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EXHIBIT 10.5 - NON DE-DEBARMENT AGREEMENT
BETWEEN ORBIT/FR, INC.
AND
THE DEPARTMENT OF THE NAVY
1. This Agreement is entered into between the Department of the Navy, on behalf
of the Department of Defense, and Orbit/FR, Inc. (hereinafter "Orbit"). The sole
purpose of this Agreement is to evince that Orbit is presently responsible to
contract with the Federal Government by insuring that Orbit has and will
continue a program of acceptable contracting practices and procedures, and by
establishing and implementing a program of compliance reviews, audits, and
reports. For purpose of this Agreement, Orbit shall mean Orbit as a body
corporate, its, successors, subsidiaries, and/or divisions and all directors,
officers, employees and/or consultants of any of the aforesaid entities.
2. Pursuant to a plea Agreement filed in the United States District Court for
the Eastern District of Pennsylvania, on November 10, 1999, Orbit entered a plea
of guilty to counts one and two of a criminal information charging it with
violating the Arms Export Control Act, 22 U.S.C. Section 2778(b)(2) and (c). The
information and plea Agreement are attached to this Agreement as Annex I. By
presentations beginning on September 2, 1999, Orbit has presented to the Navy
information demonstrating its present responsibility, notwithstanding the
conviction, including cooperation with investigators, changes in corporate
management, and establishment of compliance programs and procedures since the
time of the underlying conduct. The Navy has determined under the authority of
FAR 9.406 that the terms and conditions of this Agreement provide adequate
assurances that Orbit's future dealings with the Government will be conducted
with a high degree of honesty and integrity, and that suspension or debarment of
Orbit is not necessary to protect the Government's interest.
3. This Agreement affects only those causes for debarment arising from the facts
and circumstances referred to in Annex I. Except as provided in paragraph 16, or
as otherwise authorized in writing by the Debarring Official, or an appointee
thereof (hereinafter "the Navy Debarring Authority"), this Agreement shall not
be used for any purpose with regard to any criminal, civil, or administrative
charge, claim, or action by or against Orbit related to or arising out of any
criminal or civil investigation conducted by any component of the Department of
Justice or the Department of Defense.
4. By this Agreement, Orbit recognizes its corporate responsibility to ensure
that Orbit fully complies with all federal procurement laws and regulations when
contracting, directly or indirectly, with the United States Government. In this
regard, all aspects of Orbit's corporate and business operations shall be
conducted according to the highest code of corporate ethics, generally
prevailing lawful and honest behavior, and the guidelines set by the letter and
the spirit of this Agreement.
5. To fulfill its corporate responsibilities, Orbit has begun and shall, in
accordance with the Schedule attached hereto as Annex II (hereinafter "the
Schedule"), fully implement a Compliance Program by which Orbit can and will
adhere to lawful and ethical procedures and practices in all areas of and
relating to its provision of goods and services as a Government
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contractor and/or subcontractor. This Compliance Program shall have the
following components:
5.1 A WRITTEN CODE OF ETHICS: Orbit has established a written Code of
Ethics as part of its Employee Handbook, which provides notice to all employees
that the highest standard of business ethics is mandated. A copy of the Code of
Ethics is attached as Annex III.
5.1.1 The Code of Ethics shall be maintained, reviewed on an
annual basis by Orbit's duly appointed legal counsel, and updated as required
for compliance with statutory and/or regulatory changes.
5.1.2 All Orbit directors, officers, employees, and
consultants shall be required to sign a certificate stating that they have read
the Employee Handbook and agree to abide by its provisions.
5.2 COMPLIANCE OFFICER: Orbit has established and shall, for at least
the duration of this Agreement, maintain a position designated as the Compliance
Officer.
5.2.1 The Compliance Officer reports to and is responsible
only to the Board of Directors of Orbit. To facilitate implementation of this
Agreement, the Compliance Officer also reports on a dotted line to the Senior
Corporate Officer.
5.2.2 The identification and qualifications of the current
Compliance Officer are set forth in Annex IV. The signature of the Navy's
Debarring Official on this Agreement shall signify acceptance of the current
Compliance Officer.
