Army trims field to four

The Army cut at least four bidders from the competition for its Portable-2 contract including industry leader Compaq Computer Corp. industry sources said last week. The down-select leaves a field of four companies vying for the $150 million-plus prize: Comax Technologies Inc. Government Technology Services Inc. International Data Products Corp. and Sysorex Information Systems Inc.

The four vendors were invited to submit best and final offers with industry expecting the Communications-Electronics Command Acquisition Center Washington Operations Office (CACWOO) to make an award before Christmas. Besides Compaq other vendors who did not make the final cut were BTG Inc. Digicon Corp. and Telestar Corp. Officials at BTG and Telestar confirmed they did not receive an invitation to submit a BAFO. Officials at Digicon did not respond to phone calls. A Compaq spokeswoman said the company does not comment on ongoing competitions.

The Army's decision to cut Compaq before BAFO caught some industry observers by surprise because the company is a powerhouse in the commercial market with its portable PCs and serves as GTSI's supplier on the ongoing Portable-1 pact.

Several industry officials said the Army cut Compaq because it lacked experience as a prime contractor in the federal market. Bob Dornan senior vice president of Federal Sources Inc. McLean Va. said the Army runs little risk by cutting bidders before BAFO indeed by doing so it may render bidders a fiscal favor. Winnowing out bidders who have a poor chance of winning after BAFO "saves them money if [CACWOO] has concluded they don't have a chance " Dornan said.

One industry source said the Army did the companies it cut even more of a favor. "I don't see how anyone can make much money on Portable-2 since it is a price-driven buy " the source said. This executive added that thin margins could get even thinner if the continuing tight supply of lithium-ion batteries and LCD matrix screens impacts the Portable-2 winners. "The government is doing a disservice not only to the bidders but itself because such a policy could drive some of the smaller guys out of business."

The surviving bidders on Portable-2 have kept their solutions and suppliers closely held saying the Army will end up with Pentium-class portables with most of the bells and whistles found on commercial PCs but probably not well-known brand names.

While some industry executives viewed Portable-2 with skepticism George Fuster president of International Data Products which also holds a Portable-1 contract is eager for the award. "We can hardly wait for this to be awarded. We really would like to win this one " Fuster said.