Free Response in Opposition to Motion - District Court of Arizona - Arizona

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Pixler, Reid (USAAZ)
From: Sirabella, Michael [msirabeI|[email protected]]
Sent: Friday, May 19, 2006 2:56 PM
To: 'Martel, Carlos C'; Fradera, Marisol; Pixler, Reid (USAAZ)
Cc: Sheehan, Britney; Preble, Charles; Mckenzie, Dennis; Webb, David; Jolin, Jerry; Sudhoff,
Robert (Dick); Calnan, William A; '[email protected]'; '[email protected]';
'[email protected]'; '[email protected]'; ’[email protected]';
'[email protected]'; '[email protected]'
Subject: RE: Emailing: joint motion in opposition.PDF
Attachments: Iearjet MarketingPIan.pdf; Ad Plan Learjet—Miami spcl req.xls
Carlos,
EG&G has answered the questions in your email to the best of our ability given the
short notice.
Item #1. Current costs expended on advertising the plane (Estimate will be okay).
Current cost expended on advertising to date is approximately $25,000. Our sales
costs are not estimated to exceed 5 percent of sales revenue.
Item #2 EG&G's view on why an auction is better than a private sale.
In EG&G's opinion, selling the Learjet by means of a specialty sale is not only the
most efficient, cost-effective method, but it also fulfills the mandate of our
Statement of Work (19 U.S.C. 1581), which in summary states that items seized by
the Government must be sold publicly. In part, this protects the Government from
the perception of preferential treatment to one individual or company, or
negotiating any "back door" deals.
Oral, outcry public auctions evoke emotional responses from and create a sense of
urgency in prospective buyers. This urgency, is compounded by the fact they must
all qualify to bid by presenting a $250,000 good faith deposit, which weeds out
less serious prospects and allows the auction to create maximum competition for the
commodity. The best way to make an individual willingly pay more for a Learjet is
to let him or her know of the immediate competition.
The Government is well within its right to set a minimum bid for the Learjet. If
this bid is not achieved at auction, the aircraft can be pulled from sale.
For more details, please refer to the marketing and sales plan which was sent to
your offices on March 17, 2006
Item #3 Impact of cancelling the auction:
The impact of canceling is negative. To start, costs have already been incurred
for ads that have run and/or cannot be canceled at this point in time. It is the
cumulative effect of these ads, along with the direct mail efforts we have already
undertaken to reach targeted buyers, and online advertising
(www.treas.gov/auctions/customs/learjet.html, which includes a virtual tour of the
inside of the jet) we have already attracted considerable interest from potential
buyers. Because we have this interest, the effect of pulling the plane from public
auction would wrongly give the impression that there is something wrong with the
aircraft or that the Government has negotiated some type of '"back door deal."
This now not only affects the plane, but auction program and the Government as a
whole.
Other items we wish to address from Mr; §artel's email:
5/19/2O(8(ase 2:04-cv-00363-JWS Document 169-2 Filed 05/19/2006 Page 1 of 2

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#1 The order instructed CBP to :el1 via public auction.
CIV-04-363-PHX-JWS, Order for Public Judicial Interlocutory Sale, 3. "The defendant
property shall be sold at public auction sale pursuant to 28 U.S.C.2001(a), after
notice and a hearing has been held, pursuant to 28 U.S.C.2201(b)."
#2 EG&G's experience/succes= in selling aircraft:
EG&G consistently maximizes competition and revenue on the sale of all luxury
items, including aircraft of all types. In the last four years alone, we have sold
20 aircraft and achieved an average of 131 percent return on third party
appraisals. We have sold a seized DC—9 jet for $3.55 million. Please see the
first and second paragraphs of our Marketing and Sales Plan for additional
support. Our advertising plan, which is attached, demonstrates our aggressive
targeting strategy for achieving maximum interest in the sale of this plane, in
addition to the special web page created for the Learjet on the
treas.gov/auctions/customs site, which averages 115,000 page views per month, as
well as targeting 150,000 email subscribers.
#4 BPOA' s offer to accept $200k commission and "25%" of all amounts over the :um
of $4 mil. appears to be an unreasonable.
EG&G does not know whether this commission includes marketing and sales cost or
whether these cost would be added to the commission cost; therefore, EG&G cannot
comment on reasonableness.
#5. Potential buyer: can solicit and/or obtain extended warranties, training,
technical and operational support options from Bombardier
regardless of where purchased:
MSP will be transferred to the buyer, for a fee.
#6. Advertising the plane for auction has not negatively impacted the sale of the
aircraft.
The myth is that Government auctions are fire sales. This actually works to our
advantage in attracting bidders to the auction. The reality is the public auction
method brings in higher returns than tradition private sales methods.
Michael Sirabella
Manager, Risk Management
EG&G TECHNICAL SERVICES, INC.
Supporting the Seizures and Penalties Division
Office of Field Operations
U.S. Customs and Border Protection
Department of Homeland Security
(703) 361-3131, extension 240
(703) 361-3631 fax
-»——— Original Message ———-—
From: Martel, Carlos C [mailto:[email protected]]
Sent: Friday, May 19, 2006 4:27 PM
To: Sirabella, Michael; Fradera, Marisol
Cc: Sheehan, Britney; Martel, Carlos C; Preble, Charles; Mckenzie, Dennis; Webb,
David; Jolin, Jerry; Sudhoff, Robert (Dick); Calnan, William A
Subject: RE: Emailing: joint motion in opposition.PDF
Importance: High `
Mike,
That will be fine. Please provide the answers to me with a copy to Marisol
Fradera.
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Case 2:04-cv-00363-JWS

Document 169-2

Filed 05/19/2006

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Case 2:04-cv-00363-JWS

Document 169-2

Filed 05/19/2006

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