CACI sued by subcontractor-turned-direct competitor

Jul 29, 2013, 11:43am EDT Updated: Jul 29, 2013, 12:55pm EDT

FedBiz Talk

CACI sued by subcontractor-turned-direct competitor

                                            CACI International



, Senior Staff Reporter- Washington Business Journal

CACI International Inc. is being sued for terminating a subcontract with a New Jersey company after that company landed a prime position under the same Army program, making it a direct competitor.

Engineering Solutions & Products LLC in Eatontown, N.J., claimed in a complaint filed in the U.S. District Court in Alexandria that Arlington-based CACI terminated without cause its subcontract under the Army’s Strategic Services Sourcing program, and immediately began recruiting ESP’s employees. According to the complaint, CACI allegedly decided to sever the partnership after ESP landed its own prime contract under the S3 program with the acquisition of certain assets of USfalcon Inc.

That prime position enabled ESP to bid on task orders directly, making it a direct competitor of CACI. ESP alleged in the complaint that shortly after ESP bid on and won a task order under the S3 program, CACI protested the award and held two career fairs to recruit away ESP employees needed to perform the work.

While an exclusivity agreement between CACI and ESP barred the latter from serving as a subcontractor to other primes, it did not prevent ESP from bidding for work directly with the federal government under the same program, according to the complaint.

CACI did not respond to a request for comment.

ESP is suing CACI for breach of contract and tortious interference, asking that the court order CACI to reinstate the subcontract and prevent CACI from hiring ESP’s employees or interfering with its task orders. ESP is also asking for more than $300,000 in damages, plus legal fees.

ESP also requested a temporary restraining order that would immediately prevent CACI from terminating the contract and recruiting the employees, but the request was denied July 26.

Jill R. Aitoro covers federal contracting.

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