Free Motion to Amend Pleadings - Rule 15 - District Court of Federal Claims - federal

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS ULYSSES, INC., Plaintiff, v. THE UNITED STATES, Defendant. ) ) ) ) ) ) ) ) )

No. 06-436C (Judge Williams)

DEFENDANT'S AMENDED ANSWER TO PLAINTIFF'S FIRST AMENDED COMPLAINT AND DEFENDANT'S COUNTERCLAIMS For its answer to the plaintiff's first amended complaint, defendant, the United States, admits, denies and alleges as follows: Background 1. Admits the allegations contained paragraph 1 to the extent supported by the document cited, which is the best evidence of its contents; otherwise denies the allegations contained in Paragraph 1. 2. Admits the allegations contained in paragraph 2 to the extent supported by the document cited, which is the best evidence of its contents; otherwise denies the allegations contained in Paragraph 2. 3. Admits. 4. Admits the allegations contained in paragraph 4 to the extent supported by the document cited, which is the best evidence of its contents; otherwise denies the allegations contained in paragraph 4. 5. Denies the allegations contained in paragraph 5 for lack of information or knowledge sufficient to form a belief as to their truth. 6. Denies the allegations contained in paragraph 6 for lack of information or knowledge

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sufficient to form a belief as to their truth. 7. Admits the allegations contained in paragraph 7 to the extent supported by the document cited, which is the best evidence of its contents; otherwise denies the allegations contained in Paragraph 7. 8. Admits the allegations contained in the first sentence of paragraph 8. Denies the allegations contained in the second sentence of paragraph 8 for lack of knowledge or information sufficient to form a belief as to their truth. 9. Admits the allegations contained in paragraph 9 to the extent supported by the document cited, which is the best evidence of its contents; otherwise denies the allegations contained in Paragraph 9. 10. Admits the allegations contained in paragraph 10 to the extent supported by the document cited, which is the best evidence of its contents; otherwise denies the allegations contained in paragraph 10. 11. Denies. 12. Admits the allegations contained in paragraph 12 to the extent supported by the referenced letter, which is the best evidence of its contents; otherwise denies the allegations contained in Paragraph 12. 13. Denies the allegations contained in the first sentence of paragraph 13. Denies the allegations contained in the second sentence of paragraph 13 for lack of knowledge or information sufficient to form a belief as to the truth of the matter asserted. 14. Denies. 15. Denies the allegations contained in the first sentence of paragraph 15. Avers that

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Mr. Kennedy at the Defense Supply Center Columbus never received the letter. Admits the allegations contained in the second sentence of paragraph 15 to the extent supported by the document cited, which is the best evidence of its contents; otherwise denies the allegations contained in the second sentence of Paragraph 15. 16. Admits the allegations contained in paragraph 16 to the extent supported by the document cited, which is the best evidence of its contents; otherwise denies the allegations contained in the first sentence of paragraph 16. 17. Admits the allegations contained in paragraph 17 to the extent supported by the document cited, which is the best evidence of its contents; otherwise denies the allegations contained in paragraph 17. 18. Admits the allegations contained in paragraph 18 to the extent supported by the document cited, which is the best evidence of its contents; otherwise denies the allegations contained in Paragraph 18. 19. Denies. 20. Admits the allegations contained in paragraph 20 to the extent supported by the document cited, which is the best evidence of its contents; otherwise denies the allegations contained in paragraph 20. 21. Admits. 22. Admits the allegations contained in paragraph 22 to the extent supported by the document cited, which is the best evidence of its contents; otherwise denies the allegations contained in paragraph 22. 23. Admits.

