GULF GROUP GENERAL ENTERPRISES CO. W.L.L., Plaintiff, v. UNITED STATES, Defendant

In the United States Court of Federal Claims

Nos. 06-835C, 06-853C, 06-858C, 07-82C

Filed: July 2, 2013

Unsealed Opinion Issued for Publication: July 17, 2013

* * * * * * * * * * * * * * * *

GULF GROUP GENERAL *

ENTERPRISES CO. W.L.L., * False Claims Act, 31 U.S.C. § 3729;

* Special Plea in Fraud, 28 U.S.C.

Plaintiff, * § 2514; Contract Disputes Act, 41

v. * U.S.C. § 604; Rescission and

* Disgorgement; Termination; Breach

UNITED STATES, * of Contract; Abuse of Discretion;

* Demurrage.

Defendant. *

*

* * * * * * * * * * * * * * * *

Iliaura Hands, Miller & Williamson LLC, New Orleans, LA, for plaintiff. With her

was Machale A. Miller, Miller & Williamson LLC, New Orleans, LA.

Timothy P. McIImail, Senior Trial Counsel, Commercial Litigation Branch, Civil

Division, United States Department of Justice, Washington, D.C., for defendant. With

him were Robert C. Bigler, Stacey K. Grigsby, Kent C. Kiffner, Lartease M. Tiffith,

Russell J. Upton, Trial Attorneys, Jeanne E. Davidson, Director, Commercial

Litigation Branch, and Stuart F. Delery, Acting Assistant Attorney General, Civil

Division. Of counsel, Major Daniel Everett, Major John Gowel, and Captain Dana

Collins, United States Army, Litigation Division.

OPINION

HORN, J.

FINDINGS OF FACT

This opinion relates to four consolidated cases filed by the same plaintiff, Gulf

Group General Enterprises Co. W.L.L. (Gulf Group), in the United States Court of

Federal Claims.1 The cases arise from four awards to Gulf Group by the United States

Army in 2004. In the lead case, Case No. 06-835C (the camp package BPA case), Gulf

1

The original complaints were filed as follows: Case No. 06-835C, the camp package

blanket purchase agreement (BPA) case was filed on December 8, 2006; Case No. 06-

858C, the latrine case, was filed on December 15, 2006; Case No. 06-853C, the

Group alleges that the government’s termination of its BPA call under a general

services contract was arbitrary, capricious, and an abuse of discretion. Gulf Group also

alleges that the camp package BPA call termination was made in bad faith.2 In Case

No. 06-858C (the latrine case), Gulf Group alleges that the government’s termination of

its contract to supply latrines to Camp Arifjan in Kuwait was arbitrary, capricious, and an

abuse of discretion. Gulf Group also alleges that the latrine contract termination was

made in bad faith. In Case No. 06-853C (the dumpster case), Gulf Group alleges that

the government’s termination of its contract to supply dumpsters to Camp Arifjan in

Kuwait was arbitrary, capricious, and an abuse of discretion. Gulf Group also alleges

that the termination of the dumpster contract was made in bad faith. In Case No. 07-

82C (the bottled water BPA case), Gulf Group alleges that the government’s

requirement that it travel in military convoys to deliver bottled water to base camps in

Iraq and Kuwait3 and on return trips resulted in significant delays, as a result of which

plaintiff incurred additional costs. Gulf Group contends that the government breached

its duty of good faith and fair dealing in delaying plaintiff’s delivery of bottled water and

that, because of the breach, the government is responsible for demurrage expenses.

dumpster case, was filed on December 19, 2006; Case No. 07-82C, the bottled water

BPA case, was filed on February 1, 2007. The cases were consolidated on August 28,

2008. The complaints in each case, however, have been amended multiple times, with

the final amendment in the camp package BPA case dated May 6, 2011, the final

amendment in the latrine case dated February 25, 2011, the final amendment in the

dumpster case dated February 25, 2011, and the final amendment in the bottled water

BPA case dated February 25, 2011. Some of the cases were stayed pending decisions

of the contracting officer. Subsequently, the second amended complaints in the camp

package BPA case, latrine case, and dumpster case raised allegations of abuse of

discretion and bad faith on the part of the United States. The cases also were stayed

for a considerable period of time at the request of defendant to accommodate ongoing

criminal investigations and prosecutions, which are addressed more fully below.

2

Although plaintiff alleged bad faith in the second amended complaints in the camp

package BPA case, the latrine case, and the dumpster case, plaintiff subsequently

dropped all allegations concerning bad faith in each of the cases in which it originally

was raised. As confirmed in an April 22, 2011 Order issued by this court, “[i]n a

conference the court held with the parties on April 8, 2011, plaintiff’s counsel advised

the court that, upon reflection, counsel does not wish to pursue a bad faith claim on the

part of the government, but that plaintiff’s counsel intends to proceed with the allegation

that government officials acted arbitrarily and capriciously with respect to the

cancellation of Gulf Group’s contract.” Thereafter, in its third amended complaint in

Case No. 06-835C (the camp package BPA), filed on May 6, 2011, plaintiff dropped its

bad faith claim against the government. Plaintiff reiterated at closing argument, “there is

no bad faith claim in any one of these four cases, 06-835, 06-858, 06-853, and 07-082.”

3

The court notes that the bottled water BPA statement of work states that water was to

be delivered to camps in Kuwait, whereas the “Special Instructions” in the bottled water

BPA, discussed more fully below, indicate that water was to be delivered in Kuwait and

Iraq.

2

The government filed counterclaims and affirmative defenses in each of the four

consolidated cases. Regarding the camp package BPA case, Case No. 06-835C,

defendant alleges violations of the False Claims Act, 31 U.S.C. § 3729 (2000),

amended by Fraud Enforcement & Recovery Act of 2009 (FERA), Pub. L. No. 111–21,

123 Stat. 1617,4 the Contract Disputes Act, 41 U.S.C. § 604 (2000) (current version at

41 U.S.C. § 7103(c)(2) (Supp. V 2011)), and the Special Plea in Fraud statute, 28

U.S.C. § 2514 (2000).5 Defendant seeks forfeiture of plaintiff’s entire camp package

BPA claim under the Special Plea in Fraud statute, damages in the amount of plaintiff’s

unsupported claim, as well as defendant’s cost of reviewing plaintiff’s alleged false claim

under the Contract Disputes Act, and treble damages and allowable civil penalties

under the False Claims Act. Defendant also seeks rescission of the calls issued under

the camp package BPA, which the government alleges were obtained by plaintiff

through bribery, conflict of interest, and fraud, and defendant seeks disgorgement of all

monies the United States paid for calls issued under the camp package BPA, plus

costs.

In the latrine case, Case No. 06-858C, defendant alleges violations of the False

Claims Act, the Contract Disputes Act, and the Special Plea in Fraud statute.

Defendant seeks forfeiture of plaintiff’s entire claim under the Special Plea in Fraud

statute, damages in the amount of plaintiff’s unsupported claim, as well as defendant’s

cost of reviewing plaintiff’s allegedly false claim under the Contract Disputes Act, and

allowable civil penalties under the False Claims Act, plus costs. Although defendant

argues that the latrine contract also was tainted by bribery, conflict of interest, and

fraud, defendant does not seek rescission of the latrine contract.

In the dumpster case, Case No. 06-853C, defendant alleges violations of the

False Claims Act, the Contract Disputes Act, and the Special Plea in Fraud statute. As

in the latrine case, defendant seeks forfeiture of plaintiff’s entire claim under the Special

Plea in Fraud statute, damages in the amount of plaintiff’s unsupported claim, as well as

defendant’s cost of reviewing plaintiff’s allegedly false claim under the Contract

Disputes Act, and allowable civil penalties under the False Claims Act, plus costs. As in

the latrine case, although defendant argues that the dumpster contract was tainted by

bribery, conflict of interest, and fraud, defendant does not seek rescission of the

dumpster contract.

4

The 2009 amendments to the False Claims Act apply retroactively to claims pending

on or after June 7, 2008. See United States ex rel. Bennett v. Medtronic, Inc., 747 F.

Supp. 2d 745, 762-63 (S.D. Tex. 2010). Although the amended version of the False

Claims Act could potentially apply to a submission that plaintiff made in 2011, the court

refers to the previous version of the False Claims Act because, as indicated below,

plaintiff’s conduct in 2011 does not implicate liability under the False Claims Act.

5

The court notes that some courts refer to the Special Plea in Fraud statute as the

“Forfeiture of Fraudulent Claims Act” or “FFCA.” See, e.g., Ulysses, Inc. v. United

States, 110 Fed. Cl. 618, 648 (2013); Grand Acadian, Inc. v. United States, 105 Fed. Cl.

447, 458, appeal dismissed (Fed. Cir. 2012).

3

As to the bottled water BPA case, Case No. 07-82C, defendant alleges violations

of the False Claims Act, the Contract Disputes Act, and the Special Plea in Fraud

statute. As in the camp package BPA case, defendant seeks forfeiture of plaintiff’s

entire claim under the Special Plea in Fraud statute, damages in the amount of plaintiff’s

unsupported claim and the cost of reviewing plaintiff’s allegedly false claim under the

Contract Disputes Act, and treble damages, as well as allowable civil penalties under

the False Claims Act. Defendant also seeks rescission of the BPA calls, which

defendant alleges were obtained by plaintiff through bribery, conflict of interest, and

fraud, and seeks disgorgement of all monies the United States paid for calls issued

under the bottled water BPA, plus costs.

Pursuant to the False Claims Act, the government alleges that Gulf Group

knowingly submitted false or fraudulent claims to the government on the camp package

BPA, the latrine contract, the dumpster contract, and the bottled water BPA. Regarding

the camp package BPA, defendant claims that plaintiff violated the False Claims Act in

submitting invoices for a call issued under the camp package BPA and in submitting to

the government its claims for monies due because the award of the camp package BPA

was tainted by bribery, plaintiff inflated the amount of its claims relating to BPA call

00016 for services and supplies it had not rendered, and plaintiff supported at least one

of its claims with an invoice for services rendered by another government contractor,

Green Valley Company (Green Valley).7 According to defendant, plaintiff also inflated

6

Camp package BPA call 0001 was issued pursuant to the camp package BPA on

September 30, 2004, for items covered by the camp package BPA for Camp Buehring.

7

The parties stipulated that, “[o]n September 28, 2004, Gulf Group and Green Valley

entered into a joint venture agreement to perform certain contracts,” including for

supplies and equipment and other necessary expenses, under which Suresh Pulikkal, a

legal consultant for Gulf Telecom, a wholly owned subsidiary of Gulf Group, and other

companies in the region, was given power of attorney to act for Green Valley. Saud Al

Tawash, the General Manager of Gulf Group, testified that, to the best of his

recollection, Gulf Group did not perform any projects with Green Valley under the brief

joint venture agreement between the two companies. Saud Al Tawash also testified,

however, that Gulf Group had contacted Green Valley in connection with securing

equipment to perform under the camp package BPA call for Camp Buehring. Palm

Springs General Trading and Contracting Establishment (Palm Springs), a separate

company established by Saud Al Tawash, apparently also had a joint venture with

Green Valley. Saud Al Tawash testified that, although Palm Springs and Green Valley

had worked together on a project, he terminated the joint venture between Palm Springs

and Green Valley shortly after a December 2004 meeting about waste management

fraud perpetrated by Green Valley employees. Saud Al Tawash testified that

government personnel were confused about the relationship between Palm Springs and

Green Valley and a contract performed by the two companies was modified in an

attempt to clarify the confusion. When asked about the relationship between Palm

Springs and Green Valley, Saud Al Tawash offered the following testimony:

4

the amount of its latrine and dumpster contract claims for services and supplies it did

not render, inflated the amount due on its claims for demurrage under the bottled water

BPA, and obtained the bottled water BPA, and latrine and dumpster contracts through

bribery.

Pursuant to the Contracts Disputes Act, defendant alleges that Gulf Group

cannot support the monetary claims submitted in the above-captioned cases due to

misrepresentation of fact or fraud. In each case, defendant asserts that plaintiff

submitted a claim for an amount significantly greater than the contract or BPA call price.

As to the camp package BPA, defendant contends that plaintiff claimed $4,544,339.84,8

although BPA call 0001 was only for $1,447,457.22, the call was only twelve days into

performance when it was terminated, and as with the False Claims Act allegations,

plaintiff supported its claim with an invoice from Green Valley. Under the latrine

contract, defendant alleges that plaintiff claimed $4,558,428.60, although the contract

was only for $613,142.86, the contract was terminated after twenty days of

performance, and the contract was obtained through bribery. Defendant also alleges

that plaintiff certified entitlement to $999,994.67 under the dumpster contract, although

the contract was only for $346,998.00, the contract was terminated thirty-two days into

the performance period, and the contract was tainted by bribery. Defendant further

argues that plaintiff claimed $1,065,711.39 for demurrage under the bottled water BPA,

although its documented demurrage charges do not total $1,065,711.39. Defendant

also alleges that the bottled water BPA was obtained through bribery. Therefore,

defendant contends, plaintiff must pay the government the amount of money it has

claimed which is unsupported, plus the government’s costs generated in reviewing the

claims.

Pursuant to the Special Plea in Fraud statute, asserted in Case No. 06-835C, the

camp package BPA case, Case No. 06-858C, the latrine case, Case No. 06-853C, the

dumpster case, and Case No. 07-82C, the bottled water BPA case, the government

Q: So these [Palm Springs and Green Valley] are two completely separate

companies?

A: Yes.

Q: There’s no comingling of funds, there’s no joint employees, there’s

nothing that is in common to each other?

A: If Green Valley was my company why would I ask for a modification on

this contract?

Q: Why would you even need a joint venture?

A: Why would I need a joint venture, right.

8

The parties have, by stipulation, generally converted Kuwaiti dinars (KD) into United

States dollars (USD) using a 1:3.571 rate throughout their pleadings.

5

alleges that the contracts and BPA calls were awarded in exchange for “money, trips,

and other things of value” given by Gulf Group to Carolyn Blake, the sister of John

Cockerham, a former Army Major, contract specialist, and contracting officer at Camp

Arifjan, Kuwait, who was involved in the award, and terminations, of some of Gulf

Group’s contracts. Defendant asserts that Gulf Group’s actions constitute fraud under

the Special Plea in Fraud statute, requiring forfeiture of plaintiff’s claims, as Gulf

Group’s actions created an unlawful conflict of interest and violated 18 U.S.C.

§ 201(b)(1) (2000), which prohibits the offering or promising of anything of value to a

public official with the intent to influence an official act. Defendant further alleges that

Gulf Group violated the Special Plea in Fraud statute by submitting false claims under

each contract and BPA call to the United States government for an amount of money “to

which it knew or knows it was not entitled.” Defendant also contends that Gulf Group’s

camp package and bottled water BPAs were void from the beginning, because they

were tainted by bribery, conflict of interest, and fraud, entitling the government to the

rescission of the calls and the disgorgement of all amounts paid to Gulf Group under the

calls issued for the BPAs.

Contract Awards

Gulf Group is owned by members of the Al Tawash family, including Saud Al

Tawash. Saud Al Tawash, a Kuwaiti citizen, was the General Manager and one of the

directors of Gulf Group in 2004 and 2005, the time period pertinent to the contracts and

BPAs at issue. Saud Al Tawash also was the Managing Director of Gulf Telecom,

which employed Ms. Blake. Saud Al Tawash was the primary point of contact for the

United States for both Gulf Group and Gulf Telecom.

On September 30, 2004, Maj. Gloria Davis,9 who was at the time the chief of

Army contracting at Camp Arifjan, awarded the camp package BPA to Gulf Group. The

parties stipulated that the camp package BPA, W912D1-04-A-0047, called for “the

provision of tent packages, portable latrines, light sets, bulk water, dumpsters, and

generators for use in Kuwait.” The period of performance on the camp package BPA

was September 30, 200410 through September 30, 2006, with a BPA master dollar limit

of $10,000,000.00, and a BPA call limit of $7,000,000.00. On September 30, 2004, Maj.

9

On December 12, 2006, after speaking with the Army’s Criminal Investigation Division

(CID) at Camp Victory, Maj. Davis committed suicide. The Wall Street Journal reported

that “[o]n December 11, 2006, CID agents met Maj. Davis at Camp Victory in Baghdad’s

Green Zone to ask about $225,000 found in her offshore accounts. Sometime after

midnight, the CID investigators escorted Maj. Davis to her quarters, agreeing to resume

debriefing the next morning. Before dawn, she used her own sidearm to commit

suicide.”

10

There is a slight discrepancy in the camp package BPA as to the period of

performance. In one section, the camp package BPA states the period of performance

begins on September 30, 2004, but in another section, the camp package BPA states

that the period of performance begins on October 1, 2004.

