Commerce: Japanese firms guilty of dumping in NCAR bid

The Commerce Department late last month announced in a preliminary finding that two Japanese concerns offered supercomputers for sale to a U.S. national laboratory at prices less than fair value a move that supports the dumping accusations made by Cray Research Inc. in a complaint filed with Commerce last July.

Commerce officials ruled that NEC Corp. and Fujitsu Ltd. were guilty of dumping as part of a 1996 bid to sell a vector supercomputer to the National Center for Atmospheric Research (NCAR) which is funded by the National Science Foundation. NEC won the contract with the company's $35 million bid to sell its SX-4 series to the laboratory. According to Commerce's finding NEC's supercomputer bid was 454 percent lower than fair market value while Fujitsu's bid was 27 percent below fair market value. Cray a subsidiary of Silicon Graphics Inc. also bid the NCAR deal.

NSF in July directed NCAR to suspend the supercomputer pact until Cray's dumping complaint is resolved. If Commerce upholds its initial ruling this summer NEC could be forced to pay stiff penalties in future sales to U.S. customers. NEC could be forced to pay Commerce 454 percent of the price of any system sold in the U.S. and Fujitsu could be penalized 27 percent of any system sold in the U.S.

Because NEC has refused to respond to Commerce's request for data agency officials relied on figures supplied by Cray in its complaint to determine the extent of NEC's dumping. Fujitsu however did respond to Commerce's requests.

"There is a price to be paid when a company decides to thumb its nose at the Commerce Department " said John Greenwald a lawyer representing Cray. "If a company refuses to provide data when it has the opportunity to prove its case you can read something into that about what the actual data had to say. Ultimately Cray is interested at getting at the truth. We think our analysis is pretty darn close to the truth."

NEC has maintained since the beginning of the dispute that Commerce could not provide a fair or unbiased investigation. Officials from HNSX Supercomputers Inc. the U.S. subsidiary of NEC have said this is why the company has not responded to requests from the government to provide information. Samuel Adams HNSX's vice president of sales and marketing said in a statement that the preliminary finding was "totally unfounded."

"Months before this investigation was even initiated Commerce with the approval of then-Secretary [Mickey] Cantor released an analysis finding our company guilty of dumping in order to keep NEC supercomputers out of the U.S. market " according to Adams' statement. "Clearly Commerce is not capable of judging the dumping allegations subsequently filed by Cray Research in its anti-dumping petition in a fair and impartial manner."

Although the squabble over the NCAR contract centers around the price of the supercomputers Bob Dornan senior vice president of Federal Sources Inc. said the price of high-performance computers is much less relevant to government agencies today than in the past.

"No longer is price the sole or even the predominant selection factor " Dornan said. "It's more political but more than that it's what is the best machine for the situation. It's really who has the best relationships who's done the best marketing and who has the best products and support services."

NEC in October 1996 filed a lawsuit in the Court of International Trade to enjoin Commerce from investigating Cray's complaint.

The court on March 21 denied NEC's motion for a preliminary injunction a trial is scheduled for April 21.Cray's Case:A TIME LINE* July 1996 - Cray lodges supercomputing dumping charges with the Commerce Department.* October 1996 - NEC files lawsuit in Court of International Trade asking the court to enjoin Commerce from investigating the charges. * March 21 - Court of International Trade denies NEC's motion for a preliminary injunction.* March 31 - Commerce issues preliminary finding which holds that NEC and Fujitsu were guilty of dumping vector supercomputers in the U.S. market.

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