5.2.3 Should the current or any subsequently appointed
Compliance Officer leave the position, that fact shall be reported to the Navy
Debarring Authority, in writing, within 10 days of said leaving. A replacement
shall be selected by Orbit and reported to the Navy Debarring Authority within
forty-five calendar days of said leaving. Appointment of a replacement
Compliance Officer shall be subject to approval by the Navy Debarring Authority,
which approval shall be solely within the discretion of the Navy Debarring
Authority, but will not be unreasonably withheld or denied. The Navy agrees to
advise Orbit of the reasons for its denial so that Orbit can address the Navy's
concerns. Should the Navy deny approval of any replacement Compliance Officer,
Orbit shall promptly select another and report its selection to the Navy
Debarring Authority. Failure to comply with the provisions of this paragraph
shall be deemed a material breach of this Agreement.
5.2.4 The Compliance Officer shall assist Orbit in identifying
and reporting violations of its Code of Ethics.
5.2.5 Investigation Reports - The Compliance Officer shall
investigate all instances of suspected misconduct and, at the conclusion of the
investigation, shall report in writing the findings to the Board of Directors
and Senior Corporate Officer for management response. Said management response
shall be in writing and shall be provided to the
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Compliance Officer within thirty days of the receipt by management of the
Compliance Officer's report. If the Compliance Officer finds no merit to
allegations of misconduct, no written management response shall be required.
5.2.5.1 The Compliance Officer's investigation shall
begin within five working days of the receipt of the notice of actual or
suspected misconduct.
5.2.5.2 In addition to the final investigation report
during the course of the investigation, the Compliance Officer shall prepare a
quarterly report to the Board of Directors, chronicling the progress of the
investigation then to date.
5.2.5.3 The Compliance Officer shall provide to the
Navy Debarring Authority copies of all reports of investigations and
management's response within ten working days of when said documents were
created or received by the Compliance Officer. The quarterly report to the Board
of Directors, alternatively, may be included in the Quarterly Report referenced
in paragraph 6 below.
5.2.6 Quarterly Reports - The Compliance Officer shall, within
10 working days after the end of each fiscal quarter, prepare and deliver to the
Navy Debarring Authority a synopsis of each instance of suspected and/or
confirmed misconduct which became known to the Compliance Officer during the
fiscal quarter. This synopsis shall be made without regard to the degree to
which the Compliance Officer has been able, as of the due date of the report, to
investigate the misconduct. This synopsis shall include disclosure of any
remedial action taken to date.
5.3 A HOT LINE: Orbit has established and shall, for at least the
duration of this Agreement, maintain a "hot line" to facilitate the reporting of
misconduct by or within Orbit. The policies and procedures of this component are
fully presented in Annex V. Execution of this Agreement by the Navy Debarring
Official shall evidence approval of this component by the Navy Debarring
Authority.
5.4 A WRITTEN CONTRACT COMPLIANCE MANUAL: Orbit has developed and
implemented an Employee Handbook containing the regulatory standards and
acceptable practices for doing business with the Government and/or Government
prime contractors. These practices and procedures shall be applied to all of
Orbit's business dealings involving Government contracts or subcontracts.
5.4.1 A copy of the Employee Handbook is attached as Annex VI.
5.4.2 Execution of this Agreement by the Navy Debarring
Official shall evidence approval of this component by the Navy Debarring
Authority.
5.4.3 In addition to any other provisions, Orbit's Employee
Handbook includes a requirement that employees comply with Orbit's Export
Control Manual.
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5.5 A WRITTEN AUDIT AND COMPLIANCE REVIEW PROCEDURE: Orbit shall
establish and, for at least the duration of this Agreement, maintain an Audit
and Compliance Review Procedure.
5.5.1 Orbit's Audit and Compliance Review Procedure for export
controls is set forth in the attached Annex VII. Execution of this Agreement by
the Navy Debarring Official shall evidence approval of this component by the
Navy Debarring Authority.
5.5.2 Orbit's Audit and Compliance Review Procedure for
corporate compliance is set forth in Annex VIII. Execution of this Agreement by
the Navy Debarring Official shall evidence approval of this component by the
Navy Debarring Authority.
5.5.3 In addition to any other provision that the corporate
compliance audit and review procedures may have, these procedures shall provide
for yearly audits of each component of this Compliance Program.
