IN THE UNITED STATES COURT OF FEDERAL CLAIMS

Transcription

1 Case 1:11-cv MCW Document 29-1 Filed 08/15/12 Page 1 of 33 IN THE UNITED STATES COURT OF FEDERAL CLAIMS Number C Judge Mary Ellen Coster Williams TEXTEL, INC., v. Plaintiff, THE UNITED STATES, Defendants. PLAINTIFF S BRIEF IN SUPPORT OF PLAINTIFF S RESPONSE TO DEFENDANTS RCFC 12(b)(1) MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION Cyrus E. Phillips IV ALBO & OBLON, L.L.P Clarendon Boulevard, Suite 1201 Arlington, Virginia Attorney of record for Plaintiff, Tektel, Incorporated. REDACTED VERSION

2 Case 1:11-cv MCW Document 29-1 Filed 08/15/12 Page 2 of 33 TABLE OF CONTENTS TABLE OF AUTHORITIES iii-v QUESTIONS INVOLVED I. IS THIS TUCKER ACT, 28 U.S.C. 1491(a)(1), CIVIL ACTION PROPERLY BEFORE THE COURT UPON A FILING FROM A CONTRACTOR WITH DIRECT PRIVITY OF CONTRACT? II. DID DEFENDANTS, WITHOUT AUTHORITY SO TO DO, PUT AN END TO DEFENDANTS TWO EXPRESS PURCHASE ORDER CONTRACTS? III. IF SO, ARE DEFENDANTS NOW IN BREACH OF THESE TWO EXPRESS BILATERAL PURCHASE ORDER CONTRACTS THUS ENTITLING PLAINTIFF TO RECOVERY OF THE FULL PANOPLY OF PLAINTIFF S BREACH DAMAGES? IV. MUST THESE PROCEEDINGS NOW BE STAYED TO ALLOW PLAINTIFF THE OPPORTUNITY TO SUBMIT A MONEY CLAIM AS IS REQUIRED BY THE DISPUTES CLAUSE OF THESE TWO EXPRESS BILATERAL PURCHASE ORDER CONTRACTS? STATEMENT OF THE CASE ARGUMENT I. NEITHER EXPRESS BILATERAL PURCHASE ORDER CONTRACT INCORPORATED THE MULTIPLE AWARD FEDERAL SUPPLY SCHEDULE CONTRACT, NOR DID TEKTEL PERFORM ONLY AS A SUBCONTRACTOR TO NORTEL NETWORKS, INCORPORATED i -

3 Case 1:11-cv MCW Document 29-1 Filed 08/15/12 Page 3 of 33 II. THE CLERK AND THE AOUSC ACTED WITHOUT AUTHORITY UNDER THESE TWO EXPRESS BILATERAL PURCHASE ORDER CONTRACTS, AND THUS THE CLERK AND THE AOUSC ARE IN BREACH OF THESE INSTRUMENTS, ALLOWING TEKTEL FULL RECOVERY OF TEKTEL S BREACH DAMAGES III. THE COURT MUST STAY THESE PROCEEDINGS SO AS TO ALLOW TEKTEL THE OPPORTUNITY TO SUBMIT A MONEY CLAIM UNDER THE AOUSC DISPUTES CLAUSE CONCLUSION CERTIFICATE OF SERVICE ii -

4 Case 1:11-cv MCW Document 29-1 Filed 08/15/12 Page 4 of 33 TABLE OF AUTHORITIES STATUTES 28 U.S.C. 604(a)(10) U.S.C. 604(a)(10)(A) U.S.C. 1491(a)(1) passim 28 U.S.C. 1491(a)(2) , 3 41 U.S.C. 7102(a) U.S.C. 7103(a) U.S.C. 7103(b) , U.S.C. 7103(c) , 18 REGULATIONS Federal Acquisition Regulation , 41 C.F.R. Ch. 1 ( Edition) Federal Acquisition Regulation , 41 C.F.R. Ch. 1 ( Edition) Federal Acquisition Regulation , 41 C.F.R. Ch. 1 ( Edition) Federal Acquisition Regulation , 41 C.F.R. Ch. 1 ( Edition) Federal Acquisition Regulation , 41 C.F.R. Ch. 1 ( Edition) , 22 - iii -

5 Case 1:11-cv MCW Document 29-1 Filed 08/15/12 Page 5 of 33 CASES Best Foam Fabricators, Inc. v. United States, 38 Fed. Cl. 627 (1997) Caroline Hunt Trust Estate v. United States, 65 Fed. Cl. 271 (2005), aff d in part, 470 F.3d 1044 (Fed. Cir. 2006) Demodulation, Inc. v. United States, 104 Fed. Cl. 794 (2012) , 25 Frazier v. United States, 67 Fed. Cl. 56 (2005), aff d 186 Fed. App. 990 (Fed. Cir. 2006) Home Savings of America. v. United States, 399 F.3d 1341 (Fed. Cir. 2005) International Industrial Park, Inc. v. United States, 95 Fed. Cl. 63 (2010) National Air Traffic Controllers Association v. United States, 160 F.3d. 714 (Fed. Cir. 1998) Novell, Inc. v. United States, 109 F. Supp. 2d 22 (D.D.C. 2000) Novell, Inc. v. United States, 46 Fed. Cl. 601 ( 2000) , 3 Rumsfeld v. Applied Companies, 325 F.3d 1328 (Fed. Cir. 2003), cert. den. sub nom. Applied Companies v. Rumsfeld, 124 S. Ct. 462 (2003) Tashima v. AOUSC, 967 F.2d 1264 (9 th Cir. 1992) iv -

