An article in yesterday's Federal Report incorrectly described Cyrus E. Phillips IV, a member of the General Services Administration's Board of Contract Appeals. He is an administrative judge. His decision in a case involving the Treasury Department's purchase of a computer was written on behalf of a three-member panel of the nine-member board.
The General Services Administration's Board of Contract Appeals has found that the Treasury Department violated the law last year when it decided to buy a $4.2 million IBM mainframe computer without seeking bids -- a decision made by a Treasury official who has since been nominated to head GSA.
In a May 16 decision, Administrative Law Judge Cyrus E. Phillips IV also revoked an agreement between GSA and Terence C. Golden, then assistant secretary of the Treasury for administration, that authorized Treasury to buy the computer. Under federal regulations, computer purchases are controlled by GSA.
Golden, who was nominated in March to be GSA administrator, asked GSA's Office of Information Resources Management last December if the department could buy the IBM computer from the Federal Home Loan Mortgage Corporation (Freddie Mac), a government corporation. The computer was to be used by Treasury's Financial Management Service as part of the Reagan administration's campaign to improve the handling of the government's cash flow.
GSA officials authorized Treasury to buy a computer, but specifically refused to sanction the purchase of the one owned by Freddie Mac.
Frank McDonough, a deputy assistant administrator of GSA, said, "We did not specifically approve or disapprove of their current strategy. But we told them that federal regulations require them to seek maximum practical competition."
Treasury instead decided to treat Freddie Mac as a "federal agency," which would allow the department to acquire the computer as an "interagency transfer" without seeking further bids.
But Amdahl Corp., which wanted to sell one of its computers to Treasury, protested the decision to the Board of Contract Appeals, which judges claims filed by computer firms seeking government contracts. The firm argued that Treasury had failed to promote competition because it did not seek other bids.
Phillips, in his decision for the three-member board, said that Freddie Mac was not a federal agency and thus Treasury should have sought bids for the equipment.
In addition, the board said Treasury may have cost the government an undisclosed sum because it ignored significant costs associated with storing and moving the computer equipment.
Golden would not take calls on the subject, but his executive assistant, Susan Brita, acknowledged that Golden had "signed off on the initial request to buy the computer." But she defended his action as "routine."