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Archives: Contracts

Rutgers Students Protest Coke Contract

Students at Rutgers University formed a coalition to protest the University’s contract with Coca-Cola Corporation.  Rutgers students wanted to influence the University’s administration to look at other options before making a final decision on the soft drink distributor.  Most of the student-formed coalition consisted of on-campus groups.  These students signed petitions against the University signing another Coke contract.

Many students are upset that a company as large as Coca-Cola is allowed to create a “monopoly” of Coke on their campus.  It appears that many college students of the 21^st century are against large companies such as Coke and Microsoft creating a monopoly at higher education institutions.  The protests served as a way to educate Rutgers students of the issues and concerns in this debate, and to spark activism.

The issues that many Rutgers students have against the soft drink giant are, exclusivity and the ethics of the company.  In the past Coca-Cola has been connected to killings of Columbian union organizers.  An event like this has made students think that Coca-Cola has no interest in their global bottling plants, and consequentially, cannot be responsible for unfavorable events that occur.  In regards to exclusivity, the students would like for Rutgers Administration to look into local distributors in addition to the soft drink company. 

Scientific Games Awarded Lottery Services Contract

Pacific Online Systems Corporation recently awarded Scientific Games Corporation a contract to supply almost one thousand online lottery terminals and a central lottery system.  Pacific Online Systems is the operator for the official Philippines lottery.  The contract awarded to Scientific Games is worth $12 million, and begins in the second part of 2005.   Scientific Games Corporation will provide these services for at least 7 years.

For many years, Scientific Games Corporation have attempted to expand their business abroad.  Obtaining this contract will allow them to keep up with their future global expansion goals.  The contract will allow Pacific Online to help the lottery expand its outlets, and increase sales and proceeds to lottery winners.

Scientific Games is one of the leading integrated suppliers of instant tickets, systems and services to lotteries.  In addition, the corporation has a client base tat spans more than 60 countries.  Therefore, it is no surprise that they were able to land this contract with Pacific Online.  Scientific Games has been able to grow their operations by expanding their markets and resolving any pending future contract litigation in a timely manner. 

New European Law Side with Airline Passengers

A new European law is welcomed with open arms by consumer advocates and criticized by airlines for being the most strict air-passenger rights in the world.  The new law increases penalties on airlines for “bumping” passengers and requires airline carriers to pay passengers for most delays, and cancellation, even if the cause is bad weather.  Customers from all nationalities are covered by this new law when traveling within Europe, and possibly to some trans-Atlantic flights.

The law was introduced last month, and is applicable to 25 member nations of the European Union.  Overall, this law includes most of Europe.  The purpose of the law is to curtail airline carriers from engaging in practices that are annoying to passengers, such as overbooking.  Proponents of the law think that it’s great because the passenger is no longer the victim to airline antics.

Airline carriers don’t argue with the bumping rules, but have a major issue with cancellations that are a result of bad weather.  Carriers contend that the law is going to add to their costs of operation, and in turn will increase the fares for customers in the end anyway.  However, the law does not cover non-European Union airlines that originate outside Europe. 

The High Costs of Contract Language

An Ohio County Department of Job and Family Services has to fix a contract language dispute with their affiliate state offices, or will run the risks of losing more than $200,000 in state reimbursements.  Under a government contract, Ohio covers payment of 66 percent of child enforcement services performed some county courts and other county offices located in Ohio for Job and Family Services purposes. 

Time to correct the contract language is about to run out.  An agreement must be made by the end of this month or Seneca County could lose out on at least $200,00 in 2005 alone.  A local county official stated that county judges and prosecutors had issues with three areas of the contract the Ohio Department of Family Services wants the county to sign in order to get reimbursement for child protective services.  One contract issue that is still left up in the air is that if the current language is left the same, county judges could be exposed to liability since judges are considered officers of the state. 

Confidentiality clauses of the contract also present issues in these negotiations.  Regardless of the contract language in dispute, judges will still have to perform child support enforcement services whether or not if Ohio counties will get reimbursed for the costs. 

NY Governor Implements New Lobbying Bill

New York Governor, George Pataki implemented legislation this week that aims at strengthening public confidence in the state government.  The new legislation will ban gifts from lobbyists, closing a loophole that allows former state employees to avoid punishment for ethics violations, and curtail lobbying for state control.  Pataki’s legislation has achieved the same goal that the New York Legislature has wanted for a long time- drastically limiting lobbying for contracts, and revamping the state’s lobbying laws to encompass a general definition of lobbying.

Although Pataki has introduced this legislation, critics believe that it may be difficult to get the Democratic-led State Assembly and the Republican-led Senate to reach an agreement and implement new laws.  The main issue that needs to be addressed by both sides is that New York citizens are hungry for the government to be more accountable and responsive.  The possible implementation of Pataki’s legislation would be a step in the right direction to meet the public’s needs. 

After incidents in the NY government past, such as the former labor commissioner being convicted of funneling state funds in exchange for money and the former state Senator, pleading guilty to bribery-related accusations helping his dad’s law firm obtain state contracts, it’s no wonder that the NY public wants a more responsible government to represent them. 