6 Case 1:11-cv MCW Document 29-1 Filed 08/15/12 Page 6 of 33 Torncello v. United States, 681 F.2d 756 (Ct. Cl. 1982) United Partition Systems, Inc. v. United States, 59 Fed. Cl. 627 (2004) , 25 - v -

7 Case 1:11-cv MCW Document 29-1 Filed 08/15/12 Page 7 of 33 PLAINTIFF S BRIEF IN SUPPORT OF PLAINTIFF S RESPONSE TO DEFENDANTS RCFC 12(b)(1) MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION QUESTIONS INVOLVED I. Is this Tucker Act, 28 U.S.C. 1491(a)(1), Civil Action properly before the Court upon a filing from a Contractor with direct privity of Contract? II. Did Defendants, without authority so to do, put an end to Defendants two express bilateral Purchase Order Contracts with Plaintiff? III. If so, are Defendants now in breach of those express bilateral Purchase Order Contracts thus entitling Plaintiff to recovery of the full panoply of Plaintiff s breach damages? IV. Must these proceedings be now stayed to allow Plaintiff the opportunity to submit a money Claim as is required by the Disputes Clause of these two express bilateral Purchase Order Contracts? - 1 -

8 Case 1:11-cv MCW Document 29-1 Filed 08/15/12 Page 8 of 33 STATEMENT OF THE CASE PARTIES PLAINTIFF Tektel, Incorporated, 7435 Shepherdsville Road, Elizabethtown, Kentucky (Tektel) is a closelyheld for profit Kentucky Corporation and a Small Business. (ECF Document Number 1, 1, filed July 7 th, 2011). Tektel was founded in 1989, and Tektel provides Information Technology solutions including installation and maintenance of telephone switching systems. ( about-us-and-contact-info/index.htm, last visited August 7 th, 2012). DEFENDANTS Defendants are the Clerk of Court, United States District Court for the Northern District of Illinois (the Clerk) and the Director, Administrative Office of the United States Courts (AOUSC). The Clerk was here acting upon a delegation of the procurement authority vested in the AOUSC by 28 U.S.C. 604(a)(10). (ECF Document Number 1, 1, filed July 7 th, 2011). The AOUSC has authority under 28 U.S.C. 604(a)(10)(A) to contract for supplies and services on behalf of the Judicial (U.S. CONST. art. III) Branch. Novell, Inc. v. United States, 46 Fed. Cl. 601, (2000). The Clerk - 2 -

9 Case 1:11-cv MCW Document 29-1 Filed 08/15/12 Page 9 of 33 and the AOUSC, both here performing ministerial procurement functions, are mere Article III adjuncts not exercising Article III discretion which is otherwise immune from any review whatsoever. Tashima v. AOUSC, 967 F.2d 1264, 1269 (9 th Cir. 1992) cited by Novell, Inc. v. United States, 109 F. Supp. 2d 22, 25 (D.D.C. 2000). JURISDICTION The Clerk and the AOUSC are not Executive Branch Agencies (U.S. CONST. art. I) subject to the statutory Contract Disputes provisions, 41 U.S.C. 7102(a); Novell, 46 Fed. Cl., at Therefore there is no jurisdiction here under 28 U.S.C. 1491(a)(2). Nonetheless, this Court has jurisdiction under 28 U.S.C. 1491(a)(1) because at issue are two express bilateral Purchase Order Contracts among Tektel, the Clerk, and the AOUSC, and these express bilateral Purchase Order Contracts provide Tektel substantive rights to money damages. International Industrial Park, Inc. v. United States, 95 Fed. Cl. 63, 70 (2010); Frazier v. United States, 67 Fed. Cl. 56, 59 (2005), aff d, 186 Fed. App. 990 (Fed. Cir. 2006). Tektel has here expressly pled jurisdiction under the Tucker Act provisions, 28 U.S.C. 1491(a)(1), not under the statutory Contract Disputes provisions, 28 U.S.C. 1491(a)(2). (ECF Document Number 1, 8, filed July 7 th, 2011)

