A division of Macke Co., one of the nation's largest vending machine firms, inadvertently was awarded a U.S. Army contract set aside by the government for small businesses.

And after officials at the Aberdeen Proving Grounds in Maryland realized their mistake, they decided to keep the contract with Macke rather than give it to a smaller firm because it would have been too costly to change, according to Army officials.

If the Macke contract were cancelled, "the government would be responsible for costs incurred by Macke," according to an Army administrative report that characterized the costs as "substantial." In addition, if the contract were reopened for bids by small businesses, costs would be higher because Macke's bid was 13.7 percent lower than the nearest small business bid "and thus it would be uneconomical to proceed with a Small Business set-aside," the report said.

"We're not too happy, but it's one of those things," an Army spokesman said last week.

According to the Army's administrative report, Macke Laundry Service Co. was interested in a contract to supply and maintain washing and drying machines for the Aberdeen Proving Grounds in Maryland. An Army procurement official told a Macke representative that a firm with less than 500 employes was eligible to bid on the project. "No mention was made of including parent companies' or affiliated companies' employes in this total," the administrative report said.

"The representative of the Macke Laundry Service Co. stated his company had only 45 to 50 employes and thus qualified as a small business under the size standard involved," the report continued. "At the time, none of the procurement personnel dealing with this matter had any personal knowledge of the Macke Company's size and thus they had no reason to question Macke's status as a small business."

Macke Co. has more than $230 million in annual sales and approximately 11,000 employes.

Macke's laundry firm submitted the best bid -- $157,548 -- and was awarded the contract on April 8. However, Solon Automated Services, one of the nation's leading suppliers of laundry equipment, learned of the award and protested it.

But the Army dismissed the protest because Solon is not a small firm and therefore could not qualify as an interested party.

A Macke laundry services spokesman yesterday said that if the government did not want it to have the contract, Macke would have backed out gladly. The Army said that Macke did not try to deceive government officials about its size but was misled by the Army's procurement officers.

"Macke's participation in this solicitation was in good faith, and the procurement personnel at Aberdeen Proving Ground are in part responsible for Macke's certification" as a small business, the administrative report said. "There being no bad faith on Macke's part; no basis exists for voiding the contract."