On August 1 and 15, 1996, the state of Hawai`i came into possession of three electric vehicles it had commissioned from a Big Island manufacturer. The cars arrived some two years after delivery dates specified in the original contract – and still were in substandard condition. On one, the driver’s side windshield wiper did not wipe and the driver’s door latch did not work; a faulty suspension caused the vehicle to list to the left. These were but a few of the problems.
About two weeks later, the manufacturer delivered to the state fix-it kits intended to bring the vehicles up to par. The contents of one such kit were itemized in a September 13 letter back to the manufacturer:
“Two (2) black cloth head visors marked ‘Suntera Visor’. (These visors were presumed to be provided to comply with the contract specification requiring window/sun visors.)
“’One (1) butane (?) lighter marked ‘Wailua Town’ with damaged warning label. (It was presumed to be provided to comply with contract specification requiring a vehicle ciga rette lighter.)
“’One (1) 6.77 fl oz. bottle marked Rain X The Invisible Windshield Wiper.’ (It was presumed to be provided to comply with the contract specification requiring windshield wipers to clear the windshield in front of the driver.)”
Suntera, the manufacturer, has as far been paid nearly a million dollars to develop elec tric vehicles. These three cars, along with their kits of odds and ends, are the only visible result. The total bill to the taxpayer may be millions more, depending on the outcome of a lawsuit brought by Suntera against the state agencies and individuals involved in Hawai`i’s electric vehicle demonstration project.
To understand how such a well-inten tioned program could arrive at such an un happy impasse, Environment Hawai’i has reviewed the state’s files relating to the con tracts it entered into with Suntera, the electric vehicle manufacturer that launched the liti gation. The documents reveal a level of frac tiousness and contentiousness that, in retro spect, appears to have doomed the partnership from the outset.
Jonathan Tennyson
Those who knew Jonathan Tennyson would often describe him as a visionary who em braced the view that the earth is groaning under the pressure humans are putting on its natural resources. Tennyson was a self-taught inventor who challenged the industrial world’s insistence on driving gas-guzzling cars by developing solar and electric ones on a Big Island farm.
“By putting the Chinese and other Third World countries on wheels, we will be dou bling the greenhouse effect every two years”, he was quoted as saying in a May 1989 Honolulu magazine article, “Power from the sun,” by Diana Lomont. “We’re already in big trouble – we’ve got to stop trying to improve a bad design, the internal combus tion engine.”
Tennyson arrived on the island of Hawai’i from Florida in 1981. While he had always experimented with invention, he was not schooled in engineering. At Duquesne Uni versity in Indiana he had studied business, a field that later, in the mid-1970s, resulted in his being hired to market haute couture hair shows for shampoo maven Paul Mitchell.
It was with Mitchell, also an environmentalist, that Tennyson settled onto a 32-acre, three-family solar-powered farm in Pa’auilo, a small plantation town on the Hamakua Coast of the Big Island. Together, they de signed solar cars, entering one – the Mana La – in the Australian Pentax World Chal lenge. The car failed to complete the race due to technical difficulties.
Tennyson’s work eventually turned away from strictly solar vehicles. Electric vehicles (EVs), more practical and affordable than solar ones, were Tennyson’s primary focus by the early 1990s.
Tennyson, who sported Birkenstock shoes and a wild, wiry beard, has been described by some as an anti-establishment visionary. For a long time, he avoided connecting to the electric grid, powering everything at the Pa’auilo farm with solar panels. He wanted complete independence and enjoyed it for several years. However, Mitchell’s death in 1989 effectively pulled Tennyson’s financial cushion out from under him. Mitchell had funded all of Tennyson’s efforts, and with Mitchell’s death, Tennyson was forced to seek new investors.
Shortly after Tennyson began exploring EV development, Congress allocated to Hawai’i $5 million to distribute to electric vehicle researchers and developers. The ap propriation, contained in the Defense budget approved in 1993, provided a total of $25 million to the Defense Advanced Re search Projects Agency (ARPA or DARPA, as it later was known) for electric vehicle dem onstration projects.
Each project carried a one-to-one federal non-federal matching requirement. The non-federal match could be met by in-kind contri butions from non-federal entities and by proceeds from the sales (if any) of electric vehicles developed.
Tony Locricchio
Anthony Paul Locricchio, an attorney prac ticing in Kailua, O’ahu, gained a measure of fame when he launched high-profile lawsuits against former Honolulu Mayor Frank Fasi and a Maunawili golf course developer. In 1993, Locricchio – a former priest from Detroit – became the chief executive officer of Tennyson’s EV manufacturing company, Suntera, The Solar Electric Chariot Com pany, Inc. By late 1993, Locricchio was sign ing all contracts and penning all Suntera correspondence with the state. He was also making all of Suntera’s business deals.
HTDC and The HEVDP
The 1983 Hawai’i State Legislature created the High Technology Development Corpo ration (HTDC) to help develop commercial high technology industry. It was this agency that was designated to administer the $5 million ARPA grant earmarked for electric vehicle research in Hawai’i. To oversee this project, the HTDC established the Hawai’i Electric Vehicle Demonstration Project (HEVDP).
Policy of the HTDC is set by a board of directors. HTDC’s executive director is Bar bara Kim-Stanton, a former DBEDT deputy director.
The HTDC decides and approves contract changes and the like, but it is not in charge of day-to-day administration of the contracts. In the case of the EV research grant, that task falls to the HEVDP staff.
The HEVDP is one of seven consortia across the United States participating in DARPA’s Electric and Hybrid Vehicle Tech nology Program. The program’s purpose is to explore and develop technology for electric and hybrid vehicles for military and commer cial use.
The HEVDP has a staff of four: Director Tom Quinn, project manager Herb Hendrickson, contract administrator Shan non McKenzie, and a part-time secretary, Robin Melchor. Together, they administer millions of federal dollars to about two dozen HEVDP consortium members, one of which was Suntera.
The Agreement
In April 1993, David Rezachek, president of the Electric Vehicle Association of Hawai’i and an alternate energy specialist with DBEDT, submitted to HTDC an “expression of interest” in membership in the HEVDP consortium on behalf of “the Suntera Group” – a loose association of entities interested in pursuing development of a new kind of elec tric vehicle, manufactured “from the ground up.” Included in the association were several academic institutions (Hawai’i Community Colleges locally, and York Technical College and Jordan College on the mainland – the last two said to be already involved in electric vehicle technician training programs). Also listed were several parts manufacturers, the Electric Vehicle Association of Hawai’i, the U.S. Postal Service, and “Sunterra” – pre sumably Suntera.
Rezachek stated that Suntera was develop ing three types of vehicles – a commuter vehicle, a pickup truck version of the same vehicle, and a 14-passenger bus. Referring apparently to the corporation, Rezachek went on to say, “Sunterra is proposing to develop an electric vehicle manufacturing facility in Hawai’i for the manufacture of the above vehicles and plans to locate this facility in an economically disadvantaged area (e.g., Hamakua or Kaua’i).”
Suntera had already developed the “World Car,” Rezachek wrote – “a high-visibility, light-weight, energy-efficient commuter car constructed of composite materials and mostly off-the-shelf, readily available compo nents.” He continued: “They have also done considerable work towards the development of a medium-sized, 14-passenger bus called the Sparky and will complete this work under this program. Finally, Suntera has been requested to develop a pickup truck version of the World Car – the PFC (Pickup First Class).”
