*SWRI WHILE SERVING AS A SECOND-TIER SUBCONTRACTOR ON A U.S. ARMY PROGRAM HAS HAD A PURCHASE ORDER FOR ELECTRIC DYNAMOMETER LOAD SYSTEMS TERMINATED FOR CAUSE BY TIBURON ASSOCIATES INC. THE FIRST-TIER SUBCONTRACTOR. THE BASIS OF SWRI'S TERMINATION WAS SWRI'S ALLEGED FAILURE TO MAKE PROGRESS IN DELIVERING ELECTRIC DYNAMOMETER LOAD SYSTEMS. IT IS SWRI'S POSITION THAT ANY ALLEGED FAILURE TO MAKE PROGRESS UNDER THE PURCHASE ORDER WAS ATTRIBUTABLE TO SWRI'S VENDOR. DIRECT DRIVE SYSTEMS WHICH HAD COMPLETE RESPONSIBILITY FOR THE DESIGN AND MANUFACTURE OF THE HARDWARE AND THAT ANY FAILURE OF DDS TO PERFORM WAS BEYOND SWRI'S REASONABLE CONTROL UNDER THE TERMS OF THE PARTIES' CONTRACT. SWRI FILED SUIT AGAINST DDS FOR ITS FAILURE TO DELIVER THE DYNAMOMETER LOAD SYSTEMS AND THIS MATTER HAS BEEN SETTLED. AS A CONSEQUENCE THE PRIME TIBURON ASSOCIATES INC. AND SWRI WERE PROPOSED FOR DEBARMENT ON MAY 12 2017 BUT IT WAS ALMOST IMMEDIATELY DETERMINED THE PROPOSED DEBARMENT OF SWRI WAS NOT APPROPRIATE IN THE CIRCUMSTANCES AND IT WAS REMOVED ON MAY 16 2017 AND SWRI HAS BEEN DETERMINED TO BE A "PRESENTLY RESPONSIBLE CONTRACTOR."