Free Motion for Summary Judgment - District Court of Federal Claims - federal

Case 1:01-cv-00459-GWM

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS ____________________________________ ) INTERNATIONAL DATA PRODUCTS ) CORP., ) ) Plaintiff, ) ) v. ) No. 01-459C ) (Judge George W. Miller) THE UNITED STATES, ) ) Defendant. ) ____________________________________) DEFENDANT'S PROPOSED FINDINGS OF UNCONTROVERTED FACT Pursuant to Rule 56(h)(1) of the Rules of the United States Court of Federal Claims, defendant submits the following proposed findings of uncontroverted facts: I. Desktop V Contract 1. On May 5, 1997, the Air Force awarded Contract F01620-97-D-001 ("Desktop

V") to plaintiff International Data Products ("IDP"). Compl.1 ¶5; Def. App.2 8. 2. IDP was a small minority-owned business and participant in the United States

Small Business Administration's ("SBA") 8(a) program. Compl. ¶ 4. 3. IDP's proposal stated that it had served the Government "over the past twelve

years." Def. App. 100. 4. Section B.1.a. of the Desktop V contract stated that "[t]his is a firm fixed-

price (FFP), indefinite delivery, indefinite quantity (ID/IQ) contract providing commercial computer systems and bundled support services to support general purpose applications which will satisfy portable, desktop, and server computer needs common throughout the Air Force, other Department of Defense (DoD) agencies (excluding Navy & Army), and as directed by GSA, other Federal civilian agencies." Def. App. 8.

"Compl. ¶ ____" refers to paragraphs in the complaint that plaintiff filed in its second suit, No. 03-2515. "Def. App. ____" refers to the Appendix to Defendant's Motion for Summary Judgment filed with and in support of this brief.
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5. Compl. ¶ 5. 6.

The Desktop V contract consisted of one base year and four one-year options.

Section B.2.a. of the Desktop V contract stated that "[i]n the base year of the

contract, the minimum amount for award will be $100,000.00." Def. App. 9. 7. Section B.2.b. of the Desktop V contract stated that "[t]he exercise of an

option does not re-establish the contract minimum." Def. App. 9. 8. Section B.2.d of the Desktop V contract stated that "[a] maximum of

$729,010,929 is established for this contract including option amounts." Def. App. 9. 9. Section B.3 of the Desktop V contract stated that IDP would provide products

"and bundled support services." Def. App. 10-11. Section B also contained unit prices for the products provided by IDP, including warranties and other bundled support services. Id. 18-25. 10. Section C.3.6.1 ("Warranty") of the Desktop V contract required IDP to

provide different types of warranty services and software upgrades for products sold under the contract: The Contractor shall provide users with a minimum 3 year, on-site, full parts and labor warranty for all offered products (excluding software) which includes CLINS 0001-0005. The Contractor shall provide users with a minimum 5 year (4 years on-site, 5th year return to IDP) full parts and labor warranty for all offered products (excluding software) for SLINS 0007AA through 0007CE. For SLINS0007DA through 0007DU, contractor shall provide a three year on site, 24 hour fix or replace on hardware warranty, and a two year upgrade warranty on software. Computer system, printers, and peripherals shall be user expandable and maintainable without voiding the Contractor provided warranty. The warranty coverage shall be worldwide and provide for no charge problem reporting 24 hours per day, 7 days per week. The warranty shall provide for repairing or replacing products (excluding software) and prompt return to customer service after problem notification. Def. App. 45, § C.3.6.1 "Warranty" (emphasis in original). 11. Def. App. 90 . 12. Section I of the Desktop V contract incorporated by reference a termination 2 Section 2 of IDP's proposal listed IDP products with a "3 yr warranty."

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for convenience clause, DFARS 252.211-7000 (March 1991), that stated that "[i]n no event shall the sum of the termination amounts payable and any amounts paid for items delivered under the contract exceed the total contract price." Def. App. 50, 67 (¶ (b)(5)). II. Orders and Payments By The Government 13. On May 5, 1997, the award date of the contract, the Government placed an

initial order of $109,575, later modified to $100,436. Def. App. 69, 87. 14. By the time the Desktop V contract was terminated on October 8, 1999, the

