Army admits it mistreated would-be defense contractor

The Army has egg on its face. No less a figure than its inspector general has admitted that it treated an aspiring defense contractor in a shoddy fashion by failing properly to evaluate the equipment he had for sale and perpetuating ''misconceptions'' about it.

''A particularly outrageous example of bungling, waste, and mismanagement,'' huffed Sen. William V. Roth, Jr. (R) of Delaware last week when he chaired a Senate Governmental Affairs Committee hearing into the curious affair of Loebe Julie and the US Army.

For seven years now, Mr. Julie, the scrappy president of Julie Research Laboratories (JRL), a New York City electronics firm, has been trying to sell automated calibration equipment to the Army's Missile Command. ''Every bid and every unsolicited offer JRL made during that entire seven year period was summarily rejected,'' observed Julie bleakly during the Senate hearing Nov. 5.

Calibrators are used to ensure the accuracy of equipment employed to test a wide range of materiel and weapons - most notably, perhaps, to check the electronic testing gear used for missiles.

Loebe Julie manufactures an automated calibration system known as the LOCOST 106. But although it has made a favorable impression on the Army's Materiel Development and Readiness Command, not to mention experts at the White Sands Missile Range in New Mexico, the Army has consistently refused to buy it.

Julie claims that the Army (and particularly its Test, Measurement, and Diagnostic Equipment Support Group at Redstone Arsenal, in Huntsville, Ala.) chose to buy from his competitors - the John Fluke Manufacturing Company Inc. of Everett, Wash. and the Hewlett-Packard Company of Palo Alto, Calif. by ''sole-source procurement (and) fictitious competition.'' In Senator Roth's view ''this is one of the most blatant cases I have seen of the 'old-boy network' operating to freeze out a legitimate, innovative small businessman.''

The Army inspector general, charged with probing Julie's allegations, asserts that JRL's LOCOST 106 ''was a better system than it was given credit for being'' by Redstone Arsenal. He contends that the system was ''prematurely eliminated from serious consideration'' chiefly because a ''confrontational atmosphere'' developed between Julie and Army officials, a charge the feisty JRL president rejects.

The inspector general discounts any waging of a ''deliberately malicious campaign'' against JRL on the part of the Army, but declares that ''various Army officials . . . have perpetuated, at least unwittingly, certain misconceptions concerning JRL equipment.''

Essentially the inspector general finds that JRL ''was not afforded . . . a full opportunity to compete on an equal footing with other vendors,'' and blames Julie's ''aggressive marketing techniques'' and Redstone Arsenal's ''familiarity with other vendor products'' for the unfortunate state of affairs.

Although Julie feels vindicated, he contends the Army is bent on putting him out of business because he dared expose ''this mess.'' The Army denies such an intention.