Rezachek’s proposal eventually led to ne gotiations involving Suntera, the U.S. De partment of Defense, and the HTDC over the number and type of vehicles Suntera would produce. Correspondence in HEVDP files suggests some conflict among the parties already at this early stage, prompted by the fact that the HTDC attorney, under contract to the state, belonged to a firm that repre sented a Maunawili Valley golf course devel oper. Locricchio, who was representing a group of valley tenants facing eviction, took strong exception to working with the HTDC contract attorney, Everett Kaneshige. Ac cording to a chronology of events prepared by HEVDP, when Locricchio learned in Octo ber 1993 that Kaneshige was representing the HTDC, he “refused to meet to negotiate the contract”.
Nor was that the only obstacle. According to a list made later by HEVDP of “special efforts” undertaken to assist Suntera, the DOD evaluated the Suntera pickup proto type and found it “unsuitable for DOD re quirements because of deficiencies.” Those included difficult entry to and exit from the vehicle “because of poor door design;” im paired “forward visibility… because of wide front pillars and fairings;” and “cargo capacity inadequate because of small cargo box.”1
Still, the DOD agreed to support the de sign and development of a revamped pickup, to be called the C-Mobile (the “C” stands for ‘current’). To accommodate added redesign expenses, it was agreed that $100,000 would be provided to Suntera in anticipation of Suntera’s signing a contract calling for deliv ery of five electric vehicles.
On November 24, 1993, the memoran dum of agreement was signed, giving Suntera $100,000. Services covered in the agreement included preparation of a prototype produc tion facility in the Hamakua Coast town of Honoka’a, development of a staff training program, and creation of the initial mold for one of the vehicles. At the time, the then-director of HTDC, William Bass, sought expedited payment for Suntera. On the same day the memorandum was signed, Bass in formed then-DBEDT Director Mufi Hannemann that Suntera was “strapped fi nancially, and to get the project under way, I am requesting your assistance in expediting the attached request for an advance payment of $100,000 to get them started.”
While delays of weeks, or even months, are not unheard of in the processing of state payments, the state’s failure to process at once the $100,000 payment to Suntera was claimed to have wreaked hardship on the company. According to a letter December 13, 1993, from Locricchio to David Yun, professor of engi neering at the University of Hawai’i and principal investigator on the ARPA-funded project, Suntera was still awaiting payment, despite “a long string of string-along calls” and “multiple promises.” (Yun forwarded Locricchio’s complaint to staff at the HEVDP along with a note: “Per attached, we must do something to get going or we will pay the price and look ridiculous (in public). Pls tell me what’s being done or can be done.”)
The `93 Contract
Despite the rocky start, Suntera completed the work called for in the letter of agreement and, on February 17, 1994, Locricchio signed the first contract with HTDC. Together, they were going to build electric vehicles from the ground up, a first in American automotive history.
Under that contract – which HEVDP calls the EV 93 contract (referring to the federal fiscal year from which the funds for the contract came) Suntera agreed to deliver five cars: two Suntera Sunray Pickettes (the small pickups) and three of the new-model C-Mobiles. The Pickettes would be sold by the state to HECO in Honolulu and the Hawai’i Electric Light Co. on the Big Island, with income from the sales being counted as a part of the overall contract price. The first C-Mobile was to be delivered to the Navy; the second and third were to go to the Air Force.
The contract also required Suntera to pro vide crash testing certificates, two inductive chargers (for battery charging), monthly sta tus reports, and a ribbon-cutting ceremony for the Honoka’a facility. The first vehicle – a Sunray Pickette – was to be delivered by June 30, 1994. By July 31, 1994, the second Sunray Pickette and the first C-Mobile pickup were to be delivered. The remaining two C-Mobile pickups and the chargers were to be delivered by September 30, 1994. All services were to be completed by December 31, 1994.
The value of the contract, over and above the initial $100,000, was $485,747.74, which was to be matched by in-kind contributions from Suntera of $500,000. More than $300,000 of Suntera’s in-kind match was in the form of “discounted salaries” – an ar rangement that allowed Suntera to count as contributions to the project that portion of salaries that employees would normally earn but which they agree to forego. In other words, if an employee who normally might earn $50,000 a year agrees to work on a given project for $25,000 a year, that $25,000 saved by the company is counted as an in-kind match for purposes of the contract.
According to the contract, HEVDP would make payments as stages of the contract were completed, although more than half ($322,000) of the total contract was antici pated to be paid out in the first two months. In any event, no payment for services or products was to be made until the state “has determined that the work has been satisfacto rily performed in conformance with this agreement, that the matching funds or in-kind services have been provided … and a successful technical review by Dr. David Yun, principal investigator, has been com pleted.”
After the dedication ceremony, held in January 1994, work began in “a lean-to or garage with an office, parts room, plastics room and an assembly room which is essen tially outside but covered by plastic shelter,” according to HEVDP staff who visited the design facility. Under this plastic shelter, Suntera workers would assemble the cars.
Slip-Sliding Away
On June, 30, 1994, Suntera missed the first deadline for delivery of a Pickette, for which it would have received $30,000. Nor did it meet the July 31, 1994, deadline for delivery of a second Pickette and a C-Mobile.
Suntera was out of funds, Locricchio claimed in a fax to the HTDC director on August 9. Even though the vehicles were not available for delivery, he requested release of $52,000, claiming that otherwise, Suntera would announce layoffs. Two days later, Locricchio demanded immediate payment of $32,000, with another $20,000 to be paid as soon as possible.2
On August 11, HEVDP project manager Herb Hendrickson and an ARPA team, in cluding Major Richard Cope, inspected the vehicles and determined that Suntera had spent the money it had received on efforts to improve the vehicles’ crashworthiness, rather than on finishing the vehicles by the contract deadlines. According to a memo prepared by Herb Hendrickson and sent to HTDC Direc tor William Bass and David Yun, “Major Cope recommended that HEVDP pay Suntera $52,200 immediately to get them going and pay all remaining EV-93 contract funds ($81,000) upon delivery of the two Pickettes.”
Releasing all the funds would mean that the state would relinquish what is called its “holdback” – funds held in reserve until all contract terms have been satisfied. But, Hendrickson’s memo went on to say, “Major Cope considers the entire EV-94 funding [referring to a Suntera contract being negoti ated at the time] to be a sufficient holdback to ensure that Suntera will deliver C-Mobiles.”
On August 17, the state cut a check to Suntera for partial payment. Instead of the full $74,500 it would have been paid on delivery of the three vehicles, it received $52,250, representing all of the June payment and approximately half of the July payment.
Forgery?
Even as Suntera was falling behind schedule on its first contract, on July 1, 1994, Suntera applied for a second contract with the state for ARPA funding. According to Locricchio’s account, the contract would have covered two proposed projects, with a total ARPA contribution of $2.5 million, matched by a slightly larger in-kind contribution from Suntera. The contract was to have been one of several included in a comprehensive HEVDP consortium package submitted to him.
However, Locricchio has charged, only one of the Suntera projects was included in the HEVDP package, resulting in a reduction of $938,234 from the original proposal.3 Locricchio claims the proposal was altered without his knowledge or consent by HTDC principal investigator Yun. In addition, Locricchio claims, Yun effectively forged Locricchio’s signature on the proposal’s cover page by pasting in, over the signature line, a photocopy of Locricchio’s signature obtained from another, unrelated, document.
At the time, Locricchio enlisted the sup port of Big Island Representative Virginia Isbell in initiating an investigation of Yun through his employer, the University of Hawai’i.
So, by September 1994, the company was delinquent on the delivery of its first three vehicles and the deadline for delivery of the remaining two was imminent; it needed ad ditional funds to complete work on the contract; and it was seemingly in possession of evidence that a state employee had fraudu lently tampered with its proposal for a second contract. The stage was set for contract rene gotiation.
