Rice Systems, Inc. v. United States

62 Fed. Cl. 608, 2004 U.S. Claims LEXIS 297, 94 Fair Empl. Prac. Cas. (BNA) 1501, 2004 WL 2475341
CourtUnited States Court of Federal Claims
DecidedOctober 29, 2004
DocketNo. 01-311C
StatusPublished
Cited by4 cases

This text of 62 Fed. Cl. 608 (Rice Systems, Inc. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rice Systems, Inc. v. United States, 62 Fed. Cl. 608, 2004 U.S. Claims LEXIS 297, 94 Fair Empl. Prac. Cas. (BNA) 1501, 2004 WL 2475341 (uscfc 2004).

Opinion

OPINION

HORN, Judge.

The plaintiff in this case, Rice Systems, Inc., alleges that the United States Air Force terminated the contract at issue for the convenience of the government in bad faith. Specifically, plaintiff maintains that its contract was terminated as a result of gender and national origin discrimination. Denying that the contract was terminated in bad faith, the defendant filed a motion for summary judgment, which plaintiff opposes.

FINDINGS OF FACT

The United States Air Force solicited proposals for a Small Business Innovative Research (SBIR) contract to construct a prototype “Precision Orbital Microaccelerometer” (POM) for the measurement of satellite crosswinds and drag. The desired POM was described as one that is “low-cost, small size and highly reliable” with the ability to “accurately measure drag at the 0.05 micro-g (5 ng) level and cross track winds at the 0.01 micro-g (1 ng) level.” The project contemplated two phases. The goal of Phase I was to “[p]rovide conceptual design of a space-qualified instrument,” including a “determination of achievable scale factor and bias levels, size, weight and power requirements.” In Phase II, a prototype instrument was to be developed.

[610]*610Frank Marcos, a principal physicist at the Air Force Research Laboratory (AFRL) at Hanscom Air Force Base, Massachusetts, was the primary Air Force employee responsible for administering the POM project.1 Mr. Marcos served as the Air Force’s technical contract manager. Mr. Marcos drafted the solicitation upon which the contract was awarded and was one of the evaluator’s of Rice’s proposal.

Rice submitted a Phase I proposal on January 2, 1997, and the Air Force awarded the Phase I contract on March 4, 1997. The basic goal of the Phase I contract was to develop a Phase II proposal. As a result of its Phase I work, Rice submitted a Phase II technical proposal on January 16, 1998. In that proposal, Rice stated that within twenty-four months, it would design, fabricate, and test a POM. Rice also made five other representations to the Air Force in its proposal that are relevant to the dispute in this case. The first four concerned the key personnel who would work on the POM project. Rice’s fifth representation dealt with the performance specifications it would meet in designing and constructing the POM.

First, Rice identified Dr. Victor Vali as its “Chief Scientist” and “Principal Investigator” for the project. According to the defendant, the Air Force considered the Principal Investigator position as “the single most important” position on the project.2 No specific requirements for the Principal Investigator position were set forth in the solicitation. The defendant maintains, however, that the Air Force regarded training, education, and depth of experience in the particular sub-field at issue in the solicitation as “important qualifications” for the Principal Investigator.

The subsection of Rice’s proposal titled, “Rice Systems Inc. Related Experience with Integrated Optic Sensors,” stated that:

For over 20 years, Dr. Vali has been recognized as one of the pioneers in the fields of integrated optics and fiber optics. He is the inventor of the fiber optic gyro. He has published about 65 scientific papers, including the first papers on fiber optic interferometric sensors, laser geophysical strain meters, and gamma ray lasers.

The proposal further indicated that Dr. Vali had received a B.S. in physics in Uppsa-la, Sweden, and a Ph.D. in physics from the University of Colorado. In addition, Dr. Vali held the following positions: Staff Scientist at Boeing Research laboratory, Research Professor at the University of Washington, Senior Research Scientist at the University of Utah, Consultant for Hughes Aircraft Company on various fiber optic sensors, and Principal Investigator on numerous federal government agency contracts. Dr. Vali had published six articles in relevant fields, was the first to develop the principle of gamma ray lasers, built the first fiber interferometer, and developed a long baseline laser interferometer to measure earth displacements. In evaluating Rice’s proposal, the Air Force rated the Principal Investigator staff as “excellent.” According to Mr. Marcos, Dr. Vali had “dazzling credentials” and the Air Force regarded him as “someone with very, very high credentials in the field needed for success for this program.”

Second, Rice identified Bruce Youmans as the Program Manager, another important position on the project. Third, according to its proposal, Rice had negotiated a memorandum of understanding with the Electronic Systems Corp. of GEC-Marconi Hazeltine (GEC-Marconi) to provide engineering support for the project, and to be responsible for laboratory testing. Fourth, Rice indicated it would collaborate with Lucent Technologies/Bell Laboratories (Lucent) on the design [611]*611and fabrication of the integrated optics chips, which were to serve as the base for the POM.

Fifth, Rice’s technical proposal outlined a list of “performance specifications” for the POM, which the company claimed it could “practically achieve during the developmental phase of this program.” The performance specifications were as follows: Sensitivity: 4 ng, Peak Acceleration: 7g, Bandwidth: DC to 0.05 HZ, Size: 10 cm x 10 cm x 10 cm, Weight: 2 kg, and Power: 3 W. According to the independent report issued with regard to this contract, the “key issues in the design of the spacecraft accelerometer are sensitivity, mass and size.”

After submitting its proposal, but before a contract was executed, Rice lost both the Principal Investigator and the Program Manager identified in its Phase II proposal. On June 21,1998, Rice terminated Mr. Youmans, the Project Manager. Less than a week later, Dr. Vali informed Rice that he no longer wished to hold the position of Principal Investigator on the project. According to the defendant, however, prior to signing the contract, Rice did not notify the Air Force of the loss of the Principal Investigator identified in its proposal.

In July, 1998, the Air Force awarded Rice the SBIR Phase II contract, based upon its Phase I proposal, which had identified Dr. Vali as the Principal Investigator and Mr. Youmans as the Program Manager. The cost-plus-fixed-fee contract provided for a two-year performance period. The contract price was $740,652.00. Pursuant to the contract’s limitation of funds clause, the contract was incrementally funded in the amount of $375,000.00 for the first year of the contract through June 30,1999.

According to the parties, the device contemplated by the contract had never been produced or designed; the contract was a “Research and Development” project. Pursuant to Section C of the contract, Rice was to “design, fabricate, test and deliver a low cost, compact, three axis accelerometer to measure drag cross winds on satellites” in accordance with its technical proposal, which was incorporated by reference into the contract. Subsection C of section 5352.215-9005 of the contract provided that:

The detailed technical content of the Contractor’s proposal was an important factor in the selection of the Contractor for award of this contract. The documents listed above (the proposal) are now contractually binding. The contractor shall not change or otherwise deviate from the content of these documents without prior written approval from the Contracting Officer.

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Bluebook (online)
62 Fed. Cl. 608, 2004 U.S. Claims LEXIS 297, 94 Fair Empl. Prac. Cas. (BNA) 1501, 2004 WL 2475341, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rice-systems-inc-v-united-states-uscfc-2004.