10 Case 1:11-cv MCW Document 29-1 Filed 08/15/12 Page 10 of 33 THE REQUESTS FOR QUOTATION On September 8 th, 2009 the Clerk issued two Requests for Quotation for supplies and services for the Court s telephone switching systems, the first a Request for Quotation for a hardware upgrade, installation, and support for the Court s upgraded telephone switching system, and the second a Request for Quotation for one year s maintenance services on the Court s telephone switching system for the Fiscal Year commencing October 1 st, 2009 with three option years thereafter. Appendix, Tab 1, at pages through The second Request for Quotation, this one for telephone switching system maintenance services, provided that the maintenance quotation will follow the terms and quotations of the Nortel Networks General Services Schedule Number GS-35F-0140L. Appendix, Tab 1, at page The first Request for Quotation, this one for the telephone switching system hardware upgrade, installation, and support, was not so cozened. Appendix, Tab 1, at pages through The second Request for Quotation, this one for telephone switching system maintenance services, required services from telephone technicians dedicated to the Court s telephone switching system at the Dirksen Federal Building, Chicago, Illinois; a guarantee that these telephone technicians would be available for dispatch after hours, and that these telephone technicians would be available - 4 -

11 Case 1:11-cv MCW Document 29-1 Filed 08/15/12 Page 11 of 33 seven days a week, twenty-four hours each day, with a response time of four hours or less; and that the selected Contractor would provide on-site at the Court an inventory of critical telephone switching system components. The second Request for Quotation allowed for suitability determinations prior to delivery of telephone switching system maintenance services: Technicians used on this project must be Certified in Nortel Meridian PBX and Call Pilot. Please provide the names of the local technicians that would be working on this account. All technicians must have a valid state I.D. to enter the Dirksen Federal Building. Technicians may also be required to undergo and pass a background investigation, which will include, but is not limited to a comprehensive criminal background check and fingerprint check. Each technician must come to the courthouse and complete the fingerprint check during normal business hours before starting the project. The US District Court will not pay for the technician s time while being fingerprinted. The cost to perform the background check is at the expense of the US District Court. Appendix, Tab 1, at page (Emphasis added). Both Requests for Quotation included the AOUSC s PURCHASE ORDER TERMS AND CONDITIONS (APR 2001). Appendix, Tab 1, at pages through The AOUSC s Terms and Conditions applicable to both Request for Quotation included the following AOUSC Disputes Clause: DISPUTES CLAUSE (AOUSC 1999) a. A contract dispute means a written claim, demand or assertion by a contracting party for the payment of money in a sum certain, the adjustment or interpretation of contract - 5 -

12 Case 1:11-cv MCW Document 29-1 Filed 08/15/12 Page 12 of 33 terms or other specific relief arising under or relating to the contract. A dispute also includes a termination for convenience settlement proposal and any request for an equitable adjustment, which is denied. A voucher, invoice or other routine payment that is not disputed by the parties is not a dispute under this clause. b. A contract dispute must be filed within 12 months of its accrual and must be submitted in writing to the contracting officer. The dispute must contain a detailed statement of the legal and factual basis of the dispute and must be accompanied by any documents that support the claim. The claimant must seek specific relief, as provided in paragraph (a.) above. However, the time periods set forth here shall be superceded if the contract contains specific provisions for the processing of any claim which would otherwise be considered a dispute under this clause. c. Contracting officers are authorized to decide or settle all disputes under this clause. If the contracting officer requires additiona1 information, the contracting officer shall promptly request the vendor to provide such information. The contracting officer will issue a written determination within 60 days of the receipt of all the requested information from the vendor. If the contracting officer is unable to render a determination within 60 days, the vendor shall be notified of the date on which a determination will be made. The determination of the contracting officer will be signed by the Office of General Counsel and shall be considered the final determination of the agency. d. The contractor shall proceed diligently with performance of this contract pending resolution of the dispute. The contractor shall comply with the final determination of the contracting officer, unless such determination is overturned by a court of competent jurisdiction. Failure to diligently continue contract performance during the pendency of the claim or failure to comply with the final determination of the Contracting Officer may result in termination of the contract for default or imposition of other available remedies. Appendix, Tab 1, at page

13 Case 1:11-cv MCW Document 29-1 Filed 08/15/12 Page 13 of 33 The AOUSC s Terms and Conditions applicable to both Request for Quotation incorporated by reference the DEFAULT (FIXED-PRICE SUPPLY AND SERVICE) (APR 1984) clause set out at Federal Acquisition Regulation (FAR) Appendix, Tab 1, at page This clause provided, inter alia: (a)(1) The Government may, subject to paragraphs (c) and (d) below, by written notice of default to the Contractor, terminate this contract in whole or in part if the Contractor fails to (i) Deliver the supplies or to perform the services within the time specified in this contract or any extension; (ii) Make progress, so as to endanger performance of this contract (but see subparagraph (a)(2) below); or (iii) Perform any of the other provisions of this contract (but see subparagraph (a)(2) below). (2) The Government s right to terminate this contract under subdivisions (1)(ii) and (1)(iii) above, may be exercised if the Contractor does not cure such failure within 10 days (or more if authorized in writing by the Contracting Officer) after receipt of the notice from the Contracting Officer specifying the failure..... (g) If, after termination, it is determined that the Contractor was not in default, or that the default was excusable, the rights and obligations of the parties shall be the same as if the termination had been issued for the convenience of the Government. Appendix, Tab 8, at pages through

