Toshiba Loses in Pentagon Laptop Bidding

Toshiba Corp. of Japan, whose machine tool subsidiary provided the Soviet Union with secret submarine technology, lost a potentially lucrative bid Tuesday to sell 90,000 portable computers to the Pentagon.

The U.S. Air Force announced that it would buy its laptop computers, along with related software and services for U.S. defense agencies worldwide, from a unit of Zenith Electronics Corp. for $104.5 million.

Before the submarine technology scandal became a political issue, Toshiba was reported to be the favored bidder on the contract. The giant manufacturing company makes a popular line of laptop computers. It recently began producing the machines at its plant in Irvine, partly in response to import sanctions imposed by the Reagan Administration on some Japanese electronics products.

Senior defense officials have said the Pentagon is observing a temporary ban on new business with Toshiba as a result of the submarine controversy. But Air Force officials said Tuesday that Toshiba was allowed to bid on the contract and that its failure to win did not mean the firm was being singled out for punishment.

“Zenith just submitted the best bid for the equipment,” said one defense official.

The Pentagon said it sought bids from 235 firms and ultimately received 18 bids from 14 companies.

In Irvine, where Toshiba has its only U.S. laptop manufacturing operation, general manager John Rehfeld said the loss of the large contract to Zenith would have no impact on its local operations.

“We’re disappointed, of course,” Rehfeld said. “But we hadn’t counted on it.”

The Irvine plant began laptop production about six weeks ago and employs fewer than 100 workers.

Toshiba Machine Co., a subsidiary of the electronics firm, and the Norwegian arms firm Kongsberg Vappenfabrik have been accused of transferring technology to the Soviets that allows them to produce virtually silent submarines.