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Tech Firm Sues UA BoardLock Icon

3 min read

A Reston, Virginia, technology company said it entered into multimillion-dollar contracts with the board of trustees of the University of Arkansas only to later learn that the board doesn’t have the money for the company’s work.

Carahsoft Technology Corp. filed a lawsuit in U.S. District Court in Little Rock against the board seeking $8.59 million in damages.

The legal trouble started in 2020, when Carahsoft entered into two five-year contacts with the board of trustees on behalf of the Arkansas Research & Education Optical Network of Fayetteville, also known as ARE-ON, the suit said. The contract called for Carahsoft to provide software licenses and services to ARE-ON.

ARE-ON is a nonprofit association controlled by presidents and chancellors of participating schools of higher education. It provides “a high-speed fiber optic backbone network throughout the state,” according to its website.

ARE-ON’s mission is “to promote, develop, and apply advanced application and communication technologies to support and enhance education, research, public service, and economic development.”

Carahsoft said in the lawsuit that it paid for the software license upfront for the project. “None of the amount paid by Carahsoft was refundable,” the suit said.

In connection with the software contract, the university paid $712,000 for the first year under that contract, as required, but didn’t pay the second year’s amount of $890,000 and wasn’t planning on paying for the rest of the years, according to the lawsuit. ARE-ON also hasn’t paid for two years of services, which was $1.3 million annually, the suit said.

In a letter to Carahsoft on Jan. 19, 2021, JoAnn Maxey, general counsel for the University of Arkansas System, said, “Unfortunately, the current situation and actions precipitating the issuance of the [purchase orders] was without appropriate authorization of the ARE-ON Executive Committee and was outside the delegated authority of ARE-ON’s then Executive Director who is no longer in ARE-ON’s employ.”

The lawsuit doesn’t say who the executive director was, but Robert Nordmark’s LinkedIn profile shows he led the organization between July 2019 and September 2020.

“Notwithstanding this fact, ARE-ON recently made efforts to get special appropriations, which may have provided needed funding for this project, but those efforts have not been successful.” Maxey said in the letter.

Maxey also said in the letter, which was attached as an exhibit in the suit, that ARE-ON doesn’t anticipate receiving the money.

ARE-ON wanted to partially terminate one of the contracts. It asked Carahsoft to stop working on any new service for ARE-ON but to continue working on services underway.

Carahsoft said in the suit that the purchase orders are valid and the board of trustees is responsible for the payments. Carahsoft said in the suit that a partial termination of the contract wasn’t permitted.

Carahsoft is suing for breach of contract and said that it’s owed $5.96 million for one of the contracts and $2.6 million for the other.

Carahsoft’s attorney is Timothy Hyland of Reston, Virginia.

A spokesman for the University of Arkansas System said it was the system’s policy not to comment on ongoing litigation.

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