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24. Admits the allegations contained in Paragraph 24 to the extent supported by the document cited, which is the best evidence of its contents; otherwise denies the allegations contained in paragraph 24. 25. Admits the allegations contained in paragraph 25 to the extent supported by the document cited, which is the best evidence of its contents; otherwise denies the allegations contained in paragraph 25. 26. Admits the allegations contained in paragraph 26 to the extent supported by the document cited, which is the best evidence of its contents; otherwise denies the allegations contained in Paragraph 26. 27. Denies the allegation contained in paragraph 27 that "Mr. Kennedy was no longer employed with Defense Supply Center Colombus." Admits the remainder of the allegations contained in paragraph 27 to the extent supported by the document cited, which is the best evidence of its contents; otherwise denies the remaining allegations contained in paragraph 27. 28. Admits the allegations contained in paragraph 28 to the extent supported by the document cited, which is the best evidence of its contents; otherwise denies the allegations contained in the paragraph 28. 29. The allegations contained in paragraph 29 constitute plaintiff's characterization of its own case, to which no response is required; to the extent they may be deemed allegations of fact, they are denied. 30. Denies the allegations contained in paragraph 30 for lack of knowledge or information sufficient to form a belief as to the truth of the matters asserted. 31. Admits the allegations contained in paragraph 31 to the extent supported by the

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document cited, which is the best evidence of its contents; otherwise denies the allegations contained in paragraph 31. 32. Denies. 33. Denies. 34. Denies that the plaintiff is entitled to the relief set forth in paragraph 34 or to any relief whatsoever. 35. Denies that the plaintiff is entitled to the relief requested in paragraph 35 or to any relief whatsoever. 36. Denies each and every allegation not previously admitted or otherwise qualified. AFFIRMATIVE DEFENSES 37. Plaintiff's claim is barred by illegality as a result of submitting a false claim. DEFENDANT'S COUNTERCLAIMS 38. This counterclaim arises pursuant to the False Claims Act, 31 U.S.C. §§ 3729-3733, the special plea in fraud, 28 U.S.C. § 2514, and the antifraud provision of the Contract Disputes Act, 41 U.S.C. § 604. The Court possesses jurisdiction pursuant to 28 U.S.C. §§ 1503 and 2508. 39. Defendant and counterclaim plaintiff is the United States. 40. Plaintiff and counterclaim defendant is Ulysses, Inc. Factual Background 41. The Defense Supply Center Columbus ("DSCC"), Columbus, Ohio, is a primary level field activity of the Defense Logistics Agency ("DLA"). DLA is an agency of the Department of Defense that purchases, stores, and manages a wide assortment of supplies for the armed forces. DSCC is one of three DLA procurement centers, and purchases electronics and

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construction spare parts for the military. 42. On March 11, 2002, DSCC issued Solicitation SP0900-02-T-CB06 (the "First Solicitation") for the procurement of a circuit card assembly identified by National Stock Number ("NSN") 5998-00-007-1450. This NSN is a critical weapons system item, used by the Navy in the AN/AWM-54 Fire Control System, Test Set. 43. The Navy must approve all manufacturers of NSN 5998-00-007-1450 before DSCC can procure their particular parts. In order to become an approved source for that NSN, a contractor must submit a Source Approval Request (SAR) to DSCC for Navy approval. 44. The First Solicitation was issued under the DSCC DIBBS/PACE system, an automated system that solicits quotes electronically and makes awards automatically without buyer intervention. 45. The First Solicitation was governed by the DSCC Master Solicitation for Automated Solicitations and Awards ("DSCC Master"). 46. Ulysses was informed that the DSCC Master applied to the First Solicitation by the Request for Quotation screen that appeared when Ulysses accessed the website for the solicitation in order to submit its quote. 47. The First Solicitation was a "code and part number buy," which means that the solicitation described the item to be procured by a manufacturer's CAGE code and part number rather than in accordance with a particular drawing or drawings. 48. The First Solicitation listed three manufacturer's part numbers as acceptable sources of supply: Abrams Instrument Corp. (CAGE 00048) part number 178AS112; Raytheon Technical Services Co. (CAGE 072E5) part number 178AS112; Technical Services Laboratory,