The First Amendment
According to the HEVDP, by October 1994, Suntera was unable to work on C-Mobiles unless it received another advance of $100,000. Locricchio, by his own admission, was in a poor bargaining position. In a letter to HEVDP project manager Hendrickson dated October 21, Locricchio provided detailed answers to questions about Suntera’s ability to perform on the contract. “We now believe all new materials and letters requested are enclosed,” he wrote. Included in the material was a copy of a letter (never sent) to Rep. Isbell, asking that she withdraw her request to have the University of Hawai’i investigate Locricchio’s charges of forgery by David Yun. “I have no choice but to bow to whatever demands he makes in that our staff is literally without food as you and he are aware,” Locricchio wrote.
Major Cope of ARPA informed HEVDP that he had no objections to the advance payment. “Tony called me and said he needed 50K before he delivered the two vehicles (Pickettes),” Cope said in an e-mail message to project director Hendrickson on October 18. “We can give it to him as far as I am concerned. I told him that we would not start the FY94 [fiscal year 1994] effort until all five of the vehicles were delivered.”
On October 27, Locricchio and Kay Yamada, interim director for HTDC, signed the negotiated agreement that amended the EV93 contract and temporarily solved Suntera’s funding and delinquency prob lems.
The agreement allowed Suntera to receive a $50,000 “progress payment” at once. It also pushed back the deadline for delivery of three of its vehicles, two inductive chargers and its completion date. The delivery deadline for the first C-Mobile to the Navy was set at December 15, 1994. The first C-Mobile in tended for Air Force use was to be delivered January 7, 1995; and the deadline for the second Air Force C-Mobile as well as delivery of inductive chargers for Air Force use was moved back to January 27, 1995. (The con tract amendment makes no mention of re vised deadlines for delivery of the Sunray Pickettes.)
The amendment also required Suntera to stop complaining about Yun. Item nine of this agreement called for Suntera employees and agents “to withdraw and not make any further allegations as to Dr. Yun’s conflict of interest and/or conduct in the Hawai’i Elec tric Vehicle Demonstration Project (‘HEVDP’).” Despite the agreement, Locricchio later sent a request to the governor for a “full investigation,” although apparently none was ever carried out.
A Photo Op
The new deadlines passed with Suntera again falling short of its obligations.
On February 23, 1995, Suntera presented its first vehicle – a Sunray Pickette. Although the vehicle was intended for use by HELCO on the Big Island, the delivery itself was made at the state Capitol, amid great fanfare. Photographs published in the Hono lulu newspapers show Tennyson standing with a smiling Governor Cayetano in front of the futuristic Sunray.
Shortly after the media blitz, Suntera “hot-rowed” the car for display at an auto show in Geneva, Switzerland. HELCO was assured that the car would be returned in 30 days. After Geneva, the Pickette went to De troit, where Suntera was developing business relationships with two companies-TICOM and GHL. TICOM was approached about building a composite chassis for the Sunray, while GHL was contracted to build the C-Mobile.
In May 1995, GHL completed the first C-Mobile and shipped it and HELCO’s Pickette to Washington, D.C., for display at an ARPA program review held in May 1995. According to an account of the contract history prepared by HEVDP for a High Tech Development Corporation board meeting in January 1996, “When the review ended they were shipped to TICOM in Detroit for esti mating, drawing and design work… Suntera then claimed they were out of money and could not ship the vehicles back to Hawai’i.”
Locricchio’s explanation for this trounce across the seas is that he was just doing what ARPA envisioned Suntera to do: As a result of displaying the cars abroad, Locricchio claims that Suntera entered into a contract with a Tokyo-based company called Young Bear Planning, Inc., for 4,000 vehicles. “The agree ment,” Locricchio wrote in an August 1996 complaint filed in state circuit court, “was cited by ARPA and U.S. Government officials as an example of the fulfillment of the very purpose of the ARPA project funded by Con gress and in part awarded to Hawai’i and Suntera.”
While Tennyson’s focus remained on build ing ecologically sound means of transporta tion, others made much ado about Suntera’s potential as an asset to the local community. Indeed, the fact that Suntera would locate on the economically depressed Hamakua Coast appears to have been a key factor working in its favor from the outset.
For example, when then-HTDC Director William Bass was requesting from DBEDT an advance of $100,000, he added: [Suntera] has terrific public relations potential which has not escaped Rick Egged [Deputy Director of DBEDT] . . . Getting the advance to Suntera would be the catalyst for publicizing this economic development assistance to Hamakua.”
That goodwill on which much of Suntera’s political support rested was jeopardized less than two weeks after the second contract was signed. At a press conference in Detroit, Suntera apparently announced it was ready to relocate. “Suntera looks for site to build elec tric cars: Hawai’i- based firm prefers locating plant in Detroit,” read the headline of one Associated Press article, published May 13, 1995.
In a letter to the new HTDC director, Barbara Kim-Stanton, Locricchio said the AP story was “erroneous” and was being used as an excuse “for continuing the major road blocks” preventing Suntera from receiving monies owed it by the state.
Days after the AP report, Suntera fired 11 workers at its Honoka’a plant. An article carried in the Hawai’i Tribune-Herald on May 19 said a lack of funding had brought the firm to a screeching halt. In this and other newspaper articles published at the time, Locricchio was reported to have accused the HTDC of withholding a million dollars in federal money owed Suntera.
Despite acknowledged hardships, Suntera continued to gain favorable press coverage. According to a May 19, 1995 West Hawai`i Today article by Jason Armstrong, “Detroit companies advanced Suntera $8 million worth of tooling equipment and body parts suffi cient for building 10,000 units projected to be sold for one year of mass production.”
Armstrong quoted Tennyson as saying, “We are sitting on over $50 million of signed contracts.” He also referred to agreements with Japanese and African companies that he said represented the largest electric car order in history. After returning from Detroit, Tennyson said, “we get back here expecting to be heroes, and we’re told now they’re not going to fund our program until we go back and build the five cars. They’re driving people away and they’re about to drive us away.”
Barely a month later, however, TICOM provided Locricchio and Tennyson with what must have been a discouraging report. Suntera had asked TICOM to provide a quotation on the cost of a Suntera Sunray body assembly. “The problem,” a TICOM representative re sponded on June 20, 1995, “is that the current vehicle is a show car and not a production prototype. In our review and test drive of the Sunray, a number of issues became evident that would require significant redesign in order to manufacture the vehicle and also have it be acceptable to your customers…. If this were a production program for a major manufacturer, the body engineering costs for a prototype could easily exceed $3,000,000 not including crash analysis.”
In the short term, TICOM recommended using existing body molds for 10 vehicles, to be mounted on TICOM-built composite chassis. In the meantime, “a conventional design and engineering program of the entire vehicle, starting with a package drawing, can begin.” Total costs of this design and engi neering were placed at $785,000.
In 1994, Hawai’i received another grant from ARPA for electric vehicle research. This time, the award was for $8.5 million. Suntera was allocated $988,460 of that money when it signed its second contract with the HTDC, effective May 1, 1995. This contract – EV 94 – called for production of five C-Mobiles and a Sunray, with one C-Mobile and the Sunray to be used for crashtesting. The schedule of contract milestones and pay ments was divided into eight quarters, begin ning (retroactively) July 1995 and ending April 1997.
Months before the second contract went into effect, there was already talk between HEVDP and Suntera of amending both the EV 93 and the draft EV 94 contracts to ease Suntera’s financial troubles. The first con tract was to be amended to delete two C-Mobiles, air conditioners, and inductive chargers, and add crashworthiness redesign. The second contract was to be amended by adding the items deleted from the first con tract (although just one charger was to be included) and to increase Suntera’s initial payment.