14 Case 1:11-cv MCW Document 29-1 Filed 08/15/12 Page 14 of 33 For supplies, the AOUSC s Terms and Conditions incorporated by reference the TERMINATION FOR CONVENIENCE OF GOVERNMENT (Fixed Price) (Short Form) (APR 1984) clause set out at FAR Appendix, Tab 1, at page The TERMINATION FOR CONVENIENCE OF GOVERNMENT (Fixed Price) (Short Form) (APR 1984) clause provides, for supplies, that upon an authorized Contract termination, the rights, duties, and obligations of the parties, including compensation to the Contractor, will be as provided in FAR Part 49 Termination of Contracts in effect on the date of the Award. For services, the AOUSC s Terms and Conditions incorporated by reference the TERMINATION FOR CONVENIENCE OF GOVERNMENT (Services) (Short Form) (APR 1984) clause set out at FAR The TERMINATION FOR CONVENIENCE OF GOVERNMENT (Services) (Short Form) (APR 1984) clause provided, for services, that in the event of an authorized Contract termination, the United States would be liable only to make payment for services rendered before the effective date of that authorized Contract termination. THE EXPRESS BILATERAL PURCHASE ORDER CONTRACTS On September 30 th, 2009 the Clerk notified Tektel that it had been awarded express bilateral Purchase Order Contract Number O at a firm fixed-price of $135, for new - 8 -

15 Case 1:11-cv MCW Document 29-1 Filed 08/15/12 Page 15 of 33 telephone switching system equipment, for installation of this new telephone switching system equipment, and for training on this new telephone switching system equipment. The Clerk likewise then notified Tektel that it would later be awarded an express bilateral Purchase Order Contract for telephone switching system equipment maintenance services. Appendix, Tab 2, at On October 13 th, 2009 the Clerk issued to Tektel express bilateral Purchase Order Contract Number at a firm fixed-price of $48, for maintenance for a period of one year of the Court s telephone switching system equipment. Appendix, Tab 4, at Tektel signed the first of these express bilateral Purchase Order Contracts on September 30 th, Appendix, Tab 3, at Tektel signed the second of these express bilateral Purchase Order Contracts on October 21 st, Appendix, Tab 4, at On November 2 nd, 2009 Tektel provided to the Clerk a price Quotation on cables and on labor necessary to install the Court s upgraded telephone switching system equipment. Appendix, Tab 5, at page On November 6 th, 2009 the Clerk issued to Tektel express unilateral Purchase Order Number in the amount of $2,150 for these cables and for that installation labor. Appendix, Tab 5, at page

16 Case 1:11-cv MCW Document 29-1 Filed 08/15/12 Page 16 of 33 While these two express bilateral Purchase Order Contracts included a reference to Contract Number GS-35F-0140L, a Multiple Award Federal Supply Schedule Contract held by Nortel Networks, Incorporated, they likewise set out pertinent information about the Contractor under these two express bilateral Purchase Order Contracts, and this information identified Tektel as the Contractor, and did not identify Nortel Networks, Incorporated as the Contractor. Appendix, Tab 3, Blocks 2. and 10., page ; Appendix, Tab 4, Blocks 2. and 10., page Block 13. of these two express bilateral Purchase Order Contracts characterized each of them as Non-Judiciary Wide Contract including GSA Federal Supply Services [sic] and Scheduled [sic] Contracts (Terms and Conditions Attached). Appendix, Tab 3, Block 13., page ; Appendix, Tab 4, Block 13., page The express unilateral Purchase Order Contract for cables and installation labor provided in Block 13. that it was an Open Market Contract, and this express unilateral Purchase Order Contract likewise set out pertinent information about the Contractor. Again, this information identified Tektel as the Contractor, and did not identify Nortel Networks, Incorporated as the Contractor. Appendix, Tab 5, Blocks 2., 13., and. 10., page

17 Case 1:11-cv MCW Document 29-1 Filed 08/15/12 Page 17 of 33 THE MULTIPLE AWARD FEDERAL SUPPLY SCHEDULE CONTRACT Contract Number GS-35F-0140L is a Multiple Award Schedule Contract, a part of the Federal Supply Schedule program, an express bilateral Contract between only Nortel Networks, Incorporated and the United States General Services Administration. Appendix, Tab 9, pages through Contract Number GS-35F-0140L included Disputes provisions which are applicable only to Executive Branch Agencies (U.S. CONST. art. I) under the statutory Contract Disputes provisions. Appendix, Tab 9, pages through These Executive Branch Agency Contract Disputes provisions are fundamentally different from the provisions of the AOUSC Disputes Clause incorporated by reference in the two express bilateral Purchase Order Contracts among Tektel, the Clerk, and the AOUSC: these Executive Branch Agency Contract Disputes provisions require Contractor certification of money Claims, 41 U.S.C. 7103(b), and they provide for forfeitures of fraudulent Claims, 41 U.S.C. 7103(c), whereas the AOUSC Disputes Clause incorporated by reference in these two express bilateral Purchase Order Contracts includes no such provisions. United States General Services Administration Multiple Award Schedule Contracts such as Contract Number GS-35F-0140L provide concurrent authority for Contracting Officers at Ordering Activities and for Schedule Contracting Officers at the United States General Services Administra