5.5.3.1 The audits shall be conducted by the Compliance
Officer in conjunction with the appropriate Orbit management personnel.
5.5.3.2 The annual audits shall begin no earlier than
January 1, and shall be completed no later than March 31 of each calendar year
during the term of this Agreement.
5.5.3.3 A report which describes and discusses the
findings made during the audits shall be part of the Compliance Officer's
Quarterly Report for the quarter during which the audits were conducted.
5.6 EXPORT COMPLIANCE: Orbit has established and implemented an export
compliance procedure (hereinafter "Export Control Manual") that will, to the
greatest extent practicable, preclude repetition of the incidents set forth in
the information and plea Agreement and that meet or exceed the requirements of
all pertinent and applicable professional and/or government mandated standards.
5.6.1 The full version of Orbit's Export Control Manual is set
forth in a separate binder provided to the Navy Debarring Official, which is
incorporated herein by reference.
5.6.2 The signature of the Navy's Debarring Official on this
Agreement shall signify acceptance of Orbit's Export Control Manual.
5.7 RECURRING, CLASSROOM STYLE TRAINING: Orbit shall create and
implement a curriculum of classroom style training designed to familiarize each
of its directors, officers, employees, and consultants with the concepts and
precepts of each component of this Compliance Program. This training shall begin
no earlier than January 1 and shall be completed no later than March 30 of each
calendar year during which this Agreement continues.
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5.7.1 The curriculum to be used for training with regard to
each of the components of the Compliance Program is attached hereto as Annex IX
of this Agreement.
5.7.2 Execution of this Agreement by the Navy Debarring
Official shall evidence approval of this component by the Navy Debarring
Authority.
5.7.3 Training of Orbit's employees on compliance with export
regulations governing the company's business has been conducted by an outside
consultant. A copy of the curriculum is attached as Annex X. Execution of this
Agreement by the Navy Debarring Official shall evidence approval of this
component of Orbit's Compliance Program.
5.7.4 In addition to any other training they may receive, each
director, officer, employee, and/or consultant who misses the training given on
the dates indicated on the Schedule, and any director, officer, employee, and/or
consultant who joins, is hired by, or contracts with Orbit after said training
is completed shall be trained individually within thirty days of their
association with Orbit, by the Compliance Officer. In addition, the Compliance
Officer shall, as part of each Quarterly report, identify each such person,
state the date when the person joined Orbit, and state whether the person has
been trained in accordance with this section.
5.7.5 In addition to any other training, each Orbit director,
officer, employee, and consultant shall be informed of any change to any
component of this Compliance Program, which took place since the last previous
training session.
6. Orbit further agrees to:
6.1 Complete all compliance actions identified by this Agreement on or
before the date stated in the Schedule.
6.2 Orbit's Compliance Officers shall, within ten (10) working days
after the end of each fiscal quarter [March, June, September, and December],
prepare and provide a report to the Navy Debarring Authority, describing Orbit's
implementation of this Agreement. This report may be combined with the
Compliance Officer's Quarterly Report described in subparagraph 5(B)(6).
6.3 The Compliance Officer's report shall include, with respect to the
company, the status of: (1) All instances of disciplinary action for violations
of any law and/or the Code of Ethics; (2) all known, ongoing criminal
investigations; (3) all known qui tam suits; (4) all known or suspected
defective pricing cases; and (5) any other matter which might affect Orbit's
present responsibility status, including but not limited to actual or potential
suspension and/or debarment actions by other Government and quasi-governmental
agencies.
6.4 Allow designated representatives of the Department of Defense to
interview Orbit personnel and to examine Orbit's financial books, records, and
other company documents for the
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purpose of evaluating Orbit's compliance with the terms of this Agreement. Such
materials described above shall be made available by Orbit after reasonable
notice for inspection, audit and/or reproduction, provided, however, the
Department of Defense shall not be entitled to examine documents properly
subject to the attorney-client or attorney work product privileges, nor to copy:
(1) Documents containing technical data or computer software, except in
accordance with government contract data rights provisions, or (2) Documents
containing trade secrets.