In August 1995, Suntera received initial payments under the EV 94 contract totaling $382,869 – $157,640 for the contract execu tion and $225,229 for submission of drawings, photos, a tool list and reports required under Quarter 1.
Composite Chassis
On September 6, 1995, a hiccup in the fund ing process emerged when John Gully of ARPA (replacing Major Cope) visited TICOM in Detroit. The EV 94 contract required development of composite chassis, but Suntera was to use metal chassis for its first few vehicles while researching composite technology. A composite chassis, made up of fiberglass-like material, is significantly lighter than metal and can be fabricated more easily. But use of composite chassis is still in a preliminary stage; questions remain about its strength and ability to withstand the wear and tear of road use.
In discussions with Quinn and Hendrickson, Gully said he agreed it would make good business sense, in light of the company’s desire to produce all-composite vehicles, for Suntera to stop working on vehicles to be built on metal chassis and focus instead on building the composites. He also endorsed amending the Suntera contract to include payment to a company called MacNeal-Schwendler Corporation (MSC) for conducting material characterization and crash simulation tests on the composite pro posed for use in the Suntera chassis.
While Quinn supported the recommen dation, which required HTDC board ap proval, the matter failed to make the full agendas of the board’s September 28 and October 5 meetings. Locricchio has asserted that this was deliberately done to thwart Suntera’s progress. There was also some argu ment about with whom MSC should con tract – HEVDP or Suntera.
Documents in HEVDP files suggest there were growing concerns that Suntera was not paying its subcontractors. Some staff felt that to ensure that MSC was paid for the work it performed, the state should contract directly with MSC and not amend Suntera’s contract by adding money for the MSC work.
The HTDC board approved issuing a con tract directly to MSC at its meeting of No vember 21. Immediately afterward, Ray Amador, MSC’s director of engineering, later wrote, “Mr. Anthony Locricchio called and informed me that the HTDC Board of Directors agreed to a contract between HTDC and MSC and asked if I was aware of this and agreed to it. I stated that I did not consent to a contract directly with HTDC, as I did not know who HTDC was. Mr. Locricchio also informed me that this effort would be accom plished without Suntera’s participation if so contracted. “4
After Locricchio’s call, Amador called Quinn, who informed him that the HEVDP was part of HTDC and that all HEVDP contracts were accomplished through HTDC. Apparently reassured, Amador told Quinn he supported this method of contracting.”
However, Amador explained in his De cember letter to Quinn, “it was a mistake on my part to state that” he agreed to the direct contract between MSC and HTDC. “During a subsequent phone conversation with Mr. Locricchio, when I informed him of my decision/mistake he said that he would not support this MSC effort unless it was accom plished through a contract directly with Suntera. I agreed with Mr. Locricchio and saw no other proper alternative to MSC par ticipation in this project. From the begin ning, my understanding has always been that MSC’s involvement with the project was to support the development of the Sunray, the C-Mobile, and other composite material ve hicles which Suntera is designing with their subcontractor TICOM and others. To this end, close coordination and cooperation with Suntera is required for the success of this project and Suntera must be included di rectly.”
In the end, an amendment to Suntera’s contract, calling for payment of $175,000 for materials tests to be performed by MSC, was approved by the HTDC board at its Decem ber 7, 1995 meeting.
Again, a Car?
On October 19, 1995, Locricchio submitted an invoice to HEVDP requesting the balance owed on the EV 93 contract – $31,197.74 – on delivery of the three vehicles covered now by the amended contract. Above his signa ture, Locricchio stated, “I hereby certify that all work is completed under the 93 agreement as per said agreement.”
The next day, Quinn notified Locricchio that for the invoice to be processed, “the following items under the scope of services must be completed:
“All three vehicles must be completely assembled and: have an operator’s manual and warranty (para 2d, 2e); be registered and licensed (para 2f) have Certificate of Owner ship and Safety Inspection Certificate (para 2g).
“The C-Mobile must be delivered to Cooke Street (para 2b) [the HEVDP head quarters on O’ahu];
“The HELCO Sunray must be delivered and accepted by HELCO (para 2b). This is critical because their payment for this vehicle is part of our cost match.
“Monthly reports, including matching contributions, must be current (para 21).
“Additionally, record of tax clearance must be submitted (Attachment 5, para 16).”
About the same time Locricchio submit ted the invoice, Suntera had shipped to HECO, in Honolulu, an unpainted Sunray Pickette. HECO had asked that the car be shipped so it could be specially painted and available for display in an “Energy Week Demonstration” to be held in Honolulu’s Tamarind Park.
The event was to begin on October 26. The day before, the Sunray arrived at HEVDP’s Ni’ako facility, where Suntera employees worked into the night, attempting to get the car in shape for the public display.
On October 31, Quinn sent to Locricchio “a list provided by HECO of deficiencies on the Sunray for which HECO requests correc tion, prior to acceptance of vehicle.” Among the items cited by HECO’s Ralph Dobson were the facts that the vehicle had no brake lights or rear-view mirrors. The rack-and-pinion steering was not aligned, so that the turn radius to the right was half of that to the left. Holes around the brake cylinder and steering column on the driver’s side wheel well allowed water to penetrate under the dash and into the driver’s compartment. “Touch the throttle and the car jumps,” Dobson said, noting that there was “no low-speed control.”
Also, there was not enough ventilation with the doors closed. “Sliding doors cannot be locked open to allow cross-ventilation,” Dobson had complained to Quinn. The driver’s forward view was obstructed by front window posts and side window fairings, and there was no instrument panel.
Locricchio responded on November 7, saying he was “quite surprised to receive [Quinn’s] letter, given the fact that Mr. Dob son had asked our staff to have a vehicle available for short-term to display at the Energy Week Demonstration, sponsored in part by Hawaiian Electric. Our staff even though not required to do so, delivered the car in ‘as is’ condition for that event with clear understanding that the car would be com pleted at a later date.”
Many of the problems, Locricchio went on to say, were ones that should be addressed by HEVDP but which were not called out specifically in the EV 93 contract. HECO was to return the car to Suntera, Locricchio said, and at that time, the contract-specified requirements would be met.
“The $60,000 you’ll be getting from HECO should give you plenty of funds” to correct the additional problems, Locricchio continued. “We will assure the rear-view mirrors and brake lights are working and that the cigarette lighter is installed.”
Soon after, the car was returned to Honoka’a.
With large orders for vehicles, Suntera’s prac tice of hand-building them in a garage be came impractical. As described earlier, in May 1995, there was talk of relocating Suntera’s manufacturing facility to the main land United States. The notion returned in November with added urgency: “Suntera has now demanded that Quarter 2 and Quarter 3 milestone payments [of the EV 94 contract] of $191,833 and $102,507 equaling a total $294,340 must be made immediately to pre vent Suntera from moving production from Honoka’a to New York,” stated a November 21 summary of “Suntera Contracts and Spe cial Efforts Made to Assist Suntera,” by HEVDP.
But at the same time the HEVDP was receiving threats to relocate, Suntera was announcing to the public plans for an ex panded Hawai’i presence.
On November 16, Suntera called a press conference to introduce a “new line” of pick ups (the C-Mobile) and to announce “pro duction of Hawai’i’s own tourist rental EV, the Alohamobile.”
According to the news release, the C-Mobile “will be assembled in Hawai’i and New York State with component parts manu factured in Detroit, Michigan.” The Alohamobile “will feature a two-passenger Sunray vehicle with a newly designed rear end that accommodates three large suitcases the ‘trunk’ also locks during touring around the islands” (sic).