18 Case 1:11-cv MCW Document 29-1 Filed 08/15/12 Page 18 of 33 tion. In the case of Terminations for Cause and in the case of Contract Disputes, this concurrent authority was explained at FAR , Termination for cause, 48 C.F.R ( Edition), Appendix, Tab 6, at pages through , and at FAR , Disputes, 48 C.F.R ( Edition), Appendix, Tab 7, at pages through Contract Number GS-35F-0140L between Nortel Networks, Incorporated and the United States General Services Administration included the following provision setting out the respective authorities for Contracting Officers at Ordering Activities and for Schedule Contracting Officers at the United States General Services Administration: C.34 TERMINATION (I-FCI-249-B) (DEC 1997) In addition to any other clause contained herein related to termination, the following is applicable to orders placed under Federal Supply Schedule contracts. Any ordering office may, with respect to any one or more delivery orders placed by it under the contract, exercise the same right of termination, acceptance of inferior articles or services, and assessment of excess costs as might the Contracting Officer, except that when failure to deliver articles or services is alleged by the Contractor to be excusable, the determination of whether the failure is excusable shall be made only by the Contracting Officer of the General Services Administration, to whom such allegation shall be referred by the ordering office and from whose determination appeal may be taken as provided in paragraph C.l, FAR (d), Disputes. Appendix, Tab 9, at page (Emphasis added)

19 Case 1:11-cv MCW Document 29-1 Filed 08/15/12 Page 19 of 33 THE PURPORTED DEFAULT On March 1 st, 2010 the Clerk wrote to Tektel, reporting that a background investigation to determine your suitability to be a contractor for the United States District Court, Northern District of Illinois indicated that Textel s President had been previously convicted of a drug offense, and the Clerk then wrote that this offense was considered to be a felony charge. The Clerk offered Tektel an opportunity to refute this charge, by doing so before the end of the business day on March 16 th, Appendix, Tab 10, at page Tektel s President was not one of Tektel s telephone technicians, and it was only Tektel s telephone technicians, not Tektel s President, who were the subjects of the suitability clause of the second Request for Quotation. TEKTEL S ASSERTIONS OF EXCUSABILITY On March 5 th, 2010 Tektel responded, reporting that the drug offense was amended and that Tektel s President had been convicted of a misdemeanor, not a felony. Tektel asked to continue its performances under the two express bilateral Purchase Order Contracts, noting that it was performing other Federal services under Contracts which likewise allowed suitability determinations, and that Tektel had been given the requisite clearances under these other Federal Contracts. Appendix, Tab 11, at page On March 8 th, 2010 the Clerk asked Tektel for details about the amended

20 Case 1:11-cv MCW Document 29-1 Filed 08/15/12 Page 20 of 33 drug offense, and on March 17 th, 2010 Tektel provided to the Clerk the Docket Number for the prior Kentucky criminal offense and a citation to those Kentucky Revised Statutes which treated this amended criminal offense as a misdemeanor, not as a felony. Appendix, Tab 12, at page THE CLERK S DEFAULT TERMINATION On March 18 th, 2010 the Clerk wrote Tektel, explaining that [t]he contract with your firm is considered highly sensitive and that I have consulted with the Court, and the Court has more stringent policies than other government units. The Clerk then terminated the contract for cause, effective at the close of business on Friday, March 19, The Clerk directed Tektel to make arrangements for return of the telephone switching system equipment and supplies which by then Tektel had already delivered to the Court. Appendix, Tab 13, at page At 12:28 p.m. on Friday, March 19 th, 2010, before the Clerk s Default Termination became effective, Tektel provided to the Clerk a copy of an Order from the Hardin Circuit Court, Commonwealth of Kentucky, convicting Tektel s President only of a misdemeanor drug offense. Appendix, Tab 15, pages through On April 15 th, 2010 the Clerk wrote Nortel Networks, Incorporated as follows: Please be advised that the District Court for the Northern District of Illinois canceled the purchase order with Tek Tel Technologies for cause. There was an issue related to the Court s stringent security requirements for people working on the Court s telephone system

21 Case 1:11-cv MCW Document 29-1 Filed 08/15/12 Page 21 of 33 Appendix, Tab 16, at page PROCEEDINGS UNDER THE AOUSC DISPUTES CLAUSE Paragraph a. of the AOUSC Disputes Clause applicable to these two express bilateral Purchase Order Contracts is much like the statutory Contract Disputes provisions, 41 U.S.C. 7103(a), in that it also allows either Contracting Party to initiate Contract Disputes, doing so with a writing. Paragraph b. of this AOUSC Disputes Clause requires that Contract Disputes must be filed within twelve months of accrual and must be submitted in writing to the AOUSC Contracting Officer. Paragraph c. of this AOUSC Disputes Clause requires the AOUSC Contracting Officer to issue a Decision within sixty days of receipt on those written Contract Disputes which have been submitted, else notify the Contractor of the date on which the Decision will be issued. Where an express Contract not covered by the statutory Contract Disputes provisions contains a Disputes Clause which provides specific administrative remedies for Contract Disputes, then the Contractor must proceed in accordance with that Disputes Clause prior to invoking the 28 U.S.C. 1491(a)(1) jurisdiction of this Court. Demodulation, Inc. v. United States, 103 Fed. Cl. 794, 806 (2012)