6

Davis issued call No. 0001 for Camp Buehring pursuant to the master camp package

BPA in the amount of $1,447,457.22, with a period of performance from December 15,

2004 through June 15, 2005. Maj. Davis modified the camp package BPA call twice on

September 30, 2004, under Modification No. 101 and Modification No. 102.

John Cockerham was on the Contract Review Board that recommended award of

the camp package BPA to Gulf Group, but he was not the contract specialist or the

contracting officer. The parties stipulated that “Mr. Cockerham was employed by the

Department of Defense (‘DoD’) as a Major in the Army attached to the Army Contracting

Activity, Fort Sam Houston Army Post, San Antonio, Texas, from on or about June

2004, until on or about July 2007.” The parties also stipulated: “From on or about June

30, 2004, through late December 2005, Mr. Cockerham was deployed to Camp Arifjan,

Kuwait, first as a contract specialist and then as a contracting officer upon obtaining a

contracting warrant,” initially for five million dollars. Mr. Cockerham reported to Col.

John Hess, the Director of Contracting at Camp Arifjan in Kuwait. Mr. Cockerham was

responsible for soliciting and reviewing bids for Department of Defense contracts in

support of Army operations in the Middle East, and was authorized to award contracts

after receipt of his contracting warrant in October 2004. Mr. Cockerham has been

convicted of conspiracy, bribery, and money laundering in connection with his

assignment in Kuwait. Mr. Cockerham is currently serving his prison sentence at a

federal facility in Texas. Mr. Cockerham was in federal custody when he testified at trial

in the four above-captioned cases.

On September 28, 2004, Maj. Davis awarded Gulf Group a fixed-price contract

for the provision of latrines and latrine services at Camp Arifjan. The contract, W912D1-

04-P-0932, required four hundred new latrines with daily cleaning services. Mr.

Cockerham was the contract specialist assigned to the contract award. Although Mr.

Cockerham was not a member of the Contract Review Board that recommended that

the latrine contract be awarded to Gulf Group, he signed the Contract Review Board’s

Contract Review Memorandum as the point of contact for the latrine contract. The base

period of the latrine contract was listed as September 28, 2004 through January 21,

2005, with additional option periods totaling twenty-nine months, which could have

caused the contract to be extended through early 2007. After a modification, the

contract price for the base period of the latrine contract was $613,142.86.11 The option

periods were priced at a combined $4,444,752.28.12 Thus, the total potential price of

the latrine contract was $5,057,895.14.

11

The latrine contract indicates that the base period price of 171,680.000 KD was

equivalent to $613,142.86, which is the figure that defendant cites in its briefs. Although

an application of the conversion rate to which the parties have stipulated results in a

base period price of $613,069.28, the court uses the price that appears on the face of a

contract or call, rather than the conversion rate to which the parties have stipulated,

when the contract or call provides a USD figure.

12

The prices for the base and option periods are listed in the original contract in USD,

but a modification to the contract listed the prices for the base period in USD and KD,

and for the option periods in KD. The KD numbers are calculated into USD in plaintiff’s

7

On September 20, 2004,13 Maj. Davis awarded a fixed-price contract, W912D1-

04-P-0897, to Gulf Group for the provision of dumpsters and dumpster services at

Camp Arifjan. Mr. Cockerham testified that he “thought” he was the contract specialist

assigned during the award of the dumpster contract. Mr. Cockerham signed a Contract

Review Board Memorandum as the point of contact for the dumpster contract, although

he was not a member of the Contract Review Board that recommended award of the

dumpster contract to Gulf Group. The base period of the dumpster contract was listed

as September 25, 2004 through March 24, 2005. There were five additional option

periods of six months each following the base period, which were available to extend

the contract through September 24, 2007. The price awarded for the base period of the

dumpster contract was $346,998.00. The combined price of the option periods was

$1,110,621.72. Thus, the total potential price of the dumpster contract was

$1,457,619.72.

On September 28, 2004, Maj. Davis awarded the bottled water BPA, W912D1-

04-A-0052, to Gulf Group for the provision of bottled water. Although Mr. Cockerham,

the contract specialist, was not a warranted contracting officer at the time the BPA was

awarded, and he was not a member of the Contract Review Board that reviewed the

award of the bottled water BPA, his name appears next to the duty position “Contracting

Officer” in the Contract Review Board Memorandum. The base period of performance

for the bottled water BPA was September 28, 2004 through September 28, 2006. The

contract called for the supply and delivery of bottled water to locations in Kuwait and

Iraq. The BPA master dollar limit on the bottled water BPA was $10,000,000.00, and

the BPA call limit was $7,000,000.00. The performance period was extended to

September 7, 2008 by Modification P00001, which also deleted the original

$10,000,000.00 BPA call limit. Modification P00001 was signed by Mr. Cockerham as

the contracting officer on December 20, 2005.

A number of separate incidents are relevant to understanding the events related

to each of the contracts and BPAs at issue in the above-captioned cases. The parties

stipulated that, subsequent to the award of the BPAs and contracts, “COL Patrick

claim. Defendant does not dispute plaintiff’s numbers and agrees that the correct base

period price is represented by the USD and KD figures listed in the contract

modification. Therefore, the total, possible award for the latrine contract appears to

have been $5,057,895.14. In his decision on Gulf Group’s claim with respect to the

latrine contract, which is described below, contracting officer Joseph Libbey, a

warranted level-3, maximum level, contracting officer, stated that the price reflected on

the contract for the base period was inaccurate. The latrine contract, however, states

the price of each line item. The court, therefore, refers to the amounts listed on the face

of the modification to the contract.

13

According to the parties’ joint stipulation of facts, the dumpster contract was entered

into on September 26, 2004. This appears to be an error, however, as the contract

performance period is listed as starting on September 25, 2004, and the signatures on

the dumpster contract are both dated September 20, 2004.

8

Dardis, the ‘Camp Buehring Mayor,’ sent MAJ Robert McKinzie and MAJ Terry England

to conduct a site visit of Gulf Group’s yard at Amgarah on or about October 6, 2004.”

According to Saud Al Tawash and his brother, Megbel Al Tawash, a director of Gulf

Group, and Gulf Group’s Operations Manager in 2004 and 2005, the visit was

conducted to inspect Gulf Group’s preparations for the camp package BPA. Saud Al

Tawash and Megbel Al Tawash testified that this first site visit was very quick and

unannounced, and, although the inspectors “were not happy,” they did not explain their

concerns to Megbel Al Tawash, who had received them. Nevertheless, the government

moved up the period of performance of Gulf Group’s camp package BPA call for Camp

Buehring from December 15, 2004 to November 15, 2004 due to a surge. A second

site visit was conducted on October 13, 2004, by Lt. Theodore Rivera, Capt. William

Trimble, Jr., and Capt. Ryan N. Novak, who were assigned to the contracting office at

Camp Arifjan. The purpose of the second site visit was to ensure that Gulf Group was

prepared to carry out the camp package BPA call. Saud Al Tawash was present during

this second site visit, apparently conducted a day after the termination of the camp

package BPA call at issue, at which time he first learned that the date of the camp

package BPA call was being accelerated due to the surge. Bobby Wilson, Gulf Group’s

Project Manager in Kuwait, also was present during this second inspection and

indicated that the contracting office inspectors were satisfied with their review.

Regarding the second site visit, defendant’s October 20, 2004 Memorandum for the

Record14 on the subject of “Gulf Group Cancellation” states:

During the site visit, the government was able to evaluate the Gulf Group’s

capabilities of meeting the surge. All the equipment (dumpsters, latrines,

generators) on site was brand new and Saud [sic] Tawash (General

Manager) produced copies of the purchase orders for the fire-retardant

tents. Saud informed the CO’s [contracting officers] that he currently has

a contract at Camp Arifjan supplying dumpsters and latrines. The CO’s

believed Gulf Group were [sic] able to do the job and do the job well. Gulf

Group had the technical and logistical expertise, manpower, material, and

equipment, and it was our firm recommendation to allow Gulf Group to

continue with this contract.... On 14 Oct 2004, the 3 CO’s arranged a

meeting with Major Cockerham and Mr. Tijani to meet GG [Gulf Group].

Prior to meeting with GG, the government personnel discussed GG’s

capabilities.... He blessed their capabilities and informed the CO’s he

would follow up with Lt. Col Hess.

At trial, Capt. Novak remembered preparing a memorandum on the subject of

Gulf Group’s readiness to perform the camp package BPA, along with Capt. Trimble

14

The October 20, 2004 Memorandum for Record introduced as an exhibit at trial is

unsigned. Additionally, at the end of the unsigned memorandum, there were hand-

written notations. At trial, it was not established who wrote the October 20, 2004

Memorandum for Record, or who authored the hand-written notes on the document,

with various witnesses disavowing responsibility for the Memorandum for Record and

Mr. Cockerham challenging some of the statements attributed to him in the

memorandum.

9

and Lt. Rivera, and Capt. Novak agreed with the impression that Gulf Group could do

the job well. Capt. Novak indicated remembering a document similar to the

memorandum quoted above. He testified, however, that he did not believe the

memorandum quoted above is the exact memorandum he prepared because of the

phrase, “blessed their capabilities,” which he said “just seems out of place to me.” Capt.

Novak acknowledged that the memorandum quoted above could have been a draft of

the final memorandum he prepared. Capt. Trimble did not remember writing the

memorandum quoted above or any similar memorandum, or assisting anyone in writing

such a memorandum, but stated that “[w]e left with the impression that they could

perform the work.” Capt. Trimble also agreed with statements in the memorandum,

including, “[t]he CO [contracting officer] believed Gulf Group were [sic] able to do the job

and do the job well,” and noted that “Gulf Group had the technical and logistical

expertise, manpower, material, and equipment and it was our firm recommendation to

allow Gulf Group to continue with the contract.”

With regard to Gulf Group’s performance on the dumpster contract, according to

the testimony of M. Sgt. Edward Sivert,15 a contracting officer’s representative who

maintained life support systems, including dumpsters, at Camp Arifjan from March 2004

to February 2005, there were issues with Gulf Group not having enough dumpsters to

replace Future Services, a rival contractor, when Gulf Group took over performance of

dumpster services at Camp Arifjan between mid-September and October 10, 2004.

M. Sgt. Sivert testified that, as a result of this dumpster shortage, trash appeared on the

ground in different areas of Camp Arifjan over the course of a week or so, although no

item of trash necessarily had been on the ground for a full week. According to plaintiff,

the government had reduced the number of dumpsters below the number required from

previous contractors.16 Following the termination of Gulf Group’s dumpster contract, the

government awarded the contract to another contractor, Green Valley, and required two

hundred sixty-five dumpsters, which was thirty-two more dumpsters than the

government had ordered plaintiff to provide. M. Sgt. Sivert explained that the trash on

the ground was not necessarily caused by the alleged reduction in the number of

government-requested dumpsters because some of the dumpsters had been located at

the ball field, which was closed. When asked, “if there is trash on the ground because

there is no [sic] sufficient dumpsters, whose fault is it,” M. Sgt. Sivert replied “probably

the government’s at that time, if there was enough dumpsters to put there.” M. Sgt.

Sivert further explained that not all of the other dumpster contracts had run out by

September 30, 2004, and that both Future Services and Gulf Group had dumpsters on

base at the same time. M. Sgt. Sivert noted that he was not present when Gulf Group

allegedly had insufficient dumpsters on site. He also testified that he remembered Gulf

15

Edward Sivert was a Sergeant First Class, rather than a Master Sergeant, during the

time of the relevant BPAs and contracts.

16

According to a spreadsheet introduced into the record, which plaintiff asserts was

prepared by a Maj. Ken Braddock, there were three hundred fifty-one dumpsters that

were expired and renewed between June 2003 and September 2004. The Army

contracted with Gulf Group for the provision of two hundred thirty-three dumpsters.

10

Group’s dumpsters being blue and Future Services’ dumpsters being “[g]oldish brown.”

Saud Al Tawash testified, however, that Gulf Group’s dumpsters were painted red.

According to Saud Al Tawash, there was an incident with trash on the ground in

September 2004, which he attributed to “dirty competitors or dirty practices.” Saud Al

Tawash testified that other contractors had flipped over their own dumpsters, causing

trash to pile up on the ground. Megbel Al Tawash also testified that he believed the

trash on the ground on the first day of Gulf Group’s performance resulted from other

companies tipping over their dumpsters. Mr. Cockerham, who was a contract specialist

at Camp Arifjan at the time, testified that he had never heard of any problems with Gulf

Group’s dumpsters.

According to Joseph Libbey, the contracting officer who issued the final decisions

on Gulf Group’s latrine and dumpster contracts and camp package BPA claims, a police

report that was in the contract files, which he reviewed while considering Gulf Group’s

claims, indicated that employees of Gulf Group were scavenging through dumpsters at

Camp Arifjan. The police report that Mr. Libbey referred to, however, was addressed to

another contractor, Gulf Company, as opposed to plaintiff Gulf Group. During testimony

at trial, Mr. Libbey indicated that “I took Gulf Company to mean Gulf Group, I mean it’s

got Gulf and then Co. over here.” The parties have stipulated, however, that “Gulf

Company is not associated or related in any way with Gulf Group, Gulf Telecom, or any

of the Al Tawash family members.” The two companies are distinct organizations, and

the record does not reflect that the government has ever issued any cure notices to Gulf

Group regarding performance under the dumpster contract. Moreover, Saud Al Tawash

testified that he received no performance complaints related to the dumpsters under the

contract.

Gulf Group’s performance of the latrine contract appears to have been

contentious since its inception, or even before, as Mr. Cockerham testified at trial that,

prior to the initiation of contract performance on the latrine contract, Col. Hess had

received a telephone call from Sally Ziedan of the incumbent contractor, Future

Services, who was “livid going off about how dare he. How could he let Maj.

Cockerham go ahead and award the latrine contract to Gulf Group and how much

experience they had, and she was just raving.”17

Mohammed Al Tawash, Saud Al Tawash’s and Megbel Al Tawash’s brother, was

asked to oversee the servicing of the four hundred Gulf Group latrines. Mohammed Al

Tawash also was a shareholder in Gulf Group, although, according to his testimony, he

only worked for Gulf Group on one occasion, October 7, 2004, which was his first time

at Camp Arifjan. On that day, Mohammed Al Tawash carried a notepad, asked the

military escorts for a map, and asked questions about the location of the cafeteria and

other buildings where latrines were to be placed. Mohammed Al Tawash testified that

he requested the information because Gulf Group did not have a service route for the

latrines, and a map could enable Gulf Group to be more efficient and effective in its

performance of the latrine contract. The parties stipulated that, “[o]n October 7, 2004,

17

According to Mr. Cockerham, Future Services’ bid had arrived two days late.

11

four Gulf Group employees, were detained by Military Police and/or Counterintelligence

officers at Camp Arifjan. After being questioned, they were released to the Kuwait

Ministry of the Interior” and a Military Police Report was generated regarding the

incident. The police report stated that Mohammed Al Tawash asked questions

regarding locations on base for latrine placement.

According to Mohammed Al Tawash, the military escorts answered his questions

and he did not remember the escorts questioning his need for information or the

building locations. The military escorts worked in three hour shifts and, after the second

shift, Mohammed Al Tawash and the three other Gulf Group employees with him

returned to the security station, hoping that a third escort could be arranged.18 At that

time, Mohammed Al Tawash and the other three Gulf Group employees were detained

and interviewed by military police, who were not in uniform, but dressed in what

Mohammed Al Tawash testified was “evening night out attire.” The military police did

not search him or the vehicle the Gulf Group employees were driving. Mohammed Al

Tawash was not asked to sign any paperwork, nor was he fingerprinted. The notepad

he used to draw a service map and to take notes on the latrines that had already been

serviced was confiscated and not returned. The military police turned the Gulf Group

employees over to the Kuwait Ministry of the Interior, and they were transported to a

police station. According to Mohammed Al Tawash, at the police station a detective

asked them questions, requested their civil identifications, ran a background check, and

cleared them shortly before midnight on the same day, October 7, 2004. Mohammed Al

Tawash testified that they were released, no charges were filed against them, and they

were not asked to return for a hearing. According to Saud Al Tawash, none of Gulf

Group’s employees were barred from the United States military camps as a result of this

incident or any other incident. Mohammed Al Tawash testified that he was not able to

finish cleaning the latrines that day, but believed a vacuum truck returned to finish the

job. He was unsure how many latrines remained to be serviced. Mr. Wilson testified

that he had heard that Mohammed Al Tawash had been using a GPS on base, and had

a cell phone with him at the time he inquired about the latrines, but could not confirm the

accuracy of the information. Capt. Novak also reported hearing something about a GPS

incident and Gulf Group, but he did not necessarily remember anything about workers

asking allegedly suspicious questions. Mr. Wilson indicated that he “grilled him

[Mohammed Al Tawash] pretty hard” about the alleged security incident afterward and

instructed him, as a precaution, not to ask similar types of questions on base.

