Army leaders have confirmed under oath that a small businessman's ability to compete for defense contracts was prejudiced by unnamed senior procurement officials who were "alienated" by his "aggressive marketing techniques" and who didn't even open one of his bids.
The David-and-Goliath victory of Loebe Julie, the son of Polish immigrants, came at a five-hour Senate hearing Nov. 5 that lifted his morale without assuring that his firm, which makes automated measuring equipment, will survive more than a few months.
Julie heard Undersecretary James R. Ambrose vindicate his charge of unfair treatment of Julie Research Laboratories (JRL) of New York City. He head Deputy Inspector General Robert B. Solomon announce that his investigation showed that senior Army officials, possibly "inadvertently" at times, had unfairly criticized JRL equipment and misled their bosses and Congress with "inaccurate, unproven, inconsistent" statements. And Julie heard his equipment blessed by the head of a testing team at the Army's own White Sands Missle Range in New Mexico.
He heard himself praised by a half-dozen senators who raged at his hidden foes. They wondered if hundreds or thousands more victims of anti-competitive military procurements are "out there," unnoticed. They warned that his case reveals the kind of Pentagon conduct that could help to bring public support of rising defense outlays to "a screeching halt," in the words of Sen. Warren Rudman (R-N.H.)
But Julie also heard Ambrose say he has ordered a new study of the Army's need for automated calibration equipment. By the time the study is done next spring, protested Sen. William S. Cohen (R-Maine), JRL may be out of business, leaving the field to its single rival. Cohen and other senators pledged to try to help Julie, but admitted his cause may be lost.
"This is one of the most blatant cases I have seen of the 'old-boy network' operating to freeze out a legitimate, innovative small businessman," said Chairman William V. Roth Jr. (R-Del.) of the Senate Governmental Affairs Committee. It is, he said, "a particularly outrageous example of bungling, waste and mismanagement in the procurement process."
Sen. Thomas F. Eagleton (D-Mo.) saw in the Julie case more evidence that "the key to the military procurement process" is the access large, politically well-connected corporations gain to the Defense Department and Congress through campaign contributions and hiring former high-ranking military officers. Julie had no such employes.
By his account, he tried to sell his automated calibrators on their merits, aided by satisfied customers. At the Pentagon, he became what Rudman politely termed "a pain in the neck." Finally, in 1980, he "went public" by distributing cartoon books that told his story. The title of the first book: "You're Not Supposed to Get Mugged by Your Own Army."
Julie's claims of superiority for his calibrators, while supported by the White Sands tests, were disputed by Ambrose, who has been in office only a short time. In a clear vindication of Julie, however, he disclosed that, on the eve of the hearing, he had canceled a contract awarded to a JRL rival in 1980 under questionable circumstances. He held out the possibility of a new competition.