Jury: 2007 LANL Contract Was Unfair

May 07--A state court jury decided Tuesday that national lab manager Los Alamos National Security LLC and the new contractor selected for vendor management services, COMPA Industries, did not play fair during the contract negotiation process in 2007.

Jurors awarded $3.64 million to Orion Technical Resources LLC for breach of implied contract and breach of the duty of good faith and fair dealing.

The jury heard three weeks of testimony and looked at mountains of documents in a trial before District Judge Beatrice Brickhouse, earning compliments from both sides for their attentiveness. Jurors frequently submitted their own written questions for witnesses to answer.

Orion filed its lawsuit in 2009 alleging that LANS, a prime contractor for the Department of Energy that manages the Los Alamos lab, conducted the federally funded bidding process, procurement and subsequent protest "using secret policies and procedures inimical to a fair and open bidding procedure."

A call to a LANS attorney at the Stelzner law firm was not returned.

In June 2007, LANS sought bids for vendor management services to handle non-technical aspects of lab operations such as administration, payroll and benefits for a five-year period with an option to renew for five more.

The contract was worth roughly $395 million over the first five years and almost $800 million over the decade, according to the lawsuit.

Orion is a New Mexico minority-owned small business that provided engineering, scientific, administrative and support staff to the lab from 2006 to 2009, employing over 80 employees. It closed its office after the contract went to COMPA.

The Orion lawsuit claimed that even though it followed every mandate laid out in the solicitation for bids, LANS acted arbitrarily and capriciously in awarding the bid to COMPA -- a company Orion alleged did not meet the requirements.

Orion, COMPA and LaSER were the three bidders selected as finalists for the contract award, and were invited to make oral presentations and site visits.

LANS denied that it had departed from procedures in the plan governing how the subcontractor for vendor management services would be selected, or that it had discovered problems with the technology COMPA proposed but allowed COMPA to fix its proposal.

LANS also denied deviating from its customary practices in order to give the contract to COMPA.

Orion protested the contract award to COMPA and sought a permanent injunction to halt the award and have new bidding, but Brickhouse denied the request.

Brickhouse dismissed claims against the defendants in November 2010, but the New Mexico Court of Appeals reversed her ruling on the breach of implied contract claim while upholding her order about an injunction.

Orion attorney David Freedman said that although the case was complex, the issues came down to not being treated fairly, and the jury agreed.

Copyright 2014 - Albuquerque Journal, N.M.

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