According to Col. Laurence Portouw, the Third Army Assistant Chief of Staff who

ran the intelligence organization for the staff that supported the General at the Third

Army at Camp Arifjan and in Atlanta, Georgia, one of his staff officers told him about the

alleged security incident involving Gulf Group personnel and said that the contract was

going to be cancelled. Col. Portouw was asked whether he could have the cancellation

delayed so that the incident could be examined. Thereafter, Col. Portouw called Col.

Brick Miller, Commander of the Area Support Group in Kuwait, stationed at Camp

Arifjan, about the incident. During this call, Col. Portouw asked Col. Miller to delay

18

At trial, Mohammed Al Tawash was unclear as to whether he asked questions of both

the first and second shifts of escorts, or only of a single shift.

12

cancellation of Gulf Group’s contract so the intelligence organization could look into the

incident. Ultimately, a case was not opened on the incident involving Gulf Group

because, according to Col. Portouw, “there was no substance to it” and the questions

asked by Mohammed Al Tawash were “innocent.”

According to Col. Miller, he received a telephone call asking him to delay

termination of Gulf Group’s contract, but he does not recall who the call was from,

although he admitted that “it could very well” have been from Col. Portouw.19 Col. Miller

also indicated that during this telephone call he was informed that the Counter

Intelligence Team was looking into whether Gulf Group was involved in detonating

improvised explosive devices (IEDs) using cell phones, and he “took that as they [Gulf

Group] were aiding and abetting those that detonated IED’s with cell phones.”

According to Col. Miller, he notified Col. Hess of the request to delay cancellation, and it

was his understanding that Col. Hess then deferred the termination.20 Col. Portouw,

however, testified that he did not tell Col. Miller that Gulf Group employees were

suspected of detonating IEDs with cell phones because he was “not even sure I knew

who the company was at the time.” According to Capt. Jacquelyn Olsa,21 the S222

intelligence officer at Camp Arifjan in October 2004, who reported to Col. Miller, she did

not have any discussions with Col. Miller about IEDs related to Gulf Group. She did

believe, however, that she would have discussed the alleged security incident with Col.

Miller, although she did not specifically remember doing so.

Col. Portouw indicated that such incident reports were not frequent, but also not

uncommon, and that, “invariably we found out that they were curiosity-generated reports

and simply required explaining to the employee why they shouldn’t do that.” Capt. Olsa

indicated that similar incidents would typically occur “once a week,” although she

indicated that she would “recommend a bar for these types of activities.” Col. Miller felt

the incident was not particularly important. When asked, Col. Hess agreed that the

failure to give a contractor a schematic plan of the camp could complicate performance,

particularly during startup, and that a layout with the number and locations of latrines

would be of considerable use to a new contractor. Like Col. Hess, Maj. Timothy Petty,

the support operations officer under the director of logistics at Camp Arifjan who

19

In a July 7, 2010 email to Capt. Lisa Satterfield of the office of the Judge Advocate

General, Col. Miller indicated that he had received a phone call from “[t]he CFLCC/3rd

AR C2/G2, a COL whose name escapes me,” and the officer stated that he had heard

the contractor would be terminated for deficiency and asked for a delay of the

termination.

20

As described in greater detail below, Col. Hess testified that he reviewed Gulf Group’s

contract files and found no documentation linking the Al Tawash family to terrorists, anti-

American groups, the Taliban, Saddam Hussein, or any other enemies of America.

21

At the relevant time, in Kuwait in 2004, Capt. Olsa was known as Capt. Hellmeier.

22

The S2 refers to an intelligence officer at the coordinating staff level.

13

oversaw latrine contracts, testified that the provision of a map of where latrines should

be located was a good idea.

As a result of the alleged security incident, Col. Miller sent warning letters on

October 21, 2004 to Saud Al Tawash, Marcos Sotos, Bobby Wilson, Mohammed Al

Tawash,23 Fizan Abdula, Mohadien Asif, and Munir Ahmed regarding Gulf Group and its

employees not following certain unspecified security regulations. According to Saud Al

Tawash, only four of the letter recipients (Mohammed Al Tawash, Fizan Abdula,

Mohadien Asif, and Munir Ahmed) had been involved in the incident. Although not

consistent with other testimony he offered at trial, Col. Miller testified that he first

became aware of the alleged security incident concerning Gulf Group when he signed

these warning letters. Col. Miller indicated that “[t]housands” of warning letters such as

these were sent at that point in time in Kuwait and that this incident had “[n]othing to do

with” the termination of Gulf Group’s contracts and camp package BPA call.

In addition to testifying about the alleged security incident, Col. Miller also

testified about a latrine incident. According to Col. Miller, on a day in September or

October 2004, he was summoned by Maj. Gen. Gary Spear24 to view about twenty

latrines in front of headquarters and facing the dining facility, which, according to Col.

Miller, were “in a deplorable state of affairs or condition.” Col. Miller agreed with

plaintiff’s counsel’s characterization of Maj. Gen. Spear having a “one-sided

conversation” with Col. Miller, and which Col. Miller characterized as “a chewing out,

basically,” about fixing the latrines. Col. Miller testified that liquids were “overflowing out

of the toilets,” and that it was a “life health safety issue” affecting “all of the latrines that

were there, because we opened every door.” At the trial, Col. Miller further described

the overflowing latrines as follows: “It’s coming over. It’s on the floor. It’s on the seat.”

According to Col. Miller, either Col. Fugate, Col. Miller’s executive officer, or Col. Hess

was with him when he viewed the latrines, but he was not sure which officer was with

him. Col. Miller testified that either he told Col. Hess to fix the issue or had Col. Fugate

tell Col. Hess to get it fixed. According to Col. Miller, there were no subsequent

complaints, and Maj. Gen. Spear did not summon him again to view the latrines.

Joseph Libbey wrote in his contracting officer’s final decision on Gulf Group’s

contract and BPA claims that Maj. Gen. Spear not once, but twice, had “summoned

Colonel Miller and LTC Hess to, again, observe the deplorable conditions of the

latrines.” When Col. Hess testified at trial, he did not recall the latrine incident, and

testified that he did not recall ever seeing even one latrine overflowing. When

questioned about Mr. Libbey’s contracting officer’s final decision, which found, in part,

“[b]arely a week had passed from the first latrine inspection when the General again

summoned Colonel Miller and LTC Hess to again observe the deplorable conditions of

the latrines,” Col. Hess testified that he certainly did not recall a second latrine incident

a week after the alleged first incident. Furthermore, contrary to Col. Miller’s testimony,

23

The letter to Mohammed Al Tawash was incorrectly directed to “Mohammed

Altawash.”

24

Maj. Gen. Spear is sometimes referred to as Maj. Gen. “Spears” in the trial transcript.

14

Col. Hess testified that no one ever directed him to fix the dirty latrine. According to Mr.

Cockerham, the dirty latrine was in front of Maj. Gen. Spear’s office, and it was a one-

time issue in which one latrine was not cleaned, and was subsequently corrected. Mr.

Cockerham testified that he believed the latrine issue was used as an excuse to

terminate Gulf Group’s latrine contract because Maj. Petty wanted to consolidate two

latrine contractors into one, and because Maj. Petty preferred Future Services as the

contractor.

According to Maj. Petty, he learned of a latrine problem while he was at a

meeting at Camp Doha, through a call from Lt. Col. Platt, who told him that “he had

received a phone call, that they were, that they [the latrines] were just really dirty,

disgusting, and I needed to get it fixed.” Maj. Petty testified that he personally inspected

a group of eight to ten Gulf Group latrines in a high-traffic area between the dining

facility and headquarters after 5 p.m., which had “feces above the rim.” He indicated

that “there was one that was extremely bad and then the others were just unkept,” but

that all but one were usable. He did not recall seeing any debris in the basin of the

latrines. After seeing the latrines, Maj. Petty called one of the non-commissioned

officers in his office, which may have been M. Sgt. Seibert,25 who served the role of

contracting officer representative for Gulf Group’s latrine contract, to make him aware of

the situation. Maj. Petty did not recall any specific conversation with Col. Hess about

the latrine issue, but did make Col. Miller, who was at the same meeting at Camp Doha,

aware of the situation. According to Maj. Petty, Gulf Group was contacted to resolve

the issue, which he believes Gulf Group resolved the following day, and there were no

further incidents.

Saud Al Tawash testified that he never received a non-conformance report or

written complaint about Gulf Group’s latrine contract. Saud Al Tawash did, however,

receive a call about a single overflowing latrine next to the dining facility, which,

according to his on-site superintendent, was filled with empty plastic bottles, even inside

the sewage tank “as if somebody was storing plastic bottles.” According to Saud Al

Tawash, Gulf Group’s latrines were unplumbed, such that it was “not possible” for them

to overflow. Saud Al Tawash also testified, however, that the single, overflowing latrine

was an “isolated event.” Saud Al Tawash believed that this incident was due to people

storing plastic bottles in the latrine for recycling, or a cultural issue for third country

nationals on Camp Arifjan, who were not used to unplumbed latrines.

According to trial testimony from Megbel Al Tawash, Gulf Group’s office received

a call that one latrine had feces up to the brim, which plaintiff’s on-site supervisor

cleaned that same day. Megbel Al Tawash indicated that a Gulf Group latrine was

“overflowing with bottles of water and feces.” Megbel Al Tawash testified that Future

Services had about eight to ten latrines in the same area near the mess hall. Mr.

Wilson testified that, because the latrines from various companies all looked the same,

25

Maj. Petty testified that “M. Sgt. Seibert” oversaw the latrine contract. It is unclear

whether Maj. Petty’s testimony refers to M. Sgt. Sivert, who as indicated above,

maintained life support systems at Camp Arifjan, including dumpsters.

15

it was possible that the dirty latrine, or the latrines involved in the incident, belonged to

another contractor.

Maj. Petty testified that Future Services still had latrines in place when Jasmine

International Trading & Service Company (Jasmine) and Gulf Group first arrived, so that

these new contractors would know where to put the latrines, and that, as a result, two

sets of latrines may have been in a particular area at the same time. Maj. Petty also

testified that, to the best of his recollection, servicing the latrines once a day would have

been sufficient. The statement of work for Gulf Group’s latrine contract stated, in part:

4.2 Cleaning. The Contractor will empty and clean each latrine daily by

wiping down interior walls and seat with mild disinfectant water or solution

(that is nonharmful to the skin and eyes) and will provide steam cleaning

reconditioning services once a month. The Contractor will provide all

materials, equipment, personnel, chemicals, and cleaning supplies to

include using an approved disinfectant. The Contractor will provide a

Material Safe Data Sheet to the COR for any chemicals used in this

contract. The cleaning services will include the following:

4.2.1 Daily. The Contractor will vacuum sewage from the basin. Debris

such as cans, bottles, rags, sticks, etc. will be removed from the waste

tank, collected and hauled away for proper disposal. No debris will be

allowed to contaminate the outside area around the chemical latrine. The

Contractor will be responsible for cleanup of any spills. After all sewage

and debris have been removed the Contractor will wash the toilet seat,

urinal, and adjacent area around the toilet seat with the approved cleaning

solution and remove all built up dirt and waste by scrubbing with a nylon

hand brush. The Contractor will fill the empty basin with a mixture of two

(2) cups disinfectant solution and ten (10) gallons fresh water. The

Contractor will refill toilet paper dispensers and hand sanitation gel

dispensers. The Contractor will leave the area in and around the latrines

in a sanitary state.

(emphasis in original). Based on his experience, Col. Hess believed that a contract that

only required service of latrines once a day in high-traffic areas like the mess hall or

headquarters may have set a contractor up for failure because these areas should have

been cleaned twice a day. Steven Perry, a former Army Colonel and plaintiff’s expert

on issues of Army contracting and standard practices and procedures for Army

contracting,26 also testified that, if the government sets a once-per-day cleaning

requirement for latrines, but has not anticipated the extent of the usage, the state of

uncleanliness of the latrines may not be attributable to the contractor, but rather to faulty

26

Mr. Perry was qualified as an expert in the standard practices and procedures of

Army contracting, including the subjects of the solicitation, award, management,

administration, closeout, and termination of contracts. Mr. Perry also was qualified as

an expert on the interrelationship and interface of those same practices and procedures

with basic principles of command and control.

16

specifications, and that, if the specification underestimates usage, the specifications

may need to be altered. Moreover, according to Mr. Perry, if bottles of water were

found in a latrine, it would be the fault of the “end-user,” not of the contractor.

Mr. Perry further stated that “in a latrine contracting situation, you get all kinds of

garbage dumped in the latrines all the time. That happens to be a performance issue.

That is why this type of contract is very hard to manage.” During his testimony, Col.

Miller also indicated that latrines are “a subject that you have to watch,” and that he

would expect that, if a contracting officer representative had seen the latrine incident, a

non-conformance report would have been prepared “[a]t some point.” In contrast, Col.

Hess testified that “we generally did not have problems with latrine contracts.”

According to Col. Hess, a contractor missing a group of latrines during servicing was not

uncommon and was not considered a serious offense warranting termination for default.

Col. Hess further testified that, to his knowledge, his contracting office had no

performance problems with Gulf Group and that Gulf Group’s latrine contract was not

terminated for failure to clean the latrines. Mr. Perry also testified that he does not think

latrine contracts are “hard to manage, as long as you set in place what needs to be

done.”

There is confusion and inconsistency in the record as to the timing of the latrine

incident relative to the alleged security incident involving Mohammed Al Tawash. In his

July 7, 2010 email to Capt. Satterfield, Col. Miller indicated, almost six years after the

event in question, that he believed the latrine incident occurred in the week prior to the

alleged security incident. According to Maj. Petty, the support operations officer at

Camp Arifjan who oversaw numerous latrine contracts, the alleged security incident

occurred before the latrine incident, the latter of which occurred in the “October time

frame.” Maj. Petty testified that, “[i]nitially before the deposition and we met, I would

have said it [the questions incident] was after the dirty latrines. But after reviewing the

notes that you [plaintiff’s counsel] showed me to refresh my memory, that it was before.”

According to Mr. Wilson, the latrine incident was before the alleged security incident.

Mr. Wilson stated, “you know, first it was this issue in the latrine, and the next thing it’s

the issue of Mohammed. And the next thing it’s the issue of a counterintelligence

measure.…”

Terminations of the Camp Package BPA Call, the Latrine Contract, and the

Dumpster Contract

Maj. Davis terminated Gulf Group’s camp package BPA call at Camp Buehring

on October 12, 2004, through Modification 103. According to the parties’ joint

stipulation of facts, the camp package BPA call was terminated for the government’s

convenience, although this is not clearly indicated on Modification 103. The

modification stated: “The purpose of this modification is to cancel the BPA call with Gulf

Group. Gulf Group has no issues with this cancellation and will accept it at no cost to

the government.” Despite terminating the camp package BPA call, the government had

sufficient funds to pay for, and continued to be in need of, the camp package services.

The same day the cancellation was issued, Future Services was awarded two BPA calls

17

for Camp Buehring for approximately the same amount of goods and services as Gulf

Group’s cancelled camp package BPA call.

Plaintiff’s initial submission to the contracting officer in relation to the camp

package BPA call termination indicated that the termination was made in order to award

Gulf Group another BPA call. Plaintiff’s statement was supported by some of the

testimony at trial, which indicated that the termination of the Camp Buehring camp

package call was conditioned on the award to Gulf Group of a camp package call for

Camp Virginia. During cross-examination at trial, Saud Al Tawash indicated that he

may have agreed to the termination of the Camp Buehring camp package call based

upon the assurance that he would receive a camp package call for Camp Virginia.

Saud Al Tawash testified that he had asked for the paperwork to be sent over for the

proposed swap, which he never received. The parties have stipulated that “BPA Call

No. 0002 under Master BPA 0047 for general camp package services at Camp Virginia

was prepared for Gulf Group but never signed.” Saud Al Tawash indicated at trial that

he had received an undated hand-written note from Mr. Cockerham, stating:

Here is a copy of the cancellation to Camp Buehring. This cancellation

was made because we were giving you a larger camp call Virginia.

Virginia award was verbal with the agreement to cancel Buehring. Virginia

was not awarded on paper as a command directive. The original

cancellation was sent out 13 Oct 04. But here is another copy as

requested. Thank you.

From this note, Saud Al Tawash testified that he understood that the Army would

not award Camp Virginia to Gulf Group. Mr. Cockerham testified, however, that he may

have sent the note as a “reassurance” and that the note was intended to convey that a

call for Camp Virginia had been verbally “awarded,” but that Col. Hess had ordered

contracting personnel not to award Camp Virginia “on paper” because he may have

been considering another contractor for the Camp Virginia call and because Col. Hess

“was checking on...some other issues from perhaps a security report.” Instead, the

camp package call for Camp Virginia was initially awarded to StarCon, Ltd. (StarCon),

but the BPA call issued under that BPA was cancelled on October 11, 2004 by Maj.

