A Flow General Inc. subsidiary was fined $30,000 yesterday by a U.S. judge in Alexandria for illegally buying inside information to help win a $2.6 million Army computer contract in 1980.
U.S. District Court Judge Albert V. Bryan Jr. imposed maximum $10,000 fines on each of three criminal conspiracy and corruption charges against the firm. The subsidiary, General Research Corp., pleaded guilty to the charges last month in U.S. District Court in Alexandria.
In exchange for the plea, federal prosecutors agreed to drop six counts of an original 20-page indictment and dismissed all charges against five company employes.
"We're glad to have the matter behind us," company representative Douglas Poretz said yesterday. He declined to comment on whether the case might lead to General Research being barred from future government contracts.
General Research has several hundred employes and offices in McLean, Santa Barbara, Calif., and elsewhere. Last year, its management systems division held government contracts worth $10.7 million, with $8.9 million of it defense-related. The firm, which is engaged in the design of sophisticated computer software, accounted for 75 to 80 percent of Flow General's $40 million in defense-related revenues in 1981, according to Poretz.
Federal prosecutors contended that General Research improperly offered jobs and the promise of bonuses to two Army procurement officials intimately involved in development of a servicewide computer system for assigning Army personnel. Prosecutors charged that both men accepted the job offers in August 1980, about a month before they left the Army and five weeks before the contract was awarded to GRC.
During the interim, the two officials disclosed confidential information concerning two competing firms' bids and helped GRC tailor its proposal to meet Army specifications, the government said. One of the officials was considered the Army's in-house expert on the proposed system, prosecutors said at the time of the plea.
In one instance, General Research employe Paul G. Shinderman allegedly reviewed drafts of GRC's bid proposal and wrote one section of it while still an Army employe, according to a prepared statement issued by the U.S. Attorney's Office in Alexandria.
Shinderman and the other four employes resigned on May 24, the day General Research entered its guilty plea.
The charges--which Flow General President Joseph Hall earlier characterized as "technical violations"--included conspiracy, aiding government employes in actions that affected their own and the company's financial interests, and a federal revolving-door statute governing former government employes who enter private business.