The Math Box, a computer sales firm that recently won a federal contract, was started by Steve Freed and Jerry Freed in 1974. An article on July 1 incorrectly reported the founders.

In this case, the little guy won a big one.

The Math Box, a small, $12 million-a-year Rockville-based chain of computer retail stores edged out the Xerox Corp. in competitive negotiations with the General Services Administration to set up a pilot retail computer store and training center for federal employes.

"It's unbelievable," said Avner Parnes, president of The Math Box. The firm not only beat out Xerox, it also prevailed over several of its biggest rivals in the local personal computer retail market--Radio Shack and Computerland.

The contract promises The Math Box at least $100,000 in guaranteed sales to the federal government in the first year, although a Math Box executive said that the deal could be worth $20 to $40 million over the life of the three-year contract. No personal sales to federal employes are permitted.

The store will be set up in the GSA headquarters building at 18th and E streets NW, and will open its doors Aug. 16.

"It's part of a bigger program designed to bring computer technology closer to government decision makers," explained William Frazer III, the GSA project manager. He said The Math Box was selected because its proposal was "better than the offerings of the competition" on technical, business and price criteria.

The Math Box, which runs six local retail stores from Wheaton to Springfield, pulled off the coup by putting together a coalition of five companies that provide the varied types of services sought by GSA.

In that package, M/A Com Sigma Delta Inc. will manage the related services and do the training. Supplies will be provided by Moole Business Centers, MAI/Sorbus will provide maintenance, Software Centers International will provide the software and PC Telemart will hook up an on-line computer library for associated computer products. Math Box will be the hardware and software retail sales agent.

"Together we are a tremendously strong technical and financial team," said Parnes. "We will give federal employes technical support, loaners when a machine is down, a tremendous amount of advice which you can't get from one source."

Frazer said that over the past 20 years, federal agencies have purchased about 18,000 general purpose computers, but through the remainder of the decade as many as 500,000 units--including versatile and increasingly inexpensive personal computers--could be bought.

Parnes said although he is guaranteed $100,000 worth of business in the first year, he expects sales to be in the $2.5 million to $4 million range.

"The potential value of the contract comes from opening other stores," said Parnes, an Israeli immigrant who built the company from scratch in Rockville a dozen years ago. "That could be worth $20 to $40 million over the next three years."

The store will offer, in stock, six types of computer systems: the IBM PC, Apple, DEC, Osborne, Compaq and Fortune. In addition, Parnes said, "we will put together any other subcontracts for different computer systems that are sought on request."

Also bidding on the contract were Radio Shack, Computerland of California, Personal Computer Center, On-Line/Off-Line and American Calculator and Computer Corp.