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Inc. (CAGE 51283) part number 178AS112. Only these three manufacturers had been approved by the Navy at that time for the above-described circuit card assembly item. 49. The DSCC Master informed offerors that PACE only considers "qualified quotes" for award. "Qualified quotes" are in exact compliance with the solicitation requirements (i.e., a "bid without exception"), and are submitted on DIBBS. 50. The DSCC Master further informed offerors that quoting an alternate item is considered an "exception" to the solicitation requirements, and that alternates will not be considered for award. 51. Finally, the DSCC Master provided that alternate items may be submitted for acceptance for future procurements, and accordingly indicated where the contractor could send alternative item technical data for evaluation. 52. Ulysses submitted its quote electronically on DIBBS by filling in certain required fields in the Request for Quotation form. Ulysses noted that its bid was "without exception" and that it was offering CAGE 072E5, part number 178AS112. 53. CAGE 072E5 corresponds to Raytheon Technical Services Co. 54. Because Ulysses indicated that its bid was "without exception" ­ and cited an approved source's name and CAGE Code ­ a notice appeared on the quote form that alerted Ulysses as follows: You have stated that the product offered for NSN is an "exact product." Exact product means CAGE 072E5 part number 178AS112, manufactured by or under the direction of CAGE 072E5. If you intend to manufacture this item, but are not CAGE 072E5, you must have evidence of a current contractual relationship with CAGE 072E5 to manufacture and sell this item as CAGE 072E5 P/N 178AS112 in order to quote exact product. Any product not meeting these criteria is considered an alternate -7-

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product even though it may be manufactured in accordance with the drawings and/or specifications of CAGE 072E5. 55. That notice further instructed Ulysses that "[a]ny indication that you have misrepresented the product offered shall result in the Government considering rescission of any resultant contract and all other sanctions, contract penalties, and remedies established under any other law or regulation." 56. On April 29, 2002, DSCC awarded unilateral Purchase Order SP0960-02-M-4209 9 ("First Purchase Order") to Ulysses for part number 178AS112 manufactured by Raytheon Technical Services Co. for a unit price of $525.00 and a total price of $44,625.00. The material was to be delivered in two shipments by June 29, 2002 and August 27, 2002 respectively. 57. Ulysses did not deliver any items by the first shipment's delivery due date of June 29, 2002. 58. In July 2002, DSCC learned that Ulysses intended not to provide the Raytheon part number that was ordered, but rather to provide an item that Ulysses itself was manufacturing. 59. When DSCC contacted Ulysses regarding its problematic bid, Ulysses admitted that it would not be providing a Raytheon part, but rather a part that Ulysses itself was manufacturing. 60. Ulysses did not, and does not now, claim to have any contractual relationship with Raytheon that permitted Ulysses either to manufacture or sell the relevant Raytheon part that was the subject of the First Purchase Order. Moreover, Ulysses did not, and does not now, claim that it was manufacturing that part under the direction of Raytheon. Rather, Ulysses claimed to be an approved source for this item. 61. On August 19, 2002, DSCC issued a stop work order to Ulysses and asked Ulysses -8-

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to submit all technical data for this item to the Government to determine whether Ulysses in fact was an approved source. 62. The contract file indicates that the first DSCC contact from Ulysses, after the stop work order was issued, was a letter dated October 14, 2002, inquiring about approval for its part. The contracting officer responded that he had not received any supporting documentation from Ulysses and was awaiting the submittal of the technical data to determine whether Ulysses was an approved source for the part in question. 63. From November 13, 2002 to December 6, 2002, there were several exchanges of correspondence between the contracting officer and Ulysses. As part of that correspondence, the contracting officer continued to request technical data or proof that Ulysses had been previously approved to manufacture or to supply the relevant Raytheon item, and Ulysses continued to argue that it, in fact, had been so approved. Ulysses did not submit any such technical data or proof to the contracting officer for review. 64. In December 2002, Ulysses sent the contracting officer a drawing of a printed wiring board assembly as proof that Ulysses was an approved source for this item. 65. On January 6, 2003, the contracting officer forwarded the drawing and correspondence from Ulysses to the DSCC technician responsible for this NSN and asked for advice regarding the acceptability of the Ulysses part. The technician correctly responded that Ulysses was not a Navy approved manufacturer for this item, and that to be approved as a source of supply Ulysses should submit a Source Approval Request (SAR) that met all the requirements of the Navy SAR website. 66. On February 14, 2003, the contracting officer informed Ulysses that its submitted