Arizona Doctors Seek Protection Against Malpractice Suits

In the near future, Arizona patients may be asked to waive their right to sue doctors before they receive medical treatment as a way to cut malpractice costs.  Doctors voiced their concerns regarding the trend of malpractice suits during strategy sessions attended by business leaders and local politicians.  At these sessions, the overwhelming opinion about this trend is that it is causing the country’s health care system to suffer and that it is only getting worse. 

Some of the strategies emphasized at the strategy sessions included doctors lobbying their patients for reform, shifting to a contract law system where patients agree to waive their rights to sue, and paying injured patients over time rather than one lump sum payment. Arizona politicians believe that tort reform is needed to reduce what they call “lawsit abuse”. 

Republican Senator, Jon Kyl, tried to pass federal legislation that would limit lawyer fees to $2,000 per hour, then $10,000 per hour, and all the way up to $20,000 per hour, but the bill failed because it won only 37 votes in the Senate. 

Kyl favors federal efforts to limit awards on punitive damages.  Some states that have limited these awards have experience relief from rising medical malpractice premiums.  These caps have only stunted the growth of premiums, but have not decreased the rates. 

Gambling Expansion Allows Growth in Florida School Districts

Florida voters approved a ballot initiative that authorize the expansion of gambling in some Florida counties, including Miami County in return for a big return for education.  The initiative would authorize Florida counties to hold separate referendums that will let voters decide whether to allow Las –Vegas style slot machines at dog and horse racetracks in South Florida. 

The debate over the gambling expansion is very political.  Florida Governor, Jeb Bush, and other prominent lawmakers in the GOP Legislature are greatly opposed to efforts to broaden gaming in Florida.  Proponents of the gambling expansion are attempting to guarantee that the new slots will provide millions of dollars each year for Florida education. 

Bush is warning voters against this education promise.  He believes that the big casinos are enticing voters with a hollow promise of more education funding.  Bush contends that the true costs are significant and real, which is the potential long-term decay of Florida’s traditional industries and the social fabric of the communities. 

Oregon Court Rules Lost Rebates Legal

The 2001 Oregon Legislature transferred over $100 million to the federal Medicaid reimbursement from the state’s special health account fund.  Some anti-tax critics believe this transfer is a scam, and proponents view it as “creative accounting”.  The transfer had the effect of reducing tax refunds by almost one-third under Oregon’s kicker law.  Under the state’s kicker law, taxpayers are refunded tax dollars that exceed Oregon’s projected revenue.  This depends on if the unexpected revenue surpasses the estimate by 2 percent or more.

Although the transfer has caused a lot of heat from anti-tax critics, the Oregon Supreme Court held that the tax return reduction was legal.  Proponents believe the transfer was the right thing to do because they believed that it never made sense that federal money that was set aside for healthcare to be transferred in the form of tax rebates to taxpayers. 

Oregon lawmakers are still awaiting a Supreme Court holding regarding a proposal that will completely change the state’s budget.  Oregon justices are deciding whether cost-cutting strategies aimed at reforming the state’s pension system in 2003 violated contract rights.  The 2003 legislation reduced the long-term obligations of the Public Employees Retirement Systems by almost $8 million.  However, these savings resulted from cutting anticipated benefits.  The lawsuit was filed by a coalition of anti-tax activists against the state. 

China Establishes Workers Compensation Program

China is in the works to establish a common workers compensation standard, which will allocate up to twenty years salary in the event of death of injury from work related accidents that are determined to be the fault of the employer.  The initiative is designed to make it really expensive for employers, especially mining and construction industries employers, who inherently have very dangerous working conditions for their workers.

The plan would encourage employers to take out accident insurance on their staff. The new regulations designed to create greater workplace safety were introduced about one year ago.  Many industries in China depend on migrant workers that are very low-paid.  Many of these industry employers till refuse to buy employee accident coverage.

Just last week, there was a fatal gas explosion that killed more than 200 coal miners in the Liaong region of China named Fuxin. The employer involved with the gas accident was alleged to have forced their coal miners to sign a contract specifying a maximum of $18,860 (in Hong Kong dollars) in the event of a fatal explosion at work.  Chinese central government wants to impose provincial legislative bodies to impose the new workers compensation standard and ensure the enforcement of the regulation as soon as possible. 

WorldCom CFO Admits to “Cooking the Books”

Last week, former WorldCom CFO, Scott Sullivan, testified that his goals to meet Wall Street projections clouded his obligation to follow the law. Sullivan cooked the books by making adjustments that were not necessary in order to meet these high expectations.  Sullivan testified that he cooked WorldCom’s books because WorldCom former chief, Bernard Ebbers, instructed him to meet Wall Street’s earnings and revenue targets.

Sullivan is the only witness to connect Bernard Ebbers to the large fraud scandal at WorldCom.  Sullivan testified that he knew it was wrong to go against the law but that he thought he would make it through without problems.  The primary issue in this case is whether a jury believes that either Sullivan or Ebbers was the ringleader in WorldCom’s large accounting fraud.

