Pro2Serve Accusing FBP of Improperly Trying to Take Away Work, Employees
Mike Nartker
WC Monitor
4/04/2014
Professional Project Services (Pro2Serve) is accusing Fluor-B&W Portsmouth, LLC, of improperly trying to take away its work at the Portsmouth D&D project—a move Pro2Serve alleges could put its “ongoing viability” at risk. Last week, Pro2Serve filed a lawsuit against FBP in federal court, accusing the Portsmouth D&D contractor of seeking to violate a teaming arrangement and a subcontract, as well as of trying to poach Pro2Serve employees. “If Defendants’ actions are not halted, Pro2Serve will lose the whole of its investment and will lose all revenue yet to be gained with future performance at the [Portsmouth] site,” the suit says. “More importantly, without these employees performing this [statement of work], Pro2Serve will immediately face a substantial and devastating reduction in its revenue stream which will place the ongoing viability of the company at risk.”
Pro2Serve’s suit goes on to state, “Moreover, as a result of the significant revenue loss caused by Defendants’ misconduct, Pro2Serve will have to immediately dismiss numerous corporate staff that generate business for the company—not including the 28 onsite employees that Defendants are attempting to poach. These layoffs will irreparably harm Pro2Serve by preventing it from making up these cuts in revenue by pursuing new business opportunities and will further risk the ongoing viability of the company.” Both Pro2Serve and FBP declined to provide any additional comment on the suit this week.
Pro2Serve Says Fluor Gave Scope Commitments
Pro2Serve’s commitment for work at the Portsmouth D&D project, according to the company’s suit, stretches back to a teaming arrangement reached in 2009 with Fluor Federal Services (FFS) in preparation for the Department of Energy’s procurement for the site D&D contract. Under that agreement, Pro2Serve agreed to provide “its extensive expertise and valuable knowledge” to aid FBP in preparing its bid, and in exchange, if FBP won the contract, it would issue a subcontract to Pro2Serve to perform surveillance, maintenance, infrastructure and D&D support services that was estimated to generate $5-10 million revenue in each year of the 10-year site D&D contract. Pro2Serve also negotiated language in the teaming arrangement that would largely prevent FBP from terminating its subcontract for convenience and that would prevent FBP from soliciting Pro2Serve employees for jobs, as well as the inclusion of a specific statement of work. Pro2Serve’s suit notes, “Generally, large companies (such as FFS) do not make explicit commitments of scope and revenue to their small business team members on these types of procurements. In this case, however, because of the value of Pro2Serve’s expertise in obtaining the contract from the DOE, FFS took the unusual step of making a specific commitment to Pro2Serve’s SOW.”
In March 2011, FBP provided Pro2Serve with an indefinite delivery/indefinite quantity-type subcontract to fulfill the requirements of the teaming arrangement, but according to the suit, Pro2Serve was not assigned its promised statement of work. An arrangement was later reached that had Pro2Serve hire employees that were set to transition from USEC, the previous leaseholder of the Portsmouth site, to FBP and perform the promised statement of work. “FBP provided Pro2Serve with pay rates for each of the transitioning employees. In addition, because FBP required Pro2Serve to offer comparable benefits, Pro2Serve created a new fringe benefits pool applicable to personnel assigned to the FBP Subcontract. In August and September, 2011, FBP and FFS conducted extensive reviews of Pro2Serve’s benefit plan and determined that they were ‘comparable’ as required by FBP’s prime contract,” the suit says.
Questions Over Billing Rates
According to Pro2Serve, FBP’s first attempt to take away its work came in late 2012, when FBP “disavowed” an agreement reached over billing rates. At the same time, FBP “began to approach Pro2Serve staff and direct them to accept positions with FBP staff augmentation subcontractors and/or to accept positions with FBP directly,” the suit says. During a Dec. 20, 2012, meeting, an FBP executive “explained that the underlying issue was what FBP perceived as unreasonably high costs associated with Pro2Serve’s performance,” the suit says, adding, “Specifically, FBP raised concerns regarding the cost of paying Pro2Serve’s salaries and benefits.” Pro2Serve responded by explaining that its costs “were driven by contractual obligations that FBP had placed on it as a result of requirements the DOE had included in the solicitation and prime contract,” the suit says. Pro2Serve and FBP subsequently reopened negotiations on billing rates, and reached a new agreement in late February 2013.
The question of appropriate billing rates came up again, though, in late 2013, when “Pro2Serve management began to hear rumors from its Portsmouth employees that FBP intended to ‘de-scope’ Pro2Serve’s work in order to have Pro2Serve ‘more aligned’ with a revenue range of $5 million to $10 million per year as initially estimated in the TA [teaming arrangement],” the suit says, adding, “In fact, Pro2Serve had actually generated revenues of approximately $34 million over 3 years, or just over $11 million per year, which already was ‘aligned’ with the TA revenue estimates.” Pro2Serve executive Del Baird met on Dec. 20, 2013, with FBP Site Project Director Dennis Carr, during which “Carr stated that DOE was ‘beating them up’ on the Pro2Serve rates, and that ‘Pro2Serve’s rates are way out of line with FBP and the site contractors,’” the suit says, adding, “In response, Mr. Baird again informed Mr. Carr that this was due to the prime contract language requiring comparable pay and benefits.”
FBP Moves to De-Scope Pro2Serve
According to the suit, in early March of this year, Pro2Serve employees were told that their statement of work was being removed, and if they wanted to keep their jobs, they would need to apply with FBP. On March 10, Pro2Serve received a letter stating that FBP intended to de-scope work and “reduce labor support from 28 people associated with performing that work,” the suit says. “Pro2Serve informed FBP that the de-scoping was a violation of the TA, the Subcontract (PO-38), and TR28; that soliciting Pro2Serve employees was a violation of the TA; and that FBP was interfering with the contractual agreement between Pro2Serve and its employees by encouraging the employees to violate the 180-day restrictive employment agreement.”
On March 13, Pro2Serve executives met with FBP officials, during which FBP Deputy Site Project Director Bob Nichols said FBP planned to move forward with de-scoping Pro2Serve, according to the suit. When Pro2Serve executive Baird asked how the company could keep its work, the suit says, “Mr. Nichols held up the cost analysis and said ‘meet these rates.’” Pro2Serve then offered “an alternative solution that would not impact pay or benefits,” the suit says. Pro2Serve’s proposal would have had the company “manage its SOW (i.e. manage the methods and means of execution), which would permit FBP to give Pro2Serve a budget 20% below its current spend rate. Pro2Serve would assume the risk of performance and figure out how to accomplish the mission within FBP’s budget,” the suit says. “Mr. Nichols rejected this idea as not feasible and stated that FBP would move forward with de-scoping Pro2Serve.”
