Kodak officials irked about contracts Panel investigating procurement practices

November 24, 1993|By John W. Frece | John W. Frece,Staff Writer

Representatives of Eastman Kodak Co. yesterday accused Maryland's Department of General Services of intentionally channeling thousands of dollars in contracts for high-speed printing equipment to a rival company.

In testimony before a legislative task force investigating state procurement practices, Kodak officials alleged that General Services subtly steered contracts to Xerox Corp. by declaring that Xerox was the "sole source" for the specific equipment the department wanted.

At other times, Kodak officials contended, General Services drafted bid specifications for printing equipment that were tailored so closely to Xerox's products that other potential bidders were, as a practical matter, excluded. The allegations were typical of complaints that have been made periodically about the way Maryland government purchases goods and services, and the sort of criticism that prompted legislators to establish the task force.

Leonard Redon, general manager and vice president of markets development for Kodak, claimed Kodak's printing equipment would have compared favorably with Xerox's, and would have been less expensive as well, if only Kodak had been given a fair opportunity to compete.

But William E. Culen, director of General Services' division of printing and publications, disagreed. "They [Kodak] cannot do the same thing [as Xerox]," he said. "Somebody can always do it less expensively once the [competition's] numbers are known. The differences in equipment costs are often incremental, but sometimes the differences in equipment capability are substantial."

Mr. Culen said Xerox's top-of-the-line printer, called Docutech, is capable of reproducing 135 copies a minute, while Kodak's top printer, called Lionheart, can produce only 90. Kodak's representatives had argued that a combination of Kodak equipment could have competed with Xerox's single printer.

"You can't say two pickups equal a dump truck, or make those kinds of arguments," Mr. Culen said. He said he believed Kodak was attacking the procurement process because "I don't think they have a product that meets their competition head-on."

Mr. Culen more broadly denied that General Services has steered contracts to any particular vendor, although he acknowledged the department has sometimes relied too heavily on a particular company's product description brochure in drafting bid specifications.

"We recognize there is a problem there and we're trying to correct it," he said.

The legislature's joint task force on procurement was created after the award of a series of contracts for, among other things, lottery computers, MedEvac helicopters and the state's vehicle emissions testing program. Critics have charged that some awards have been tainted by interference from special interest lobbyists, legislators or others.

Testimony before the panel also has indicated that those responsible for buying goods and services for state agencies often are inadequately trained. Voluminous records of what the state buys are kept by hand, which makes it difficult if not impossible to evaluate whether the state is getting its money's worth.

The panel is expected to have at least two work sessions in December before forwarding recommended changes in the state procurement law to the 1994 General Assembly, which will convene in early January.

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