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Valued at $50 Million : Cubic Loses 'Top Gun' Air Force Contract

June 17, 1989|GREG JOHNSON | Times Staff Writer

SAN DIEGO — Cubic Corp., the sole supplier of the so-called "Top Gun" air combat training systems since 1973, has lost a multimillion-dollar contract to supply two of the complex systems to the Air Force, Cubic Defense Systems Vice President George C. Tweed said Friday.

Cubic lost the most recent contract, reportedly valued at $50 million, to Kollsman Industries, a Merrimack, N.H.-based defense contractor. Before the most recent contract, Cubic's San Diego-based Defense Systems subsidiary had won 21 consecutive contracts for the "Top Gun" systems.

Cubic earlier this month made an unsuccessful court attempt to delay the contract award. Company officials declined to comment on that unsuccessful court challenge. The Air Force contract involved systems for use by National Guard units in Alaska and Wisconsin.

Cubic Defense Systems Vice President George C. Tweed on Friday complained that Cubic "cannot understand the rationale behind this decision." Tweed said that Cubic was "the low bidder for the contract . . . we also received the highest technical score."

Tweed declined to discuss the contract's dollar value and Kollsman officials were not available for comment on Friday.

The computer-driven air combat training systems are used by the Air Force, the Navy and the National Guard, as well as air forces around the world. Fighter pilots use the system to record action during in-flight combat training. The system allows pilots to view the training missions after they are completed.

Cubic's bid for the Alaska Air Guard contract surfaced in an affidavit released as part of the federal government's ongoing investigation into defense procurement fraud. The document released by a federal court in Maryland alleged that Cubic used information that was illegally obtained by a defense industry consultant.

According to the affidavit, Victor Cohen, the Air Force's assistant secretary for acquisition, "illegally assisted" a former Cubic Defense Systems subsidiary executive while Cubic was seeking "Top Gun" contracts. The information allegedly was passed to former Cubic executive Colvin C. (Sam) Wellborn by William Galvin, a Washington, D.C.-based consultant.

The affidavit was based upon wiretaps on Cohen's telephone and electronic bugs in his office. During the conversations, Galvin, Cohen and Wellborn allegedly discussed Cubic's attempts to win Defense Department contracts. The recorded conversations led federal investigators to conclude that "Cohen will provide illegal assistance to Cubic in its efforts to win" a contract to supply part of an air-combat-training system in Alaska.

Wellborn, 56, retired earlier this month after 30 years with Cubic. Tweed has taken over management of the Defense Systems subsidiary until a replacement is named.

The "Top Gun" contracts account for a hefty portion of Cubic's Defense Systems subsidiary. Defense contracts accounted for 42% of Cubic's $364 million in 1988 revenue.

While Cubic has successfully defended the "Top Gun" program from competitors, a 1986 federal law increased the likelihood that another company eventually would win a contract. The 1986 Competition in Contracting Act required the Defense Department to no longer rely upon sole sources for weapons systems.

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