The accounting fraud that has caused WorldCom to go into bankruptcy is estimated to be a record $11 billion.  On cross-examination, Sullivan testified that every time these adjustments occurred, only Ebbers and himself were present.  Some critics believe that Sullivan took marching orders to make adjustments from Ebbers, to run and commit fraud on his own free will. 

Ohio State Coach Alleges Breach of Contract

Jim O’Brien, former Ohio State’s men’s basketball coach, is suing the University for violating the terms of the contract when he was fired some time last year.  O’Brien alleges that that Ohio State owes him about $3.5 million dollars.  O’Brien’s lawyer, Joseph Murray believes that awarding O’Brien the amount requested is in accordance with the law, but that it may not be such a popular move for the University.

O’Brien is seeking this award without a trial.  O’Brien was terminated last year after he admitted to giving $6,000 to a basketball recruit in the 1999 season. As a result, Ohio State ordered a one-year postseason tournament ban on the men’s basketball team.  O’Brien alleges that his contract with the University only allowed for termination without compensation only for narrow situations. 

In O’Brien’s contract, it required that Ohio State not terminate him without compensation for alleged NCAA violations unless the NCAA started a large-scale investigation and sanctioned the school.  O’Brien was terminated before the NCAA started an investigation.  Representatives of Ohio State claimed that they acted well within their authority with O’Brien’s termination.  O’Brien was terminated with five years left on his contract.

New Bill Gives Maryland School District Right to Alter Superintendents’ Contracts

Under a proposed bill by Maryland lawmakers, school boards in Maryland would have the authority to fire superintendents in the last four months of their contracts without going through State officials.  As of now, local Maryland school boards are not able to remove their superintendents.  The Maryland superintendent of schools may remove a superintendent for misconduct in office, immorality, insubordination, and incompetence.

Some local lawmakers sponsored the bill because of problems that resulted in prior years when a local Board of Education sought to dismiss a superintendent, but he refused to leave his position.  The superintendent who was asked to leave his post stated that he owned his contract and that no one could force him out of his job.

Proponents of the bill emphasize that the bill does not allow local school boards to dismiss a superintendent at any time during their contract.  The bill only allows for a dismissal after the date when the board must tell the superintendent whether it intends to renew the contract. 

The purpose of the bill is to make sure that local boards don’t have disruptions for the last four months if the school board is not going to renew the contract.  Opponents of the bill contend that there may be an area of contention between the superintendents and the school board because the superintendent’s signature is necessary to validate any contract.  Therefore, this could affect the assignment and transfer of staff if a superintendent is forced out of their post. 

Chicago Mayor Bans Campaign Contributions From City Contractors

Chicago Mayor, Richard Daley, signed an order that bars city contracts from contributing to hi political campaign.  Daley has moved in this direction in order to change the structure of fundraising in Chicago in a way that few elected U.S. officials have embraced.  The City of Chicago’s chief lawyer, Mara Georges, called the executive order unprecedented, but recognized that a determined city contractor could still get around the order if they really wanted to contribute to the Mayor’s campaign. 

Although contractors could find a way around the new order, Georges believes that Daley’s executive order was tightly written, and that contractors face severe penalties, which would deter them from contributing.  The order was signed in the middle of a contracting scandal.  The executive order bars contributors from companies that have City of Chicago contracts and their subcontractors.  In addition, the order prohibits the companies’ owners and their spouses and domestic partners from giving to the Mayor’s campaign.

Contractors, who violate the order, stand to have their contracts voided.  If the contractors are in the midst of competing for city business at the time of the contribution, their bids will be thrown out.  Lawyers and lobbyists of city contractors are still permitted to contribute under the new order unless they are ordered by the direction of their clients.  In addition, employees of city contractors can make contributions unless it can be proven that they were forced to do so by their employer.

State of Illinois Awards Pharmacy Contract to Medco Health Solutions

The State of Illinois has announced its intent to award a five-year pharmacy benefit contract to Medco Health Solutions.  The State’s Department of Central Management Services will begin its contract with Medco starting July 1, 2005. Medco will allocate a comprehensive benefit program to over 230,000 state employees, dependents, retirees, and other eligible residents.

Medco Health Solutions, Inc., is a leading pharmacy benefit manager with the nation’s largest mail order pharmacy operations. Medco assists its customer to stabilize prescription costs and increase the quality of prescription drug benefits provided to their members from around the country.  Medco works with both private and public sector employers, and healthcare institutions. 

Medco was selected to provide this benefit program during the State’s competitive bidding and review process.  The prescription drug claims of the members served by Illinois’ health care program is estimated to be more than $400 million annually. Medco’s award with Illinois is still subject to a final contract execution. 

Los Angeles Mayor Requests Ethics Reforms as a Consequence of Pay-to-Play Contracts

Los Angeles Mayor, James Hahn, issued an order to clear up ethical standards for Los Angeles commissioners and guarantee that contracts are awarded through a competitive bidding process.  This order is a consequence of recommendations by a Southern California panel that reviewed allegations of pay-to play city contracting. 

