Tyco Electronics M/A-COM takes ‘first step’ toward New York litigation
Tyco Electronics M/A-COM informed the state of New York that it plans to file litigation in response to the state’s decision two weeks ago to terminate its $2 billion contract with the vendor that was supposed to result in the construction of a statewide wireless network (SWN) for first responders.
Attorneys representing Tyco Electronics M/A-COM communicated the plans in correspondence that the state received last week, according to Angela Liotta, spokeswoman for the New York Office for Technology (OFT).
“Our office did receive a notice of intent to file a claim from M/A-COM’s attorney, which is the first step for them to proceed with litigation,” Liotta said during an interview with Urgent Communications.
A legal challenge from the vendor was expected after New York on Jan. 15 terminated the SWN contract and demanded immediate payment of at least $50 million to cover costs the state has incurred during the life of the project. New York severed the relationship after claiming that the initial buildout area of the M/A-COM system—covering Erie County and Chautauqua County—is “unacceptable for public-safety use.”
In its assessment, the state cited results of November tests that revealed M/A-COM fixed only four of the 19 deficiencies cited in the state’s August letter of default to the vendor—findings that the state claims were confirmed by Federal Engineering, the independent validation and verification firm hired by the state.
But M/A-COM’s attorneys dispute this notion in its notice, claiming that the deficiencies cited by the state “were not, in fact, deficiencies at all.” In addition, the deficiencies noted would not be grounds for terminating the contract, because the fact that the SWN was not yet operational means that the deficiencies did not endanger SWN users and did “not threaten the ongoing operations” of the network, according to M/A-COM.
Under the contract, M/A-COM was required to establish a $50 million letter of credit—one that had to be replenished, up to $100 million—that the state could draw from if the contract was terminated with cause, Liotta has said. In its notice, M/A-COM claims that the New York OFT “repeatedly hindered” the vendor’s performance and that the “pretextual purpose” in issuing the August letter of default was to terminate the contract and to get money out of M/A-COM’s letter of credit.
“Indeed, the decision to terminate the master agreement was not based on technical issues related to the buildout of the [initial phase],” M/A-COM states in the notice. “Rather, it was a result of a determination by certain user groups that the system purchased by the state was no longer compatible with their evolving needs, coupled with an erosion in political support for construction of the SWN—based in no small part on the large budget deficits faced by the state.
“In short, the OFT has embarked on the politically expedient course of blaming M/A-COM for purported technical deficiencies in order to excuse OFT and the state from their obligations under the contract.”
M/A-COM also cited multiple occasions in which it claims that state officials defamed the company and damaged its reputation. M/A-COM claims the state’s actions have caused the vendor to suffer damages “well in excess of” $100 million.