6.5 In addition to the reports made pursuant to paragraph 6.B. and C.,
disclose, within 30 calendars days of its alleged occurrence, to the Department
of Defense and to the prime Government customer if such customer is not a DoD
component, all instances in which there are reasonable grounds to believe that
Orbit, its directors, officers, employees, consultants, suppliers and/or
Government personnel have violated Federal laws or regulations relating to U.S.
Government procurements. Further, Orbit shall take immediate corrective measures
to remedy the matter disclosed, and to notify the Department of Defense, and the
prime Government customer, if the matter relates to a non-DoD contract, of the
corrective action taken and Orbit's opinion regarding any impact the matter may
have on the Government.
6.6 Cooperate fully with any investigation by the Department of Justice
or the Department of Defense of which Orbit knows or learns in the future.
6.7 Upon conviction of Orbit for violation of any Federal criminal
statute, take appropriate disciplinary action against all responsible
individuals.
6.8 Upon indictment of, or the entering of a guilty plea or plea of
nolo contendere by any director, officer, employee or consultant of Orbit for
violation of any criminal statute, which violation occurred in connection with
the individuals performance of duties for or on behalf of Orbit, immediately
remove the director, officer, employee or consultant from active status with the
Company relating to any dealings with the U.S. Government.
6.9 Upon unappealed conviction of, or after an unsuccessful appeal by
any current director, officer, employee or consultant of Orbit for violation of
any criminal statute, which violation occurred in connection with the
individuals performance of duties for or on behalf of Orbit, take prompt action
to terminate the employment of such officer, employee or consultant, or as
appropriate to remove such director from the Orbit Board of Directors in
recognition of Title 10, U.S.C. Section 2408.
6.10 Treat all costs associated with the termination, severance and/or
removal of any director, officer, employee or consultant of Orbit under
paragraph I, above, which are incurred subsequent to the execution of this
Agreement; as unallowable for Federal Government Contract purposes.
7. During the term of this Agreement, Orbit shall not knowingly employ, engage
or accept the services of an individual who is listed by a Federal Agency as
debarred, suspended, or
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otherwise ineligible for Federal contracting. Reasonable inquiry shall be made
into the suspension/debarment status of any potential employee or consultant
prior to the offer of employment or engagement of services. Further, Orbit shall
promptly terminate the employment of or contract for services with any
individual who was suspended or debarred as of the effective date of their
association with Orbit. Moreover, Orbit shall immediately remove such individual
from responsibility for or involvement with Government contract matters until
the resolution of any question there might be regarding their suspension or
debarment status as of the time of their association with Orbit.
8. During the term of this Agreement, Orbit shall not knowingly enter into any
subcontract or other business relationship relating to Federal Government
contracts with any individual or business entity (hereinafter "prospective
business associate") listed as debarred, suspended, or otherwise ineligible for
contracting by a Federal Agency (hereinafter "listed contractor") without prior
approval by the Navy Debarring Authority.
8.1 Orbit shall make reasonable inquiry into the listed contractor
status of each prospective business associate.
8.2 Whenever the inquiry required by the preceding paragraph "A"
reveals that the prospective business associate is a listed contractor, Orbit
shall submit a notice to the Navy Debarring Authority in form and content as
specified in FAR 9.405-2(b).
8.3 Orbit shall also give written notice of the prohibition effected by
this paragraph 8 to each prospective business associate at the earliest
practicable date.
8.4 Navy Debarring Authority approval of Orbit's association with any
listed contractor shall be deemed given if notice of disapproval is not received
by Orbit within fifteen (15) business days after receipt by the Navy Debarring
Authority of the notice prescribed in paragraph 8(B).
8.5 Orbit shall notify each prospective business associate that neither
actual nor "deemed" approval of Orbit's association with a listed contractor
shall be grounds for any party to assert that the Navy has found the listed
contractor to be presently responsible to contract with any Agency of the
Federal Government. Orbit shall further notify each prospective business
associate that such approval shall mean only that the protections afforded the
Government by Orbit, as stated in its notice to the Navy Debarring Authority
referred to in paragraph 8(B), have been found sufficient to protect the
interests of the Government.
8.6 If this paragraph 8 or any of its subparts in any way conflicts
with the restrictions and/or requirements of FAR 9.405-2, the latter shall
govern.