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drawing was insufficient evidence that Ulysses was an approved source and that if Ulysses could not provide the exact item identified in the purchase order, the Government would cancel the order at no cost to the Government. 67. Ulysses was dissatisfied with the CO's determination, and thus requested that the matter be elevated to DSCC's legal department. 68. At the request of the DSCC legal office, Ulysses submitted documentation to show that it had previously provided the part in question to the Government and was an approved source. Those documents, however, do not show that the Government had ever approved Ulysses to manufacture the item in question or that Ulysses ever had any contracts with the Government to supply the item. The documents only show that Ulysses previously had provided the part to other contractors and to the Australian government. 69. On December 17, 2001, DSCC issued Solicitation SP0900-02-T-K808 for the same circuit card assembly as was procured under purchase order SP0960-02-M-4209. 70. DSCC failed to receive any quotes via the automated system by the solicitation closing date (December 31, 2001), and thus proceeded with a "manual" procurement. 71. Because DSCC was aware of the First Purchase Order issued to Ulysses, DSCC sought a quote from Ulysses for the new solicitation. 72. Mr. Demetrios Tsoutsas, president of Ulysses, Inc., thereafter submitted a quote on behalf another of his companies, Melstrom Manufacturing Corp. While the quote referenced the relevant NSN and part number, the quote did not specify a CAGE code. 73. On June 27, 2002, the contracting officer issued (unilateral) Purchase Order SP0960-02-M-5456 ("Second Purchase Order") to "Ulysses, Inc., CAGE 54432" for 99 units of

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the NSN at a total price of $50,490, to be delivered by November 4, 2002. Section B of the award document specifically identified the requested item as Frequency Selective Networks, Inc. (CAGE 56662) part number 178AS112. 74. In July 2002, DSCC learned that Ulysses intended to provide its own part under the Second Purchase Order (just as Ulysses intended to do with respect to the First Purchase Order). 75. The facts from that date forward, with respect to the Second Purchase Order, virtually are identical to those described above with respect to the First Purchase Order. For example, although the contracting officer requested technical information from Ulysses with respect to the Second Purchase Order, Ulysses likewise failed to provide any such information. 76. DSCC canceled the Second Purchase Order on June 17, 2003, the same date upon which DSCC canceled the First Purchase Order. 77. On February 16, 2006, Ulysses submitted its certified claim to the DSCC contracting officer. 78. In that certified claim to the contracting officer, Ulysses represented that it "has always been considered as an approved source for P/N 178AS112." Ulysses, in that certified claim, also claimed that it "has successfully provided both P/N 178AS112, as well as P/N 178AS100 which incorporates P/N 178AS112 to the Government in the past." 79. Plaintiff's certified claim explicitly claimed that "Ulysses is an approved source" and accordingly requested the contracting officer: (1) to "pay Ulysses the total contract amount for Contract 4209 for a value of $44,625.00"; and (2) to "pay Ulysses the total contract amount for Contract 5456 . . . for a total value of $50,490.00."

