British Prime Minister Margaret Thatcher has appealed to President Reagan to choose a British firm for a $4.3 billion contract to equip the U.S. Army with a new mobile battlefield communications system, according to U.S. officials.
Officials said Thatcher wrote a letter to Reagan Aug. 30 after the Army had recommended a French concern for the contract, which represents the largest single U.S. military deal ever opened to foreign competition.
Thatcher's unusual appeal prompted a top-level Defense Department review of the competitive bids, officials said, delaying a decision that had been expected in late August.
Other Pentagon officials discounted the impact of Thatcher's letter and explained the delay as routine while the office of Defense Secretary Caspar W. Weinberger analyzes the rival communications systems.
The contest for the Army's Mobile Subscriber Equipment (MSE) program has assumed a political importance outweighing its commercial benefits.
The contract is seen as a test of the traditional U.S.-British bond and an opportunity to further draw the French defense industry into the Western alliance and away from the Third World, where it has concentrated its arms sales in recent years.
Weinberger, seeking to modernize the Army's cumbersome communications network with an MSE system that operates like cellular telephones, decided to buy "off the shelf" from abroad rather than spend the time and money to develop a U.S. model.
The two military electronics companies that submitted final bids Aug. 2 are the London-based firm of Plessey Defense Systems, which developed the Ptarmigan system for the British army, and the Paris-based concern of Thomson CSF, developer of RITA, for Reseau Integre de Transmissions Automatique, which is used by the French and Belgian armies.
Both companies have U.S. partners, with Plessey aligned with Rockwell International Corp. and Thomson with GTE Corp.
In her letter, Thatcher called the contract "extremely important" for Britain and emphasized her nation's purchase of U.S. military equipment and its reliability as an ally, sources said. Her government supports such Reagan programs as the Strategic Defense Initiative, which is opposed by Paris.
Officials said Thatcher also touted the Ptarmigan system as more advanced than the older and less costly French model, and she asked that technology as well as price be considered in the final analysis.
A British Embassy spokesman in Washington confirmed that the letter was sent to Reagan but declined to disclose its details. Reagan received the letter while vacationing at his California ranch.
The Army, which reportedly favors the French system on the basis of cost and performance, had been expected to announce the award Aug. 26. Then the announcement was rescheduled to come after Labor Day. A Pentagon spokesman said a decision appears imminent.
Reasons for the delay are in dispute.
Some officials said it was prompted by the intensity of Thatcher's appeal. Others insisted that Weinberger's office was devoting more time to cost analysis.
"This is not a political consideration in any sense," said a senior defense official. "A contract of that size bears close scrutiny."