Mayor Hahn issued the mandate days after the panel issued the report.  Some people believe Hahn issued the order because he is in a tight race for re-election.  Hahn established the panel after the federal and county grand jury investigations into Los Angeles’ contract bidding process.

In the past, Lose Angeles has already taken some steps to improve the contract bidding process.  The new initiatives have prohibited most city commissioners from fundraising on behalf of city officials.  The law went into affect last April.  Initially, Hahn opposed the ban on pay-to-play contracts, but has recently requested for greater limits on donations by city contractors.

Markland Technologies, Inc. Awarded Multi-Year Contract with U.S. Army

Recently, Markland Technologies, Inc. was awarded $9.2 Million in new orders from the U.S. Army under a multi-year contract.  This contract brings the total of Markland’s new orders from the Army under the Omnibus Contract beyond $36 million.  Markland is homeland security and defense company that advances laboratory technology into practical products and services.  The U.S. Army’s Night Vision and Electronic Sensors Directorate have awarded Markland new orders for their services and technology products.   

The U.S. Army’s Night Vision and Electronic Sensors Directorate group is one of the military’s most technological group leaders.  Markland is creating a variety of “next-generation” technology solutions for the Night Vision and Electronic Sensors Directorate.  Some of these solutions include night vision and advanced sensor applications, threat-detection systems and disposable sensors.

The contract in new orders is under a five-year omnibus contract. The sales from the new orders will be over a twelve-month performance period.  The ongoing five year omnibus contract could potentially provide a maximum ceiling amount of up to $80 million dollars in fiscal year revenues for Markland Technologies.  This contract has a potential value of $406 million over the life of the omnibus contract.  Markland is a board member of the Homeland Security Industries Association and supports military and law enforcement to protect citizens and territories.

Government Contracts With Lockheed Martin to Build Marine One Presidential Helicopter

The U.S. Navy awarded Lockheed Martin a contract worth more than 1.7 billion to build the next fleet of Marine One helicopters.  The U.S. Navy chose Lockheed Martin’s European inspired helicopter for the helicopters used to transport U.S. presidents.  Eventually, the contract will be worth 6.1 billion dollars for 23 helicopters that the government wants to acquire for the presidential fleet.

The contract was negotiated at the end of a competition between Lockheed Martin’s European Helicopter and Sikorsky Aircraft Corp’s all-American model.  By awarding Lockheed Martin with the contract, the government was concerned about the appeals to patriotism and worries about loss of U.S. jobs to Europe were set against leaders of Italy and Britain.

U.S. Navy officials said that two-thirds of the Lockheed Martin helicopter would be built in the United States, and Italy.  The contract commits 1.7 billion dollars to the development of one helicopter and 6.1 billion dollars for the entire fleet.  The prestige of making the president’s helicopters is known to be a great selling point in marketing the helicopters to other entities. Because of Lockheed Martin’s contract, they have a competitive advantage for a future 6 billion dollar contract to provide quality search and rescue helicopters. 

United Airline’s Union Rejects Employees’ Wage Cuts

United Airlines were dealt a large blow in its efforts to come out of bankruptcy when its 7,000 plane cleaners and mechanics rejected a company proposal to lower their wages.  Because of this proposal, these workers threatened to strike.  Unions that represent flight attendants and pilots expect to end their votes early this week on similar wage cut proposals.

United Airlines has been in bankruptcy court for over two years.  In attempt to get out of bankruptcy, United hopes to cut its annual payroll by $613 million and management salaries by $112 million.  The airline proposed cutting mechanics’ pay by 5 percent and slashing the pay of plane cleaners by 10 percent.  However, union members rejected that idea.

In addition, these union members voted to strike if United’s bankruptcy’s judge throws out their labor contract, allowing the company to impose wage cuts on its own.  When the union vote was disclosed, United officials said they would seek to have the contracts cancelled.  Many union members feel that United relies too much on the employees to balance the budget, and not enough on management. United management is unsure of how they would continue to fly if a strike happened.  If the strike occurred, United would be in trouble since the airline lacks employees trained to take over maintenance duties.

Bush Administration Contracts with Conservative Columnist

Under the direction of Tommy Thompson, the Department of Health and Human Services contracted with a third conservative columnist to assist in advocating for a Bush Administration policy.  The third columnist in the policy’s initiative Mike Manus was paid $10,000 to train marriage counselors as part of the Department of Health and Human Services’ initiative that promotes marriage to build stronger families.

This contract disclosure was revealed as the Government Accountability Office sent a letter to the Department of Education requesting for all materials related to its contract dealings with a prominent conservative press commentator.  Recently, the Department of Education contracted with conservative commentator Armstrong Williams to create ads that featured Bush aids and promoted Bush’s No Child Left Behind law.  The Armstrong contract also bound him to provide media access for former Education Secretary Rod Paige and to persuade other journalists to discuss the law.