Davis, and ultimately was awarded to Kamal Al Sultan Company (KMS) on October 14,

2004.

On October 18, 2004, Mr. Cockerham issued Modification P00002, which

terminated plaintiff’s latrine contract pursuant to 48 C.F.R. § 52.212-4. The description

of Modification P00002 reads: “This contract is being canceled due to command

directive of the ASG [Army Support Group] commander SWA COL Brick Miller 3rd Army

Arcent Kuwait. The contract is canceled under the terms of 52.212-1, 52-212-4 [sic],

52.249-4.” According to the parties’ joint stipulation of facts, the latrine contract was

cancelled on October 24, 2004, pursuant to Modification P00003, but the description of

Modification P00003 reads: “Modification to this previously canceled contract by order of

the ASG Commander Kuwait COL Miller. This mod is to remove money from previously

canceled contract that was ordered [sic] to be canceled. Contract was canceled in

18

accordance with FAR Part 52.212-4.” Despite terminating Gulf Group’s latrine contract,

the government had sufficient funds to pay for, and continued to be in need of, the

latrine services. The parties stipulated that “[a]ll or part of the service that was initially

awarded to Gulf Group under the latrine contract was awarded to Jasmine.” Following

termination of the latrine contract, the government continued to place orders for latrines

with Gulf Group for other locations, including Camp Victory, Camp Crossing, and the

Ash Shuaybah Sea Port of Debarkation.

On October 22, 2004, Mr. Cockerham issued Modification P00005 on behalf of

the Army, which terminated Gulf Group’s dumpster contract for the convenience of the

government.27 Modification P00005 reads: “Contract is cancelled by order of the ASG

Commander Kuwait COL Brick Miller. Contract was canceled in accordance with FAR

Part 52.212-4 Termination for Convenience of the Government.” Despite terminating

the dumpster contract, the government had sufficient funds to pay for, and continued to

be in need of, the dumpster services. Prior to the termination of Gulf Group’s dumpster

contract, on October 14, 2004, the government sent a request to Fouad Salem of Abdul

Hameed Salem, seeking a quote for dumpster services at Camp Arifjan, to which Fouad

Salem responded. Four days later, on October 18, 2004, and before plaintiff’s dumpster

contract was cancelled, a contract for dumpster services was awarded to Green Valley.

After Gulf Group’s dumpster contract was terminated, however, the government

continued to order dumpsters from Gulf Group for the Ash Shuaybah Sea Port of

Debarkation.

Despite the language contained in the modifications terminating the camp

package BPA call and the latrine and dumpster contracts, at trial, a number of

witnesses offered contradictory testimony as to the reasons for the multiple

terminations. Although contradicted by other witnesses, Col. Miller indicated that he did

not direct, nor was he involved in, the termination of the camp package BPA call, the

latrine contract, or the dumpster contract.28 Col. Miller stated that contracting was a

27

The parties’ joint stipulation of facts states that Mr. Cockerham issued the termination

on October 22, 2004. Although Mr. Cockerham signed the modification terminating the

contract on October 21, 2004, October 22, 2004 is shown as the “effective date” of the

termination. Gulf Group was faxed the modification on October 28, 2004.

28

For example, during direct examination, Col. Miller was presented with a copy of

Modification P00005 to the dumpster contract, which stated: “Contract is canceled by

order of the ASG Commander Kuwait COL Brick Miller. Contract was canceled in

accordance with FAR Part 52-212-4 Termination for Convenience of the Government.”

After the Modification P00005 to the dumpster contract was read into the record, Col.

Miller and plaintiff’s counsel had the following exchange:

Q: Is that statement true and correct?

A: No, sir.

19

completely separate command structure from his own command, and that he did not

have the authority to terminate or award contracts. Col. Miller also testified, however,

that the Gulf Group terminations were not related to the alleged security incident,

indicating at least some awareness of the whole situation. In addition, according to

Clea Efthimiadis, a United States Army29 civilian attorney assigned to Camp Arifjan at

the time, Col. Miller represented to her that Gulf Group’s latrine contract “was

terminated because they couldn’t do the job,” and that the contract was terminated for

default based on a “repeated failure to perform to the statement of work.” As noted

above, however, Gulf Group’s contracts and camp package BPA call were terminated

for the convenience of the government.30

Q: Do you have any idea on your -- this is going back to your knowledge

and -- mind you -- why Major Cockerham would have said that you

ordered this termination?

A: Can you be more specific than, “any idea?” Any idea at that time? Any

idea now? Any idea hearsay?

Q: Very good point. In -- you’ll notice the effective date of this is October

22, 2004. In 2004, did you have any idea -- did you even know that this

contract had been canceled?

A: Sir, I couldn’t have told you that this contract even existed in this form.

Because I didn’t talk to contractors. I didn’t --

Q: This is not your command.

A: -- correct. I had no reason to look at these, nor do I have any reason to

look at when they cancel them.

29

Although formerly a civilian attorney for the United States Army, Ms. Efthimiadis was

an attorney for the United States Navy when she testified in the above-captioned cases.

30

The distinction between termination for default or cause and termination for

convenience is evident from the termination clauses in the camp package BPA:

Termination for the Government’s convenience. The Government

reserves the right to terminate this contract, or any part hereof, for its sole

convenience. In the event of such termination, the Contractor shall

immediately stop all work hereunder and shall immediately cause any and

all of its suppliers and subcontractors to cease work. Subject to the terms

of this contract, the Contractor shall be paid a percentage of the contract

price reflecting the percentage of the work performed prior to the notice of

termination, plus reasonable charges the Contractor can demonstrate to

the satisfaction of the Government using its standard record keeping

system, have resulted from the termination. The Contractor shall not be

required to comply with the cost accounting standards or contract cost

20

Col. Hess, the head of contracting at Camp Arifjan at the relevant time, offered

inconsistent and self-serving testimony at trial, but generally testified that he believed

Gulf Group’s camp package BPA call, latrine contract, and dumpster contract were

terminated because of security concerns, and that Col. Miller gave a directive or order

to terminate the contracts. According to Col. Hess’ testimony, Col. Hess ordered Mr.

Cockerham to terminate Gulf Group’s latrine and dumpster contracts, and Col. Hess

ordered Maj. Davis to terminate Gulf Group’s camp package BPA call, because “[w]e

were ordered to get Gulf Group off the bases, the camps.” Col. Hess indicated that this

order to remove Gulf Group from the bases did not come from Col. Mark Neumann, the

Principal Assistant Responsible for Contracting at Camp Arifjan in October 2004, to

whom Col. Hess reported, or anyone in ARCENT (United States Army Central

Command). He also stated that he had reviewed the contract files, and that none of the

files included any documentation linking the Al Tawash family to terrorists, anti-

American groups, the Taliban, Saddam Hussein, or any other enemies of America.

According to Mr. Wilson, however, Col. Hess told him that Gulf Group’s contracts were

terminated due to “counterintelligence on the Al Tawash family, and they have ties [to]

Al Qaeda and Saddam Hussein.” Notably, Col. Hess testified that the government

terminated Gulf Group for convenience, rather than for default, so that Gulf Group could

file claims for reimbursement because the government did not “want to cause any

undue hardship” to Gulf Group. Col. Hess further stated that he does not believe that a

termination for default is proper even if a contractor is suspected of anti-American ties

or sentiments.

According to Col. Portouw, the Gulf Group cancellations “had something to do

with performance with latrines,” but he did not recall who told him that and did not

indicate to which Gulf Group contract he was referring because he never referred

specifically to any particular contract during his testimony. According to Maj. Petty’s

recollection, Gulf Group’s contracts were terminated because of the alleged security

principles for this purpose. This paragraph does not give the Government

any right to audit the Contractor’s records. The Contractor shall not be

paid for any work performed or costs incurred which reasonably could

have been avoided.

Termination for cause. The Government may terminate this contract, or

any part hereof, for cause in the event of any default by the Contractor, or

if the Contractor fails to comply with any contract terms and conditions, or

fails to provide the Government, upon request, with adequate assurances

of future performance. In the event of termination for cause, the

Government shall not be liable to the Contractor for any amount for

supplies or services not accepted, and the Contract shall be liable to the

Government for any and all rights and remedies provided by law. If it is

determined that the Government improperly terminated this contract for

default, such termination shall be deemed a termination for convenience.

21

incident, as opposed to the dirty latrine incident.31 Maj. Petty testified that he had never

heard of Gulf Group having any affiliation with the Taliban.

Capt. Novak also testified that a Gulf Group contract was terminated because of

a “security incident.” Capt. Novak disagreed with the decision to terminate Gulf Group’s

camp package BPA call, and although he was at first unable to meet with Col. Hess,

Capt. Novak did meet with Col. Neumann32 to discuss his disagreement with the

termination. Capt. Novak also indicated that he did not feel that he was going outside

the chain-of-command or risking his career by doing so. Eventually, Capt. Novak was

able to meet with Col. Hess to voice his disagreement with the decision to terminate

Gulf Group’s camp package BPA call. Capt. Novak also met with Tijani Saani, a civilian

assigned to the contracting office at Camp Arifjan, who was the deputy to Col. Hess,

about the decision. Capt. Trimble also spoke to Col. Neumann about terminating Gulf

Group’s camp package BPA call and told Col. Neumann that he believed Gulf Group

was capable of performing. Capt. Trimble indicated that he had heard that Gulf Group’s

camp package BPA call was going to be terminated because the camp “mayors”

preferred to keep their current contractors to avoid interruption of services.

Mr. Cockerham testified that he terminated Gulf Group’s latrine and dumpster

contracts based on a direct order from Col. Hess, who himself had been ordered to

terminate the contracts by Col. Miller. According to Mr. Cockerham, a termination for

convenience in the interest of national security relieves the government of liability for

“any losses.”33 Mr. Cockerham stated, however, the termination has to be or should be

heavily documented, which is why he requested a report to document the file, to protect

the contracting office and the government. According to Mr. Cockerham, Col. Hess

directed him to cancel Gulf Group’s contracts “in the interest of security, national

security.” Mr. Cockerham further testified that Col. Hess said that a call for Camp

Virginia should not be awarded to Gulf Group because they were a security risk.

According to Mr. Cockerham, he asked Col. Miller and Col. Hess for a security incident

report, or even just the incident number, to attach to the latrine and dumpster contract

cancellations, but they never gave him one. Capt. Trimble testified that Mr. Cockerham

was upset that he never received a Memorandum of Record from Col. Hess, stating that

Col. Hess directed Mr. Cockerham to cancel Gulf Group’s contracts. At trial, Col. Hess

31

Maj. Petty’s testimony on this point appears to be related to the termination of three of

plaintiff’s contracts, the camp package BPA call and the latrine and dumpster contracts,

although his testimony is not explicit in this regard.

32

Although the trial transcript refers to “Col. Newman,” other areas of Capt. Novak’s

testimony refer to Col. Neumann, Col. Hess’ superior and the Principal Assistant

Responsible for Contracting at Camp Arifjan.

33

Mr. Cockerham subsequently elaborated that in his mind, “[t]he only time the

government can possibly get around reimbursing in the interest of convenience is in the

interest of national security.” It is unclear from Mr. Cockerham’s testimony whether he

believed that a termination for convenience in the interest of national security absolves

the government of all liability or only liability relating to “losses.”

22

denied that either Mr. Cockerham or Maj. Davis had asked for a security incident report

in order to support the cancellations of the contracts or the camp package BPA call.

The October 20, 2004 Memorandum for Record, which Capt. Novak stated is

similar to the one he wrote with Capt. Trimble and Lt. Rivera, provides that, “Major

Cockerham informed the CO’s to cancel the [camp package] BPA call to Gulf Group

due to their inexperience in building tents,” and that the contract should be awarded to

British Link Kuwait, although its prices were “unreasonably” high. At trial, however, Mr.

Cockerham denied having told Capt. Trimble, Capt. Novak, and Lt. Rivera that Gulf

Group’s camp package BPA call was being terminated due to Gulf Group’s

inexperience in building tents, or that it was in the government’s best interest to award

the call to British Link Kuwait. Mr. Cockerham testified he believed that Tijani Saani told

Capt. Trimble, Capt. Novak, and Lt. Rivera that the statements were coming from Mr.

Cockerham, when they actually came from Col. Hess.

Joseph Libbey stated in his contracting officer’s final decisions, and testified at

trial, that he believed that the contracts were terminated due to dumpster diving and

rummaging through camp dumpsters, perhaps the latrine issue, and security reasons.

In Mr. Libbey’s final decision for the dumpster contract he stated: “On 9 October 2004,

six Gulf Group employees were detained for security violations involving traveling on

Camp Arifjan without their required escort, and rummaging through a dumpster. At

least four of these individuals were barred from Camp Arifjan by Colonel Miller on 16

and 18 October 2004.” The contractor allegedly involved in dumpster diving, however,

was Gulf Company, not Gulf Group. At trial, Mr. Libbey testified that he “took Gulf

Company to mean Gulf Group.” Mr. Libbey’s final decision on Gulf Group’s dumpster

contract also stated:

The Government originally contemplated terminating Gulf Group’s

contracts for failure to comply with security regulations; however, due to

the global war on terror operational tempo in the area, and a desire to

maintain a friendly working relationship with local contractors that often

include prominent Kuwaiti families, the Government decided to terminate

the contract for the convenience of the Government.34

According to Saud Al Tawash and Mr. Wilson, they first learned that Gulf Group’s

latrine and dumpster contracts and camp package BPA call were being terminated

through their competitors. According to Saud Al Tawash, he first heard rumors about

the cancellations from an individual working with a competitor, Jasmine, who told him

“they’re going to cancel all your contracts because they have a report of an intelligence

that you guys are related to terrorist groups and you’re anti-American.” Saud Al Tawash

also testified that Mr. Wilson was then told “directly from the contracting office” that

34

Mr. Libbey testified that Mr. Randall Kemplin, a government civilian counsel who

worked with Mr. Libbey on the claims, wrote the above quoted paragraph, which was

incorporated into Mr. Libbey’s contracting officer’s final decision. Although Mr. Libbey

was not aware of how Mr. Kemplin had obtained the information, Mr. Libbey stated he

was “good with it.”

23

there was a “security” and a “counter intelligence concern,” and that the contracting

office alleged that the alleged security incident was the reason for the cancellations. At

trial, Saud Al Tawash also pointed out that the contracting officer, Mr. Libbey, made a

final determination that the contracts were terminated due to the alleged security

incident. Saud Al Tawash testified that Capt. Trimble, Capt. Novak, Lt. Rivera, and

Tijani Saani all told him that the contracts were terminated as a result of a concern for

security. Saud Al Tawash also indicated that he had heard that the promised award of

Camp Virginia had been put on hold, with the possibility of cancellation, due to the

security concerns.

According to testimony offered by Mr. Wilson, on October 17 or 18, 2004, he

spoke with Mr. Cockerham, Tijani Saani, and Col. Hess about the Gulf Group

cancellations and prepared a report about those discussions. Mr. Wilson testified that

Mr. Cockerham told him that the cancellations were coming from above him at “the

general level.” Mr. Wilson also stated that Col. Hess told him that the cancellations had

to do with security and counterintelligence, and that the Army Support Group

commander made the decision to cancel. According to Mr. Wilson, Tijani Saani told him

that they were cancelling all of Gulf Group’s contracts for security reasons, but that

“we’ll try to get you guys some work.” Mr. Wilson also spoke to Col. Hess over the

telephone. Mr. Wilson stated Col. Hess did not want to talk to him, and was “really

nervous, talking in circles.” According to Mr. Wilson, Col. Hess stated during this

telephone call that Gulf Group’s contracts were terminated due to “counterintelligence

on the Al Tawash family, and they have ties [to] Al Qaeda and Saddam Hussein.” Mr.

Wilson also heard someone comment that Gulf Group was a “bunch of kids” and

needed to be “taken out,” although he could not remember if he heard this from an Army

officer or from one of Gulf Group’s competitors.

Col. Khalid Al Salal, a retired intelligence officer for the Kuwait Ministry of

Defense, who had left the ministry, but maintained communication with the security and

intelligence office, testified as a witness for plaintiff and stated that Gulf Group, Gulf

Telecom, and Saud Al Tawash were all cleared by Kuwaiti security and passed

background checks. Col. Al Salal further testified that the Al Tawash family is very well-

known in Kuwait, and that he had never heard of any links between the Al Tawash

family and the Taliban, Saddam Hussein, or other anti-American groups. Maj. Petty

similarly testified that he never heard that Gulf Group was suspected of having

connections with the Taliban. Mr. Cockerham testified that he heard a number of

rumors about Gulf Group’s involvement with the Taliban and other similar groups, which

he believed were not true.

