Subcontractor takes GTSI to court
- By Nick Wakeman
- Nov 26, 2003
A subcontractor to GTSI Corp. is suing the company, a former employee and a competitor, claiming they conspired to take business away from it.
Ichiban Inc. of Lorton, Va., provided repair and maintenance services on five contracts held by GTSI of Chantilly, Va. Ichiban claims that after the contracts were awarded, GTSI began pressing the company to lower its fees, according to a lawsuit filed in Fairfax County, Va., Circuit Court.
Ichiban is asking for $75 million in compensatory damages and $350,000 in punitive damages. The suit was filed Nov. 7. Also named as defendants are William Weithman, a former Ichiban employee and part owner, and Prism Pointe Technologies LLC of Ridgeland, Miss., and its majority owner Clifford King.
The loss of the business with GTSI has caused the company to shut down much of its operations, including laying off 34 people ? 90 percent of its work force, an Ichiban spokesman said.
A GTSI spokesman said the company has not been served with the lawsuit yet, and has not seen the allegations. The company declined to comment.
According to the suit, GTSI used Ichiban's status as a service-disabled, veteran-owned company to help win contracts for desktop computer services with the State Department and Army. Richard Ochsner, an Air Force veteran, founded and owns 90 percent of the company. Ichiban and GTSI began winning contracts together in 1999.
Under the terms of the contracts, Ichiban was to receive a $65 fee for each service call. During 2000, GTSI asked Ichiban to charge a lower fee for certain services, even though GTSI would continue to charge the full amount to the government, according to Ichiban's lawsuit. GTSI continued to seek pricing concessions from Ichiban through 2002 and 2003.
Ichiban also claims that GTSI did not stock spare parts at the levels agreed upon in the contracts, and did not make timely payments. In addition, the suit charges that GTSI diverted work to other companies and violated the contracts' exclusivity clauses.
In 2000, Ichiban hired William Weithman, who eventually exercised stock options giving him a 10 percent ownership stake in Ichiban. He signed confidentiality and noncompete agreements with the company, according to the suit.
During 2002, Ichiban began talking with Prism Pointe and its chief executive officer, Clifford King, about business opportunities, including Prism Pointe becoming a subcontractor to Ichiban on the work with GTSI. They also discussed the possibility that Prism Pointe would acquire Ichiban. The two companies signed a nondisclosure agreement in May 2002.
At the end of 2002, Prism Pointe became Ichiban's primary subcontractor for onsite repair services. During this time, Weithman was the primary contact between Ichiban and Prism Pointe.
Ichiban's suit alleges that sometime in 2003, Weithman and King agreed that if Prism Pointe couldn't acquire Ichiban, then Weithman would join the company, and they would work to take Ichiban's business from GTSI.
In May 2003, Weithman left Ichiban and joined Prism Pointe, but told Ichiban that he would only work on commercial business, not government business, according to the lawsuit. Ichiban charges that this was misleading, and that Prism Pointe and Weithman actively pursued government business and a relationship with GTSI.
On Aug. 29, GTSI terminated its agreement with Ichiban. Ichiban claims that Weithman, Prism Pointe, King and GTSI conspired to get GTSI to break its ties with Ichiban.
Ichiban claims the actions of the defendants have hurt its business and continue to damage the company.
The Fairfax County Circuit Court clerk's office said no hearings have been scheduled for the case.
Nick Wakeman is the editor-in-chief of Washington Technology. Follow him on Twitter: @nick_wakeman.