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Turning a Losing Battle into a Winning One : Romanian Emigre Overcomes Red Tape to Win Contracts

July 29, 1986|CROCKER COULSON | Times Staff Writer

For a man who threw away everything he had to escape the unbridled power of a totalitarian state, Romanian emigre Andre Hancu seems almost unnaturally eager to work for the U.S. government.

Six years ago, while on tour as a chess master representing Romania, Hancu staged an escape that is the stuff of Cold War spy novels, standing on top of a toilet in a men's room stall in Vienna to ditch the government informer who accompanied him.

Three years later he was in the United States, had founded his Rancho Bernardo-based electronics company, Automatic Integrated Systems (AIS), and was performing small development projects for NASA and acting as a subcontractor for larger defense firms.

Hancu had come to America to stoke the armament furnace of the free world. To all appearances, it was a Reagan-era installment in the unending saga of the American dream.

Then, in the spring of 1985, Hancu decided to get ambitious, buying out an electronics firm that had gone belly up and submitting his own bids on government contracts. With a 4,500-square-foot plant, his own equipment and office, four full-time employees and a light-blue pasteboard sign with the word "President" tacked to his door, he was ready to grab what defense contracts he could.

In the ensuing year, however, AIS received only a few stray drops of Defense Department funds, and Hancu received a frustrating tour of the interlocking and overlaid agencies that determine who gets a cut of the greatest defense binge in history.

In that one year, Hancu lost more than $130,000 on revenue of less than $60,000, spent countless hours preparing bids that he claims were never carefully examined and saw everything that he owned put in jeopardy. After a year of countless projections, flow charts, reports, letters and vendor bids, he had received only one $16,000 contract for a printed circuit board that "a child could put together."

The odyssey began last July, when Hancu learned that he had been the second-lowest bidder on a contract for an Army radio worth $3 million.

Hancu was in the midst of moving into a new facility in Rancho Bernardo when a pre-award monitor, F.E. Tully, showed up for an inspection tour. Tully was an official of Defense Contract Administration Services (DCAS) in San Diego, which determines whether low bidders are capable of fulfilling government contracts.

After surveying the three lowest bidders, DCAS recommends what bid should be accepted. Standing among the unpacked crates, Hancu said he begged Tully for an extension so that he could take an inventory of the plant. Extension denied.

Tully, according to Hancu, then demanded that Hancu complete the complex forms covering all aspects of his financial, production and quality-control standards.

"Of course, I had to leave most of them blank," Hancu said. "I had just moved in, hadn't even checked the equipment myself."

Finally, Tully agreed to give Hancu a three-day extension. Hancu said he worked feverishly but was still one day late in completing the forms. Tully refused to consider any of the information, Hancu said.

"It was not so much the fact that I was rejected, but rather the way that he rejected me," Hancu said. "He denied that I had a facility, that I had equipment, that I had staff--he denied practically everything, after he had seen it with his own eyes."

According to Hancu, DCAS ignored the same data for four other surveys that it conducted later that summer. "It could only be for malicious reasons," he said.

Tully, when contacted, said that he was prohibited from speaking to the media.

A spokesman for DCAS said that the agency would not discuss specific allegations by contractors.

After being rejected by DCAS for the radio contract, Hancu approached the Small Business Administration (SBA) for a certificate of competency (COC). The SBA represents the interests of the smaller contractors in the government procurement process and a COC is a golden ticket to the federal banquet table, capable of overturning a DCAS ruling.

But the SBA rejected Hancu's bid for a competency certificate on technical grounds. Hancu claims that the SBA "practically ignored" subcontracting arrangements that he had made with other electronics firms--Keystone General and E-Systems--who had a proven record in those areas in which AIS' expertise was shaky.

By the end of December, Hancu had bid on and been surveyed for five Defense Department contracts. Each time his proposals had grown more detailed as he sought to cover all previous objections and each time, he claims, the surveys became more and more irrational, the errors and omissions more obvious.

Also in December, the Army's judge advocate general in Washington suspended AIS from all further work on federal contracts because it was an "affiliate" of San Diego-based Dove Electronics, whose president, Aldwyth Roach, was later indicted by a federal grand jury for making false statements to the Defense Department.

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