Ferdinand Peters, the attorney retained by Gulf Group in October 2004, testified

that he met separately with Col. Hess, Col. Miller, Mr. Cockerham, and Tijani Saani, and

was given “a variety of reasons” by “everyone” for the termination of Gulf Group’s latrine

and dumpster contracts and camp package BPA call. Mr. Peters testified that “I can

only say that there were multiple reasons given.” Mr. Peters indicated that he was “told

about security problems, and words had come up in various discussions as connections

to terrorists, cell phone use, personnel of Gulf Group asking questions and being a

24

security threat, or whatever. Things like that.” Mr. Peters recalled that, in his meeting

with Col. Miller, Col. Miller had “mentioned” the latrine incident to Mr. Peters, and may

have indicated that Gulf Group was suspected of being allied with anti-American

interests. Mr. Peters could not “remember exactly what was stated,” but indicated that

“[i]t was so serious of what we were being told that efforts were being made by the

family to figure out through Congressional action and like that on what was going on

here.”

After speaking with Mr. Wilson and hearing rumors from his competitors, Saud Al

Tawash contacted Congressman Trent Franks, who was “an old family friend,” to

inquire on Gulf Group’s behalf about rumors of Al Tawash family links to anti-American

groups because “it was hurting our family reputation.” According to Saud Al Tawash,

Congressman Franks called Col. Miller, Col. Hess, Tijani Saani, and Mr. Cockerham to

“restore my family’s reputation” and to “chat with the right people from in the upper

channels at the military to find out if this is truth [sic].” In an October 27, 2004 email

addressed to Gen. Keith Alexander and Gen. Steven Whitcomb, Congressman Franks

stated: “I am respectfully asking the military command to issue a letter stating

categorically that the cancellation of the subject contracts was in no way related to any

counterintelligence, espionage, or security concern connected to the Al-Tawash family

or the Gulf Group.” Gen. Whitcomb forwarded the email to Col. Miller, Col. Richard

McEvoy, and Col. Louis Yuengert, requesting a status update. Col. McEvoy responded

that the letter had been taken care of by the Army. Col. Miller recalled receiving a

telephone call from Congressman Franks about the Al Tawash family, followed shortly

by a telephone call from Gen. Alexander on the same subject. Col. Hess testified that

he did “not remember being called by Congressman Franks.” On November 3, 2004,

Col. Hess was directed, he assumed by Col. Miller,35 to write a letter to Mohammed Al

35

Col. Hess’ testimony at trial was as follows:

Q: Looking at Exhibit 147, this being a letter from the Department of the

Army dated November 3, 2004 to Mohammed Al Tawash, with what

purports to be your signature. Is that indeed your signature?

A: Yes, it is.

Q: Did anyone order you to write this letter?

A: I don’t remember, but I wrote the letter so I presume I was directed to

write the letter.

…

Q: Do you recall receiving a direct order commanding you to write the

letter, or did someone simply ask if you might accommodate them by

writing the letter?

A: Instead of saying yes or no, can I explain my recollection of the letter?

25

Tawash about the cancellation of Gulf Group’s latrine contract, which, according to

Saud Al Tawash, was drafted in response to Congressman Franks’ inquiries. Saud Al

Tawash testified that he did not know why the letter from Col. Hess was addressed to

his brother, Mohammed Al Tawash. The letter stated, in pertinent part:

Please rest assured that the Gulf Group’s contract to service portable

latrines at Army camps in Kuwait was not terminated because of security

reasons. While it is true that some employees of the Gulf Group have

been either barred from the installation or warned because they had not

followed the rules for contract employees on the installation, these

incidents did not cause the termination of the contract.

The contracting officer terminated the contract because circumstances

arose that caused the contracting officer to conclude that it was in the best

interest of the Army to terminate the contract. Since the contract was

terminated for convenience of the government, the Gulf Group should not

suffer any repercussions to its reputation or competitive standing. The

Gulf Group is fully eligible to compete for other Army contracts in Kuwait.

I hope this clarifies this unfortunate misunderstanding.

Col. Hess further testified that “Colonel Miller actually wanted to author a letter to

send to the Al Tawash family and I recommended against that, that this was a

contractual issue and any such letter ought to be coming from the contracting office.”

According to Col. Hess, the security and espionage concerns about Gulf Group “turned

out to be unfounded,” but the statement in the letter that Gulf Group’s latrine contract

“was not terminated because of security reasons” was “false.” In other words, based on

Col. Hess’ testimony, Gulf Group was terminated for security reasons, but those same

security concerns later turned out to be unfounded. Also according to Col. Hess, the

Q: Please do. Yes, sir.

A: My recollection of the letter was we went through all the security stuff,

all the concerns about espionage in the previous few exhibits we went

through, and it turned out to be unfounded. This is my recollection. As

such, we still had a viable contractor that we could do business with. The

purpose of this letter was to put Gulf Group on notice that we still would

like to consider them to do Army contracting, to engage, to bid on Army

requirements in the future.

Q: Who directed you to send this letter?

A: I don’t recall specifics.

Q: It was Colonel Brick Miller, wasn’t it?

A: I’m going to have to make the assumption that it was the ASG, Colonel

Miller. He was my primary customer.

26

statement that some Gulf Group employees had been barred was, likewise, untrue and

inaccurate based on his recollections, but he had obtained that information to insert into

the letter from Col. Miller. Col. Hess indicated that he also had help from the ASG

Judge Advocate General’s office when composing the November 3, 2004 letter, but did

not identify by name any individuals who aided him.

Bottled Water Delays

Gulf Group’s bottled water BPA calls were not cancelled at the time of the

October 2004 terminations of the camp package BPA call, the latrine contract, and the

dumpster contract, and Gulf Group continued to supply bottled water to the Army under

the bottled water BPA in 2005. According to the parties’ joint stipulation of facts,

between November 1, 2004 and March 31, 2005, United States government contractors

supplying bottled water in Iraq were required to travel in military convoys. The convoy

requirement was issued to ensure the prompt delivery of bottled water and for the

protection of personnel and supplies. During this time period, all of Gulf Group’s

deliveries of bottled water to camps in Iraq were made by trucks traveling to and from

Iraq and Kuwait with military convoys. The trucks were delayed at times for a number of

reasons, including IEDs and observance of religious holidays by Iraqi nationals. The

parties have jointly stipulated that “[a]dditionally, the delays occasionally were caused

by the Government not having sufficient escorts.” According to Saud Al Tawash, most

Gulf Group trucks going into Iraq around April 2005 were delayed more than a week.

Saud Al Tawash testified that, pursuant to Gulf Group’s bottled water BPA, Gulf

Group was required to contact certain Army officials to obtain delivery instructions. The

bottled water BPA refers to these requirements as “Special Instructions,” which state in

part:

Purchased For: US Army Various Locations in Kuwait and Iraq. Surface

to some of the locations are unimproved which could cause delays in

deliveries. Contractor shall do everything possible to ensure deliveries are

made on time. The contractor is liable for all equipment and personnel

necessary to deliver to the proper quantities. The US Military is not liable

for damages caused to transportation assets or equipment necessary to

deliver the items.

Personnel to contact for directions and acess [sic] to various locations are

as follows:

MAJ Banks:36 968-4819

CPT Sharp:37 970-5952

36

According to the parties’ joint stipulation of facts, “Major Banks was the chief of the

bottled water branch until October 2004, when she was replaced by LTC Derrick

Shoemake,” who was the chief of the bottled water branch at Camp Arifjan during April

2005.

27

Saud Al Tawash further testified that the Army officers gave Gulf Group convoy

numbers, which he understood to be a requirement that Gulf Group travel in convoys.

According to Mr. Wilson, at a post-award vendor meeting attended by Lt. Col. Derrick L.

Shoemake, chief of the bottled water branch at Camp Arifjan, Mr. Cockerham, and Sgt.

Diane Brooks, all the bottled water contractors were told that they were required to

move in convoys. Also at the post-award vendor meeting, Mr. Wilson was told to follow

the instructions to travel with convoys given by Lt. Col. Shoemake and Sgt. Brooks. Mr.

Wilson stated that contractors could hire private protection, but that even then they

would have had to coordinate transportation with the Army. Mr. Wilson explained that

Gulf Group could not have transported the water without the military convoys because

there was significant fear over the physical safety of the water and potential biological

additives, such that “if you showed up at a front gate of an army base unescorted with

truck loads of water, you’re probably going to be shot.” Mr. Wilson also testified that

rules and regulations were posted on a wall at Camp Navistar, a convoy consolidation

point in Kuwait, specifying that trucks “must stay in convoy, they must be escorted all

times.”

Lt Col. Mary O’Connor, a battalion commander and chief of transportation

responsible for the movement of control teams at convoy support centers throughout

Iraq in 2004 and 2005, testified that all trucks in Iraq were required to move in military

convoys, and that she knew this to be the case because she was in charge of this

process. Lt. Col. O’Connor identified a specific “fragmentary order” (FRAGO) as the

document requiring all vehicles used in support of the military to travel in convoys. The

FRAGO provides:

The purpose of this FRAGO is to enhance and convoy [sic] security

measures to protect the force by providing convoy commanders and unit

commanders tools to ensure that all measures have been properly taken

to safeguard personnel and equipment. Unit/convoy commanders are

personally responsible for the conduct and protection of convoy

operations. MNF-I units will monitor their convoys, and exercises control

measures implemented by unit commanders.

3.C. (U) Tasks to Subordinate Unites. [sic]

3.C.1. MNC-I

3.C.1.A. Continue to produce internet status updates, and maintain the

information on the MNCI webpage. Convene emergency status board

update when the situation warrants.

3.D. (U) Coordinating Instructions.

37

Capt. Sharp was Maj. Banks’ deputy at the time the “Special Instructions” were

issued.

28

3.D.1. There will be two vehicles minimum during daylight hours, and

three vehicles minimum during the hours of darkness. There will be at

least two soldiers per vehicle and three in the trail vehicle to provide a

turret or rear gunner for tactical vehicle movements.

3.D.2. Non-tactical vehicle (NTV) movements used to transport

military members, DOD civilians, and DOD contractors are cautioned

not to move outside secure zones without security as set forth by

MSC38 commanders. As far as practical use armored/add on armored

commercial vehicles to move off FOBS. The use and number of NTVS to

support movement requirements is delegated to the MS[] commanders.

However, the number of NTVs used should consider current AIF TTPS,

emergency cross loading of personnel requirements and safety. NTVs will

posses [sic] communication IAW Para 5.A.2. below, and have

communication with the security escort.

3.D.3. Convoy commanders are responsible for the self-protection

capability within their convoy. There will be at least one rifle in each

vehicle for all movements. Tactical vehicle movements must have 360

degree security consisting of an M249 or above from the turret or out the

back with the “canvas” removed. All military personnel will carry personal

weapons, wear fragmentation protective vest, ballistic eye protection, and

combat helmet. A minimum of one vehicle will maintain communications

contact with coalition forces. Convoys will not have lights on during

daylight operations. During night operations white lights will be used, and

they will have NVDS in each vehicle.

3.D.4. Prior to all movements, convoy commanders will conduct

coordination and include communications equipment sufficient to

communicate with other MSCS when traveling through their AOR.

Advanced notification to other MSCS will minimize potential fratricide of

blue on blue forces. All vehicles must log out with parent unit and provide

ETA to destination. All vehicles must report at destination to their parent

unit.

3.D.5. Breakdown procedures, convoy commanders are responsible for

self-recovery capability within each convoy. Recovery equipment will be

available to each convoy. Commanders will take all reasonable measures

to recover vehicles and will abandon vehicles as last resort only. They will

recover the vehicle to the nearest CSO or LSA if possible. If not, leave

appropriate security personnel and an operational vehicle with it until it

can be recovered.

3.D.6. All MSCS will report deteriorating road conditions to MNCI, upon

reporting to convoy support center operations cell(s), convoy commanders

38

It appears that MSC stands for Major Subordinate Command.

29

will report locations where maintenance is required and where engineer

work could mitigate areas of vulnerability.

3.D.7. In the greater Baghdad area defined by the MND Baghdad area

there will cautinue [sic] to be mission critical movements only. Units will

verify route status with 1 CD website or Iraqna or prior to any movement.

3.D.8. There will be a minimum ratio of one tactical security vehicle for

every ten military cargo vehicles, and a minimum ratio or [sic] one tactical

security vehicle for every 5 KBR cargo vehicles. There will be no less

than two security vehicles for every convoy (Para. 3.D.1.).

...

4.B. (U) All units will conduct risk assessments using mission, enemy,

terrain, troops, time available, and civilian demonstrations (METT-TC) to

identify and assess hazards. Ensure that seatbelts are properly used.

Gunners in turrets and rear facing security will ensure other safety

measures are used due to the inability to wear seat belts. All soldiers

operating or riding in tactical and NTV vehicles must wear regulation gear

as stated in paragraph 3.D.3. above.

The FRAGO does not specifically refer to government contractors. Lt. Col.

O’Connor testified, albeit inconsistently, that it was understood that, if a contractor was

supporting the military, it was “assumed in the order that they would – that we would

protect them.” Nevertheless, Lt. Col. O’Connor testified that the language “DOD

contractors are cautioned not to move outside secure zones without security as set forth

by MSC commanders. As far as practical use armored/add on armored commercial

vehicles to move off FOBS,” was a recommendation, rather than an order, until a more

stringent order was delivered. Lt. Col. O’Connor also testified that she had not seen a

more stringent order. She then stated that the existing order was intended to require

civilian contractors to travel in military convoys. Lt. Col. O’Connor also testified that

there were no exceptions to this convoy requirement, however, she conceded that some

contractors violated the convoy requirement. She also acknowledged that the Army

could not control the travel of all civilians. Although her testimony regarding the number

of days of travel time between Kuwait and Iraq was inconsistent, she did indicate,

however, perfect travel conditions were rare in Iraq at the time.

Regarding the cause of the bottled water transportation delays, Saud Al Tawash

stated that, having been to the border between Kuwait and Iraq, he had personal

knowledge of Gulf Group trucks delayed at the border due to insufficient escorts, which

was “the only cause” of delay. He stated, however, that he did not travel with the Gulf

Group trucks beyond the border to deliver the water into Iraq. According to Saud Al

Tawash, it was Lt. Col. Shoemake and KBR, another contractor, through whom Saud Al

Tawash learned that the truck delays in Iraq were caused by lack of escorts. Mr. Wilson

stated that he had learned from the truck drivers that the delays in the delivery of bottled

water were caused by “security and the lack of escorts,” as well as convoy priorities. He

30

further indicated the delays were also caused by IEDs and accidents. Mr. Wilson also

testified that Gulf Group trucks were being delayed at the bases because they also were

being used to store water and to haul military equipment on their return trips, despite

Gulf Group’s contract and arrangement with the trucking company that there only would

be one-way hauls. Neither Saud Al Tawash nor Mr. Wilson, personally, were on board

the trucks that delivered bottled water for Gulf Group into Iraq.

Megbel Al Tawash testified that he knew from project managers and from

coordinating with Expeditors, the company Gulf Group had hired to transport the bottled

water, that the lack of escorts “was the main problem” Gulf Group experienced with the

delivery of bottled water to Iraq. Megbel Al Tawash further stated that he personally

observed Gulf Group trucks used by the military to haul equipment, specifically

Humvees, on return trips from Iraq. Lt. Col. O’Connor agreed that it was “quite

possible” that bottled water trucks coming back from Iraq into Kuwait were loaded with

military equipment. Mr. Cockerham testified that “quite often what they would do is put

equipment on the trucks that were designated just for carrying water,” and that he

believed Gulf Group’s bottled water trucks were being used to haul military equipment

on the return trips. Mr. Cockerham stated that there was no agreement between the

bottled water contractors and the government to use the bottled water trucks for hauling

military equipment on return trips. The parties also have stipulated that, “[t]here was no

agreement between Gulf Group and the Government to use some or all of Gulf Group’s

trucks that delivered bottled water to camps in Iraq, to transport military equipment back

to Kuwait on their return trips from Iraq.” The Army had another contract in place to

take equipment out of Iraq, but it apparently was not always used.

Due to the acknowledged delays in the delivery of bottled water, the government

offered to increase the amount it was paying to the bottled water contractors to cover

demurrage charges. Between November 1, 2004 and March 31, 2005, Gulf Group

charged 2.400 KD per case for bottled water. The parties stipulated, “[o]n April 5, 2005,

a contracting officer, John Cockerham, submitted a proposal to all contractors supplying

bottled water to camps in Iraq to increase the price of the bottled water to 2.578 KD per

case, in exchange for the contractors not charging the Government for additional

expenses including demurrage incurred in the deliveries.” Mr. Cockerham’s email

stated: “All previous claims prior to APR 05 will continue to be processed.” According to

the parties’ joint stipulation of facts, Gulf Group received, and accepted, the proposal of

the higher rate per case in exchange for not making any more claims for demurrage

incurred after April 1, 2005.

