Etek accuses Picker of VA service bid-rigging

January 30, 1991

A trial date of July 15 has been set for a third-party scannermaintenance dispute between Etek and Picker International, accordingto Anthony Montgomery, legal counsel for Etek. The case will betried in the U.S. district court for the southern district

A trial date of July 15 has been set for a third-party scannermaintenance dispute between Etek and Picker International, accordingto Anthony Montgomery, legal counsel for Etek. The case will betried in the U.S. district court for the southern district ofTexas at Galveston.

Although Etek of Houston sold its assets to R Squared ScanSystems of Corona, CA, a year and a half ago (SCAN 7/5/89), thethird-party scanner maintenance company continues to exist asa legal entity. One of the allegations in Etek's case is thatmonopolistic activity by Picker forced Etek out of business, Montgomerysaid.

The Etek case originally centered around claims that Pickerdisparaged the smaller company's service abilities and the firm'suse of Eimac CT replacement tubes. The service company also allegedthat Picker promoted the use of tubes made by Dunlee, a Pickersubsidiary, and restricted the supply of Dunlee tubes to Etek.(SCAN 8/17/88)

While these charges remain central to the Etek case, new issueshave been added. One of the most potentially damaging chargesagainst Picker is that the vendor influenced the Veterans Administrationto write scanner service contracts that effectively preventedEtek from competing for VA business.

"Our position is that they (Picker) interfered with severalof our contracts, existing and perspective, with the VeteransAdministration. (Etek also charges) that they (Picker) infiltratedthe Veterans Administration and lied and misrepresented the efficacyof the Eimac tube," Montgomery said.

Etek alleges that Picker persuaded individuals within the VAto insert a restrictive covenant into service contracts that requiredthe use of the Dunlee tube. If this charge is proved, the actionswould be in violation of government procurement laws, which requireopen bids on outside contracts, the lawyer said.

Picker would not comment on the allegations because of theongoing litigation.