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OASYS Contract Could be Worth $100 Million

San Diego County Business Editor

Office Automation Systems, a Sorrento Valley manufacturer of laser printers and image-processing controllers, has been awarded a contract worth at least $50 million over the next five years to supply machines to the Air Force. OASYS officials say the procurement could eventually be worth close to $100 million to the company.

The OASYS agreement to supply at least 15,000 8-page-per-minute LaserPro Express Series II machines is part of a contract won by American Telephone & Telegraph to supply the Air Force with up to $929 million worth of Unix-based computers and peripheral equipment. The printer contract is the largest in OASYS history.

Losing bidder Honeywell Federal Systems contested the contract award to AT&T;, but the three-judge Board of Contract Appeals of the federal General Services Administration last week upheld the contract.

Highly Sought After

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The contract was highly sought after because it may set computer equipment standards for other branches of the military and government agencies, OASYS President Peter Steiner said Monday.

The total value of the AT&T; contract, which is an “open-ended procurement,” may end up exceeding $1.5 billion, Steiner said. The AT&T; minicomputer systems will include networking capabilities, he said. AT&T; officials were not available for comment Monday.

Founded in 1983 by Tony Stramondo and Bob Freeman, OASYS expects 1989 revenue to reach $28 million, up from $18 million last year. Stramondo has since left OASYS, but Freeman is now vice president of corporate planning. OASYS’ chairman is Bruce Lemoine. The company shipped its first printer in 1985.

OASYS employs 130 workers and has sales offices in a dozen U. S. cities. The closely held company has about 300 shareholders and was started without venture-capital financing.

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The company does not expect a significant increase in hiring to result from the new contract, deliveries on which are scheduled to begin next month. Steiner said he plans to add only 20 workers by the end of the year.

OASYS makes image-processing controller circuit boards, the “brains” of laser printers, and incorporates them into the printer engines supplied by Japanese manufacturers Minolta, Tokyo Electric and Ricoh. The Air Force contract calls for OASYS to supply laser printers only with Tokyo Electric engines, Steiner said.

OASYS also sells controllers to other laser printer manufacturers.

Steiner said OASYS controllers give laser printer users more flexibility than competing brands in that they enable the printers to combine a variety of type fonts, designs and even bar codes on a single page.

OASYS controls less than 1% of the “low-end” U. S. printer market, or machines that print 10 pages per minute or less. That market was estimated by Steiner at about 1 million units shipped last year, a 50% increase from the previous year.

The dollar value of the low-end computer printer market in 1988 was estimated by CAP International, a Norwood, Mass.-based market research firm, at $3.2 billion.


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