Plaintiff’s Submissions and Claims

On December 15, 2005, Gulf Group submitted a claim under the bottled water

BPA for 298,435.000 KD in demurrage for delays incurred between November 2004

and March 2005 to Mr. Cockerham, who was the contract specialist for the bottled water

BPA in Kuwait.39 The following day, December 16, 2005, Gulf Group submitted three

39

The KD value later was calculated to be equivalent to $1,035,802.23 in plaintiff’s

original complaint in the bottled water case, Case No. 07-82C, and $1,065,711.39 in its

31

“Claim & Settlement Offers”40 to Mr. Cockerham, proposing settlement in the amount of

$4,544,339.84 for the termination of the camp package BPA call, in the amount of

$4,558,428.60 for the termination of the latrine contract, and in the amount of

$999,994.67 for the termination of the dumpster contract.41 The 2005 Claim and

Settlement Offers also asserted that Gulf Group was entitled to $10,000,000.00 for the

termination of the camp package BPA call, $5,058,428.5942 for the termination of the

latrine contract, and $1,110,621.72 for the termination of the dumpster contract. Saud

Al Tawash signed the cover letter to Gulf Group’s four submissions to Mr. Cockerham in

2005, and all four submissions were certified by plaintiff’s attorney at the time,

Ferdinand Peters.

On October 19, 2006, the Camp Arifjan contracting office files were searched,

but there was no record of Gulf Group’s December 15 and 16, 2005 submissions. Gulf

Group then re-submitted the same Claim and Settlement Offers between October 20,

2006 and October 22, 2006, and the submissions were put on the contracting command

log. Mr. Cockerham testified that he had received the 2005 latrine and dumpster Claim

and Settlement Offers twice, and that he does not know if Gulf Group’s initial

submissions were logged, although they would have been placed in a box in the

contracting office. Although not clearly referring to plaintiff’s 2006 resubmissions, Mr.

Cockerham also testified that he made minimal efforts to ensure that Gulf Group’s Claim

second amended complaint in the bottled water case. In plaintiff’s first amended

complaint in the bottled water case, plaintiff simply listed the amount as 298,435.000 KD

without a USD equivalent.

40

As indicated below, it is not immediately clear that the 2005 submissions relating to

the terminations of the camp package BPA call, the latrine contract, and the dumpster

contract, constituted “claims” under the Contract Disputes Act. Defendant’s post-trial

briefs generically refer to plaintiff’s 2005 submissions as “claims,” but defendant initially

argued that the Claim and Settlement Offers did not constitute claims under the

Contract Disputes Act. In discussing plaintiff’s submissions with respect to the court’s

jurisdiction under the Contract Disputes Act, therefore, the court distinguishes between

the “Claim and Settlement Offers” that plaintiff submitted in 2005, and the “claims” that

plaintiff submitted in 2007 and 2011. The court includes the 2005 Claim and Settlement

Offers in general references to “claims” elsewhere in this opinion, however, because the

2005 submissions constitute claims in other contexts, such as under the False Claims

Act. See 48 C.F.R. § 49.001 (2005) (“A settlement proposal is included within the

generic meaning of the word ‘claim’ under false claims acts (see 18 U.S.C. 287 and 31

U.S.C. 3729).”).

41

The parties’ joint stipulation of facts lists plaintiff’s 2005 Claim and Settlement Offer as

seeking $5,058,428.59. That is the full amount that plaintiff claimed it was owed, but

plaintiff’s submission offered to settle for $4,558,428.60.

42

In calculating plaintiff’s claimed entitlement to $5,058,428.59, plaintiff’s 2005 Claim

and Settlement Offer appears to have used a different conversion rate between KD and

USD than the rate stipulated to by the parties.

32

and Settlement Offers were processed, indicating that the “[o]nly thing I really remember

doing was just notifying the chief that this was the second time....”

The record is unclear as to whether the government ever reviewed plaintiff’s

2005 Claim and Settlement Offers. Mr. Cockerham, however, confirmed at trial that he

wrote the notations on the Claim and Settlement Offers that appear in the record

relating to the camp package BPA call, the latrine contract, and the dumpster contract,

indicating that the Claim and Settlement Offers in the record are the Claim and

Settlement Offers that Mr. Cockerham received on December 16, 2005, rather than the

copies of the Claim and Settlement Offers that plaintiff re-submitted between October

20, 2006 and October 22, 2006. Although raising more questions than it addressed, Mr.

Libbey’s contracting officer’s final decision for plaintiff’s 2007 camp package BPA claim

attempted to explain what had happened to the 2005 Claim and Settlement Offers,

stating:

The settlement offer [for the camp package BPA] was one of three

termination packages Major Cockerham allegedly received from Mr.

Surresh Pulikkal [sic] of Gulf Group43 in October 2005. Major Cockerham

allegedly signed for the three settlement proposals, and handed them off

to the Claims Section in the contracting office. These matters are

“alleged” as the Government has no evidence to establish these events

actually occurred. Major Cockerham and Gloria Davis, the awarding

contracting officer, came under investigation for improper and illegal

contracting activity after the subject contract was awarded....

Gulf Group representatives returned to the Contracting Command in late

November 2005 and again in December 2005 to check on the status of

the settlement offer. No record could be found that it had been submitted,

so Mr. Surresh Pulikkal [sic] was asked to resubmit the settlement offer.

Mr. Pulikkal subsequently gave a settlement offer to Major Cockerham,

who signed for it acknowledging receipt....

Gulf Group Representatives Saud Al Tawash and Allen Tadayon met with

LTC David Pershing, Commander, United States Army Contracting

Command, Southwest Asia-Kuwait (USACC), Major Marcellus Newson,

Contracting Officer, and Captain Andrew Gast, Contracting Claims Officer,

both of USACC, on or about 19 October 2006 to discuss the following

topics.... Concern over an earlier termination for convenience.... Their

settlement offers....

43

Although defendant has repeatedly described Suresh Pulikkal as a Gulf Group

employee, Saud Al Tawash testified that Suresh Pulikkal was a legal consultant for a

number of the companies that Saud Al Tawash managed, describing him as “our legal

counsel…a legal consultant.” Mr. Cockerham also confirmed that Suresh Pulikkal

“worked with several companies.”

33

Mr. Tadayon asked about the settlement offer Gulf Group had submitted,

inquiring about its status. Captain Gast was directed by LTC Pershing

during the meeting to check his files for its status. Captain Gast checked

his file log for disputes and reported there was no record of any settlement

offers being filed by Gulf Group....

Captain Gast checked with other members of the Claims Team on 20

October 2006, specifically asking Major Paul Bidinger, Contracting Claims

Officer, Third Army, U.S. ARCENT, about the Gulf Group’s inquiry. Major

Bidinger reported back to Captain Gast the same day that he could not

find Gulf Group’s name on the disputes lists....

On 22 October 2006, Gulf Group representative Allen Tadayon provided

Captain Gast with a copy of the settlement offer by email. Captain Gast

reviewed the documents briefly and noted they were missing the required

certification....

On 22 October 2006, Mr. Tadayon emailed three “certifications” signed by

Gulf Group’s counsel to Captain Ghast [sic].

On 15 November 2006, Mr. Tadayon requested an appointment with

Captain Gast to discuss the settlement offer. Captain Gast responded on

16 November 2006 that the only appointments he was making was for

current disputes and ratifications he was working on....

Mr. Tadayon communicated again with Captain Gast on or about 17

November 2006 concerning the status of the three settlement offers.

Captain Gast stated he had not yet begun to work on them. This was the

last communication Captain Gast had with Gulf Group concerning its

documents.

It appears from Mr. Libbey’s summary of the events surrounding the submission

of plaintiff’s 2005 Claim and Settlement Offers, and from Mr. Cockerham’s testimony

regarding his receipt of plaintiff’s Claim and Settlement Offers, that plaintiff may also

have originally submitted the Claim and Settlement Offers to Mr. Cockerham in October

2005, prior to the December 16, 2005 submissions in the record. That plaintiff

previously submitted the camp package BPA, latrine contract, and dumpster contract

Claim and Settlement Offers is consistent with the October 2005 date that appears on

the cover letters to each submission.

Plaintiff interpreted the lack of a response to its 2005 submissions for almost a

year to be a deemed denial of its “claims” pursuant to 41 U.S.C. §§ 605(c)(1), (c)(3)

(2005) (current versions at 41 U.S.C. § 7103(f)(1), (f)(3) (Supp. V 2011)).44 Based on

44

In Case No. 06-835C, the camp package BPA case, plaintiff asserts that the sixty

days under 41 U.S.C. § 605 began to run on October 10, 2005. In Case No. 06-853C,

the dumpster case, plaintiff asserts that the sixty days began to run on October 20,

34

this perceived denial of its “claims,” Gulf Group ultimately filed the four suits which are

currently consolidated before this court. The parties stipulated that, “[o]n December 8,

2006, Gulf Group commenced [the camp package BPA case in the United States Court

of Federal Claims] seeking $7,000,000.00, plus interest, costs, and attorney fees arising

from the contracting officer’s deemed denial of its claim” for the cancellation of the camp

package BPA call. The parties also stipulated that, “[o]n December 15, 2006, Gulf

Group commenced [the latrine case in the United States Court of Federal Claims]

seeking $6,000,000, plus interest, costs, and attorney fees arising from the termination”

of the latrine contract. The parties further stipulated that, “[o]n December 19, 2006, Gulf

Group commenced [the dumpster case in the United States Court of Federal Claims]

seeking $1,800,000, plus interest, costs, and attorney fees arising from the cancellation”

of the dumpster contract. Finally, the parties stipulated that, “[o]n February 1, 2007,

Gulf Group commenced [the bottled water case in the United States Court of Federal

Claims] seeking $1,035,802.23, plus interest, costs, and attorney fees arising from calls

issued pursuant to” the bottled water BPA.

In the camp package BPA case, the latrine case, the dumpster case, and the

bottled water BPA case, defendant requested that the judges initially assigned to each

case stay the proceedings in each case because defendant believed, with respect to

each Claim and Settlement Offer, “that plaintiff’s submission constitute[d] a ‘termination

settlement offer,’” rather than a “claim” under the Contract Disputes Act, which,

according to defendant, deprived this court of jurisdiction over plaintiff’s complaints.

The judges initially assigned to the camp package BPA case, the latrine case, and the

dumpster case, each agreed to stay the cases pending a decision by the contracting

officer on each of plaintiff’s “claims.”45 On March 26, 2007, Gulf Group presented

“revised” claims to the contracting officer, certified by plaintiff’s replacement attorney,

and current attorney of record, Ms. Iliaura Hands, for $7,000,000.00, $1,800,000.00,

and $6,000,000.00, arising from the camp package BPA, the latrine contract, and the

dumpster contract, respectively.46 In addition, Ms. Hands signed the cover letter to all of

2005. In Case No. 06-858C, the latrine case, plaintiff references two dates, October 17,

2005 and December 16, 2005, from which the sixty days could have run. In Case No.

07-82C, the bottled water BPA case, plaintiff asserts that the agency’s sixty days began

to run on December 15, 2005.

45

The undersigned judge denied defendant’s request to stay the bottled water BPA

case. The bottled water BPA case did not involve a termination for convenience. With

respect to the 2005 bottled water BPA Claim and Settlement Offer, the language that

plaintiff used in requesting a decision, and the context in which plaintiff’s submission

was made, indicated that plaintiff had asserted a “claim” under the Contract Disputes

Act. The undersigned judge, however, subsequently stayed all four of the consolidated

cases at the request of the United States Department of Justice because of related

ongoing criminal investigations and prosecutions.

46

In its pleadings to the court, plaintiff submitted a different version of the revised claim

for the dumpster contract than the version of the revised claim that was admitted at trial.

Although the differences between the versions are minimal, this discrepancy is one of

35

the revised claims. Each revised claim included a copy of the relevant 2005 Claim and

Settlement Offer, which contained a cover letter that was signed by Saud Al Tawash,

and which was certified by plaintiff’s previous attorney, Ferdinand Peters.

On May 21, 2007, Joseph Libbey reviewed Gulf Group’s revised claims and

issued final decisions on the revised camp package BPA, latrine contract, and dumpster

contract claims. Mr. Libbey awarded Gulf Group $33,053.57, $149,285.71, and

$57,833.00, plus interest, for its camp package BPA, latrine contract, and dumpster

contract claims, respectively. The parties stipulated that “Mr. Libbey did not interview

anyone in preparation of the final decisions.” Randall Kemplin, a civilian attorney for the

Army, wrote portions of the final decision from information he received from Army

attorney Clea Efthimiadis, who, in turn, obtained information on the terminations of Gulf

Group’s contracts from Col. Brick Miller, Tijani Saani, and Mr. Cockerham.47

After Mr. Libbey issued his contracting officer’s final decisions, Gulf Group filed

amended complaints before this court in each of the three cases he addressed, the

camp package BPA and the latrine and dumpster contracts. The original complaint in

the bottled water BPA case was also subsequently amended. In its amended

complaints, plaintiff altered the amounts sought in each case, except the bottled water

BPA case, the only case on which Mr. Libbey did not issue a contracting officer’s final

decision. In its original complaint in Case No. 06-835C, the camp package BPA case,

plaintiff sought $7,000,000.00. In its first amended complaint in the camp package BPA

case, plaintiff sought $2,682,160.86.48 In its second amended complaint in the camp

package BPA case, plaintiff sought $3,463,287.57.49 Subsequently, in its third

numerous deficiencies in plaintiff’s submissions to the court. Additionally, as discussed

below with respect to the dumpster contract, the copy of Saud Al Tawash’s signature

page from the 2005 Claim and Settlement Offer is dated October 20, 2004.

47

Ms. Efthimiadis testified that she did not contact Col. Hess regarding plaintiff’s claims.

When questioned, Ms. Efthimiadis stated:

I was in the middle of starting the litigation report, I did not complete the

litigation report. I did not interview all the witnesses or take even written

statements from them as is required in [sic] litigation report. The uptempo

in Kuwait was tremendous, the workload was tremendous at that time.

48

Plaintiff sought $1,447,457.22 in lost profits, $1,234,703.64 in preparatory expenses,

legal fees, costs incurred in preparing a settlement of plaintiff’s claims, and interest.

49

Plaintiff sought $3,387,247.64 in lost profits, $69,002.43 in preparatory expenses,

$7,037.50 in fees and costs incurred in preparing the settlement for plaintiff’s claims,

prejudgment interest, cost of litigation, and attorneys’ fees.

36

amended complaint in the camp package BPA case, plaintiff now seeks $922,851.84.50

In 2011, plaintiff submitted a second revised claim for the camp package BPA to Maj.

Daniel Everett,51 which mirrored the amounts plaintiff claimed in its third amended

complaint. In its original complaint in Case No. 06-858C, the latrine case, plaintiff

sought $6,000,000.00. In its first amended complaint in the latrine case, plaintiff sought

1,572,967.611 KD.52 In its second amended complaint in the latrine case, plaintiff now

seeks $2,830,662.20.53 In its original complaint in Case No. 06-853C, the dumpster

case, plaintiff sought $1,800,000.00. In its first amended complaint in the dumpster

case, plaintiff sought $1,946,721.78.54 In its second amended complaint in the

dumpster case, plaintiff now seeks $780,031.63.55 In its original complaint in Case No.

07-82C, the bottled water BPA case, plaintiff sought 298,435.000 KD, calculated as

$1,035,802.23. In its first amended complaint in the bottled water BPA case, plaintiff

sought 298,435.000 KD. In its second amended complaint in the bottled water BPA

case, plaintiff now seeks 298,435.000 KD, calculated as $1,065,711.39, for demurrage

and related expenses.56

The total potential contract prices and the amounts claimed by Gulf Group can be

summarized as follows:

50

Plaintiff seeks $846,811.91 in lost profits, $69,002.43 in preparatory expenses,

$7,037.50 in fees and other costs, prejudgment interest, costs of litigation and attorneys’

fees.

51

Contrary to plaintiff’s assertion that the judge directed plaintiff to submit a revised

claim to Maj. Everett, a member of the Army JAG Corps assisting defendant, the court

directed plaintiff to file revisions to any of the complaints filed in the four above-

captioned cases, if appropriate.

52

Plaintiff sought 1,416,360.000 KD in lost profits, 156,607.611 KD in preparatory

expenses, legal fees, costs incurred in preparing a settlement of plaintiff’s claims, and

interest. Plaintiff did not convert the amount to USD.