In what would seem to be an effort to exert pressure on the HTDC to approve revisions to Suntera’s contract, the press release stated: “This version [the Alohamobile] of the ve hicle is intended to be assembled exclusively in Hawai’i if final revision plans are approved for research and development activities of the company under an existing ARPA grant. The HTDC board meets November 21, 1995, to consider the changes in the already approved federal grant” (emphasis in original).
During this press conference, Locricchio apparently got the ear of Rep. Isbell again. On November 22, 1995, at 10 a.m., Isbell con vened a meeting in her Capitol office, at tended by herself, Jim Shon, Locricchio, DBEDT Deputy Director Egged, and Tom Quinn of HEVDP.
According to a record of the meeting pre pared by HEVDP, Locricchio had told Isbell that HEVDP was “making concerted efforts not to get funding to Suntera on time.” The HEVDP, he said, mishandled information and could not be trusted to make an accurate representation of Suntera’s situation to the board of the HTDC.5
While HEVDP was not in possession of any of the vehicles called for under either contract, Locricchio told Isbell that all three vehicles were completed, but – according to the HEVDP record of the meeting – “Suntera does not want to hand them over due to letters from HEVDP fraudulently claiming that the vehicles are unsafe.”
Locricchio also asserted, the HEVDP record states, that while HEVDP had $900,000 in the pot,” “Suntera is in poverty.”
The meeting was dominated by Locricchio. Although Quinn had prepared and faxed to Isbell a summary of the history of HEVDP’s contracts with Suntera, Isbell said she had not read it, nor did she allow Quinn an opportunity to respond to the assertions and com plaints of Locricchio.
In an effort to arrive at some resolution, Shon asked if it would be agreeable to have the HEVDP advance Suntera payments for the second and third quarters of the EV 94 con tract, while delaying deliverables on both the 93 and 94 contracts for another six months.
Locricchio said all three vehicles owed under the 93 contract could be delivered by January 1, 1996 – less than two months from the day of the meeting. However, he had an order to deliver 2,000 vehicles, and, “to save the 2,000 vehicle order, no delivery would be made until testing” had been completed. Locricchio was also reported to have said that “the New York Police Department has ordered vehicles. He said that Suntera needs funds for testing, small operations here in Hawai’i, and for the Tomorrow Car. He added that prototypes must be put out very carefully. He stated that he needed money now.”
Later on in the meeting, however, Locricchio said that Suntera “would deliver the C-Mobile to the Air Force next week, directly to Hickam, due to the competition” – U.S. Electricar – “being located at the Cooke Street facility.” Both Shon and Isbell indicated they thought that made sense.
In response to a question from Egged, Locricchio said that it was Tennyson who wanted to remain in Hawai’i, while Locricchio “wanted to go elsewhere.” Still, with an ad vance on the EV 94 contract, the company could provide 200 jobs in the Hamakua area, Locricchio was reported to have said.
In the end, Isbell asked Locricchio to prepare a written proposal to the HTDC board. Shon, the HEVDP account notes, “asked for an agreement by the end of the day with funds and deliverables.”
Under Locricchio’s proposal, sent to Quinn later in the day, Suntera would make four commitments to the state. First, it would pledge to assemble at least 1,000 vehicles in Hawai’i “and /or to limit its agreement to have vehicles from its YB Planning Japan order Sunray units to 1,000 units to be built outside Hawai’i” [sic]. Second, it would loan a Sunray to HELCO as soon as November 26, with the vehicle to be exchanged for a 94 Sunray in the spring of 1996. Third, within “10 days of this agreement,” Suntera would deliver a C-Mobile to Hickam Air Force Base. Finally, Suntera would deliver to HEVDP the Sunray Pickette intended for HECO no later than January 1, 1996.
In return, Locricchio sought to have HEVDP agree to three terms: First, it would release $200,000 (Quarters 2 and 3 payments) and defer deliverables to Quarter 4. Second, HEVDP would recommend that the HTDC board withdraw its approval of the MSC -HEVDP contract approved just the day before and would seek to have the value of the contract increased to $175,000 from the present $150,000 (with the increase to reflect Suntera’s “administrative overhead” costs). Third, HEVDP would agree “to handle privi leged information it receives from the testing phase of the contract professionally so as to protect the integrity of the project.”
Locricchio closed his letter to Quinn with another proposal of sorts: “HEVDP and Suntera will agree to keep their cups half full at all times, kiss and make up, and to always remember that they need each others good will to make this dream fly.”
No Go
Quinn responded the same day. “HEVDP/ HTDC can only process the Suntera invoice for $200,000 when we verify completion of deliverables,” unless the HTDC board provided special approval, Quinn said. As to the MacNeal-Schwendler contract, “this topic will have to be addressed at the next board of directors meeting, as the board has previously made a decision on this action.”
Locricchio was not pleased. In a fax sent the next day to Quinn, with copies to Isbell, Shon, and Egged, Locricchio wrote, “Appar ently apologies are in order. I must have not made myself clear. The proposal as amended by Mr. Quinn leaves us in a much worse position than we were before the meeting on the 22nd.” The conditions proposed by Quinn, Locricchio wrote, “require before the release of any funds whatsoever the comple tion of two quarters of work on other deliverables or tasks with no funds to com plete that work or the added activities that now need to be undertaken.”
Locricchio offered a “new idea”: “Keep the current contract in place … and amend it as described below. No amendments [sic] or deliverables or timetables would be required, only additions to the contract.” With HEVDP having come into possession of a $900,000 windfall (a result of a California project having fallen through), Locricchio proposed taking $175,000 of that sum and providing that to Suntera for the reworked contract for MacNeal-Schwendler material tests. Another $125,000 of the windfall, Locricchio proposed, would be used to pay for re-engineering of the vehicles in Detroit and for “administrative support costs.”
Should Quinn or HTDC Director Stanton be reluctant to make this proposal to the HTDC board at its next meeting, Locricchio said, DBEDT Deputy Director Egged could do so. “In short,” he continued, “I will eat whatever crow is required to pull this off. I will even make Mr. Egged’s difficult job at the board meeting less so by agreeing to keep my mouth shut.”
As reported above, the MacNeal -Schwendler contract was rescinded at the December 7 meeting of the HTDC board and the work was reauthorized as a $175,000 amendment to the Suntera 94 contract. The board took no action on Locricchio’s request for an added $100,000 to cover re-engineering work, nor did it otherwise amend the schedule of deliverables under either the 93 or 94 contract.
Moving Targets
A few days after the meeting in Isbell’s office, the HTDC did provide Locricchio with a second “supplemental agreement” to the 93 contract. The agreement extended the term of the contract through January 31, 1996. It also deleted the requirement that Suntera deliver two C-Mobiles, data acquisition systems and air conditioning, with these having been made a part of the 94 contract. When Locricchio returned the agreement, he had changed the completion date from January 31, to July 27, 1996. As a compromise, the parties appear to have settled on a deadline of April 1, 1996.
Despite having won HTDC board approval for including the funds for the MacNeal-Schwendler testing as a subcontract under the Suntera contract, Locricchio was still un happy with HTDC and HEVDP. He set forth his complaints in a letter to Governor Cayetano dated December 15, 1995.
“It is with great reluctance that we send you this letter,” Locricchio began. “After many months of trying to resolve problems here in Hawai’i, in order to enable us to meet the Japan order for our electric vehicles, it is necessary to announce that we will be building none of those vehicles in Hawai’i.” Instead, they would be assembled in New York, he said, with manufacturing in Detroit. “Also, a joint venture to complete the order with Singapore Technologies is now being final ized based on our recognition that we cannot move forward here in Hawai’i in time with the portion of the order (1,000 vehicles) we had sought to reserve to create Hawai’i jobs,” Locricchio said.