22 Case 1:11-cv MCW Document 29-1 Filed 08/15/12 Page 22 of 33 On March 17 th, 2011 Tektel wrote the Court again disputing the Clerk s terminations of its two express bilateral Purchase Order Contracts and there asking for a Contracting Officer s Final Decision regarding their terminations for purported cause, terminations which Tektel continued to dispute. Tektel wrote that it would consider the Court s failure to issue such a requested Final Decision as the Court s adoption of the contract Claims against Tektel which had been earlier asserted by the Clerk and which were effective as of March 19 th, 2010, and that lacking a Final Decision Tektel would thereafter bring a Civil Action in this Court. Appendix, Tab 17, at page There was no response from the Court or from the Clerk to this letter of March 17 th, This Civil Action was filed here on July 7 th, 2011, more than sixty days after March 17 th, (ECF Document Number 1, filed July 7 th, 2011). ARGUMENT I. Neither Express Bilateral Purchase Order Contract Incorporated The Multiple Award Federal Supply Schedule Contract, Nor Did Tektel Perform Only As A Subcontractor To Nortel Networks, Incorporated. Pointing to provisions of the Nortel Networks, Incorporated Multiple Award Federal Supply Schedule Contract with the United States General Services Administration which deny privity of

23 Case 1:11-cv MCW Document 29-1 Filed 08/15/12 Page 23 of 33 Contract to Nortel Networks, Incorporated s subcontractors when Delivery Order are placed by Federal Agencies under that Multiple Award Federal Supply Schedule Contract and then performed by those subcontractors, the Clerk and the AOUSC argue that Tektel is not in direct privity of Contract with the United States, and thus that this Civil Action should be dismissed under RCFC 12(b)- (1) for lack of subject matter jurisdiction. (ECF Document Number 24, pages 14 through 19 of 27, filed August 3 rd, 2012). First, facts which the Clerk and the AOUSC ignore. The Request for Quotations which was drafted by the Clerk and issued by the Clerk expressly does not incorporate the Nortel Networks, Incorporated Multiple Award Federal Supply Schedule Contract into either Quotation. It is only the second Request for Quotation, the one for telephone switching system maintenance services, which says anything at all about this issue, and what is there said is only that this second Quotation for yearly maintenance services will follow the terms and conditions of the Nortel Networks, Incorporated Multiple Award Federal Supply Schedule Contract. Block 10. of each express bilateral Purchase Order Contract identifies Tektel, not Nortel Networks, Incorporated, as the Contractor. And correcting the otherwise inappropriate appellations in Block 13. of these express bilateral Purchase Order Contracts, what is there said is only that these

24 Case 1:11-cv MCW Document 29-1 Filed 08/15/12 Page 24 of 33 express bilateral Purchase Order Contracts are Non-Judiciary Wide Contracts, i.e., these express bilateral Purchase Order Contracts bind only the United States District Court for the Northern District of Illinois. Tektel concedes the remaining point in this Block 13., a point which makes no difference here, that United States General Services Administration Federal Supply Schedule Contracts may likewise sometimes bind only a single entity within the AOUSC. Then there is the fundamental difference in the AOUSC Disputes Clause regime incorporated by reference in the two express bilateral Purchase Order Contracts and the statutory Contract Disputes provisions in Contract Number GS-35F-0140L between Nortel Networks, Incorporated and the United States General Services Administration, Contract Disputes provisions of this Multiple Award Federal Supply Schedule Contract which in turn incorporate the statutory Contract Disputes provisions, and these are Contract Disputes provisions which require Contractor certification of money Claims, 41 U.S.C. 7103(b), and which provide for forfeitures of fraudulent Claims, 41 U.S.C. 7103(c), whereas the AOUSC Disputes Clause incorporated in these two express bilateral Purchase Order Contracts includes no such provisions. This Court s 28 U.S.C. 1491(a)(1) jurisdiction is not precluded because Nortel Networks, Incorporated s Multiple Award Federal Supply Schedule Contract Number GS-35F-0140L expressly