53

Plaintiff seeks $2,724,795.96 in lost profits, $91,978.74 in preparatory expenses,

$13,887.50 in fees and other costs, plus prejudgment interest, costs of litigation and

attorneys’ fees.

54

Plaintiff sought $1,457,619.72 in lost profits, $489,102.06 in preparatory expenses,

legal fees, costs incurred in preparing the settlement of the claims, and interest.

55

Plaintiff asserts in its second amended complaint in the dumpster case that it seeks

$780,131.63, but the total of the various amounts listed by plaintiff is only $780,031.63.

Plaintiff seeks $483,322.42 in lost profits, $282,871.71 for preparatory expenses,

$13,837.50 for fees and other costs, prejudgment interest, costs of litigation and

attorneys’ fees.

56

It appears that plaintiff’s original complaint used a different currency conversion rate

than the currency conversion rate stipulated to by the parties.

37

BPA/Contract Maximum 2005 Claim & 2007 Claim 2011 Claim Original Additional

Potential Price Settlement Offer Complaint Complaints

Camp BPA Limit: Claimed $7,000,000.00 $922,851.84 $7,000,000.00 1st Amended:

Package $10,000,000.00 Entitlement: $2,682,160.86

$10,000,000.0057

Call Limit: 2d Amended:

$7,000,000.00 Settlement Offer: $3,463,287.57

$4,544,339.84

Call 0001 3d Amended:

Price: $922,851.84

$1,447,457.22

Latrine Total: Claimed $6,000,000.00 N/A $6,000,000.00 1st Amended:

$5,057,895.14 Entitlement: 1,572,967.611

$5,058,428.59 KD

Base Period:

$613,142.86 Settlement Offer: 2d Amended:

$4,558,428.60 $2,830,662.20

Dumpster Total: Claimed $1,800,000.00 N/A $1,800,000.00 1st Amended:

$1,457,619.72 Entitlement: $1,946,721.78

$1,110,621.7258

Base Period: 2d Amended:

$346,998.00 Settlement Offer: $780,031.63

$999,994.67

Bottled Water BPA Limit: 298,435 KD N/A N/A 298,435 KD 1st Amended:

$10,000,000.00 calculated at 298,435 KD

$1,035,802.23

Call Limit: 2d Amended:

$7,000,000.00 298,435 KD

calculated at

$1,065,711.39

57

Mr. Peters testified that he did not remember if the 2005 Claim and Settlement Offer

for the camp package BPA claimed entitlement to $10,000,000.00, but later testified that

the 2005 Claim and Settlement Offer did not claim entitlement to $10,000,000.00,

guessing it claimed entitlement to $5,000,000.00. The only number that is referenced in

the Claim and Settlement Offer other than the amount of plaintiff’s settlement proposal

is the $10,000,000.00 figure. In this column, the court refers to the “claimed” amount as

the amount to which plaintiff stated it was entitled in the claim, other than the settlement

offer.

58

According to Mr. Peters, only the option periods were added to the dumpster contract

Claim and Settlement Offer, without the base period. The dumpster contract Claim and

Settlement Offer, however, asserted entitlement to the total contract price. Including the

base period, the amount to which plaintiff appeared to assert it was entitled was

$1,457,619.72.

38

The 2005 Claim and Settlement Offers for the camp package BPA and latrine

and dumpster contracts included settlement offers lower than the total amount to which

Gulf Group believed it was entitled, which, notwithstanding an apparent omission of the

base period price in the dumpster Claim and Settlement Offer, the Claim and Settlement

Offers included the price of the base period and all option periods for the latrine and

dumpster contracts. Gulf Group’s camp package BPA, latrine, and dumpster Claim and

Settlement Offers described the total potential awards as “contract costs...added to the

anticipated contract profit.”59 Saud Al Tawash indicated that he believed Gulf Group

would have performed the option periods on the latrine contract because Camp Arifjan

was permanent and there would be a need beyond the base period for Gulf Group’s

services. Saud Al Tawash further testified that Maj. Davis informed Gulf Group that, if

they performed well on the latrine contract, they would be completing the full potential

period of the contract, including all of the option periods. Saud Al Tawash also

explained that he expected to perform the option periods of the latrine contract because

the capital expenditures necessary to acquire the materials and equipment needed to

perform the contract would not have been covered by the base period alone.60

According to Saud Al Tawash, he also understood the period of performance on the

dumpster contract to be for three years because Maj. Davis told him Camp Arifjan was a

permanent camp and that, if Gulf Group performed well, then they would have the

contract for the full three-year term, inclusive of the base period and all of the option

periods. When asked whether Gulf Group understood it was not guaranteed the option

periods, Saud Al Tawash explained on cross examination:

A: No, we didn’t understand if we were guaranteed -- to be given

guaranteed or not guaranteed? We did not understand that.

Q: What was Gulf Group’s understanding with regard to the option

period?

A: We had no understanding. We understood that this contract starts

from this day and finishes from this day. That was our understanding.

59

At times, plaintiff appears to indicate in its post-trial briefs that it did not separately

seek costs in its submissions to the contracting officer. Plaintiff’s 2005 Claim and

Settlement Offers for the camp package BPA, the latrine contract, and the dumpster

contract, however, stated that “[t]his offer includes reimbursement for both costs and

lost profits” and that “Gulf Enterprises should also be compensated fully for the costs

incurred in furtherance of the contract.” In both its 2005 submissions to the contracting

officer and the 2006 complaints filed in this court, therefore, plaintiff sought lost profits

and costs as a result of defendant’s alleged breach of the camp package BPA call, the

latrine contract, and the dumpster contract.

60

As discussed below, plaintiff’s lost profits calculation indicates that plaintiff’s costs

would have exceeded its profits for the base period of the dumpster contract, rather

than the latrine contract.

39

Q: When you say start this date and ends this date, you’re talking about

the base period?

A: Talking about the contract overall period which is from A through Z, the

duration of the contract itself.

Q: Are you saying you didn’t understand that there were option periods in

the contract?

A: I believed that the understanding we had at that time was that the

contract is the contract in a normal sense, the base period. We did not

understand this options that reflect in like a contract within a contract.

We did not understand that. Now we are understanding that this is quite

different from our understanding from that time. In Kuwait most waste

management contracts are for three years, municipal. So this contract

being two to three years, we thought that this is the time that we have to

perform the contract.

An August 20, 2004 Memorandum titled, “Determination and Findings Use of

Options,” signed by Maj. Davis, stated:

Upon the basis of the following findings and determinations which I hereby

make, the Dumpster Service contract requires the use of options as

defined by FAR 17.202, Use of Options.... It is in the Government’s best

interest to include these options. There is an anticipated need for the

service beyond the contract period and the government risks potential

costs of disrupted support in re-competing the contract.... There is a

reasonable likelihood that the options will be exercised.

The memorandum was not circulated to contractors, including Gulf Group. At trial,

Saud Al Tawash did not remember if he had seen the document before, but stated that

it confirmed his understanding of what Maj. Davis had told him at the time of contract

award.

Gulf Group’s first attorney, Ferdinand Peters, testified that he believed the Army

owed Gulf Group for the option periods and included them in the 2005 Claim and

Settlement Offers. Attorney Peters testified that his legal research indicated that plaintiff

was entitled to lost profits, and that he believed there was a sound basis for claiming

lost profits for both the base periods and the option periods, without deducting expenses

for the base period or the option periods. Attorney Peters further stated that the lost

profits were the total contract price.61 Terry Carlson, an expert in government contract

61

Under cross-examination, government counsel asked Mr. Peters, “you testified earlier

that you got the amount of lost profits by summing up the values that appeared in all

option periods; is that right?” Mr. Peters replied: “Right. It is clearly stated. We even

chose the lines from the government contracts where they came from.”

40

accounting hired by Gulf Group to determine lost profit calculations on Gulf Group’s

camp package BPA, latrine, and dumpster claims, also included the base period and all

options periods when determining lost profits on the camp package BPA call, latrine

contract, and dumpster contract. Mr. Carlson testified that his calculations were

reasonable, accurate, and correct based on a good faith effort to account for every

single item of costs, and that option periods were reasonably included in the 2005 Claim

and Settlement Offers.

Although Saud Al Tawash and Attorney Peters testified that the 2005 Claim and

Settlement Offers were based on the base period and option periods, included in each

Claim and Settlement Offer was an expense table, which Saud Al Tawash and Mr.

Peters testified was only incorporated to show that Gulf Group was prepared to perform,

and not to claim that Gulf Group had actually incurred all of the expenses listed. Mr.

Peters testified that he could not calculate projected costs and, thus, did not include the

expense tables to suggest such costs as a basis for the amounts claimed, because

there had not been any performance. Attorney Peters also testified that he “didn’t put

any costs in because I didn’t have any cost data.... And I felt that if the government was

using bad faith to terminate these agreements, then they should pay everything, and

that was a legitimate basis for the claim.”

In the 2005 camp package BPA Claim and Settlement Offer, Gulf Group listed in

the expense table, in Kuwaiti dinars, 12,200.000 KD for sixty-one dumpsters,

28,000.000 KD for two vacuum tankers, 22,945.000 KD for a tower light system,

241,962.000 KD for tents, 3,490.000 KD for electric generators, 22,120.000 KD for one

hundred fifty-eight latrines, and 15,000.000 KD for a potable water truck. The 2005

latrine Claim and Settlement Offer expense table listed as expenses, in Kuwaiti dinars,

14,437.359 KD for one hundred fifty-nine drop tanks, 36,984.985 KD for shipment

expenses, 11,478.000 KD for equipment leasing and services, 3,805.000 KD for truck

rentals, 31,300.000 KD for agreements for specialized labor and equipment,

19,195.126 KD for installation, management, and consulting, 1,014.500 KD for

miscellaneous costs, and 153,900.00 in Euros for six hundred drop tanks.62 The 2005

dumpster Claim and Settlement Offer’s expense table included, in Kuwaiti dinars,

127,740.000 KD for a dumpster container purchase, 72,000.000 KD for subcontracting

papers, invoices, and receipts for dumpster service, and 761.200 KD in miscellaneous

payments. Also included in each Claim and Settlement Offer was a copy of purchase

orders and invoices for some, but not all, of the items listed in each expense table.

Of the items listed in the expense tables, Gulf Group subsequently maintained

that it purchased one tower light, one tent, one generator, and fifty dumpsters for the

camp package BPA call, which it reflected in a 2011 notice to the court. Regarding the

2005 camp package BPA Claim and Settlement Offer, Saud Al Tawash testified that the

Army would have understood Gulf Group was not submitting the expense table as a

basis for the amounts listed in the Claim and Settlement Offer because “[t]here was [sic]

no receipt vouchers, no checks, no wire transfers for the PO’s [Purchase Order’s] that

62

The claim lists a total of 171,044.970 KD, which purportedly includes the 153,900.00

Euro expense.

41

have been not purchased.” The contract for the latrines required only six hundred

latrines, and Saud Al Tawash testified that the seven hundred fifty-nine latrines listed in

the 2005 latrine Claim and Settlement Offer’s expense table was a mistake made by

Gulf Group’s accounting department. Gulf Group eventually revised its latrine Claim

and Settlement Offer to reflect the purchase of only four hundred latrines. Saud Al

Tawash explained that Gulf Group had taken mitigation efforts to sell many of the

latrines, reducing its actual costs from the costs shown in the 2005 expense table.

When questioned about the latrine Claim and Settlement Offer, Mr. Peters

acknowledged that the terminology he had used was “a little bit misleading.” Mr. Peters

stated that he understood at the time that Gulf Group had obligated itself to buy the

items listed in the expense table, not that Gulf Group had actually made the purchases.

Mr. Peters stated, however, that he did not intend for the expense tables to be

considered a basis for the amount submitted in the latrine Claim and Settlement Offer.

Mr. Peters also testified, “I admit this is pretty aggressive in what we are going for here,

but I had a bad faith situation, and a bad faith termination. So there was no reason not

be aggressive with the military.” Mr. Peters indicated that he expected the latrine Claim

and Settlement Offer would be a starting point for settlement negotiations with the Army.

Gulf Group also revised its claim for the dumpster contract, reducing the contract

preparatory expenses to 59,927.871 KD. The 2005 expense table for the dumpster

Claim and Settlement Offer showed expenses of 200,501.220 KD.

When asked why the 2005 Claim and Settlement Offers on the camp package

BPA and latrine and dumpster contracts were revised in the 2007 revised claims and in

the complaints filed in this court, Saud Al Tawash testified that he relied on the advice of

both attorneys Gulf Group hired to assist Gulf Group in putting together submissions for

the contracting officer and the court. He stated that the complaints were “revised

because we saw errors in the first claim, in the initial claim, and we seeked [sic] help

from a U.S. CPA [Certified Public Accountant], who helped us determine what would be

the best way to -- the best method and the acceptable method by the U.S. government

standards to file a revised claim.” Saud Al Tawash stated that Gulf Group believed

“[w]e are entitled to what we are [sic] deserved,” but admitted that Gulf Group had made

some mistakes with respect to the various amounts that it claimed.

Although Saud Al Tawash recognized that he had signed the cover pages to the

2005 Claim and Settlement Offers, he indicated that he did not look at the various

submissions in detail until his deposition. He stated that he had trusted Attorney Peters

to prepare the Claim and Settlement Offers properly, and that he glanced at the cover

page of each Claim and Settlement Offer before signing it, but did not understand all of

the technical matters therein about the law and accounting. Saud Al Tawash stated that

he considered it the responsibility of everyone involved with the various submissions to

the contracting officer to ensure that the submissions were accurate. Saud Al Tawash

explained that he followed Attorney Peters’ recommendations because he had never

filed a claim with the United States government before and did not understand the

process. Finally, Saud Al Tawash stated that he believed that the amounts claimed

were correct at the time they were originally presented. Yet, when questioned at trial,

Saud Al Tawash did not know why Gulf Group claimed more than the full price of the

42

latrine and dumpster contracts in its 2007 revised claims. In 2007, Gulf Group claimed

$6,000,000.00 pursuant to the latrine contract, although the latrine contract, including all

of the option periods, was worth only $5,057,895.14. Similarly, the dumpster contract,

including all the option periods, was worth up to $1,457,619.72, but Gulf Group claimed

$1,800,000.00 in 2007.

Regarding Gulf Group’s bottled water BPA demurrage claim, Saud Al Tawash

testified that the 85.000 KD/day demurrage expenses were the result of various costs,

including the fees charged by its trucking company, Expeditors, for each of the 3,511

days of delay, but also other fees related to the delays, such as insurance for the water,

temporary storage, loading and unloading, salaries, vehicles, staging area, and local

transportation charges. The water had to be stored for climate and security reasons

while Gulf Group awaited the next convoy. Saud Al Tawash testified that, although Gulf

Group’s demurrage claim was denied, he believed that the Army had awarded costs for

other contractors’ demurrage expenses. The parties stipulated that, “[s]ometime prior to

December 24, 2004 another contractor supplying bottled water to the US Government in

Iraq, StarCon Ltd., submitted a claim for demurrage expenses incurred from delays of

the convoys,” which was approved by the issuance of a BPA call on December 24,

2004. According to Mr. Cockerham, the Army also awarded demurrage to a company

identified as IAP. Mr. Cockerham testified that there were, on average, two demurrage

claims submitted each week around April 2005, and that, in total, hundreds of

demurrage claims were submitted. Mr. Cockerham recalled the government policy on

demurrage being that the Army would pay if a truck was held seven days past the

required time given for delivery, including reimbursement for offloading, storage,

reloading, and delays at the government’s port.

Certifications

Camp Package BPA

With respect to the camp package BPA, Saud Al Tawash signed the October 10,

2005 cover letter to plaintiff’s Claim and Settlement Offer. Mr. Peters certified the Claim

and Settlement Offer. Plaintiff included an unsigned copy of Standard Form 1436 in its

Claim and Settlement Offer. Standard Form 1436, which is titled “Settlement Proposal

(Total Cost Basis),” contains the following statement under the heading

“CERTIFICATE:”

(a) AS TO THE CONTRACTOR’S OWN CHARGES. The proposed

settlement (exclusive of charges set forth in Item 14) and supporting

schedules and explanations have been prepared from the books of

account and records of the Contractor in accordance with recognized

commercial accounting practices; they include only those charges

allocable to the terminated portion of this contract; they have been

prepared with knowledge that they will, or may, be used directly or

indirectly as the basis of settlement of a termination settlement proposal or

43

claim against an agency of the United States; and the charges as stated

are fair and reasonable.

48 C.F.R. 53.301–1436 (2005) (emphasis in original). The signature block of the form

contains the phrase “BY (Signature of authorized official).” Id. (emphasis in original).

