Zenith contract bid violated trade act

January 01, 1993|By New York Times News Service

AUSTIN, Texas -- In ordering the Air Force to terminate a $740 million contract awarded to Zenith Data Systems Corp. for desktop computers, an administrative judge agreed with the losing bidders that Zenith's bid did not comply with the Trade Agreements Act of 1979, as required by the contract.

The decision to uphold the protests was made on Dec. 23, but Judge Catherine B. Hyatt of the General Services Administration's Board of Contract Appeals did not disclose her reasoning until late Wednesday.

She essentially decided that the computer monitors involved in Zenith Data's bid had contained foreign-made components that were not "substantially transformed," as required, when assembled in the United States or any other of the about 50 countries covered by the trade act.

"We must conclude," she wrote, "that protesters are correct when they assert that the monitors proposed by Zenith will not comply with the requirements [of the trade act]."

Zenith Data, whose U.S. headquarters are in Buffalo Grove, Ill., is part of Groupe Bull of France.

Tom Buchsbaum, a Zenith Data vice president, said yesterday that his company disputed the ruling and would appeal it. Mr. Buchsbaum said he was puzzled by the judge's findings and asserted that all the monitors were assembled from components in the United States.

The ruling again delays, and perhaps kills, the so-called Desktop IV contract, which was to have been a model contract for speedy government procurement of technology products. Since the Air Force called for bids in July 1991, PC makers have developed more powerful, less-expensive systems.

Clarence D. Long III, a lawyer with the Air Force Office of General Counsel, said yesterday that the Air Force had three options.

"We can drop the procurement, we can amend it and do another round of best and final offers or we can attempt to proceed with the procurement in some other way," he said. Mr. Long said he expected a decision soon.

The award to Zenith Data was protested in September by Compuadd Corp. of Austin, the Electronic Data Systems Corp. of Dallas, Government Technology Services Inc. of Herndon, Va., and Apple Computer Inc. of Cupertino, Calif., all among the losing bidders.

Judge Hyatt also said the Air Force did not give sufficient consideration to awarding the contract to more than one company.

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