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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 29, 1998
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Commodore Applied Technologies, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-11871 11-3312952
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
150 East 58th Street, Suite 3400
New York, New York 10155
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 308-5800
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(Former Name or Former Address, if Changed Since Last Report)
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CURRENT REPORT ON FORM 8-K
COMMODORE APPLIED TECHNOLOGIES, INC.
July 29, 1998
Item 5. Other Events.
In July 1998, Commodore Applied Technologies, Inc. (the "Company") was
notified that the U.S. Army is considering recommending that the Company's
wholly-owned subsidiary, Commodore Advanced Sciences, Inc. ("Advanced
Sciences"), be proposed for debarment from future contracting with any agency in
the executive branch of the U.S. Government. In a letter, the Army stated that
the basis for its proposed action is the alleged participation of Advanced
Sciences in the alleged wrongdoing of a third party in connection with
submission of a bid in August 1996.
The Army has provided the Company until August 22, 1998 to respond to
its allegations. Advanced Sciences has initiated an investigation of the Army's
allegations. Advanced Sciences intends to timely respond to the Army by denying
any knowledge or any reason to know of the alleged wrongdoing and arguing that,
as a result of its lack of actual or constructive knowledge of any wrongdoing,
the rules and regulations concerning debarment do not require that Advanced
Sciences be debarred from future contracting with the U.S. government. The
Company would also support its position by supplying the Army with supporting
documentation.
There can be no assurance that Advanced Sciences will prevail in its
opposition to the Army's allegations. An adverse determination by the U.S. Army
would have a material adverse affect on the Company's business, financial
condition and results of operations.
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On August 12, 1998, the Company's Teledyne-Commodore LLC joint venture
announced that it has filed an official protest with the General Accounting
Office of the U.S. Army as a result of the omission of the Company's SET
technology from the U.S. Army's Assembled Chemical Weapons Assessment program
technology demonstrations. Additional information concerning the protest is set
forth in the press release filed herewith as Exhibit 99.1.
Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
Not Applicable.
(b) Pro Forma Financial Information.
Not Applicable.
(c) Exhibits.
Exhibit No. Description
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99.1 Press Release, dated August 12, 1998, of Teledyne-Commodore LLC.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Current Report to be signed on its behalf by
the undersigned thereunto duly authorized.
COMMODORE APPLIED TECHNOLOGIES, INC.
Date: August 12, 1998 By: /s/ James M. DeAngelis
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James M. DeAngelis, Treasurer
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EXHIBIT INDEX
Exhibit No. Description
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99.1 Press Release, dated August 12, 1998, of Teledyne-Commodore LLC.
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300 Sportsman Drive
Mail Stop 68
Huntsville, Alabama 35805
Telephone: (256) 726-1483
LOGO FAX: (256) 726-3330
NEWS RELEASE
For Immediate Release
Contact: Gerald G. Watson, President & CEO
(256) 726-2608
Teledyne-Commodore Files Protest Over Contract Award
HUNTSVILLE, Ala., August 12, 1998 - Citing major errors in the evaluation
process, Teledyne-Commodore LLC (T-C) has filed an official protest with the
General Accounting Office after T-C's technology to destroy chemical weapons
was omitted from the U.S. Army's Assembled Chemical Weapons Assessment (ACWA)
program technology demonstrations.
T-C's solvated electron technology (SET(TM)) was one of six technologies
selected in May, 1998 to move into the demonstration phase to identify
alternative approaches to incineration for the disposal of the United States'
stockpile of chemical weapons. However, in late July, 1998 the Army said it
had discovered it was short of funds and decided to down-select to three
technologies for demonstration testing. The three technologies omitted from
demonstration testing included the SET(TM) technology.
T-C filed its protest of the ACWA determination with the GAO Monday, August 10,
1998. The action is expected to delay the program until the protest is resolved.
"In our debriefing by the selection officials last week as to the rationale for
the award decision, we came to firmly believe that major errors were made in
the evaluation process and that the real intent of Congress was not being
followed," said T-C President Gerald Watson. "Meanwhile, Congressional
supporters of the program have laid the groundwork for more funding, and
members of the ACWA Dialogue groups have urged that ways be found to permit the
six technologies previously selected to be given the opportunity to
demonstrate their technologies."
"We are convinced that the SET(TM) process, coupled with our ammonia fluid jet
cutting and ammonia washout of explosive components, offers the only proven
alternative to incineration. It is a mature and fully integrated system," said
Watson. "Adding to our confidence in the SET(TM) technology is the fact that we
have already processed more than twice as many assembled rounds of ammunition
as any other technology. This has been done consistently, safely and
effectively, at our pilot plant at Redstone Arsenal."
In testing at Redstone Arsenal, M61 Rockets fully loaded with live fuses, high
explosive propellants and agent simulant were cut open and the energetics
removed and transferred automatically to the reactors where they were
destroyed, Watson said.
"I believe our process is the only process among the competitors scaled to
handle full sized rockets and projectiles," Watson said. "This is significant
and is in compliance with the RFP requesting each of the competitors to
demonstrate their capability to destroy a fully assembled chemical munition."
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Watson said he also is convinced that the proposed Teledyne-Commodore process
fully meets the Congressional mandate of a nonthermal complete solution that
neutralizes and destroys all agents and energetics, as well as decontaminating
the metal components and waste products. He said that, unlike other companies
which use multiple technologies, the SET(TM) process is the only technology
required and is effective against all agents, energetics, and metal components,
and the waste streams meet Federal requirements for disposal in permitted
landfills.
Among mistakes made in the process, Watson said, was the failure to follow
ACWA's own evaluation criteria, including properly calculating "best value" and
allowing for a "total system solution." For example, he said, the company
learned at the debriefing that, even though the evaluation criteria established
technical rankings as the most important factors, two of the three winning
companies had the lowest technical evaluations of the original six. He added
that other errors in the process included failure to properly consider
government financial support for tests carried out by two of the announced
winners, and the opportunity for some bidders to reduce costs after the
submission of bids.
"The only way we felt we could help bring about the opportunity to demonstrate
our technology on a level playing field was to file an official protest to the
GAO to show that we were mistakenly omitted from the demonstration phase of the
program," Watson said.
The company noted that Senators Mitch McConnell and Wendell Ford of Kentucky
have won Senate approval for additional funds aimed at permitting all six
companies to demonstrate their technologies. The funding for the new fiscal
year beginning October 1, 1998 is expected to be resolved in joint conference of
the two houses of Congress in September.
Teledyne-Commodore, a 50-50 joint venture of Teledyne Environmental, Inc., a
subsidiary of Allegheny Teledyne Incorporated (NYSE:ALT), and Commodore Applied
Technologies, Inc. (ASE:CXI), was formed in August 1996. It employs Commodore's
proprietary, patented SET(TM) process, a non-thermal chemical process that works
at ambient temperatures and low pressures.
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