Buchanan Ingersoll pc
ATTORNEYS

June 21, 2006

Mr. Patrick Finegan
Deputy Chief
Aviation Supply Chain Commodities Division Defense Logistics Agency
Defense Contract Supply Service
8000 Jefferson Davis Highway
Richmond, Virginia 23297-5100

Re: Your Letter of May 31, 2006

Dear Mr. Finegan:

Militec received the above-referenced letter from you, advising that the U.S. Army Research, Development, and Engineering Command (ARDEC) has 1) advised the Defense Contract Supply Center Richmond that Militec does not meet the performance requirements of MIL-PRF-32033, an Army specification for general purpose lubricant (GPL), and 2) requested that DSCR remove the Army from the list of identified users of National Stock Numbers (NSNs) 9150-01-378-3058, 9150-01-378-3118, 9150-01-415-9112, 9150-01-415-9111, 9150-01-415-9114. Enclosure 1. Following receipt of this letter, Militec, by the undersigned counsel, spoke with Robert Sebold, Counsel to DSCR, regarding this letter. It appears on information and belief that DSCR will a) remove the Army from the list of users, b) contact other listed users to advise them of the Army's alleged findings of non-compliance of Militec products, c) request that other listed users state whether DSCR should continue listing them as users of these NSNs, and d), if these listed users tell DSCR not to continue to list them, DSCR may discontinue listing the NSNs for Militec products. Militec strongly objects to these actions. Militec demands the DSCR refrain from taking any of the foregoing actions and afford Militec appropriate due process proceedings to address these issues.

I. ARDEC, RDECOM AND DSCR Actions Unfair To Militec.

Militec submits that the ARDEC, its parent agency, the Research, Development and Engineering Command (RDECOM) and DSCR actions have been

Pennsylvania :: New York :: Washington, DC :: Virginia :: Florida :: New Jersey :: Delaware :: Ohio :: California

unfair and improper. Over the past year, Militec sought to obtain fair and proper treatment of its product in procurements and NSN classifications relating to its product. It properly protested DSCR procurements in 2005 through 2006. See, e.g., Enclosure 2 (2a - 2d). It protested DSCR's unfair and improper inclusion of noncomparable products as qualified alternate sources of the NSN products at the direction of ARDEC. It protested DSCR's failure to adequately state the procuring agency's real needs. It protested DSCR's inclusion of inadequate and defective evaluation criteria in the various solicitations, which criteria prevented any meaningful evaluation between offers. And, it protested DSCR changes in the description(s) of the Militec product -- calling it a General Purpose Lubricant and limiting its product uses.

Actions by DSCR and ARDEC/RDECOM in response to these proper protests interfered with Militec's ability to sell its product. DSCR cancelled the procurements questioned by Militec. DSCR then dismissed these valid and timely protests as now "academic." See, e.g., Enclosure 3 (3a and 3b). DSCR advised Militec, through its counsel, that it took these actions because ARDEC/RDECOM refused to participate in a scheduled alternate dispute resolution (ADR). That ADR would have been presided over by Judge Richard Walters, an independent neutral from the Veterans Administration Board of Contract Appeals. Enclosures 3c and 3d. Thus, Militec's first opportunity for a neutral party to take an objective and fair look at the issues it raised was taken away.

In canceling the procurements and neutral ADR, and dismissing the Militec protests, DSCR told Militec, in correspondence and through counsel, that the DSCR, ARDEC, RDECOM components would meet to address lubricant issues and would have a new agency, the Army's Tank Automotive Command (TACOM), evaluate Militec's product MILITEC-1. See, e.g., Enclosure 4. Militec requested an opportunity to participate in these activities because they affected its product classification and treatment. These requests were denied.

DSCR said that pending these closed meetings, DSCR would put a hold on any other procurements under the NSNs to maintain the status quo. Enclosure 3. Militec requested that DSCR review the protest allegations on the merits, notwithstanding the various actions, because the concerns raised were capable of repetition yet might otherwise evade review. DSCR denied this request as well.