Although Egged and the governor’s office had been supportive, Locricchio went on to say, “the direct problem, in our opinion, lies and has always rested with HTDC and the staff of the Hawai’i Electric Vehicle Demonstra tion Project and its current director Tom Quinn.” Quinn, Locricchio said, was single handedly to blame for holding up disburse ment of already approved ARPA funds to Suntera.
“The Department of Defense official in charge of the ARPA electric vehicle program had recommended a major change in our contract and a restructuring of deliverables to accommodate what he perceived as significant breakthroughs Jonathan Tennyson and our team has made in the development of this electric transportation system,” Locricchio wrote. “That recommendation has been blocked for many months by Mr. Quinn to the extent that we must now seek replacement of that already approved funding from outside sources who naturally demand that the loca tion of the assembly facilities be in their state.”
Going in to Reverse
On December 28, Quinn forwarded to the board of directors of the HTDC a recommen dation to modify Suntera’s contract along the lines desired by Locricchio. “Although there is much concern about vehicle deliverables,” Quinn wrote, “there is a strong argument to once again postpone deliverables, this time under the EV 94 contract, in order to focus efforts on producing an all-composite vehicle – body and chassis. We attempted to make this contract modification previously by ac cepting selected deliverables under Quarters 2 and 3… Under this approach, Suntera would be paid for deliverables provided, but funding for the deferred deliverables would also be deferred. Suntera found this unacceptable, as they claim they would not have sufficient funding to proceed with the re-engineering and design effort.”
Quinn noted that the current contract called for the first vehicles to be delivered under the 94 contract to be built on a metal chassis – those vehicles having been re moved from the 93 contract and added to the 94 contract. “Suntera is now requesting to cease building vehicles with a metal chassis and deliver only vehicles with a composite chassis,” Quinn wrote. “ARPA recognized this as a sound business decision if their intent is truly to produce an all-composite vehicle, and supports the suggestion of not building any more vehicles with a metal chassis. To do this, Suntera requests deferral of deliverables under Quarters 2 and 3, and payment of all funding presently scheduled for Suntera in these quarters. This trans lates to advanced funding without deliverables under an existing contract and requires board approval.”
Quinn’s recom mendation: “That the board authorize the changes to Suntera’s contract as proposed. This in cludes deferral of specific deliverables for Quarters 2 and 3, but full payment for both quarters.
An Aborted Audit
Before Quinn’s recommendation could be heard by the board, a new twist arose in the Suntera story. On January 2, 1996, the De fense Contract Audit Agency (DCAA) launched a federal audit of HEVDP pro grams. Suntera was to be the first company to go under the magnifying glass.
The audit became an obstacle to Suntera’s getting an advance on funds. When the board met on January 4, it deferred acting on Quinn’s recommendation, opting to wait for the results of the audit and the advice of an ad-hoc committee established to look into the Suntera contracts – before making any decision.
On April 3, Kevin Koch, administrative grants officer with the Defense Contracts Management Command overseeing the au dit, expressed some disapproval of the whole Suntera situation in an e-mail to Quinn: “Please be advised that I am fast becoming concerned about the management of the grants at this time. My review of Suntera records within your office indicate that Suntera has received a total of $932,000 for efforts related to two contracts awarded un der the [1993 and 1994] grants. However, the records also indicate that no deliveries have been received for vehicles that were originally due in 1994. Finally, I understand that the most recent deadline of April 1, 1996 was not met as well. The reason I am told is because the contractor does not have $600 to make delivery with.
“Finally, I understand that although Suntera will not even allow your manage ment to enter their facilities the state is going to recommend giving Suntera an additional advance of $300,000 in funding. Frankly, these are indicators that the HTDC is failing to manage these grants appropriately.”
Despite the concerns, on June 5, Koch advised the HTDC that he had canceled the audit. “Although DCAA was not able to complete the total cost-incurred portion of the audit, they were able to provide sufficient contributing information to the overall project review I am conducting.”
The review raised several questions. Koch continued. With respect to Suntera, Koch listed the following concerns:
“Suntera has delivered one vehicle to date. It is my understanding that 2 other vehicles are complete yet Suntera has not delivered them. Is Suntera capable of delivery? If they do not deliver, how will HTDC meet the required contribution match for [the 1993 ARPA grant]? Also if Suntera is not capable of delivering, how will this affect their contin ued progress under [the 1994] grant?”
Slow Progress
By March, two major modifications to Suntera’s 93 and 94 contracts were awaiting Locricchio’s approval and signature. The first involved the revised completion date for the 93 contract. The second concerned adding $175,000 to the 94 contract to cover costs associated with analysis of composite material by MSC.
As the April 1 deadline neared for delivery of the ve hicles, Locricchio still had not re turned the revised supplemental agreement to the 93 contract. On March 27, Donna Mau, contract ad ministrator with the HTDC, sent Locricchio a re minder to have it signed, notarized, and returned “as soon as possible.” Mau also men tioned that Locricchio had not yet provided input on the draft supplemental agreement to the EV 94 contract, concerning the MSC testing. “Please let me know if the draft meets with your approval,” she wrote.
Locricchio appears not to have responded.
When April 1 arrived, Locricchio did not deliver the vehicles. Instead, he invited Tho mas Fujikawa, chairman of the HTDC ad-hoc committee on electric vehicle and Suntera issues, to inspect the vehicles in Honoka’a. However, Locricchio insisted, “No HEVDP representative, especially if it is Tom Quinn or Herb Hendrickson, will be permitted on Suntera property. They are not invited and not welcomed. Your delegation cannot be admitted to do the inspection if either of these parties are present.
The next day, Hendrickson and Quinn accompanied Hilo attorney (and now Hawai’i County council member) Bobbie-Jean Leithead-Todd – a member of the ad-hoc committee – on a trip to Honoka’a. Leithead -Todd was allowed to tour the facility, but Quinn and Hendrickson were denied access. Instead, they say, they were driven to a field, told to wait there, and promised that they would be rewarded with a viewing of the Suntera cars. After a while, Quinn and Hendrickson were picked up by a Suntera employee and taken to a parking lot, where, eventually, the three Suntera vehicles were driven. Although Hendrickson and Quinn saw the cars, they were not allowed to inspect them nor, they say, were they given an oppor tunity to talk to their designer, Tennyson.
On April 3, the ad-hoc committee held a long, contentious meeting. Locricchio now offered a new explanation for his failure to deliver the vehicles. The 93 contract, he said, continued to require delivery of five vehicles. (This appears to have been owing to the fact that Locricchio had not executed the contract amendment that had first been sent to him in December 1995, again – with revisions – in March, and which contract officer Donna Mau had reminded him about as late as March 27.) With the 93 contract still requiring five vehicles, and the 94 contract requiring six (including two moved from the 93 contract), Locricchio told the committee he would be liable for delivery of a total of 11 cars. Accord ing to minutes of the committee’s meeting, Locricchio said that “until EV 93 and EV 94 reflect delivery of three cars for 93 and six cars for 94 (total nine), they [Suntera] will keep any and all vehicles.”
On April 4, the full HTDC board met. Just a day earlier, the officer in charge of the audit of HEVDP had warned Quinn (as reported earlier) that he was “fast becoming concerned about the management of the grants at this time,” noting specifically (and solely) anoma lies with the Suntera contracts. Still, the board considered Quinn’s changes (proposed in December) to the 94 contract, allowing Suntera to defer certain Quarter 2 and 3 deliverables primarily, delivery of the first two C-Mobiles called for in the contract – to Quarter 4, which ended in April. Suntera would still deliver monthly and quarterly reports and install data acquisition systems, designed to ship performance data to a central EV data center, in the 93 contract vehicles. For this, Suntera would receive full payment for Quarters 2 and 3 – $294,340.