Government had ordered and paid IDP for at least $35 million in products. Def. App. 157. III. Termination for Convenience 15. In February 1998, IDP informed the SBA of IDP's owner's intention to sell

their IDP stock to Dunn Computer Corporation, a non-8(a) concern. Compl. ¶ 6. As a result, the Small Business Act required the Government to terminate for convenience the Desktop V contract. Id. ¶ 7. 16. The SBA denied the Air Force's request for a waiver of the statutory 8(a)

requirement that the Government terminate the Desktop V contract with IDP, and the denial was upheld by the SBA's Office of Hearings and Appeal. Compl. ¶¶ 8, 10. 17. By email dated September 16, 1999, the contracting officer, Ms. Kay Walker,

sent an email to Mr. James Crowther, IDP's Director, Contracts. Ms. Walker proposed a "no cost" termination for convenience of the Desktop V contract. Def. App. 317. 18. By email dated September 16, 1999, Mr. Crowther stated that he could not

formally respond to Ms. Walker's proposal until IDP received "the government's official T/C notice." Def. App. 320. Mr. Crowther's email referred to his email to Ms. Walker dated September 17, 1999 (Def. App. 318), and a letter to Ms. Walker from counsel for IDP dated September 23, 1999, which suggested that warranty work "could be performed under a time and material contract." Def. App. 319. 19. By two letters dated October 8, 1999, the contracting officer notified IDP that 3

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the contract was terminated for convenience, and that the termination did not affect the warranties and upgrades for products purchased by the Government. Compl. ¶ 11. Both letters stated: This termination will not affect the rights and liabilities of the parties, arising under the contract or otherwise, concerning defects, guarantees or warranties relating to any articles or component parts furnished to the Government by the Contractor under the contract or this agreement, nor the rights and liabilities of the parties concerning software upgrades as required by Section C of the contract. Def. App. 322, 323. 20. By letter dated April 11, 2000, IDP notified the Air Force that IDP would no

longer provide software upgrades and warranty services. Def. App. 327-28. In the letter, IDP demanded a contracting officer's final decision regarding whether the Government continued to hold IDP liable for warranty services and software upgrades. Id.; Compl. ¶ 13. IV. First Lawsuit 21. The contracting officer's final decision, dated August 8, 2000, denied IDP's

claim. Compl. ¶ 14. 22. IDP filed this lawsuit on August 7, 2001, seeking a declaratory judgment "that

defendant may not hold IDP to the DTV contractual provisions which could otherwise require IDP to provide warranty and software upgrade services to [the Government]." Compl. (No. 01-459) ¶ 17. V. Second Lawsuit 23. On September 18, 2002, IDP filed a certified claim with the contracting

officer, seeking termination costs that IDP claimed it was owed by the Government. Compl. ¶ 13. The claim sought $1,247,915 for inventory and restocking costs, $440,990 for warranty services and software upgrades provided after the contract was terminated, and $40,300 for executive, legal, and accounting time spent preparing and prosecuting IDP's termination settlement proposal. Id. 24. A contracting officer's final decision issued November 15, 2002, that denied 4

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IDP any termination costs. Id. ¶ 14. 25. On October 30, 2003, IDP filed a second lawsuit in this Court, No. 03-2515C,

seeking the termination costs sought in its certified claim. Compl. ¶ 16. Respectfully submitted, PETER D. KEISLER Assistant Attorney General DAVID M. COHEN Director

OF COUNSEL: E. MICHAEL CHIAPARAS Deputy Director Contract Disputes Resolution Center Defense Contract Management Agency 10500 Battleview Parkway, Suite 105 Manassas, VA 20109 MAJ. JACQUELINE POSNER Attorney Commercial Litigation Division Air Force Legal Services Agency 1501 Wilson Boulevard Arlington, VA 22209

s/ Deborah A. Bynum DEBORAH A. BYNUM Assistant Director

s/ John H. Williamson JOHN H. WILLIAMSON Trial Attorney Commercial Litigation Branch Civil Division Department of Justice Attn: Classification Unit, 8th Floor 1100 L Street, N.W. Washington, D.C. 20530 Tele: (202) 307-0277 Fax: (202) 307-0972 E-mail: [email protected] Attorneys for Defendant

July 21, 2004

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CERTIFICATE OF SERVICE I certify under penalty of perjury that on this 21st day of July, 2004, a copy of the foregoing "DEFENDANT'S PROPOSED FINDINGS OF UNCONTROVERTED FACT" was filed electronically. I understand that notice of this filing will be sent to all parties by operation of the Court's electronic filing system. Parties may access this filing through the Court's system. /s John H. Williamson

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