Federal law bans the use of public money on propaganda and media coverage.  Rod Paige was replaced by Margaret Spelling, who says that after receiving the letter from Government Accountability Office, she is going to get to the bottom of the controversial contract.  Spelling says that the contract administered by Rod Paige with the conservative columnist was an error in judgment at the department and that she is working hard to remedy the issue.  Members of the panel that oversee the Department of Education spending are looking into this issue.

In addition, Spellings has directed the Department of Education to stop all work under the contract.  Just recently, Bush ordered his Cabinet secretaries not to hire columnists to promote administration agendas.  After Bush’s order to end relationships with columnists, the Health and Human Services department implemented a new rule to prohibit the use of outside consultants or contractors that have any connection with the media. 

Hollywood Unions Face Difficulties in Sharing DVD Profits

Unions representing television and film actors reached a tentative deal on a new three- year contract worth $200 million.  This agreement increases the minimum pay to actors by 9 percent over three years, increases the pension and health fund, and encourages networks to air more scripted shows as opposed to reality shows.  However, this new deal does nothing to update a 20 year-old formula for paying actors for DVD sales.

The unions’ main goal was to change that formula.  The formula was implemented in the 1980s when the home video industry was in its beginning states.  The new formula would benefit actors, writers, and directors.  Unions contend that they were not sharing enough of the huge profits that producers experience as the DVD market has expanded over the past three years.  Hollywood studios counter this argument by contending that DVD revenue only covers the rising costs of making films, the majority of which is never recouped in costs.

In addition, producers argue that under the current formula, actors, writers and directors get residuals from DVD sales, even if the movie is a flop and the studio never recoups its investments.  Payments from DVD sales are important to the unions that represent actors, writers, and directors.

The writers component of the Hollywood unions emphasize that last year, the union mailed members a nickel to represent how much they get from each DVD that sells for $16.00.  The union says that studios take a $10.55 cut of this sale. The contract for actors provides three times what writers receive, a mere 15 cents on a $6.00 DVD.  But this amount that actors receive must be split if there are larger casts.

California Has Few Offshore Government Contracts

As California unions prepare for new plans from the Schwarzenegger administration that could potentially send many government jobs overseas, a recent audit found that state agencies have only a handful of contracts where work is being performed offshore.  On the other hand, this review also found that documenting where government work is begin performed is difficult and there are few rules aiding state officials when evaluating contractors and subcontractors who may use offshore workers.

Chief Deputy to California Auditor, Elaine Howle, finds that state departments do not collect or track information on how much work is being performed offshore.  Howle states that if the Legislature wanted to know more about the overseas work, they would have to direct it to get done.  Auditors surveyed 35 state agencies and University of California campuses and found almost 200 contracts with a combined value of $640 million in which at least some of the work is performed offshore.  Half of this work is computer related services such as maintenance and software development.

Auditors believe that it is unclear how much of the $640 million in work is actually performed overseas because California is not required to collect information from California contractors where assignments are performed.  However, state officials said among approximately 100 contracts, with a combined value of $350 million, less than 3 percent was done overseas.

One of the largest offshore contracts in California is with J.P. Morgan Chase.  This contract has a nine-year term worth $451 million, to help manage the state’s food stamp program and uses call centers offshore to answer questions from beneficiaries. 

Leasebacks and Contracts Affect America West’s Fourth Quarter Reports

America West Airlines reported a fourth quarter 2004 net loss of $49.7 million dollars.  This compares to a net income of $6.8 million for the same period last year.  America West’s fourth quarter 2004 results include special items, which net to a $1.9 million gain.  These special items included an increase in contracts for America West’s pilots and $4.6 million related to losses recorded in connection with two new aircraft sale-leaseback transactions and $6.1 million related to resolution of pending litigation.

America West Chairman and CEO Doug Parker, believes that the fourth quarter results reflect the continued difficulties facing the airline industry.  In addition, Parker contends that fuel prices that still remain very high and excess capacity continues to place pressure on their revenues.

Although America West experienced disappointing fourth quarter results, the Company did experience some operational achievements.  Some of these achievements include: inaugurated service to three new markets in the U.S., introduction of two new websites dedicated to travel agents and corporate travel managers, and created the industry’s first ever gift card.

Central Connecticut University Vendor Required to Pay Ethics Fine

Compass Group USA Inc., a former Central Connecticut State University food vendor must pay $20,000 in civil penalties for providing university employees with golf games while negotiating a contract.  The Connecticut Ethics Commission stated that the Compass Group agreed to the penalties. 

The principal attorney for the Commission, Alice Sexton, filed the complaint in December 2004.  The complaint stated that Compass, through one of its divisions, provided a state employee with more than one golf game, and that the state employee did not repay them.  In Fall 2004, the Connecticut Attorney General's office released a whistleblower report that found that the University's CEO, Frank Resnick, negotiated a $40 million, no-bid food contract with a division of the Compass Group.

The report stated the University's CEO accepted as many as 14 golf outings from the vendor while negotiating the contract.  Resnick plans to appeal his termination.  Resnick stated that the golf outings were just business events and that he believes the contract was negotiated legally under state law.  The contract was revoked after officials determined it was not put out for a competititve bid process, and the university has signed an emergency contract to continue food service with another vendor for the remainder of the school year.