On the recommendation of the ad-hoc committee, the board approved the changes, with an added proviso that Suntera “cooperate with all necessary inspections that would need to be done by Mr. Quinn and Mr. Hendrickson to assure compliance with mile stones and to reflect the board’s earlier vote under EV 93 and 94 that the total number of vehicles to be delivered is nine (9) vehicles.” At the same meeting, the board again modified the contract completion date of the 93 con tract so that delivery of vehicles destined for O’ahu would occur within ten days of HEVDP’s payment of shipping costs or June 1, 1996, whichever came first. Shipping costs were to be deducted from the $31,197.74 bal ance on the contract.
One of the outstanding tasks remaining on the 93 contract was Suntera providing the state with a tax-clearance certificate. When this point was raised, Locricchio informed the board (according to minutes of the meeting) that “there probably are about $6,000 to $7,000 worth of state taxes that did not get paid off that may be pending” and that “there were no outstanding payroll taxes that he knew of.”6
On April 11, 1996, the first of three vehicles commissioned under the 93 contract was, for the second time in as many years, presented to HELCO. This time, it was delivered in Kona, so Steve Burns, with HELCO’s integrated resource planning program, could personally receive and inspect the red Sunray.
The event – and the vehicle – left HELCO frustrated. Burns elaborated on the reasons in an April 30 letter to Quinn. The condition of the vehicle was not up to par, Burns said: “The braking system could use improvements… Currently, the brakes require heavy pedal pressure to operate.
“Major ventilation problems exist,” Burns continued. “No air-conditioning has been installed. The vehicle has no windows which can be opened. Vehicle doors must be left open during operation to let air circulate and cool the vehicle; however, they have no latch nor safety catch mechanism which results in them sliding open upon acceleration and shut upon braking.”
Suntera also provided no transfer of own ership papers, only an acknowledgement of receipt for the Sunray with an inked-in addi tion “to show that the vehicle was given to HELCO as a ‘loan’, not a final delivery.” In addition, Burns had to pick up the registra tion, “which was still in Suntera’s name” at the Honoka’a facility on April 18. Rather than pick up the registration, on April 18, the vehicle was simply returned to Honoka’a.
A Long, Hot Summer
As for the other two vehicles, Locricchio was seeking further contract changes that would result in pushing back delivery dates yet again. On April 22, he sent a letter to HTDC contract administrator Donna Mau that included a handful of proposed changes con cerning acceptance requirements and comple tion dates.
The HTDC incorporated Locricchio’s re quested changes into a contract amendment, which was returned to him on May 9 for signature. The copy signed by Locricchio was returned, with still more changes that had not been agreed to by the state. Now, Locricchio was saying, the vehicles would be released only upon Suntera’s receipt of the advance payment under the EV 94 contract. Although the HTDC board had approved the advance, it had not been released to Suntera pending Locricchio’s execution of the contract amend ment.
On May 30, according to a chronology prepared by HEVDP, Locricchio telephoned Mau from Detroit, saying he would not deliver the vehicles by the June 1 deadline.
On June 3, Quinn sent a certified letter to Locricchio, advising him that Suntera “has failed to comply with the agreed upon date of June 1, 1996, for delivery of the vehicles under your EV 93 contract… Inasmuch as it is the state’s responsibility to ensure that products paid for are received, the state will now need to review its options to bring this contract to closure as well as review Suntera’s ability to meet future contract obligations.”
A few days later, Quinn was presented with further reason to question Suntera’s financial health. On June 6, one of Suntera’s subcontractors in Michigan notified Quinn that Suntera owed it more than $100,000 in past billings plus nearly $20,000 in interest, calculated at the rate of 18 percent a year.
The exchanges between Locricchio and HEVDP grew more heated. On June 17, Locricchio fired off a volley of letters, includ ing two to Quinn. The first letter demanded that board-awarded funds (presumably the advance on the 94 contract funds) be paid at once – and, in the event they were not, that Suntera would, for test purposes, “loan” HECO, HELCO, and the Air Force the ve hicles they were intended to receive under the 93 contract and that it would forward the results of all the test [sic] to ARPA without going through your office.” Finally, the Fed eral Court as part of our litigation against you and others would then determine if the con tract goals … has been meet and who should take title” (sic).
In the second, Locricchio informed Quinn that in no event would Locricchio sign the contract amendment for 1993 with the changes you have illegally made in it. A court will decide on your conduct. Let’s not waste time.
A third letter was mailed to HECO, HELCO, and Hickam Air Force Base. In that letter, Locricchio stated that HECO and HELCO would be paying $85,000 to HEVDP for the “privilege” of having the vehicles to use “(not own)” for a limited period of time.
In addition, Locricchio pointed to the troubled history of Suntera’s contractual rela tionship with HEVDP. “For some time the vehicle you sought to test has been sitting awaiting resolution of the impasse,” he wrote. “It is now clear that this matter will have to be resolved in court as the HTDC board, while passing the required steps to resolve the con flict, has refused to force the staff to act on the board mandates.”
Locricchio made a “simple proposal” to the addressees: “Upon your agreement we will forward to you the Sunray Pickette ve hicle (or C-Mobile in the case of the Air Force) for your use and testing. We will retain title and no costs will be required from you to be paid to Suntera for use of the vehicles. In the meantime, the Federal Court will determine the outcome of the litigation we will have filed and the eventual ownership of the vehicles will be determined… It will be our goal to have the court award Suntera final title to the vehicles as part of the damages for compensation losses Suntera has suffered due to HEVDP conduct.”
As a final fillip, Locricchio wrote: “We are pleased to announce, contrary to the rumors you may have heard from Mr. Quinn, that we have been exonerated of all audit suspicions raised by Mr. Quinn. Suntera’s reputation is now free of the cloud placed on it by HEVDP and we are now free to file our litigation and move this matter to a conclusion.”
Notice of Default
On August 1, HTDC Director Kim-Stanton sent a Notice of Default and Opportunity to Cure to Suntera, calling for immediate deliv ery of the vehicles and fulfillment of other contract terms.
Locricchio responded on August 8, inform ing Stanton that shipment of the vehicles would await Suntera’s receipt of funds to cover shipping costs and agreeing to delivery of the vehicles by August 15. (At an earlier HTDC board meeting, the board had agreed to pay direct shipping costs, with the amount to be deducted from the total $31,000 balance owed to Suntera.)
In a postscript, Locricchio informed Kim-Stanton that “the name of the C-Mobile has been changed. It’s new name is the J-n-T Mobile (Just-n-Time Mobile). The reference is to world crisis of global warming and green house effect… J-n-T Mobile easily beat out the HEVDP/HTDC inspired A.S.S.G.A.P. (ASSGAP) MOBILE name being considered for an understandably short while. ASSGAP stood for Anti-Subintelligent-State-Govern ment-Against-Progress MOBILE.”
However, when HEVDP attempted to ar range for HELCO to receive its Sunray – for the third time – HELCO balked. Steve Burns informed Quinn of management’s decision to pull out in a letter dated August 13.
Burns cited communication difficulties and perpetual delays as reasons for HELCO’s pull ing out. Referring to Locricchio’s letter of June 17, Burns said: “The final straw was when after being promised delivery for a year and a half, HELCO was sent a letter from Suntera which indicated that they were going to sue the state and in the mean time would only lend HELCO the vehicle.”