25 Case 1:11-cv MCW Document 29-1 Filed 08/15/12 Page 25 of 33 denies direct privity of Contract to Tektel if Tektel were to have performed only as a subcontractor under this Multiple Award Federal Supply Schedule Contract. Where Tucker Act, 28 U.S.C. 1491(a)(1), jurisdiction is challenged based on asserted lack of direct privity of Contract, then the Court may properly look to the larger set of transactions which form the asserted direct Contractual privity. The Court did just this in Caroline Hunt Trust Estate v. United States, 65 Fed. Cl. 271, (2005), aff d in part, 470 F.3d 1044, 1049 (Fed. Cir. 2006), a Civil Action, a Winstar case, where a trust used a subsidiary thrift to acquire failing thrifts in exchange for Federal incentives, where the Federal incentives fell into breach, and where the trust then sought recovery, as here, under the Tucker Act, 28 U.S.C. 1491(a)(1). Caroline Hunt Trust teaches that even a party who has not signed a Federal contract may be deemed as in direct Contractual privity with the United States where the larger transactions involving the party asserting direct Contractual privity were part of the overall bargains with the United States. Id., quoting Home Savings of America v. United States, 399 F.3d 1341, 1349 (Fed. Cir. 2005). These two express bilateral Purchase Order Contracts were formed directly among Tektel, the Clerk, and the AOUSC. Tektel performed on each of them, delivering supplies and services to the United States District Court for the Northern District of Illinois until such time as the Clerk and the

26 Case 1:11-cv MCW Document 29-1 Filed 08/15/12 Page 26 of 33 AOUSC unlawfully claimed that Tektel was in breach of these two express bilateral Purchase Order Contracts, a contract Claim which thereby allowed the Clerk and the AOUSC to avoid paying for Tektel s efforts under the agreed-upon TERMINATION FOR CONVENIENCE OF GOVERNMENT (Fixed Price) (Short Form) (APR 1984) clause. The Clerk did not bother to tell Nortel Networks, Incorporated that he had terminated Tektel s two express bilateral Purchase Order Contracts for purported cause until April 15 th, 2010, Appendix, Tab 16, at page , well after March 19 th, 2010, the effective date of his termination. This is evidence that Tektel s performance was not only as a subcontractor s performance under the Multiple Award Federal Supply Schedule Contract. The Clerk and the AOUSC now assert that Nortel Networks, Incorporated s Multiple Award Federal Supply Schedule Contract Number GS-35F-0140L with the United States General Services Administration is either incorporated into these two express bilateral Purchase Order Contracts among Tektel, the Clerk, and the AOUSC, else that Nortel Networks, Incorporated s Multiple Award Federal Supply Schedule Contract is among the larger transactions here, a part of the overall bargains among Tektel, the Clerk, and the AOUSC. (ECF Document Number 24, pages 19 through 22 of 27, filed August 3 rd, 2012). Tektel agrees with this concession, because so read Tektel is

27 Case 1:11-cv MCW Document 29-1 Filed 08/15/12 Page 27 of 33 then in direct privity of Contract with the United States and, as such, this Court has jurisdiction to hear and consider Tektel s Tucker Act, 28 U.S.C. 1491(a)(1), contract Claim. II. The Clerk And The AOUSC Acted Without Authority Under These Two Express Bilateral Purchase Order Contracts, And Thus The Clerk And The AOUSC Are In Breach Of These Instruments, Allowing Tektel Full Recoveries Of Tektel s Breach Damages. The law in this Court is crystal clear when an Ordering Office under a Multiple Award Schedule Federal Supply Schedule Contract (here, the Clerk and the AOUSC) acts to terminate a Contract or Contracts and the Contractor asserts that the claimed performance/delivery failures are excusable (Tektel s assertions between March 5 th and mid-day on March 19 th, 2010), then: (1) the Ordering Office is without authority to effect the termination; (2) it is only a Schedules Contracting Officer at the United States General Services Administration who can effect the termination, and (3) the matter is to be referred by the Ordering Office to the United States General Services Administration for a decision on the termination proposed by the Ordering Office. United Partition Systems, Inc. v. United States, 59 Fed. Cl. 627, (2004). And what if the Ordering Office does not refer the proposed termination to a Schedules Contracting Officer at the United States General Services Administration, and instead, as here, the Or

28 Case 1:11-cv MCW Document 29-1 Filed 08/15/12 Page 28 of 33 dering Office effects the termination without authority and then demands that the Contractor dispose of the materials which have accumulated during the course of performance? Once again, United Partition provides the rule of decision the actions of the Ordering Office (here, the Clerk and the AOUSC) are nullities, and this Civil Action proceeds as if they had never occurred. Id., 59 Fed. Cl., at The cancellation of these two express bilateral Purchase Order Contracts by the Clerk and the AOUSC without the necessary authority so to do likewise nullifies subparagraph (g) of the DEFAULT (FIXED-PRICE SUPPLY AND SERVICE) (APR 1984) clause set out in the AOUSC s Terms and Conditions incorporated by reference in these two express bilateral Purchase Order Contracts. Torncello v. United States, 681 F.2d 756, 772 (Ct. Cl. 1982); Best Foam Fabricators, Inc. v. United States, 38 Fed. Cl. 627, (1997). Had subparagraph (g) been applicable (it is not), then an authorized termination of these two express bilateral Purchase Order Contracts, if it were later determined that Tektel was not in default or that the default was excusable, would be deemed to have been one for the convenience of the Clerk and the AOUSC, and Tektel s termination remedies would be limited to recovery of the costs and expenses incurred by Tektel up to the point of the termination of the first express bilateral Pur