Antifraud Law Makes Whistle Blowers Rich

New federal antifraud laws has allowed whistle blowing employees to become rich, instead of jeopardizing their future careers. 

Jim Alderson, a former accountant, received 20 million dollars in one settlement and 50 million dollars in another settlement for blowing the whistle on his former employer, Quorum, for Medicare fraud.  Quorum is the nation's largest for-profit hospital chain.

At one point, Alderson faced a destroyed career with no pension benefits.  Now, Alderson owns homes in the Southwest and the Northwest of the United States.  Although Alderson has become wealthy because of his whistle blowing initiatives, he claims that after long legal battles, blowing the whistle on Quorum was not as easy as it appeared.

Alderson is one of any former employees that has benefitted from The False Claims Act.  This law passed about twenty years ago to encourage whistle blowers to come forward with contract fraud committed by their employers.  The False Claims Act promises whistle blowers up to a quarter of the money received by the government.  This law has generated 12 billion dollars for the federal treasury and more than 1 billion dollars for whistle blowers.

The Continuous Troubles for Haliburton

According to investigative reports to Congress, the U.S. government alleges that a third or more of the government property paid to Haliburton Company to manage the Coalition Provisional Authority (CPA) in Iraq cannot be located by auditors.

The investigative reports allege that Haliburton has not effectively managed government property, and auditors cannot locate many CPA items worth millions of dollars in Iraq and Kuwait used this summer and fall.  These findings bring to surface the most recent bad news for Vice President Cheney's former company.

Haliburton is the focus of both an FBI investigation into favoritism from the Bush Administration and a criminal investigation into alleged fuel gouging.  FBI agents continue to interview an Army contracting officer who went public last month with allegations that the Bush administration was improperly awarding contracts to Haliburton without competitive bidding.

The CPA dissolved after a year in power in Baghdad when an interim Iraq government took control of the country this summer.  Haliburton was given a key logistics contract to manage a full spectrum of property from trucks and generators to computers.

Voter List Contract Protested by State Employees

Many critics want the Wisconsin Elections Board to cancel its 12 million dollar contract with Accenture, LLP.  Accenture, LLP is a conglomerate based out of Bermuda.  There is a rally to protest the voter list contract and additional state privitization efforts next week.

Barbara Smith, a state employee, contends that it is the goal of the Wisconsin Professional Employees Council to cancel the contract.  Smith stated that the Council wants to keep private companies out of elections.  In addition, Smith alleges that state employees could do the voter list work at a fraction of the costs, and the contractors are not accountable.

The Help America Vote Act of 2002 requires that all states create a statewide voter registration list by January 1, 2006.  If Wisconsin does not meet the deadline, it could lose 50 million dollars already allocated to the state.  Ed Garvey, a Madison lawyer, contends that because there is no public input into this contract, that it should be cancelled.

Supreme Court Hears Oral Arguments for Tribal Contract Support Case

Last week, the U.S. Supreme Court heard oral arguments in a tribal lawsuit against the federal government for reimbursement of contract support costs, and from contractors that do business with the government.  Many tribes allege that the government owes them millions of dollars in contract support costs the government has never reimbursed.  This lack of government reimbursement has caused the tribes to divert the money from basic health services Congress intended to fund.

The goverernment contends that its obligation to provide contract support costs is not ultimately binding because tribal self-determination contracts are unique.  The Cherokee and Shoshone-Paiute tribes are requesting reimbursement for the cost of administering federal health programs in 1996 and 1997, under self-determination contracts with the government. 

In the Indian Self-Determination and Education Assistance Act of 1975, Congress appointed the Department of Health and Human Services to pay for contract support costs of tribes, subject to the availibility of appropriations. 

The Department of Health and Human Services contend the tribes were denied funding in those years because of the lack of available funds in its appropriation from Congress meant other tribal programs would have suffered if some tribes were reimbursed for the full costs of administering their contract services.

University Student Satisfaction Necessary for State Funding

Under Colorado state law, each college that wants to accept state-funded vouchers must sign a performance contract that addresses each school's core curriculum.  As of the next academic year, state-funded vouchers is the only way universities will get state money. 

Rick O'Donnell, the director of the Colorado Commission on Higher Education contends that the state is not telling Colorado University, or any other state university what their core curriculum should be.  Instead, the Commission is requesting that all chosen core courses must be accepted at all schools.  This will allow Colorado students to transfer to any school without losing credit for core courses.

Betsy Hoffman, Colorado University President says she won't concede control over her school's curriculum.  Hoffman does not believe that the Commission has the statutory autrhority to promulgate this requirement.  In addition, Hoffman contends that the performance contract is purposely vague in order to force the university to hand over control of their curriculum.

On the contrary, the Student Bill of Rights gives the Commission authority to enforce a transferrable core curriculum, even without performance contracts.  The performance contracts will require more accountability from the schools while giving them more management flexibility, and the ability to raise tuition higher than the current limits.  Smaller state schools, such as Northen Colorado have already finalized their contracts.