On August 14, Hendrickson observed a C-Mobile and a Sunray being driven into the HEVDP parking lot. The HELCO vehicle was delivered the next day to HELCO’s Hilo office, leaving HELCO eventually to ship the car to HEVDP in Honolulu. Suntera equated their delivery with comple tion of the contract. The HEVDP did not.
Dual Use Visors
Contractual obligations remained, according to an August 23 letter from contract administrator Shannon McKenzie: Upon inspection of the delivered vehicles, Hendrickson identified several items that did not meet contract specifications. These included a wiper that did not wipe, brake adjustments, non-latching doors, insufficient suspension, and the absence of sun visors.
Suntera had also failed to submit operator manuals, warranty papers, proper title transfer papers, monthly status reports from November 19, reports on matching contributions since June 30, 1994, and original copies of a final invoice and tax clearance. All of these items were required by the contract.
Locricchio responded on August 26 with a letter demanding that McKenzie retract the August 23 letter, a letter he considered defamatory. “Failure to do so is at your own peril,” he told McKenzie. In effect, Locricchio’s claim was based on the argument that Kim-Stanton’s letter of August 1 amounted to a contract amendment that eliminated all requirements except those specifically listed. He told McKenzie that she had “falsely raised other issues which under the August 1, 1996 B.S. to APL letter cited above are not applicable once delivery was accepted or would in no case have ever been applicable.”
In a postscript, Locricchio turned his attention to McKenzie’s request for “additional items” needed to meet contract specifications. On the matter of missing sun visors, for example, Locricchio referred McKenzie to the “vehicle kit” he was later to deliver. He further explained what he called the “Dual Sun Visor Occupant Mounted system” – i.e. simple sun visors worn by the passenger and driver in place of built-in, flip-down visors:
“The driver/passenger upper body/head sun visors which can be manually adjusted to screen out the sun from a multitude of angles. The diversity of this unit allows protection to the occupants both while interior use of the cab unit is in effect and during external missions away from the unit are occurring. This flexibility even including when the sun is coming into the rear window of the vehicle the visual/facial protection function can be thus utilized by reversing the application of the unit so that the driver/passenger lower head and neck areas might also be protected. It is recommended that the term ‘yo’ be used when endeavoring to apply this reverse use of the SUNTERA DUAL SUN VISOR UNITS. A copyright has been obtained on this unique use of the instructional portion of the unit.”
Or, on the matter of windshield washers (not provided), Locricchio notes they “are not resulted in the contract except for one vehicle. Suntera has supplied one vehicle with Washer. Suntera does appreciate the state waiving the non-required washers even though they weren’t required. While our thanks to you is not required, we waive it anyway.”
Four days later, on August 30, Locricchio filed a complaint in First Circuit Court in Honolulu. The complaint names as defendants Quinn, Stanton, Hendrickson, Yun, and other state employees; Koch, the Defense Contract Management Area Operation officer who supervised the aborted audit; Catherine Cruz of KITV-4 and Argyle Television (for broadcasting “defamatory” news stories based on “misinformation” sent out by the HTDC); the state office of attorney general; and other unnamed parties. Plaintiffs were Jonathan Tennyson and Suntera.
In the complaint, Locricchio demands money damages totaling at least $64 million for alleged breach of contract, for sheltering Yun from investigation, for causing harm to Tennyson’s health, and for ruining Suntera’s business relationships.
On September 3, Suntera delivered operator manuals and two vehicle kits filled with items intended to be substituted for certain vehicle specifications. These items included the “occupant-mounted” head visors, a cigarette lighter, a bottle of Rain-X, a highway flare, a battery-operated flasher with Velcro and suction cups, a can of “Gunk Non-Flammable Puncture Seal,” and metal brackets with straps and suction cups.
This was unacceptable to the HEVDP, and on September 13, McKenzie notified Locricchio that, “If Suntera fails to correct the deficiencies in its performance under the contract by 4:30 p.m. September 23, 1996, HTDC will terminate the Contract and pursue all available remedies.”
On this date, Locricchio answered with a letter informing the HTDC and the HEVDP that they would have to pay Suntera if they expected the company to do any additional work. For example, Locricchio said Suntera would provide the 25 missing monthly reports at $10 per report and would adjust the brakes for $66.00. The total charge for all services and parts, Locricchio said, would be $1,694.92.
TROs
This did not please the state agencies, and on October 4, Kim-Stanton sent notice to Locricchio that the 93 contract was terminated. On October 11, Locricchio filed a motion for a Temporary Restraining Order (TRO) in the U.S. District Court for the District of Hawai’i to stay the termination until the matter could be argued in court on October 18. (The case had been moved to federal court as a result of Koch’s inclusion in the list of defendants.)
To return the lawsuit to state court, Suntera removed Koch as a defendant and filed a motion to remand the case back to state court on October 16. It was approved by the federal court on the same day.
In the shuffle between state and federal court, the TRO motion slipped through the cracks, and the EV 93 contract was terminated on October 18.
This caused Locricchio to file another motion for a TRO on November 13 in circuit court, this time, to prevent the state defendants from any further supervision of the contract, to force the HTDC to release approved funds (which Locricchio says amount to $413,000), and to appoint a master to oversee the release of those funds.
The motion stated that if the court denied the TRO/master appointment request, Suntera would close its Hawai’i operations. The resulting loss of employment for its current and potential employees on the Hamakua Coast will result in immediate and irreparable harm to those employees and to plaintiffs commitment to them.”
The motions were not granted.
Locricchio was dealt another setback when the court determined that his role as witness and CEO of Suntera prevented him from serving as Suntera’s attorney as well. The litigation remains pending at press time.
Postscript
On March 28, 1997, McKenzie notified Locricchio that Suntera’s second contract would expire on April 30. McKenzie noted that, after receiving payment on August 3, 1995 for Quarter I milestones, Suntera had not provided any reports or deliverables over the last seven quarters.
On April 25, 1997, Tennyson died of cancer. According to Guy Archer, defending attorney for some of the state parties, Locricchio has suggested adding a wrongful death charge to the lawsuit.
Suntera was given until April 30 to hand over all finished or unfinished material to the state. April passed without a word from Locricchio. McKenzie wrote him again on May 30, giving him until June 30, 1997 to submit all materials related to both contracts.
Locricchio’s response on June 10 argued that “all materials without exception are the property of Suntera,” and that any effort to take those materials would “be deemed criminal theft.”
Currently, all three vehicles sit in the Kaka’ako electric vehicle facility shared by HEVDP and U.S. Electricar. The HEDVP is trying to find homes for the vehicles while U.S. Electricar has agreed to try to fix the cars design and construction flaws.
1. HEVDP memo dated November 21, 1995, titled “Suntera Contracts and Special Efforts Made to Assist Suntera.”
2. These events are detailed in a chronology prepared by the HEVDP staff in May 1995.
3. HEVDP records indicate, contrary to Locricchio’s claim, that the full proposal for development of composite vehicle technology was submitted to DARPA. Total value of the two projects came to $4.15 million, of which DARPA was asked to contribute $2 million. According to HEVDP officials, DARPA rejected the second project, identified in the proposal as an “option,” but agreed to the first “basic” project.
4. Letter from Amador to Quinn, December 5, 1995.
5. The account of this meeting is provided in a document labeled “Minutes of the Meeting,” prepared by the HEVDP.
6. According to a federal tax lien filed with the state Bureau of Conveyances on March 17, 1997, Suntera was – at the time of Locricchio’s statement – delinquent in payment of payroll taxes. The lien claims taxes were owed for three quarters ending September 30, 1995, December 31, 1995 and March 31 1996. By March 1997, the IRS was claiming Suntera owed a total of $15, 480.49 in taxes, interest, and penalties.
Volume 8, Number 1 July 1997
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