29 Case 1:11-cv MCW Document 29-1 Filed 08/15/12 Page 29 of 33 chase Order Contract for a telephone switching system hardware upgrade, installation, and support. There could be no recovery by Tektel for the cancellation of the second express bilateral Purchase Order Contract for one year s telephone switching system maintenance services, this because the TERMINATION FOR CONVENIENCE OF GOVERNMENT (Services) (Short Form) (APR 1984) clause provided, for services, that in the event of authorized Contract termination, the United States would be liable only to make payment for services rendered before the effective date of that authorized termination. But unauthorized termination of these two express bilateral Purchase Order Contracts by the Clerk and the AOUSC was a breach, and this breach affords Tektel the opportunity to assert money Claims for all of its breach damages, breach damages not otherwise limited by the termination provisions of the two express bilateral Purchase Order Contracts, breach damages which include: (1) recovery of the costs and expenses incurred by Tektel up to the point of the termination of the first express bilateral Purchase Order Contract for a telephone switching system hardware upgrade, installation, and support; and (2) lost profit damages incurred by Tektel on the telephone switching system maintenance services purchased by the second express bilateral Purchase Order Contract for one year s telephone switching system maintenance services, these services which Tektel was not al

30 Case 1:11-cv MCW Document 29-1 Filed 08/15/12 Page 30 of 33 lowed to deliver. Rumsfeld v. Applied Companies, 325 F.3d 1328, (Fed. Cir. 2003), cert. den. sub nom. Applied Companies v. Rumsfeld, 124 S. Ct. 462 (2003). III. The Court Must Stay These Proceedings So As To Allow Tektel The Opportunity To Submit A Money Claim Under The AOSUC Disputes Clause. The Clerk and the AOUSC raise as an issue this Court s present inability to grant the declaratory relief presently requested by Tektel (ECF Document Number 1, pages 21 and 22 of 23, filed July 7 th, 2011), citing National Air Traffic Controllers Association v. United States, 160 F.3d 714, 716 (Fed. Cir. 1998) (the Court s Tucker Act, 28 U.S.C. 1491(a)(1), jurisdiction requires a Claim for presently due money and absent such a Claim, the Court has no general authority to grant equitable relief). (ECF Document 24, pages 25 through 27 of 27, filed August 3 rd, 2012). The problem is that Tektel has filed this Civil Action upon the contract Claim asserted by the Clerk and the AOUSC, this that Tektel was in breach of the suitability provision of the second express bilateral Purchase Order Contract, and thus that even if it is later determined by the Court that Tektel was not in breach, Tektel s money damages would be limited by the termination provisions set out in the AOUSC s Terms and Conditions. There is a solution

31 Case 1:11-cv MCW Document 29-1 Filed 08/15/12 Page 31 of 33 The solution is a stay to allow Tektel to now submit a money Claim as is required by the AOUSC Disputes clause, and after this money Claim is submitted by Tektel and the Court s stay is lifted, then to allow Tektel to respond in due course to a subsequent RCFC 12(b)(1) Motion to Dismiss filed by Defendants, should Defendants again choose to file. Demodulation, 103 Fed. Cl., at 808; see also United Partition, 59 Fed. Cl., at (former RCFC 56.2(a)(1), now RCFC 52.2(a), allows a stay to obtain a Decision under a Disputes clause). CONCLUSION For all of the reasons set forth in the foregoing Plaintiff s Brief in Support of Plaintiff s Response to Defendants RCFC 12(b)(1) Motion to Dismiss for Lack of Subject Matter Jurisdiction, Plaintiff Tektel respectfully requests that the Court deny Defendants RCFC 12(b)(1) Motion to Dismiss for Lack of Subject Matter Jurisdiction. Respectfully submitted, /s/ Cyrus E. Phillips IV Cyrus E. Phillips IV Virginia State Bar Number

32 Case 1:11-cv MCW Document 29-1 Filed 08/15/12 Page 32 of 33 August 11 th, 2012 ALBO & OBLON, L.L.P. Courthouse Plaza 2200 Clarendon Boulevard, Suite 1201 Arlington, Virginia Telephone: (703) Facsimile: (703) Mobile: (703) Electronic Mail: Attorney of record for Plaintiff, Tektel, Incorporated

33 Case 1:11-cv MCW Document 29-1 Filed 08/15/12 Page 33 of 33 CERTIFICATE OF SERVICE I hereby certify, under penalty of perjury, that on Saturday, August 11 th, 2012 a true and complete copy of this Plaintiff s Brief in Support of Plaintiff s Response to Defendants RCFC 12(b)(1) Motion to Dismiss for Lack of Subject Matter Jurisdiction was filed electronically via the Court s Electronic Case Filing System, through which notice of this filing will be sent to: Amanda L. Tantum, Esq. Electronic Mail: Amanda.Tantum@usdoj.gov Attorney of record for Defendants, United States District Court for the Northern District of Illinois and the Administrative Office of the United States Courts. /s/ Cyrus E. Phillips IV Cyrus E. Phillips IV