Debate of Contract Workers' Rights

The Pittsburgh City Council held a public hearing to debate a proposed law that would require businesses awarded janitorial, maintenance, security, and window-washing contracts for large buildings in the city to keep employees already on assignment for at least six months.  Many supporters of this initiative argue that it would protect contract workers with only a small burden on employers.  The proposed law would apply to commercial and residential buildings that are larger than 100,000 square feet.

Under the proposed law, these contract employees cannot be terminated except for just cause.  Supporters believe that the proposed law may be the major difference between unemployment and poverty for many Pittsburgh residents.  These supporters also contend that that this initiative would provide security and dignity for occupations that are not always highly valued in society.

The proposed ordinance was drafted in response to an earlier dispute between unionized janitors and the managers of Centre City Tower, a downtown Pittsburgh business.  Centre City's management company changed cleaning companies only two months after the union negotiated for improved health insurance benefits for the employees. 

Opponents of the ordinance argue that the initiative is illegal and further damages Pittsburgh's negative business climate.  Attorneys for the opponents of the proposed law contend that the intiative is illegal because a local charter prohibits council from passing laws that impose restrictions or requirements on private employers in labor and employment matters.

FBI Investigates Haliburton

The FBI has returned to investigate whether the Defense Department improperly awarded no-bid contracts to Haliburton Inc., by seeking an interview with a head Army contracting officer, and collecting documents from many government offices. 

This investigation expands an earlier FBI investigation into whether Haliburton overcharged taxpayers for fuel in Iraq.  The inquiry further questions whether the Bush Administration showed favoritism to Vice President Cheney's former company.

Last week, FBI agents obtained permission to interview Bunnatine Greenhouse, the Army Corps of Engineers' chief contracting officer who went public with allegations that her agency unfairly awarded a Haliburton subsidiary, no-bid contracts worth billions of dollars of work in Iraq. Greenhouse's lawyers stated that their client will cooperate but that she wants whistleblower protection from Pentagon retaliation.

FBI agents began collecting documents from Army offices in Texas and the rest of the country to examine how and why Haliburton got the no-bid assignment.  FBI officials allege that the investigation does not involve anyone in the White House, including Cheney's office.  The Vice President, who continues to receive deferred compensation from when he was CEO of Haliburton, mantains that he has played no role in the selection of his former company's federal business.

Raptors Player Loses in Federal Court

Vince Carter, an NBA player,  is the talk of the league because he is ordered to pay approximately $5 million dollars to a former agent who sued the player for breach of contract.  A federal court jury ruled that Carter must pay his former agent, William Black, actual damages for ending their work agreement in 2000.  Carter ended this agreement just prior to Black's seven year conviction for federal fraud charges.

Black started his suit behind bars, while serving his sentence in a Columbia, S.C. prison.  Carter plans to appeal this verdit.  The appeal is expected to be filed by next week, and Carter is not required to attend any of the appeal proceedings.  In addition, the jury found that Black breached his financial duties to Carter and is ordered to pay the player $800,000 for two loans Carter made to Black.

The former agent pleaded guilty to money laundering, fraud, and other charges for his role in a "car-title-for-cash" scheme that bilked millions of dollars from sports celebrities, including Carter.  Black began representing Carter in 1998, the summer before Carter joined the Raptors.  Besides his client's sentence, Black's lawyer is pleased the jury saw that Carter breached a legitimate contract.

VaxGen Inc. Awarded First Federal Anthrax Vaccine Contract

Last week, the U.S. government purchased 75 million doses of a new anthrax vaccine under a $877.5 million contract that is the first contract awarded from a federal program to develop and keep on inventory barriers to chemical and biological weapons.

The government negotiated this deal with VaxGen Inc. VaxGen is located in Brisbane, CA, and was one of two biotechnology companies that competed for the National Institute Allergy and Infectious Diseases contract to develop a new anthrax vaccine for the United States.

The negotiated contract with VaxGen will provide enough vaccine to treat approximately 30 million people.  These doses will supplement the U.S. reserves to protect against a terrorist attack using anthrax spores.  Tommy Thompson, Secretary of Health and Human Services stated, "The intentional release of anthrax spores is one of the most significant bilogical threats we face".  According to Thompson, it is important for the U.S. government to stockpile this new anthrax vaccine to protect the American public against another anthrax attack.

VaxGen has received $20.8 million in federal funds to take its anthrax vaccine, in development for more than 10 years, into early stage clinical trials.  In October 2003, VaxGen Inc. received $80.3 million to continue clinical trials, test the vaccine on animals, and make 3 million doses.

Anticipatory Breach of Employment Contracts Are No Longer Unique

Lyn Whitman was ready to begin a successful career as the chief marketing officer for ING Bank. To her surprise, weeks before the start date of her position she was notified by the ING corporate office that her offer for employment and contract had been revoked. The letter Whitman received regarding the revocation of her position stated that an "internal candidate" would be filling the position and did not even attempt to apologize for the circumstances.

