Recommendation Concerning Approval of the Mediated Settlement of the Case of Escambia County v. Spirit, Inc. and Spirit Solutions, Inc., Case No. 2019 CA 001402.
That the Board take the following action:
A. Approve a settlement reached during mediation for the sum of $85,000.00 to be paid to Escambia County in exchange for the mutual execution of general releases by and between Escambia County and Spirit Solutions, Inc. and Spirit, Inc.; and
B. That the Board authorize the County Attorney’s Office to execute a settlement and release agreement which provides for payments to be made by Spirit Solutions, Inc. and Spirit, Inc. to Escambia County on a monthly basis until the full settlement payment is made and that the litigation remain stayed so as to allow enforcement of the payment schedule. |
In February of 2017, Escambia County had solicited requests for proposals for a case management software program for its Department of Corrections. The purpose of the proposal was to engage a service provider to implement evidence-based practices and outcome reporting capabilities, including consulting services and necessary software for the employees of the Department of Corrections and affiliated criminal justice agencies. Most importantly, the Department of Corrections needed case management software to accommodate a single name record entry and to be able to track all case management, accounting, community service, offender services and detention management activities for a particular probationer or offender.
As part of the procurement, a selection committee selected Spirit Solutions, Inc. to implement the case management software program. Spirit Solutions agreed to implement the case management software within 190 days of the notice to proceed. Spirit Solutions did not perform the contract as agreed between the parties and eventually a termination was approved by the Board. Prior to filing suit, voluntary mediation took place on July 10, 2019, which was then postponed to allow Spirit Solutions to craft a case management software program that would meet the needs of the Department of Corrections. However, no such alternative software program was submitted. Suit was filed. A second mediation conference took place on February 11, 2020, by agreement of the parties.
Attached to this recommendation is the mediated settlement agreement which provides that the County will be paid $85,000.00 over the course of a year in eleven equal monthly payments of $5,000.00 and then a balloon payment of $30,000.00 at the beginning of the twelfth month. Should Spirit Solutions miss any payment due date, then upon the giving of notice and the expiration of ten-day cure period, the County can obtain a stipulated final judgment for the remaining balance of the settlement amount. For example, if Spirit were to miss the third payment after having paid $10,000.00, then the County would be entitled to a final judgment in the sum of $75,000.00 should the cure period expire without further payment by Spirit.
This office recommends settlement due to conflicting factual versions as to what elements Spirit was to provide in the custom software program and the needs of Corrections staff communicated to Spirit during user acceptance testing meetings. Although the County paid Spirit $237,325.00, pursuant to the contract, the County would not be responsible for annual licensing fees in the sum of $65,000.00, nor any charges for extra work that Spirit claimed were owed it due to its contentions that additional requirements were imposed by the County that were not part of the initial scope of work. Spirit claimed over $180,000.00 in extra work.
Due to the uncertainties of litigation and the arguments by both parties that each would bear some responsibility for the failure of the software program to be implemented, this office together with Richard Powell, the Director of Corrections, recommend that the Board approve this proposed settlement. |