Militec thought the DSCR, ARDEC, RDECOM and TACOM actions might result in review of its concerns regarding improper product classifications and improper

Army/DSCR procurements, and lead to development of a fairer specification for equipment and weapons lubrication needs, especially in desert conditions. It was wrong. When RDECOM (TACOM) requested samples of MILITEC-1 to evaluate the product, it advised Militec it would be evaluating the product under MIL-PRF-32033. Militec advised RDECOM (TACOM) that its product would not meet that specification because it was the wrong specification. See, e.g., Enclosure 4. In fact, it is Militec's understanding that this specification has never been included or used in a DSCR procurement of the Militec NSN products. MILITEC-1 is a dry metal conditioning lubricant. The cited specification is for a wet lubricant. MILITEC-1 advised RDECOM/TARDEC/TACOM that the Militec product ought be tested to ascertain its capabilities as a dry lubricant for equipment and weapons, one especially good for use in desert environments. Militec received no response.

II. Current Actions Constitute De Facto Debarment, Retaliation, Waste, Fraud, and Abuse.

Militec submits that the foregoing DSCR and ARDEC actions effectively prevent Militec from selling its product to the Army and other government entities - a de facto debarment. These actions are being taken where Militec has done no wrong and only sought to do right. There is no question but that these actions affect Militec interests AND have been taken without affording Militec any appropriate review and remedies under established federal procurement laws, rules and regulations, or any due process under the Administrative Procedures Act, 5 U.S.C. Section 555(b). See, e.g., Advanced Sys. Tech., Inc. v. U.S., 69 Fed. Cl. 474 (COFC 2006).

DSCR, RDECOM and ARDEC actions also effectively amount to retaliation. The original NSNs were issued for the MILITEC-1 products in response to proven demand for the products in the field and in combat. Enclosure 5. These MILITEC-1 products were issued their own NSNs because they were a metal conditioner and lubricant suitable for weapons and machine shop applications; they were not a CLP as defined by the Army's CLP specification. Enclosures 6, 7, 8 and 9. Award of these NSNs was directed by the Assistant Deputy Under Secretary (Materiel and Distribution Management) in the Office of the Secretary of Defense in June 1995 for weapons and machine shop applications. Enclosure 6. These NSNs were issued by the Defense Logistics Agency in September 1995. Enclosures 7 and 8. Without Militec understanding the importance of ARDEC/RDECOM and/or DSCR actions, these entities over time revised these NSN descriptions on their own, ultimately describing and placing them under the NSN product category "General Purpose Lubricants." These entities also changed the listed uses of the product on their own.

Until now, these entities did not enforce these changes; they procured the products as requested by the NSN and/or commercial product name, MILITEC-1.

Now these entities are for the first time applying Army General Purpose Lubricant specifications to the Militec NSNs for apparently retaliatory purposes: 1) to qualify other companies to sell under these NSNs and 2) to disqualify MILITEC-1 under the NSNs. These actions are being done without regard to the true nature of the MILITEC-1 product. These actions appear to be in retaliation for Militec's protests over the past years regarding the propriety of DSCR and ARDEC procurements, the improper inclusion of unqualified products as alternate sources to Militec's NSNs, and Militec's ongoing issuance of questions and concerns regarding problems with the Army's specifications, testing, and continued use of CLP and GPL product specifications and products. Militec asserts that these Army-designated CLP and GPL specifications and products are unduly restrictive and do not address the Army's real requirements for use of lubricants for equipment and weapons, especially in desert environments.

Further, these actions amount to waste, fraud and abuse. There is a federal interest in ensuring that Army and other government personnel have properly functioning weapons and equipment to pursue national security and other federal security interests. To have the weapons and equipment properly cleaned, lubricated, conditioned, and preserved, the ARDEC, TACOM and RDECOM entities are charged with establishing proper specifications for products for needed activities and qualifying products that meet those specifications. DSCR and other DLA buying entities are charged with procuring compliant products and services. Militec has told DSCR and ARDEC/TACOM/RDECOM about the capabilities of its proprietary product. It has also told them that Army specifications are overly restrictive and/or defective because they do not address either the capabilities of the Militec product or the special problems with use of CLP products on equipment and weapons, especially in desert environments. Militec has provided these entities substantial evidence supporting its assertions. It has sent them an abundance of emails and other communications that were sent to Militec by personnel in the Army and elsewhere, which identify ongoing problems with the CLP specifications and products, effectiveness of the Militec product on weapons and equipment, and, in fact, that that MILITEC-1 works better than CLP on weapons and equipment, especially in desert environments.

