The General Services Administration has barred Computer Sciences Corporation from new government contracts pending the outcome of a conspiracy, racketeering and fraud trial involving the computer company and current and former employes.
During yesterday's record stock trading, CSC, a major government contractor with principal offices in El Segundo, Calif., and Northern Virginia, was the biggest loser on the New York Stock Exchange with a 19 percent plunge from 19 3/4 to 16.
The computer company was charged in a 57-count indictment last month with conspiracy to bribe a GSA contracting officer during negotiations between the company and GSA on a government-wide computer time-sharing contract, and with fraudulently boosting the prices paid for computer services by government agencies.
John W. Luke, CSC vice president and member of the board of directors, was one of the individuals indicted along with the corporation. Luke is a former president of CSC's infonet division.
Also charged were Erwin Allen, former vice president of the Infonet division; Thomas A. Marti and Norman W. Derrick, employes of CSC; Herbert G. Blacker, president of Icarus Corp. of Maryland, a CSC subcontractor on the government contract, and Peter C. Loux, former branch manager of marketing for CSC in Rosslyn.
Among other things, the indictment charges that the computer company promised a GSA contracting official a job in exchange for inside information during negotiations on the National Teleprocessing Services Contract, a contract that has been worth at least $100 million to CSC. Shortly after the contract was awarded, the employe was hired by CSC through a Lichtenstein subsidiary, the indictment said.
The indictment, handed down by a federal grand jury in Alexandria Oct. 8, also charged the company with increasing the price of computer processing charges under a "fixed price" contract by, in effect, changing the measure of usage and with charging one goverment agency for what the company said were new and enhanced services when the agency was actually receiving the same old stuff.
Trial on the charges is scheduled for Feb. 2, 1981, and is expected to take up six to 10 weeks. The company noted in a press release that the GSA suspension is for a "temporary period" and does not bind other government agencies.
Government contracts are a "substantial part of CSC's operations. For instance, in the company's data services operations, the federal government accounts for about 36 percent, according to the company's annual report.
In addition to affecting potential new business, the GSA decision may also affect about 200 users of the company's Infonet service who are not yet covered by a multiple award schedule contract for the fiscal year that began in October, the company said.