The slogan "Made in Japan" continues to fascinate the federal government's computer buyers, no matter what President Reagan may do or say about unfair Japanese trade practices. And some procurement officials seem willing to overlook just about anything in their zeal to buy Japanese products.
Consider this: One day after Hitachi's American distributor, ViON, agreed to plead guilty to 50 counts of fraud on an Army computer contract, the U.S. Customs Service awarded the distributor a $19 million contract for a Hitachi computer system.
As we have reported, the Agriculture Department notified an American computer manufacturer on April 17 that it had lost out on a $48 million contract to the Hitachi distributor. That was the very day the president announced tariffs on certain Japanese products as punishment for manufacturers' violations of trade agreements.
The particular Hitachi computers the two agencies want aren't on the punitive tariff list. But the giant Japanese firm was one of several that had been dumping computer chips on the U.S. market, which was the reason for the tariff.
The Army's fraud case against ViON wasn't exactly a secret. After a two-year investigation, the company agreed to plead guilty to fraud on April 7. The next day, Customs awarded ViON the $19 million contract. The day after that, the company's formal guilty plea was entered.
The Agriculture and Customs computer contracts have been held up because of protests filed by IBM and StorageTek. Both claim their bids on the Agriculture contract were several million dollars lower than ViON's. IBM also has protested the Customs contract, contending that, while its bid was higher, its system is superior.
The American companies' appeal is under consideration by the General Services Administration. A decision is expected this month.
The ViON charges were filed after investigators determined that the company had not provided the equipment it had agreed to and the Army had paid for, according to Lt. Col. Dave Burpee. ViON was fined $579,407.
As part of the settlement, Burpee said, ViON is required to inform the Army of any subsequent federal contracts it obtains. He said Agriculture and Customs were notified of ViON's plea "so they can monitor their contracts more closely."
When our reporter Karen Talley inquired about the company's guilty plea, the Customs Service chief counsel, Mike Schmitz, admitted he knew about it, and added: "But they weren't debarred." That means ViON was not legally prohibited from obtaining future federal contracts -- including the one it was awarded the day after it agreed to plead guilty in the Army case.
Agriculture and Customs purchasing officers say the computers offered by ViON are best suited to their needs. IBM and StorageTek dispute this.
The Customs Service will use its new computer system to relay law-enforcement information to airports and border checkpoints. The Agriculture Department computer system will fill a number of administrative functions, including payroll and finance, at headquarters here and in offices elsewhere in the country.