The Army ended a fierce British-French bidding duel for the largest U.S. purchase of foreign military equipment yesterday by choosing a consortium of French and American firms to supply a $4.3 billion mobile combat communications system.
In a contest complicated by high-level diplomatic contacts and scandals involving the U.S. partners of the rival consortia, the Army awarded the contract to the Paris-based concern of Thomson CSF and GTE Corp.
Their bid to equip the Army with a sophisticated, secure communications network that operates like cellular telephones was $3.1 billion lower than the proposal put forth by Plessey Defense Systems, which is based in London, and Rockwell International Corp., according to Undersecretary of the Army James R. Ambrose.
Administration officials said President Reagan sent a letter Monday to British Prime Minister Margaret Thatcher informing her of the award and pointing out other projects ripe for British participation, including the Strategic Defense Initiative.
Thatcher appealed to Reagan Aug. 30 to choose the Plessey-Rockwell group, citing London's reliability as an ally and calling the contract "extremely important" to Britain.
French officials responded in a warning to U.S. diplomats in Paris that bypassing the lower Thomson-GTE offer would damage bilateral relations.
Administration officials said the diplomatic flurry was partly responsible for delaying the contract award despite an internal Army recommendation more than two months ago to accept the lower bid to provide the system developed by Thomson, called RITA, which is used by the French and Belgian armies.
At a Pentagon briefing yesterday, Ambrose dodged questions on the impact of the diplomatic wrangling. He said the award was delayed by a routine cost-analysis of the two bids that was ordered by Defense Secretary Caspar W. Weinberger.
Describing the bidding process as a "hotly contested affair," Ambrose said the final decision was made "on a strict procurement basis. The main basis for the selection was a fairly substantial difference in prices."
He said the rival systems are of "equal performance capabilities." The bid for Plessey's Ptarmigan system, which was developed for the British Army, was substantially higher, Ambrose explained, because it included more expensive computer terminals and equipment that had to be shipped to the United States from abroad.
Arnold Rosenberg, Plessey's U.S. defense consultant, said in response to the award that "there's absoultely no way" the RITA system can cost $3 billion less than Ptarmigan. He predicted that the GTE-Thomson consortium will boost the price with contract changes.
Officials for GTE and Thomson could not be reached.
A spokesman for Rockwell had no comment. The company, which faces possible debarment from all government contracts, has been suspended from receiving Pentagon contracts for 30 days because it pleaded guilty last week to criminal charges of mischarging the government in 1982 on an Air Force contract.
Ambrose said if the Ptarmigan system had been selected for the contract, the Pentagon would not have been able to make the award to Rockwell until the suspension was lifted and the debarment issue resolved.
A member of the opposing consortium also had problems with the government. A GTE subsidiary pleaded guilty in early September to illegally obtaining government documents.
The communications network to be provided to the Army's five corps and 26 divisions over the next five years will modernize an outdated, cumbersome system that relies on crank-up phones and wires that must be laid whenever troops move.
Defense officials decided to buy "off the shelf" from a foreign supplier rather than spend the time and money to develop a U.S. model. Ambrose said the decision will save more than $500 million in research and development funds and more than $9.5 billion in acquisition, maintenance and re-equipment costs over the life of the system.
Ambrose said more than 70 percent of the contract work will be handled by the U.S. contractor.