Date: Jun 26, 2015 Author: Jimmy Hoover Source: Law360 (
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Law360, Washington (June 26, 2015, 2:18 PM ET) -- A military major solicited a Pennsylvania-based technology company for bribes pertaining to its U.S. Navy research contract and retaliated when the contractor refused — and later reported — his offer, the company said recently in a nearly $2.5 million suit.
Nokomis Inc. claims the Navy baselessly terminated the research contract after the company alerted the U.S. Department of Defense Inspector General to the bribery, and has refused to pay the defense contractor for the costs of work already performed, according to a two-count, 76-page complaint filed against the government Wednesday in the U.S. Court of Federal Claims.
A seasoned contractor with around 50 government projects under its belt, Nokomis conducts research and testing on "high performance" electromagnetic technologies for several defense and civilian agencies, including the U.S. Army, the Missile Defense Agency and the U.S. Department of Homeland Security.
The dispute stems from a 2008 Navy contract to deliver "defense electronics and communication equipment."
Things had taken a turn for the worse when the government assigned to the contract U.S. Air Force Major Ernesto Hernandez, who began pressuring Nokomis to use his lobbying firm, Spectrum Consulting Group LLC, to "smooth over" relations between Nokomis and the Defense Threat Reduction Agency, an association that had been "excellent" up until that point, according to the complaint. Hernandez was listed as Spectrum's vice president and chief operating officer, the suit says.
Upon Nokomis' refusal to hire Spectrum, Hernandez "took significant inappropriate actions" to punish Nokomis, including disparaging the company in meetings with DOD contracting auditors, rejecting Nokomis' vouchers, and interfering with its ability to procure other DOD awards, according to the suit.
After the company reported Hernandez' behavior to the DOD Inspector General, the agency began to unreasonably rewire testing criteria under one of the contract task orders, Nokomis alleges. Finding that the company had not lived up to the new criteria, the government terminated the contract in May 2011.
While disputing the termination notice's findings, Nokomis submitted its settlement proposal to account for the costs it incurred on the contract, including defending against what the contractor considered to be overly burdensome and unreasonable audits, according to the complaint. The government rejected the proposal because the award of the third task order was contingent upon Nokomis' performance under the second order, the suit says.
The suit seeks a declaratory judgment and attributes the government's foot-dragging to retaliation for the contractor's reporting Hernandez's conduct to the inspector general, which allegedly took actions against the military officer and transferred him from Nokomis' contract.
"Although ... Hernandez is no longer the [contracting officer's representative] for the terminated contract -0026," the lawsuit claims, "the negative effects of [Hernandez's] inappropriate activities continue to impact Nokomis through the impairments to the independence of the auditors and management at the DCAS Pittsburgh branch office."
The government could not be reached for comment on the allegations Friday.
Nokomis is represented by David B. Dixon of Buchanan Ingersoll & Rooney PC.
Counsel information for the government was unavailable Friday.
The case is Nokomis Inc. v. U.S., case number 1:15-cv-00657, in the U.S. Court of Federal Claims.
