31.205.22(a) and 18 U.S.C. § 1913 and that DESE and Wallace Kirkpatrick presented false claims to the Army in violation of 18 U.S.C. § 287. Included in the second letter was a 35-page attachment, consisting of 83 specific questions to be addressed by the plaintiffs.
The plaintiffs submitted their response in September 2001. Sheryl Butler, an "Attorney-Advisor" with PFD, reviewed the response. She found the response to be "non-responsive in many respects to the 83 specific questions, but it did set forth Mr. Tiwari's and DESE's general arguments against the allegations of wrongdoing." (Butler Memo. at p. 3).5 She also stated:
.... By Mr. Tiwari's and DESE's own admission, at least ten meetings with members of Congress, or their staff, were characterized as social lunches/dinners or personal meetings; and at least seven of Mr. Hackett's interviews with the press were characterized as a normal exchange of information between journalists, as well as occasions at which Mr. Hackett expressed his own opinions and did not act as a spokesperson for the Army or KE ASAT.
(Id.) (italics in original). The parties diligently attempted to settle their disagreements, and, at one point, perceived that they had reached a "framework for settlement of this case." (Id. at p. 4). After settlement was not possible, Butler submitted a memorandum to General Daniel V. Wright ("General Wright") as the Suspension and Debarment Official, recommending suspension of Wallace Kirkpatrick, Stephen Kirkpatrick, and DESE. She concluded as follows:
a. A prima facie case exists that Mr. Tiwari, DESE, W. Kirkpatrick, and Mr. Hackett under a DESE subcontract, performed lobbying services under contract # DASG 60-97-C-0054 and that DESE and W. Kirkpatrick submitted claims for these unallowable costs to the government in violation of 18 U.S.C. § 287 and FAR section 31.205-22(a). Counsel for DESE has admitted that these are the activities for which Titan billed DESE and which were in turn billed to the government. In addition, other activities were performed and billed for which [sic] were outside the scope of work to include social meetings and personal journalistic exchanges with members of the press. These were also unallowable costs.
b. There is no requirement that there be a contracting officer's decision or a criminal or civil justice adjudication before PFD seeks an administrative remedy to protect the government from DESE's continued lack of present responsibility.
c. W. Kirkpatrick and S. Kirkpatrick are contractors within the meaning of FAR section 9.403. Through DESE, they submitted the bid and received the government contract. Additionally, they sought the subcontract with Titan. They conducted business with the government in this instance and may reasonably be expected to conduct business with the government in the future.
d. DESE Research, Inc., W. Kirkpatrick, and S. Kirkpatrick are imputees of one another within the meaning of FAR subsections 9.406-5(a) and 9.406-5(b). S. Kirkpatrick was clearly performing his duties as the President of DESE when he entered into the contract with SMDC as evidenced by his signature on the document; and W. Kirkpatrick was clearly performing his duties as CEO of DESE when he rendered services under the contract.
5. Recommendation. That the Suspension and Debarment Official suspend Wallace Kirkpatrick, Stephen Kirkpatrick, and DESE Research, Inc., by signing the attached letters of notification.
(Butler Mem. at 5). General Wright concurred in her assessment and issued notices of temporary suspension pursuant to FAR § 9.407 for Wallace Kirkpatrick, Stephen Kirkpatrick, and DESE on November 15, 2001. He found that DESE, Hackett, and Wallace Kirkpatrick performed lobbying services under the contract and submitted claims for these unallowable costs in violation of § 287 and FAR section 31.205-22(a). He stated:
Counsel for DESE has admitted that these are the services for which Titan billed DESE and which were in turn billed to the government. In addition, other activities were performed and billed to the government which were outside the scope of work of the contract, to include social meetings and personal exchanges with members of the press. These were also unallowable costs. The administrative record that supports the suspension currently consists of this notice and the attached memorandum and supporting documentation.
(November 15, 2001 Letter to Mr. Riggs found at (PEX 1 at 1)).6 He also found that Stephen Kirkpatrick was due to be suspended because his company, Wallace Kirkpatrick, and Hackett performed unlawfully and he (Stephen Kirkpatrick) was "an imputee of DESE and W. Kirkpatrick within the meaning of FAR subsections 9.406-5(a) and 9.406-5(b)." (November 15, 2001 Letter to Stephen Kirkpatrick).
The suspension notices informed the plaintiffs that (1) their names would appear in a government publication listing them as ineligible for government contracts; (2) agencies of the executive branch would not contract with them except for compelling reasons; (3) they could not conduct business as an agent, representative, or as a surety for a third party; and, (4) the Army would examine their affiliations with or relationships to any other organization doing business with the government to determine the impact of those ties on the responsibility of that organization to be a government contractor or subcontractor. (Suspension Letters). The letters also detailed the plaintiffs' right of further administrative review under FAR Subpart 9.4. (Id.).
The plaintiffs sought no further...
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