Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, May 31, 1990 TAG: 9005310286
SECTION: BUSINESS PAGE: A-11 EDITION: METRO
SOURCE: GEORGE KEGLEY BUSINESS EDITOR
DATELINE: LENGTH: Medium
The Litton unit, based at Tempe, Ariz., last month protested the Army's award of the $164 million contract to ITT's Electro-Optical Products Division in Roanoke County.
Litton said its base offer was $139 million - $25 million less than the winning ITT bid, without the options.
But the difference could be as much as $47 million if everything is considered, Clarence Wood, marketing manager for Litton Electro-Opticals, said Wednesday.
In a response from ITT, Laurel Holder said, "The Army has stated it paid an approximate 10 percent price premium for ITT's superior products and past performance."
She said only the Army can verify the figure quoted by Litton.
The General Accounting Office is investigating the protest and its decision is due by Aug. 7 or sooner. The ITT contract has been stayed during the GAO study.
Litton believes the ITT bid is "excessive" for what the Army is getting, Wood said.
His company has asked the GAO "to take another look at the contract, to review it. We feel like there are some things there that were not apparent to the general who made the decision."
Holder said the Army awarded her company "60 percent of this night vision procurement, based upon the Defense Department concept of best value."
This concept "recognizes that many other factors may be of equal or greater significance in ensuring that the Defense Department gets the most for its money," Holder said.
She said the "best value" concept, as her company understands it, allows for consideration of benefits in safety, operations, logistics and maintainability, as well as contractual, technical and cost issues.
ITT believes the GAO will sustain the Army's original contract award to the Roanoke department, Holder said.
Wood said Litton is "a longtime, qualified supplier" of the night vision goggles. The Army said Litton's proposal "was acceptable but ITT had better value and was the most beneficial."
Jobs are on the line, no matter which company gets the contract.
Wood said Litton "knew there would be a shakedown in the industry because there is more capacity than requirement" for the night vision devices.
In April, Litton said about half of its 700 employees at the Tempe plant would have to be laid off if it loses the $164 million contract.
Wood said about 160 Litton workers have been laid off because of the initial award to ITT.
Holder said ITT has enough business from other contracts to carry its current work force while the $164 million contract is stayed.
For a different reason, ITT has given layoff notices to 240 employees - 210 hourly and 30 salaried workers. The company said it took this action because the plant did not win renewal of a contract for older Generation II night vision devices.
In a telephone interview from Arizona, Wood said, ITT "has done a helluva job of bringing its capacity up . . . They want the whole business for themselves."
Litton has "a lot of respect for ITT. They do good work," he said. John Van Shaik, a GAO lawyer, said his office's decisions usually are made before the deadline. The Aug. 7 date comes 90 days after the protest was filed, he said. Each side is to submit a final statement of its position by June 7.
Such protests by major contractors are routine in the defense industry. John Cove, executive director of the U.S. Night Vision Manufacturers Association in Washington, said protests "are not unusual, since we became a litigious nation." His organization is neutral in the dispute, he said.
Senators have taken sides in the protest. The Litton challenge was sent to the GAO by Arizona Sens. Dennis DeConcini, a Democrat, and John McCain, a Republican.
Sen. John Warner, R-Virginia, has made a special effort to commend the Roanoke ITT plant for its night-vision goggles production twice this year. He told the plant's employees the devices made here saved lives in the recent Panama invasion.
by CNB