Both the 2005 camp package BPA Claim and Settlement Offer and the Standard Form

1436 included in the submission sought $4,544,399.84. Ms. Hands signed the cover

letter and certification to plaintiff’s 2007 revised camp package BPA claim.63 Plaintiff’s

2007 revised claim requested $7,000,000.00. Although plaintiff attached its 2005 Claim

and Settlement Offer to its 2007 revised claim, plaintiff inexplicably replaced the

unsigned copy of Standard Form 1436 included in its 2005 camp package BPA Claim

and Settlement Offer with a signed copy of the Standard Form 1436 included in

plaintiff’s 2005 dumpster Claim and Settlement Offer. Plaintiff submitted a second

revised camp package BPA claim to Maj. Everett on April 12, 2011. Plaintiff’s second

revised claim sought $922,851.84 and was similarly certified by Ms. Hands.

Latrine Contract

With respect to the latrine contract, Saud Al Tawash signed the October 17, 2005

cover letter to the Claim and Settlement Offer. Attorney Peters certified the 2005 Claim

and Settlement Offer. Saud Al Tawash’s signature, dated October 17, 2004,64 appears

63

The language that Ms. Hands used to certify plaintiff’s 2007 revised claim deviates

from the language set forth in the Contract Disputes Act and the FAR implementing

regulations. Ms. Hands’ certification states:

I hereby certify that the claim herein is made in good faith and that the

supporting data submitted is accurate and complete to the best of my

knowledge and belief, that the amount requested herein accurately

reflects the contract adjustment for which the contractor believes the US

Government is liable, and that I am duly authorized to certify the claim on

behalf of the contractor, Gulf Group General Enterprises, Co. W.L.L. as its

attorney in fact.

The Contract Disputes Act and the FAR implementing regulations prescribe the

following language:

I certify that the claim is made in good faith; that the supporting data are

accurate and complete to the best of my knowledge and belief; that the

amount requested accurately reflects the contract adjustment for which

the contractor believes the Government is liable; and that I am duly

authorized to certify the claim on behalf of the contractor.

See 48 C.F.R. § 33.207 (2005).

64

Saud Al Tawash appears to have erroneously indicated that he signed the Standard

Form included in plaintiff’s latrine Claim and Settlement Offer in 2004, rather than 2005.

44

on the Standard Form 1436 included in the Claim and Settlement Offer. Both the Claim

and Settlement Offer and the Standard Form 1436 included in the Claim and Settlement

Offer seek $4,558,428.60. Ms. Hands signed the cover letter and certification to

plaintiff’s 2007 revised latrine claim.65 Plaintiff’s 2007 revised claim requests

$6,000,000.00. The Standard Form 1436 included with plaintiff’s 2007 revised claim is

identical to the copy of the Standard Form 1436 included in plaintiff’s 2005 Claim and

Settlement Offer.

Dumpster Contract

With respect to the dumpster contract, Saud Al Tawash signed the October 20,

2005 cover letter to the Claim and Settlement Offer. Attorney Peters certified the 2005

Claim and Settlement Offer. The stand-alone copies of plaintiff’s Claim and Settlement

Offer that appear in the record include an unsigned copy of Standard Form 1436. Both

the Claim and Settlement Offer and the Standard Form 1436 included in the Claim and

Settlement Offer sought $999,994.67. Ms. Hands signed the cover letter and

certification to plaintiff’s 2007 revised dumpster claim.66 Plaintiff’s 2007 revised claim

requested $1,800,000.00. The Standard Form 1436 that plaintiff included in its 2007

revised claim appears to be a copy of the Standard Form 1436 included in plaintiff’s

2005 Claim and Settlement Offer, except that the copy included in plaintiff’s 2007

revised claim contains Saud Al Tawash’s signature, dated October 20, 2004.67

Bottled Water BPA

With respect to the bottled water BPA, Saud Al Tawash signed the December 1,

2005 cover letter to the Claim and Settlement Offer. Attorney Peters certified plaintiff’s

2005 Claim and Settlement Offer.68 Saud Al Tawash’s signature, dated December 1,

2005, appears on the Standard Form 1436 included in plaintiff’s 2005 Claim and

Settlement Offer. Both the 2005 Claim and Settlement Offer and the Standard Form

1436 included in the claim seek 298,435.000 KD. Plaintiff did not submit a revised

bottled water BPA claim.

65

The language that Ms. Hands used to certify plaintiff’s 2007 revised latrine claim

similarly deviates from the language prescribed by the Contract Disputes Act and the

FAR implementing regulations.

66

The language that Ms. Hands used to certify plaintiff’s 2007 revised dumpster claim

similarly deviates from the language prescribed by the Contract Disputes Act and the

FAR implementing regulations.

67

Saud Al Tawash appears to have erroneously indicated that he signed the Standard

Form included in plaintiff’s dumpster claim in 2004, rather than 2005.

68

At trial, the parties failed to introduce a signed copy of plaintiff’s 2005 bottled water

BPA Claim and Settlement Offer and the corresponding Standard Form 1436. Plaintiff

included a signed copy of both forms in its original complaint.

45

John Cockerham and Carolyn Blake

John Cockerham and Carolyn Blake each testified in the above-captioned

consolidated cases in San Antonio, Texas.69 When they testified before this court they

were both incarcerated and serving federal, criminal prison sentences. The parties

stipulated that Mr. Cockerham was a member of the Army procurement team in Kuwait

and was introduced to Saud Al Tawash at Saud Al Tawash’s home in Kuwait in 2002.

Saud Al Tawash testified that he first met Mr. Cockerham in 2002 or 2003 in the

“Diwanya”70 at his house. Mr. Cockerham testified that he believes, however, he was

briefly introduced to Saud Al Tawash by a “Mr. Eli or Elias” during one of his earlier

tours of Kuwait at the end of 2002 at a Ramadan “social dinner.” Mr. Cockerham also

testified that he has been to dinner at Saud Al Tawash’s house twice. According to Mr.

Cockerham’s testimony at trial, he thought of, and still thinks of, Saud Al Tawash as a

friend. Saud Al Tawash testified that Mr. Cockerham and Mr. Cockerham’s wife

attended Saud Al Tawash’s wedding on February 4, 2006, in New Orleans, Louisiana.

Mr. Cockerham also testified that he was the only person from the Army contracting

office who attended Saud Al Tawash’s wedding. Saud Al Tawash and Joanne Hands,

Saud Al Tawash’s fiancé at the time, now wife, also visited Mr. Cockerham at his home

in San Antonio, Texas, in the spring of 2005 to congratulate Mr. Cockerham on the birth

of his daughter, and brought toys for Mr. Cockerham’s children. Joanne Hands testified

that she remembers Saud Al Tawash saying “a friend or something had a baby,” and

that she first met Mr. Cockerham at this visit to his house where they had conversations

like one would have with a friend.

Saud Al Tawash described Mr. Cockerham as an “older acquaintance” with

whom he had a “professional relationship.” Saud Al Tawash stated that the only social

activity he engaged in with Mr. Cockerham in September or October of 2004 was in the

“Diwanya.” Saud Al Tawash also testified to hosting a change-over ceremony for Mr.

Cockerham at the end of 2005, in which Mr. Cockerham received a small wooden

souvenir boat, because Mr. Cockerham was leaving Kuwait. Saud Al Tawash testified

that a number of Army contracting officers and Carolyn Blake, Mr. Cockerham’s sister,

were in attendance. According to Saud Al Tawash, “[i]t’s a common practice in Kuwait

when a new group -- an old group leaves and a new group comes in that we have these

change-over ceremonies.” According to Mr. Cockerham, he believes the last time he

saw Saud Al Tawash was for “a quick lunch” in Austin, Texas, in March or April of 2006.

69

Throughout the testimony of Mr. Cockerham, and especially Ms. Blake, there were

many inconsistencies and numerous memory lapses. Unfortunately, the same was true

for some of the government witnesses, such as Col. Miller and Col. Hess. Although

there were some inconsistencies in Saud Al Tawash’s testimony, he struck the court as

sincerely trying accurately to recall the events of 2004 and 2005.

70

Saud Al Tawash testified that a “Diwanya” (which he spelled out for the court reporter)

is an “open door,” and “you could receive strangers coming to a Diwanya because

usually Diwanya is not inside the house, the main quarters of houses.”

46

In 2004, Saud Al Tawash met Carolyn Blake, Mr. Cockerham’s sister, in Kuwait.

According to Ms. Blake, she went to Kuwait after she had contacted her sister-in-law,

Mr. Cockerham’s wife, to ask Mr. Cockerham if they were hiring females in Kuwait. Mr.

Cockerham recommended that Ms. Blake visit Kuwait to see if the culture was

amenable to her. Ms. Blake’s first trip to Kuwait was from August 16, 2004 through

August 22, 2004. According to Ms. Blake, Mr. Cockerham picked her up at the airport

with Diaa Salem, who was identified as the owner of Jasmine, and Diaa Salem gave her

an amount of Kuwaiti dinars, but the testimony is unclear as to whether the amount was

500.000 KD or an amount equal to $500.00. Ms. Blake testified that she was under the

impression that Mr. Cockerham and Diaa Salem talked about her working for Saud Al

Tawash. Ms. Blake also testified that during this visit, Mr. Cockerham was trying to

arrange an interview at Camp Arifjan for a clerical position.

The testimony is not clear as to when Saud Al Tawash met Ms. Blake for the first

time and if Saud Al Tawash knew she was Mr. Cockerham’s sister at the time, although

the parties stipulated that Saud Al Tawash met Ms. Blake for the first time in Kuwait,

when Mr. Cockerham introduced her as his sister and mentioned that she was

searching for a job. According to Ms. Blake, she believed that when she first arrived in

Kuwait, Saud Al Tawash knew that she and Mr. Cockerham “were family.” Ms. Blake

testified that her first introduction to Saud Al Tawash occurred at the Crowne Plaza

hotel where she was staying. Ms. Blake testified that she had never heard of Saud Al

Tawash, Gulf Telecom, Gulf Group, or Palm Springs71 before arriving in Kuwait on

August 16, 2004. Mr. Cockerham testified that he was not aware that Saud Al Tawash

was interested in hiring expatriates prior to Ms. Blake’s move to Kuwait, and that he

believes Saud Al Tawash first met Ms. Blake at Camp Doha, Kuwait, when she was

given a temporary badge. According to Saud Al Tawash, Mr. Cockerham referred to

Ms. Blake as “Sis” when they were first introduced, but Saud Al Tawash indicated he did

not realize that Ms. Blake was Mr. Cockerham’s sister until she later returned to Kuwait

for work.

Ms. Blake testified that she told Saud Al Tawash during her first visit to Kuwait

that she wanted to come back to Kuwait to work there. According to Saud Al Tawash,

after Ms. Blake returned to the United States, Saud Al Tawash offered her a job as a

“marketing consultant” for Gulf Telecom call centers, which Ms. Blake accepted. Ms.

Blake testified that when she returned to Kuwait:

I believe it was Mr. Al Tawash or his brother Michel [sic]. I think they were

trying to help me find employment, so John [Cockerham] got them to help

me, more or less like, to pay for an apartment or something like that until I

could find a job and then after not being able to find a job, then, Saud

talked more about well he would just try to hire me and find a position or

make a position for me and he would just try to set it up as me being a

consultant.

71

According to the parties’ joint stipulation of facts, “[i]n July 2005, Mr. [Saud] Al

Tawash became the sole owner of Palm Springs General Trading and Contracting

Establishment (‘Palm Springs’).”

47

According to Saud Al Tawash, the job offer to Ms. Blake was an offer with the

same benefits as those given to other Americans working for Gulf Telecom. Saud Al

Tawash testified that these benefits included “housing, travel allowance or tickets,

tuition and vehicle, phone.” Saud Al Tawash gave the following explanation of Ms.

Blake’s qualifications: “She’s an American. She understands the culture very well of the

military. She understands the American culture. She knows the holidays. She’s

somebody who has experience with that environment,” and “[s]he’s American citizen

and clients are Americans. She’s ex-military; she has retail experience; she has

experience in security as a guard and she has the personality to -- the attitude, for this

particular position. She’s educated. She has a degree. She has also a -- quite a good

knowledge of the different demographics and segments of the military.” Immediately

prior to accepting Gulf Telecom’s job offer, Ms. Blake was employed in the United

States as both an assistant school teacher and a shopping mall security guard. Ms.

Blake testified that she also had worked as a clerk in a gas station. Mr. Cockerham

testified that Saud Al Tawash hired Ms. Blake as an “English speaking liaison” and to do

“some office work and research work” and that both Ms. Blake and Saud Al Tawash told

him that Ms. Blake was doing administrative paperwork for Saud Al Tawash. Mr.

Cockerham also indicated that Ms. Blake had military training and experience, which is

listed on the résumé that Ms. Blake prepared in 2006 or 2007, although not on the

résumé that appears to have been prepared prior to working for Gulf Telecom.

According to Saud Al Tawash, Ms. Blake’s position had been open to others and

he had interviewed other individuals for the job, but he did not remember the names of

the other candidates. Saud Al Tawash testified that he did not believe it was a conflict

of interest to hire Ms. Blake “because she was not working on any contracts then or

after.” Saud Al Tawash testified that he did not tell Mr. Cockerham that he had hired

Ms. Blake, although Ms. Blake testified that Mr. Cockerham knew that the Al Tawash

family was trying to help her get a job. Mr. Cockerham testified that Ms. Blake told him

that she had worked out temporary employment with Saud Al Tawash, and that Gulf

Telecom paid her a salary, but that he was not then aware of Ms. Blake’s employment

conditions. Mr. Cockerham testified that he did not tell anybody in the Army that Saud

Al Tawash had hired his sister.

Ms. Blake testified that after she accepted the job, she was met at the airport in

Kuwait on August 27, 2004 by Mr. Cockerham, Maj. Davis, Saud Al Tawash, and Diaa

Salem. Subsequently, Megbel Al Tawash helped Ms. Blake locate housing in Kuwait.

Megbel Al Tawash cashed a 1,200.000 KD check for her, and paid Ms. Blake that

amount in cash every month as her salary, which he delivered to her in envelopes at her

apartment. Ms. Blake was paid twice as much in salary as Megbel Al Tawash. She had

asked for $4,000.00 or more per month in wages. Saud Al Tawash testified that Ms.

Blake was graded higher and, therefore, entitled to a higher wage than the local staff

because she knew the American culture and the English language, which presented a

barrier for local workers when communicating with the Army. Ms. Blake testified that

she believed her salary could have been paid to her in cash or “they can send it to your

account.” Saud Al Tawash testified that Ms. Blake was paid in cash rather than wire

transfers because “[s]he didn’t ask it to be wired to the United States, she asked to be

48

paid locally in Kuwait.” Saud Al Tawash further explained that Ms. Blake was paid in

cash because she could not obtain a local bank account and that cash payments were a

common practice in Kuwait. Mr. Wilson testified that he did not have a Kuwaiti bank

account when he first arrived in Kuwait so Gulf Group wired his salary to his United

States account, but he was not paid in cash. Megbel Al Tawash testified that he did not

remember paying cash to any other Gulf Telecom employee, although he believes

Shane Mi, a Gulf Telecom employee, also initially was paid in cash. Mr. Cockerham

testified that he never received any of Ms. Blake’s salary and did not know how much

money she earned.

The parties stipulated that, “[w]hile employed in Kuwait, Ms. Blake was given the

task of calling members of the Kuwaiti public to ask if they were interested in buying

water purification systems by cold-calling from a telephone book,” but she testified that

she failed to sell a single system. The parties also stipulated that Ms. Blake did not

speak Arabic. According to Saud Al Tawash, the call centers at which Ms. Blake was

supposed to work were on military bases, and she never went to them because she did

not have the requisite paperwork to obtain a civil identification. Saud Al Tawash

testified at trial that, although he realized Ms. Blake could not work in the call centers in

late fall 2004, he “could not cancel her employment because [he] had a close contract

with her.” Saud Al Tawash explained that a close contract is “when you enter into a

contract with your employer and employee regarding the duration period that you’re

agreed on.” Saud Al Tawash stated that, on such a contract, “I cannot fire her at that

time because she had her kids in school and it wasn’t the right thing to do. And I was

obligated by law because of a fixed contract I had to pay her anyway because of the

remainder of her contract.” According to Saud Al Tawash, under Kuwaiti labor law, he

was obligated to pay Ms. Blake for the full, one-year-term of her contract, including

indemnity, salary, and benefits, starting in August 2004, even if he fired her. In

response to a question how long did she have use of a company vehicle, Ms. Blake

stated, “I think it was December ’05, no, December ’04 until June ’07.” It does not

appear, however, that there is other testimony regarding Ms. Bla

This text is long and has been trimmed here. Open the source document for the complete record.