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80. On April 7, 2006, the contracting officer issued a final decision denying Ulysses' certified claim. Ulysses' False Or Fraudulent Claims 81. Ulysses' certified claim is false or fraudulent. 82. Ulysses knowingly and deliberately certified entitlement to $95,115.00, despite the fact that: (a) Ulysses submitted false quotes to manufacture and supply the items in question even though Ulysses knew that it was not an approved manufacturer for such items; (b) Ulysses obtained the purchase orders at issue based on those quotes and the false representation that it was an approved manufacturer for the items sought by the purchase orders; and (c) Ulysses could provide no evidence that it was an approved manufacturer for the items at issue when requested to do so by the DSCC contracting officer. Count I (False Claims Act ­ 31 U.S.C. § 3729 et seq.) 83. The United States hereby incorporates by reference the allegations set forth in paragraphs 37 through 82 above. 84. In order to obtain the two purchase orders in question, Ulysses falsely claimed with respect to each, that it was an approved manufacturer of the items sought by the DSCC salutations and subsequent purchase orders. 85. In its certified claim to the contracting officer, Ulysses falsely claimed that it was entitled to payment under two Government contracts. 86. Ulysses therefore is liable pursuant to the False Claims Act, 31 U.S.C. §3729 et seq., for at least four false claims, each of which carries a civil penalty of not less than $5,500 and not more than $11,000 for each claim presented. -12-

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Count II (Forfeiture Of Fraudulent Claims ­ 28 U.S.C. § 2514) 87. The United States incorporates by reference the allegations set forth in paragraphs 37 through 86 above. 88. Ulysses practiced or attempted to practice fraud against the United States in the proof, statement, establishment, or allowance of the claims identified in the paragraphs above. In particular, Ulysses made false claims and practiced fraud against the United States both: (a) when Ulysses claimed to have been an approved manufacturer to obtain the two purchase orders; and (b) when Ulysses presented its certified claim to the contracting officer with the intent to cause the Government to pay Ulysses amounts to which it knows it is not entitled. 89. Therefore, Ulysses is liable for the forfeiture of its claim, in its entirety, pursuant to 28 U.S.C. § 2514. Count III (Contract Disputes Act ­ 41 U.S.C. § 604) 90. The United States incorporates by reference the allegations set forth in paragraphs 37 through 86 above. 91. Ulysses is unable to support its claims, as alleged above, due to a misrepresentation of fact or fraud. 92. Accordingly, Ulysses is liable to the United States pursuant to the Contract Disputes Act, 41 U.S.C. § 604, for such unsupported claims, plus the Government's costs attributable to reviewing such claims.

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Prayer For Relief WHEREFORE, defendant the United States requests that the Court enter judgment in its favor, and against Ulysses as follows: a. on Count I (False Claims Act ­ Presentation of False Claims), for such civil penalties as are allowable by law; b. on Count II (Forfeiture of Fraudulent Claims), for forfeiture of plaintiffs entire claim; c. on Count III (Contract Disputes Act), for damages in the amount of $95,115.00, plus the Government's cost of reviewing plaintiff's false claims; and d. for such other and further relief as the Court may deem appropriate.

Respectfully submitted, PETER D. KEISLER Assistant Attorney General JEANNE E. DAVIDSON Director s/ Deborah A. Bynum DEBORAH A. BYNUM Assistant Director s/ Matthew H. Solomson MATTHEW H. SOLOMSON Trial Attorney, Commercial Litigation Branch Civil Division U.S. Department of Justice Attn: Classification Unit, 8th Floor 1100 L Street, N.W. Washington, D.C. 20530 Tel: (202) 305-3274 Fax: (202) 514-8624 May 17, 2007 Attorneys for Defendant -14-

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CERTIFICATE OF SERVICE I hereby certify that on this 17th day of May, 2007, a copy of the foregoing DEFENDANT'S AMENDED ANSWER TO PLAINTIFF'S FIRST AMENDED COMPLAINT AND DEFENDANT'S COUNTERCLAIMS was filed electronically. I understand that notice of this filing will be sent to all parties of record by operation of the Court's electronic filing system. Parties may access this filing through the Court's system.

s/ Matthew H. Solomson MATTHEW H. SOLOMSON