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VMI Sanctioned $15,000 for Making Inaccurate and False Representations to The Court

Editors Note: The following is re-published with permission from The Cadet Newspaper, “The Independent Source of the Corps and the Alumni since 1871.”

Over the past year the VMI administration, working independently, with the media and others sought to discredit The Cadet for its reporting on the lawsuit filed by The Center for Applied Innovation, LLC (CAI) claiming a conflict of interest because one of The Cadet’s Alumni mentors is a principle in the CAI. With the case now concluded, The Cadet presents herein the Court’s ruling on the administration’s actions with a link to the full Court transcript made available. The words of the presiding judge, and those in the transcript, are clear and unambiguous.

As covered in previous editions of The Cadet, the Virginia Military Institute (VMI) published a Request for Proposal (RFP) for Diversity, Equity and Inclusion (DEI) training in Nov. 2021, followed by a Notice of Intent (NOI) to award the contract to NewPoint Strategies, LLC that the Center for Applied Innovation, LLC (CAI) submitted a proposal for. The CAI protested the proposed award alleging numerous serious irregularities in how VMI conducted the procurement. After VMI denied its protest, CAI filed a lawsuit for violating procurement rules and possibly statues. VMI attempted to use a number of legal maneuvers designed to avoid a Court Trial on the merits of CAI’s case. The Court ultimately rejected VMI’s pleadings and CAI was posed to begin discovery and depositions that would include senior members of the administration, possibly including the Superintendent .

VMI did not produce any documents in response to CAI’s discovery request and when CAI sought a temporary and permanent injunction from the Rockbridge County Circuit Court to prevent VMI from awarding a contract to NewPoint until the Court case was resolved, VMI submitted a sworn affidavit to the Court, that no work had been performed under the RFP, and VMI did not intend to award a contract under the RFP until the Court case concluded. During that hearing CAI’s Counsel expressed concern that without an injunction prohibiting VMI from contracting with NewPoint the Institute could proceed while the lawsuit was pending. The laweyer from the Virginia Attorney General’s Office working at VMI, Mr. Patrick O’Leary ‘90, told the Court: “…their lawsuit repeatedly refers to a contract that’s not in existence. There is no contract. We haven’t awarded the contract yet.” According to the public transcript, the presiding judge in the case then stated: “Well, I would certainly cast the [I]nstitute in a very poor light if something different happens…” Based on VMI’s promises, CAI did not push for an injunction or seek other relief from the Court in the interim. In Jan. 2023, VMI re-affirmed twice “it will not move forward with awarding the contract to NewPoint Strategies while this litigation is pending.”

Faced with the certainty of a Court trial on the merits of the case and the associated discovery, VMI abruptly canceled the intent to award the contract and moved to have the Court case dismiss the case as moot. CAI subsequently learned that before VMI certified to the Court, in the Court hearing, it would not award a contract to NewPoint for DEI training, it had already done so through a Purchase Order (PO) of $10,000 that was reduced from NewPoint’s $30,000 costin order to to fall below VMI’s Small Purchase threshold and avoid competition. CAI then filed a motion for sanctions against VMI for its malfeasance.

In a lengthy hearing, VMI repeatedly asserted it had the right to conduct the transaction based on its $10,000 authority. Ultimately, while both the judge and CAI accepted VMI has such small purchase authority, the judge rejected VMI’s arguments to avoid sanctions for its mosconduct stating, in part:

You know, Doctor Love [VMI DEI Director] and/or others were determined to do some work with NewPoint Strategies. They were determined even though a lawsuit was pending. And the affidavit is presented at a hearing on a plea and bar. And the Court asked some pointed questions about that; about specific paragraphs in that affidavit. And among other things, counsel for VMI says, we’re not trying to be funny with the way it’s worded. We’re not going to perform work under this contract.

Now it may be fair to say that, on paragraph six, no work has been performed under the RFP. So under the RFP, if you highlight those three words, maybe that’s true because it wasn’t performed under the RFP. It was performed under the alternate procurement authority, which no one disagrees that VMI has the right to do that. Nobody says otherwise. But the words, “no work has been performed, VMI does not intend to award a contract under the RFP,” I mean, you know, two weeks later, they did. They essentially did that.

The Court transcript shows that the attorney from the Attorney General’s office in Richmond told the judge in open Court he knew nothing about the procurement and CAI’s attorney conveyed to the Court that same Attorney General representative informed him of his surprise when he learned of VMI’s actions to award a contract to NewPoint. CAI found him sincere. CAI’s lawyer then noted to the Court, on the record, that Mr. O’Leary ’90 did not answer the question of his knowledge or involvement. Given that opportunity, Mr. O’Leary ’90 remained silent.

At the conclusion of VMI’s arguments, the judge issued VMI a stern rebuke: “Someone at VMI knew that this was going on,” he stated, “knew that negotiations, communications, offers to provide services and desires on the part of VMI to receive services of NewPoint Strategies, LLC. The entire point of this lawsuit and in some of the briefs and stuff, counsel said — it’s page seven of one of the CAI pleadings. ‘VMI persists in seeking to escape liability for its malfeasance based on alleged technicalities rather than addressing the matter on its merits…’ But VMI knew that this stuff was going on with NewPoint Strategies, LLC. They’re a represented party.”

Referring to the PO (contract) for DEI training to NewPoint Strategies, the judge continued, “But it [the PO] existed on the date of the hearing. It existed on the date of the reconsideration hearing. And the witness said that information was never disclosed despite a discovery request. So I think the represented party should be sanctioned.”

Although VMI continues to deny any wrong-doing, or even apologize, the Institute paid CAI $15,407.10 in legal fees.

VMI’s Code of Ethics in General Order 46 requires honor, integrity, accountability and respect, stating, “No unlawful practice or a practice at odds with these standards can be justified on the basis of customary practice, expediency, or achieving a “higher” purpose…It is not acceptable to ignore or disobey policies if one is not in agreement with them, or to avoid compliance by deliberately seeking loopholes…” To date the Board of Visitors, itself the subject of what Virginia Lawyers Weekly reported were “VMI’s inaccurate and false representations to the Court,” has not taken any corrective action or even acknowledged VMI’s wrong-doing.

In his closing arguments to the Court, CAI’s attorney pointed out, however, that “VMI’s an institution shaping our future leaders. This is supposed to be one of the most honorable institutions in America. If a student did what they did here they would be expelled.”

– By Cadet Cody Bartmann ’25

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