Firm Suffered From Government Contracts

Regarding the article “U.S. Program to Help Minority Firms Plagued by Failures” (July 7): Federal Data Systems is a company that incurred major losses doing business with the government on fixed price development contracts subject to cost/profit withholding clauses. But, Federal Data Systems is not the only company to experience such losses. The L.A. Times has written articles about this same fate befalling major corporations.

FDS is a small company that has suffered greatly because of the incurred losses. Federal Data Systems filed for reorganization, subject to Chapter 11 proceedings with the U.S Bankruptcy Court, to deal with its debt in an organized manner.

FDS continues to perform to customers’ technical standards, and just recently the U.S. Navy exercised its option for another one-year contract.

Federal Data Systems delivered the Air Force feasibility to the Air Force’s satisfaction (including a prototype requirement that was not part of the original requirement). FDS provided five years of satisfactory computer support to the Air Force’s space division headquarters. FDS has provided what all contracts required, plus more.

The L.A. Times seems to hold the opinion that small, minority-owned companies must be held to a higher standard than large companies because they lack the financial resources to support large contract administration and in-house legal staffs. The law is written so that small companies that cannot self-insure, or lack the large infrastructure of legal and contract administration staffing that major corporations do, can compete.

GERARD RAMIREZ

Los Angeles

The writer is president of Federal Data Systems Inc.