Alternative energy company suing UMFK, claims school breached contract

By Julia Bayly, BDN Staff
Posted Dec. 17, 2012, at 11:58 a.m.

FORT KENT, Maine — A lawsuit filed in federal court in Bangor last week is alleging the University of Maine at Fort Kent and the University of Maine System deliberately mislead an alternative energy engineering company that contributed to a successful $2.7 million federal grant application.

Skanden Energy, LLC, which is based in San Diego with an office is Maine, alleges that in August and September of 2010 company engineers worked with UMFK to design a biomass heating plant for the UMFK campus and neighboring Fort Kent Community High School and worked closely with university personnel in writing the $2.7 million USDA grant application to fund the project, according to the documents filed by attorneys with Eaton Peabody of Bangor.

That grant was awarded on Nov. 4, 2011.

In return, according to the suit, UMFK “repeatedly assured [Skanden] that if UMFK was awarded the grant, [UMFK and the University of Maine System] would purchase [Skanden’s] equipment for the project and hire [Skanden] as general contractor and installer of the equipment for the project,” according to the filed documents.

On Dec. 5, the University of Maine System’s office of strategic procurement issued a request for proposals for the Pleasant Street Academy District Heating System with a proposal submission deadline of Jan. 4, 2013.

“Because [UMFK and the University of Maine System] have been awarded the USDA grant and have issued the RFP to solicit bids from others for the purchase and installation of equipment on the project, [they] have breached their contract with [Skanden],” the company is alleging in the court documents.

On Monday morning, UMFK officials denied the allegations, pointing out that all publically funded projects on university campuses must go through the bidding process, regardless of scope and overall costs.

“Skanden apparently believed they had this project, but that is not the case at all,” said John Murphy, UMFK vice president of administration and campus project contact, adding he had not yet received a copy of the court-filed suit. “It has to go through the competitive bidding process.”

A call to Laura Colban, the Skanden contributor to the USDA grant, was not immediately returned Monday morning.

On Monday afternoon Colban’s attorney, Bernard Kubetz of Eaton Peabody in Bangor, said his client, while a competent businesswoman, is not well-versed in the legal technicalities surrounding a project such as the proposed UMFK biomass heat plant.

“No one ever said to her when she offered to do the work to try and get the grant anything but ‘if we are successful in getting the grant we will purchase the equipment for the project from you and hire you,’” Kubetz said. “Based upon that and repeated assurances from senior UMFK representatives, she went about researching the grant, preparing a design for the conversion project and lobbying for the grant once it was submitted.”

Colban has not quantified the time she put into the grant project, Kubetz said, adding it was “considerable,” saying she did the work contingent upon her getting the contract if the grant was successful.

In the court documents, Skanden alleges the idea for applying for funding under the USDA’s high energy cost grant program, was the company’s idea which they then successfully pitched to UMFK officials in August of 2010.

“[Skanden] offered to assist [the] defendants with the design of the district heating plant

and research and prepare the grant proposal if [the] defendants agreed to purchase the

entire system for the project from plaintiff [and the] defendants agreed,” the court documents allege. “UMFK had not considered such a system prior to this conversation.”

Over the next 12 months, Skanden alleges, it designed the biomass heating plant, helped determine what existing buildings would be involved and consulted with UMFK on preparing the grant in addition to drafting a letter of support and lobbying members of Maine’s congressional delegation to support the project, including making a trip to Washington, D.C., to speak with the delegation members in person.

All this, Skanden says in the court documents, was based on continued assurances from UMFK that, if the grant was awarded, the alternative energy company would supply and install the biomass heating system of its own design.

“[Skanden] would not have engaged in designing the district heating plant for the project, researching and preparing the grant proposal and in lobbying intensely for the approval of the grant proposal but for the initial agreement and repeated assurances of [the] defendants that if they were awarded the USDA grant, [the] defendants would purchase the equipment for the [project] from [Skanden] and would hire [Skanden] as general contractor for the project,” according to the filed suit.

“This is a matter of misinterpretation,” UMFK President Wilson Hess said Monday morning. “I believe they have harbored that misinterpretation for a long time and we have tried to clarify it for a very long time.”

UMFK employees working on the grant were told in no uncertain terms that, while Skanden officials could be used as a resource, the biomass project was not a joint project between the university and the alternative energy company, Hess said.

“In conversations I made it clear it is state and federal policy we have to go to the open bid process,” Hess said. “This was stated over and over again.”

However, language in the grant application indicated Skanden would work with local contractors on the project and “anticipated” all equipment purchase and installation would be through that company.

In addition, according to Kubetz, his client received emails and other communication from UMFK officials assuring her she would be given the contract if the grant application was successful.

Colban would still like to undertake the biomass project at UMFK, Kubetz said.

“She wants the agreement that was made [with UMFK] to be honored,” he said. “She is prepared to go forward in good faith.”

At the same time, none of Colban’s design plans for the project was copyrighted or protected by law. Should the university move ahead with the bidding process, it is possible a competing company could use the Skanden designs and plans.

“If that were to happen we would likely seek monetary damages,” Kubetz said.

Among the options being considered by Colban is possibly participating in the bidding process, he added.

There is no current injunction against the RFP process, according to Peggy Markson, University of Maine System public relations manager, who said Monday the system has retained legal counsel from Rudman & Winchell of Bangor.

The system and UMFK have 20 days to respond to the filed suit, Kubetz said, at which time the court will set a trial date likely nine to 12 months from now.

“At any point during that time, my client and I are prepared to sit down to work out the details to go forward,” Kubetz said.

No specific amount is mentioned in its lawsuit, but Skanden seeks “damages as are reasonable in the circumstances of this case, premises, costs, and for such other and further relief as the nature of the case may require.”

Skanden was the lead contractor on the installation of the $858,000 biomass heating system serving the campus’ sports complex and one residence hall that went online in May.

Editor’s note: Kubetz’s law firm represents the Bangor Daily News.

http://bangordailynews.com/2012/12/17/news/aroostook/alternative-energy-company-suing-umfk-claims-school-breached-contract/ printed on August 27, 2014