9. In addition to those costs stated in paragraphs 6.J and 10, Orbit agrees that
the costs described below shall be unallowable for United States Government
contract purposes and shall not be charged directly or indirectly to any such
contract or subcontract:
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9.1 All costs of performing the remedial actions set forth in this
Agreement accomplished by Orbit subsequent to the execution of this Agreement.
9.2 All costs of legal services whether performed by in-house or
private counsel, administrative and clerical services, services of accountants
and consultants, salaries and wages of employees, officers, and directors,
travel, and any costs directly related to the aforesaid, incurred in the
implementation of and/or continued compliance with the terms of this Agreement.
10. Within thirty days of the anniversary of the effective date of this
Agreement, and each year for the duration of the Agreement, Orbit will remit the
sum of $5,000.00, made payable to the Treasury of the United States, as and for
final payment of the costs of monitoring, reviewing, enforcing, and
administering this Agreement.
11. Except as provided in paragraph 16, the execution of this Agreement by the
Navy in no way waives any criminal, civil, contractual, or administrative remedy
or right that the Government may have for the acts described in the Notice, or
for any other conduct that would give rise to such remedies.
12. Material breach by Orbit of the terms of this Agreement, if not cured to the
reasonable satisfaction of the Navy Debarring Authority within 30 working days,
or as otherwise permitted by the Navy Debarring Authority after receipt by Orbit
of written notice of such breach, shall constitute a cause for debarment subject
to the procedures established by the Federal Acquisition Regulation and any
other applicable statute or regulation.
13. By execution of this Agreement, Orbit releases the United States, its
employees, agents, and instrumentalities, in both official and personal
capacities, of any and all liability arising out of or otherwise related to this
Agreement. Further, Orbit agrees not to file any claim against the United
States, its employees, agents, and instrumentalities, in both official and
personal capacities, in any forum or jurisdiction, with regard to any matter
arising out of or otherwise related to this Agreement.
14. By execution of this Agreement, Orbit avers that any adverse action taken or
to be taken against any Orbit director, officer, employee, consultant, or agent,
with regard to any matter arising out of or related to the facts and
circumstances set forth in the Notice, are the result solely of Orbit's
initiatives and decisions, and are not the result of any action by or on behalf
of the United States, its employees, agents or instrumentalities.
15. Orbit agrees to indemnify the Government against, and hold the Government
harmless from, any and all claims, liabilities, obligations, and causes of
action of whatsoever kind or nature for damages sustained by, or injury to or
death of any person, and for any injury or damage to or destruction of any
property, arising out of or as a result of the facts which form the basis for
this Agreement, even if the Government's liability to any person arises out of
the acts or
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omissions of the Government, its employees, agents, invitees, or representatives
of any other description whatsoever.
16. In recognition of the actions by and covenants of Orbit set forth herein,
the Navy, on behalf of the Department of Defense, will not suspend or debar
Orbit based on the facts and circumstances set forth in Annex I.
17. This Agreement is subject to the Freedom of Information Act and may only be
distributed by the Navy throughout the Executive Branch of the Government and to
other interested parties in accordance with the exemptions to FOIA.
18. Modification to this Agreement may be made but shall have no effect until
the terms of the Modification are expressly incorporated in a writing which has
been executed by both parties. Neither party shall seek or accept the benefit of
a judicial or quasi-judicial order directing the other to execute a writing
which would, if executed, modify this Agreement.
19. For purposes of interpretation of this Agreement or any part hereof by a
court of competent jurisdiction (or any other judicial or quasi-judicial body),
this Agreement shall be deemed to have been drafted equally by all parties
hereto.
20. This Agreement shall become effective on the date of the last signature
hereto and shall continue thereafter for three years, or should Orbit for any
reason cease to be in full compliance with the letter and spirit of this
Agreement, for a period of three years following reestablishment of full
compliance as determined by the Navy Debarring Authority, whichever period is
longest.
21. This Agreement constitutes the entire Agreement between the parties and
supersedes all prior Agreements and understandings, oral or written, with
respect to the subject matter hereof. This Agreement shall inure to the benefit
of, and be binding upon, the parties and their respective successors and
assigns.
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U.S. Navy Debarring Official Xxxxx Xxxxxxxxx
Executive Vice President and
Chief Operating Officer
Orbit/FR, Inc.
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