Despite raising these issues and facts, Militec has now effectively been told -- The Army has flunked its product under the General Purpose Lubricant specification.

DSCR now appears poised to spread this misleading information as to MILITEC-1 capabilities to Militec's other users. DSCR plans to contact listed users, advise them of the Army's alleged findings and the Army request to be removed as a listed user of the NSNs, and inquire as to whether these other listed users wish to continue their listed user status on the MILITEC-1 NSNs. Thus, DSCR, as a result of what Militec believes are improper Army actions, potentially may cancel Militec's NSNs. Further, because of this, it appears that the Army, DSCR, and potentially others, would continue to procure CLP and GPL products under CLP and GPL specifications that do not do the job. By their actions, these entities have applied inappropriate Army specifications to a proprietary commercial product with special characteristics. They have used them to intentionally eliminate MILITEC-1 from use on their weapons and equipment. These actions appear to have been done with an intent to mislead not just the Army, but DSCR and other users, since, to Militec's knowledge, these specifications have never been used in the Militec NSNs or in procurements of products under the Militec NSNs. These actions place national security interests in jeopardy and perpetuate a fraud -- that only CLP and GPL works and MILITEC-1 does not work -- on the government and government users of these products.

III. These Problems Must Be Addressed By An Objective Independent Tribunal.

Militec is suffering multiple types of harm by virtue of the foregoing actions. Militec has been afforded no opportunity to be heard and no meaningful review and relief for any of these harms. It is Militec's sincere belief that it has been retaliated against because of its attempts to gain due process and raise bona fide concerns. Militec requires that DSCR cease any planned actions and establish an administrative tribunal to afford Militec its long overdue due process and appropriate relief with regard to each of the foregoing actions. Militec requests that this matter be handled and reviewed at a higher level than DSCR and RDECOM, using persons who have not previously been involved in the matters raised and who can objectively review, assess and make determinations regarding the concerns raised. Militec believes it is particularly important that these issues be raised to a level above DSCR and RDECOM since the senior RDECOM personnel have been involved in actions that have harmed Militec interests for a number of years. They clearly do not appear to be objective.¹ And, by virtue of their seniority, these personnel have the capability to assert undue influence over DSCR and other lower level activities and personnel.

________________________

1 The RDECOM/ARDEC, through its Commander, General Nadeau, and others have engaged in a very public course of conduct to besmirch Militec's product and lead other potential purchasers and users of its product to believe that MILITEC-1 does not work and in fact harms equipment and weapons. Enclosure 10 (excerpts of articles).

Please contact the undersigned counsel to advise how these issues will be addressed, how DSCR will act to avoid doing further harm to Militec, and how it will provide Militec its long overdue opportunity to be heard and be treated fairly.

Sincerely,
Susan Warshaw Ebner
Counsel for Militec

Enclosures
cc: Mr. Brad Giordani
Mr. Steven Hilton
Mr. Ronald Perlman

ENCLOSURE 1

DEFENSE LOGISTICS AGENCY
DEFENSE SUPPLY CENTER RICHMOND
8000 JEFFERSON DAVIS HIGHWAY
RICHMOND, VIRGINIA 23297-5100

MAY 31 2006

IN REPLY DSCR-FAE REFER TO

Mr. Brad Giordani
MILITEC, Inc.
11828 Pika Drive
Waldorf, Maryland 20602
Dear Mr. Giordani:

This letter is to inform you that the US Army Research, Development, and Engineering Command has requested that the Defense Supply Center Richmond (DSCR) remove the Army as an identified user of National Stock Numbers (NSN) 9150-01-378-3058, 9150-01-378-3118, 9150-01-415-9112, 9150-01-415-9114, and 9150-01-415-9111. The Army informed DSCR that the products listed under these NSNs do not meet the performance requirements of MIL-PU-32033, the military specification for a general purpose lubricant.