Practicing employment attorneys comment that this revocation of employment is not that uncommon. Howard Levitt, an employment attorney stated that having a job offer rescinded with or without a contract happens more often than most people would think. This anticipatory breach of contract is when someone is fired in anticipation of officially starting their position.

Breaches of employment contracts are not as well known because 99% of these cases settle out of court. Under these circumstances, employers want to avoid litigation, and will offer to pay settlements to keep prospective employees out of court. Out of court settlements allow employers to avoid bad publicity as well. 4% of 1900 U.S. corporations and government agencies rescind offers in the midst of an economic downturn, restructuring, or internal pressures.

The Ethical and Legal Issues of an Internet-Brokered Organ Transplant

Recently, Rob Smitty donated a kidney to Bob Hickey in Denver, Colorado. This arrangement was made through the Internet. Both Smitty and Hickey argue that the organ donation was merely an act of kindness. But, critics believe that Smitty agreed to donated his kidney for alternative reasons.

Critics believe that Smitty agreed to this Internet brokered transplant arrangement because he owes up to $10,000 in back child support. There is currently a warrant out for his arrest because he has failed to make any payments on this substantial amount. Hickey, the donee of the transplant paid Smitty approximately $5,000 for his donation. Hickey argues that this amount merely covered the costs of transportation, hotel accomodations, and medical services related to the transplant.

This potentially unethical agreement has an added twist. As Hickey was recovering from his transplant surgery, he was being sued by a party alleging a breach of contract. Hickey sold a 1967 Jaguar to a California collector on E-bay for $50,000. The car collector is alleging a breach of contract because the car turned out to be a lemon. The attorney for the car collector stated that his client has given Hickey every opportunity to live up to the contract.

Update: Bob Hickey contacted L&E News regarding this article and empahsized that a judge will decide the merits of his case, and not the critics of this exchange with Rob Smitty.

New York Adult Homes Regulated Under State Law

All adult homes in New York State will be regulated by the Department of Health. This regulation was signed under state law by New York Governor George Pataki.

Under the Department of Health regulations, the authorities of adult facilities and assisted living centers must be licenced by the state.

Because many of the adult homes were unregulated and not licensed by the state, these facilities on occassion were able to undercut their operating costs. An adult residence home that markets itself as an assisted living center must adhere to the licensing requirements. Currently, there are some facilities that provide housing, but contract for medical services and separate home care.

Under the revised Department of Health standards, senior citizens won't have to make disruptive and costly relocations to nursing homes. Facilities that operate outside the Department of Health regulations have an unfair advantage over licensed homes since there is no firm count as to their residents. The Department of Health law requires facilities that provide care and services for seniors to meet the same standard that is already required of licensed adult homes and assisted living centers.

Growing Trend of Corporate Counsel Outsourcing Document Review Projects

There are increased initiatives by in-house legal departments to cut litigation costs and increase shareholder value by legal outsourcing. In-house legal departments are achieving this goal by contracting with companies such as Black Letter Discovery (BLD), which provides experienced U.S. licensed contract attorneys for discovery projects.

Since discovery is an essential element to litigation where documents are reviewed for important issues in a case, it is a very time consuming process that generates a large amount of bills to in-house departments across the country.

One of the primary influences to this cost cutting trend is the DuPont Legal Model. In the DuPont Model, there is an emphasis on the benefits of outsourcing legal tasks to corporations other than law firms. This model allowed DuPont to save $8.8 million in legal bills in 2002.

Companies like BLD are using a large pool of U.S. licensed legal professionals that are under-utilized to perform these vital tasks. These companies provide corporate counsels with U.S. licensed attorneys for document review and issue coding projects at a fraction of the cost of their law firm counterparts. By analyzing the importance of the context of large-scale document review and issue coding projects, in-house legal departments are able to reduce litigation costs that translate into millions of dollars in cost savings.

Gay Couples and the Importance of Property Agreements

Because there is an absence of statutory protections available to non-married gay and lesbian couples, it is critical for these couples to have a property agreement to avoid legal ambiguities.

There are no well defined state law for non-married cohabitants, unlike those available for married couples. The fact that the legal status of cohabitants greatly varies between states and cities, makes property allocation very complicated even for heterosexual cohabitants.

Typically, courts do not recognize a common law statutory right of an unmarried cohabitant to receive the cohabitant's property or alimony payments. For this reason, unmarried couples should draft written agreements that outline their obligations and rights.

The following are points that should be addressed in a comprehensive agreement:
1. Designate which cohabitant has the responsibility for debts incurred during the cohabitation relationship. A cohabitant is responsible only for the debts on which he or she has cosigned or for loans that are products of co-mingled assets.
2. Establish the contract consideration that makes the agreement valid. Usually the household contribution of each person can be classified as consideration.
3. Determine who has responsibility for child care. The responsibility of financial and personal child care should be specified for both the period of cohabitation and after the relationship ends.
4. Determine what circumstances will terminate the written agreement. Specify circumstances that will terminate the agreement, such as incompatibility and mutual consent.