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B-146872 1 (1973-07-24)

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                COMPTROLLER GENERAL OF THE UNITED STATES
                A LdA.1 ~.~ WASHINGTON. D.C. 2WM4
                               RELEASED

B-146872                                                JUL 24 1973


The Honorable Edwin B. Forsythe
House of Representatives

Dear Mr. Forsythe:

     This is in reply to your request of March 15, 1973, relating to
the complaint from Comdata Systems, Inc., about thee               ent
of telecommunications equipment; Comdata said the Navy was incurring
u;,iecessary costs dy (evel oping display-editor consoles which Comdata
had already perfected. These consoles, to be added to the airborne
teletypewriter systems carried in P-3A and P-3B aircraft, are capable
of preparing, editing, and storing a full page of text before trans-
mitting it by the teletypewriters.

     Our analysis of the latest pricing data available at the time of
contract award indicated that the RgIy1surce selection for the con-

could not establish that Comdata possessed, at the time the Navy chose
a source for display-editor consoles, a perfected prototype of the
console called for in the applicable Navy specification.

     Presently the Naval Avionics Facility (NAFI), Indianapolis, Indiana,
is developing, testing, and manufacturing 31 display-editor consoles.
The Lockheed-California Company, Burbank, California, is manufacturing
retrofit kits for use in installing the consoles and is providing limited
logistical support for these items. The consoles will be installed at
Naval Air Rework Facilities during routine aircraft maintenance.

BACKGROUND

     In 1966 the Navy awarded a contract to the Sperry Rand Corporation
for the design, development, and fabrication of three complete teletype-
writer systems. Each system consisted of a display-editor console, a
keyboard, and a printer. These devices were intended to be significant
improvements over the keyboard and printer then used in the P-3 aircraft.
Sperry delivered these three systems to the Navy in late 1968.

     Comdata was formed in 1968 by former Sperry engineers who had been
responsible for designing and developing the three systems. In June
1969 the Navy contracted with Comdata to maintain, service, and update
the three systems built by Sperry. This contract was renewed annually
and ended in June 1972. During that period Comdata developed, with its
own funds, a model system which, in its opinion, was superior to the
systems Sperry produced. We could not examine that model, because it was
destroyed on March 15, 1973, during an explosion and fire at Comdata's plant.
                             *j4~~~ 4.....0dr6

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