Please feel free to contact me if you have any questions or concerns

Sincerely,


Patrick J. Finegan
Deputy Chief
Aviation Supply Chain Commodities
Division

Enclosure 2

Buchanan Ingersoll pc
ATTORNEYS

November 17, 2005

VIA FACSIMIHLE, E-MAIL AND UPS-OVERNIGHT

Defense Supply Center Richmond
ATTN: Lucretia Gresham, PAH1666 DSCR
Procurement
8000 Jefferson Davis Highway
Richmond, VA 23297-5774

Re: Militec, Incorporated

Request For Clarification, Or In The Alternative, Agency Level Protest Filed
Under E.O. 12979, Under Defense Supply Center Richmond Solicitation No.
SP0406-06-Q-9007

Dear Ms. Gresham:

Militec, Incorporated, 11828 Pika Drive, Waldorf, Maryland 20602, telephone number: (301) 893-3910, facsimile number: (301) 893-8354, email: www.militec-1.com ("Militec"), by the undersigned counsel, submits this pre-award request for clarification or, in the alternative, E.O. 12979 Agency Level Protest per Section L75B of the above-referenced Solicitation and requests a stay of the procurement until the underlying issues are resolved. We are filing this request or in the alternative agency protest because of improprieties in the Solicitation which must be corrected before the procurement may proceed.

Militec is an interested party for purposes of this clarification and agency protest because it is a prospective offeror under the Solicitation. Militec's direct economic interests are being materially adversely affected by the improprieties in the Solicitation. This request for clarification, or in the alternative, agency protest is timely under FAR 33.104 (both for purposes of filing the protest and for triggering a suspension of the procurement under the guidelines of FAR 33.104 because it is being filed prior to the date for submission of quotations in response to the Solicitation).

Pennsylvania New York Washington, DC Florida New Jersey Delaware California

Ms. Lucretia Gresham
November 17, 2005 Page 2

The factual and legal grounds for the request for clarification, or in the alternative agency protest, are as follows:

• Solicitation No. SP0406-06-Q-9007 was issued on November 7, 2005 ("Solicitation" or 'RFQ"). (Exhibit 1.)¹ Quotations in response to the RFQ are due before the close Of business on Nov6Mb 30; 2005. RF Q at p: The Solicitation seeks to procure 1100 boxes of National Stock Number 9150-01-415-9112 (CLIN 001 - 980 boxes, CLIN 002 - 120 boxes), which the Solicitation at page 3, Section B, Item Description states is:

LUBRICATING OIL, GENERAL PURPOSE
MILITEC CORPORATION CAGE OKXEO
P/N M1001/MILITEC-1
XXXXXXXXXXXXX, CAGE 3E1X6
P/N XXXXXXXXXX
UNIT BOX CONTAINS ONE HUNDRED LO FL OZ PLASTIC BOTTLES.
LABEL TO BE AFFIXED TO EACH BOX:
NOT APPROVED BY DOD FOR USE AS A SMALL ARMS LUBRICANT OR AS AN OIL/FUEL ADDITIVE.
ALL ALTERNATE OFFERS MUST BE APPROVED BY US EC PRIOR TO CONTRACT A W.

• The RFQ at Section L, L53F, further states that as a condition for evaluation and acceptance of offers:

... All Offerors shall indicate below, or through an alternative means in an electronic quoting system, whether they are offering an 'exact product,' an 'alternative product' (which includes a 'previously reverse-engineered product'), a 'superceding part number,' or a'previously-approved product;' and shall furnish the data required for whichever is applicable.... Any product offered must be either a product cited in the AID; or be physically, mechanically, electrically, and functionally

On November 9, 2005, DSCR also issued a solicitation to procure 1150 boxes of NSN 9150-01-415-9114, General Purpose Lubricant in 4.0 fluid ounce bottles, a dozen bottles per unit, Solicitation No. SPM-4A6-06-Q-0694. (Exhibit 2). Closing date of that Solicitation was stated as November 18, 2005. Id. That RFQ was apparently cancelled. See page 2 of the Solicitation at https://dibbs2.bsm.dla.mil/Downloads/RFQ/4/SPM4A606Q0694.pdf . If the RFQ was not cancelled, Militec requests clarification or in the alternative submits an agency ADR protest of that solicitation on the same grounds set forth in this letter for Solicitation SPO- 406-06-Q-9007.