Ulysses, Inc. v. United States
| Decision Date | 30 April 2013 |
| Docket Number | No. 06-436C,06-436C |
| Parties | ULYSSES, INC., Plaintiff, v. THE UNITED STATES, Defendant. |
| Court | U.S. Claims Court |
Contract Disputes Act, 41 U.S.C. §§ 604
and 605; Request for Quotation;
Approved Source; 48 C.F.R. § 13.004;
Termination for Convenience, FAR
52.249-1; Government Counterclaims;
False Claims Act, 31 U.S.C. § 3729 et
seq.; Government Knowledge Defense;
Forfeiture of Fraudulent Claims Act,
Cyrus E. Phillips IV, Albo & Oblon, L.L.P., 2200 Clarendon Blvd., Suite 1201, Arlington, VA 22201, for Plaintiff.
Stuart F. Delery, Jeanne E. Davidson, Deborah A. Bynum, A. Bondurant Eley, and David D'Allesandris, Commercial Litigation Branch, Civil Division, Department of Justice, P.O. Box 480, Ben Franklin Station, Washington, D.C. 20044, for Defendant.
This case comes before the Court following a trial on liability on Plaintiff's Contract Disputes Act ("CDA") claims and Defendant's counterclaims under the False Claims Act ("FCA"), Forfeiture of Fraudulent Claims Act ("FFCA"), and fraud provision of the CDA.1 Plaintiff, Ulysses, Inc. ("Ulysses"), alleges that the Government wrongfully canceled two purchase orders for printed circuit cards, P/N 178AS112 ("112 Part"), and seeks either reinstatement of those purchase orders or payment for full performance.
The Court finds that the Government legally canceled the First Purchase Order because Plaintiff admittedly was manufacturing the part itself and not providing the exact part specified in Plaintiff's response to the Request for Quotation ("RFQ") and the resultant purchase order -- a Raytheon Technical Services Corporation ("Raytheon") part. The Second Purchase Order is a different matter. This purchase order described the item to be supplied as a part manufactured by Frequency Selective Networks ("Frequency") even though neither the RFQ nor Plaintiff's quote had mentioned the Frequency part. When Plaintiff advised the Government that it would be supplying its own part, not the Frequency part, the Government canceled the Second Purchase Order. Plaintiff claimed it had completed 80 to 85% of the order and challenged the cancellation, seeking termination for convenience damages. Because "the contractor did not contribute to the mistake resulting in the award and was not on direct notice before award that the procedures being followed were wrong," the contract should be terminated for the convenience of the Government. United States v. Amdahl, 786 F.2d 387, 395 (Fed. Cir. 1986). Defendant's counterclaims fail for legal insufficiency and lack of proof.
Ulysses is a manufacturer of electronic equipment, transmitter receivers, and cable and mechanical assemblies. Tr. 25. Demetrios Tsoutsas is the president and owner of Ulysses. Tr. 24. Mr. Tsoutsas is also the president of Melstrom Manufacturing Corporation ("Melstrom"), a company located at the same address and having the same employees as Ulysses. Tr. 24, 111. Mr. Tsoutsas has been involved in Government contracting since 1962. Tr. 32. Mr. Tsoutsas operated four companies and estimated that his companies, Ulysses, Melstrom, Pluto Industries, Inc., and D&A Electronics Manufacturing Inc., earned a total of five million dollars in business from Government contracts. Tr. 64, 311. Sixty percent of Ulysses' sales were made to the United States Government, and the remaining forty percent were to large companies, such as Sikorsky Aircraft Corporation. Tr. 25.
The 112 Part is one of two printed wiring board assemblies in the Aircraft Firing Circuit Test Set AN/AWM-54, also known as P/N 178AS100, or the "100 Part." Tr. 26. According to Mr. Tsoutsas, Ulysses and Melstrom have provided P/N 178AS100, the Aircraft Firing Circuit Test Set, which includes the 112 Part as a component, to the Government and other contractors who were performing under Government contracts since 1997. See Tr. 166; DX 48 (Pl.'s Resp. to Def.'s First Set of Interrogatories). Ulysses also received 28 Government contracts for P/N 178AS114, another more complicated component of 178AS100. Tr. 26-27; PX 27.
