Gary wrote: "Charles..people seem to forget that IMCI is working off a $12m contract from DARPA that takes them to the end of 2003."
Well, I guess we learn another reason why DARPA deals don't mean very much -- not only because they imply a speculative not-ready-for-prime-time technology (the reason I was not impressed before) but because the Feds can cancel anytime for no given reason.
As they did here.
The government's termination can't mean anything good. It implies that what IMCI has sucks. And the fact IMCI didn't see this coming implies worse.
- Charles
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WARWICK, R.I.--(BUSINESS WIRE)--Oct. 31, 2002--Infinite Group (NASDAQ:IMCI) today provided the following further clarifications regarding the previously announced termination of its primary contract with the Defense Advanced Research Projects Agency (DARPA), Contract # MDA972-02-C-0013.
What happened to the DARPA contract?
On October 30th, 2002, Infinite received a Notice of Termination of Contract #MDA972-02-C-0013. The Contract was terminated for the Government's convenience under the clause entitled Termination, Federal Acquisition Regulation (FAR) 52.249.6.
Why was the DARPA contract terminated?
The Government has the right to terminate a contract for "default" or "convenience." In this case, the Government's contract with Infinite Photonics, a subsidiary of Infinite Group, was terminated for the Government's convenience. Termination for convenience is the right of the Government to terminate or cancel performance of work under a contract, in whole or in part, if the contracting officer determines that termination is in the Government's interest. This right is contained in most Government contracts. Alternatively, Termination for default typically will occur in situations where the Government determines that the Contractor has failed to perform within the specified terms of the contract. To reiterate, the Contract was terminated for the Government's convenience.
How far had Infinite Photonics progressed in the execution of the contract?
The contract was executed approximately ten months ago in February 2002. The original term of the contract was 24 months with an approximate total value of $12 million. As of June 30th, the Company had billed the Government approximately $2 million for its Research and Development efforts under the Contract. Incremental billings occurred during the quarter ended September 30, 2002. Financial results for the third quarter will be reported in the very near future.
What happens next?
We will work very closely with the Government on the settlement process. For contracts terminated for the convenience of the Government, the settlement process may occur by negotiated agreement, by determination of the Terminating Contracting Officer, or by costing out those efforts associated with the Termination. The Company is entitled under the Contract to payment for all work allowable under the Contract that has occurred as of the termination date and all costs allowable under the Contract's settlement provisions.
What does the termination mean to Infinite Group?
We are currently assessing both the short and long-term impact of the termination. Although the Company has had regular contact with DARPA throughout the term of the Contract, the receipt of a Notice of Termination for Convenience was unexpected at this time. We do remain committed to developing our laser diode technologies for commercial and military applications, and have confidence that our technologies have strong commercial potential across multiple markets. We intend to vigorously explore all means to continue these efforts. |