The evidence with respect to Plaintiff's prior history of quoting the 112 Part is as follows. In 1998, Melstrom submitted a quote in response to a 112 Part solicitation. Tr. 67-70. In response, the Defense Supply Center Columbus ("DSCC") sent Mr. Tsoutsas a letter stating in pertinent part:
Solicitation Number SP0960-98-R-X154 sent to 8 prospective Contractors was opened on July 1, 1998 with 1 approved offer received. After evaluation, your recent offer submitted in response to the above solicitation was not eligible for a contract award for the following reason(s):
Your recent offer submitted in response to the above solicitation was not eligible as an alternate item. The next higher assembly is not an acceptable alternate for this National Stock Number (NSN) 5998-00-007-1450 [the Stock Number for the 112 part].
Consequently, award [was] made as follows to the firm offering a previously approved item whose offer was judge[d] the most advantageous to the Government.
+------------------------------------------------------------------------+
¦Name and Address of ¦ ¦ ¦ ¦ ¦
¦ ¦Contract No. ¦Item ¦Quantity ¦Unit Price ¦
¦Successful Offeror ¦ ¦ ¦ ¦ ¦
+-----------------------+-----------------+------+----------+------------¦
¦Abrams Instrument Corp.¦ ¦ ¦ ¦ ¦
¦ ¦SP0960-99-D-C-001¦001 ¦168 ¦$438.20* ¦
¦1322 Rensen Street ¦ ¦ ¦ ¦ ¦
+-----------------------+-----------------+------------------------------¦
¦Lansing, MI 48910-3688 ¦ ¦*Weighted Average ¦
+------------------------------------------------------------------------+
If you wish to pursue approval prior to issuance of the next requirement, please contact Mr. Frank Washburn, DSCC-CACB Technician at 614-692-7412 or Ms. Wanda Robinson, DSCC Competition Advocacy Office at 614-692-2399.
. . . .
Your interest in bidding on the requirements of this Center is appreciated. Your name will be retained on the bidder's list to receive future solicitations.
JX 1. Neither the referenced solicitation (No. SP0960-98-R-X154) nor Plaintiff's response to the solicitation is in the record.
Mr. Tsoutsas did not think either Ulysses or Melstrom needed to go through the process to become an approved source for the 112 Part because the companies had already provided the 100 Part to the Government, which contained the 112 Part as a component. Mr. Tsoutsas believed that being qualified to produce the 100 Part automatically qualified his companies as approved sources for their component 112 Parts. Tr. 71. Neither Ulysses nor Melstrom attempted to become an approved source for the 112 Part. Tr. 76. Mr. Tsoutsas testified: Tr. 72; see also Tr. 70-71, 101-02, 104-05, 108, 163-64, and 168-69.
When asked if Ulysses was an approved source for the 112 Part in 2002, Jim Mort, the "second in command" in Mr. Tsoutsas' companies, testified: "I don't think we had anything, such as a source approval request, approval, or any kind of first article approval that would indicate that we were an approved source, but we had provided it to other - - Sikorsky as a prime contractor in the test set." Tr. 322. Further, when asked "to the best of your knowledge were you an approved source for the United States Government for the 112 part?" Mr. Mort answered "[n]o." Tr. 323. However, Mr. Mort subsequently testified that Ulysses had always been considered an approved source for the 112 Part:
Tr. 324-25. At his deposition, Mr. Mort testified that Ulysses had not always been considered an approved source for the 112 Part. Tr. 325. At trial, he addressed the discrepancy in his testimony as follows:
And again I come up with the same feeling when I walked away from this testimony or whatever this was, that the question was "Were they always considered an approved source," that statement that I said, "No" at that time, and I thoroughly believed it was no. But when I throw in the fact that we built the test set, the next higher assembly, then yes, we were an accepted source. Were we accepted by the government is the key to me, and no, we weren't.
On March 11, 2002, DSCC issued Request for Quotation Number SP0900-02-T-CB06 ("First RFQ"), seeking printed circuit cards to use in an Aircraft Firing Circuit Test Set -- 178AS100. DX 1. The First RFQ stated in pertinent part:
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