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CRAY RESEARCH CHAIRMAN TELLS HOUSE SUBCOMMITTEE THAT JAPAN IS NOT COMPLYING WITH SUPERCOMPUTER TRADE AGREEMENTS

 CRAY RESEARCH CHAIRMAN TELLS HOUSE SUBCOMMITTEE THAT JAPAN IS NOT
 COMPLYING WITH SUPERCOMPUTER TRADE AGREEMENTS
 Rollwagen Cites New Evidence of Continued Unfair Competition
 in Japanese Public-Sector Procurements
 EAGAN, Minn., July 1 /PRNewswire/ -- Citing evidence from a just- completed bidding process, Cray Research (NYSE: CYR) Chairman and CEO John A. Rollwagen today told a subcommittee of the U.S. House of Representatives that Japan is not complying with existing supercomputer trade agreements with the United States, and that Japanese vendors continue to receive unfair advantage in government-funded supercomputer procurements in Japan.
 According to company spokesperson Frank Parisi, another Cray Research executive was originally scheduled to testify at the hearing of the House Committee on Government Operations, Subcommittee on Legislation and National Security, and would have told subcommittee members that "the jury is still out" on the trade agreements. But when results of the latest Japanese-government bidding process reached Cray Research on Tuesday, Rollwagen decided to fly to Washington himself to report that "the jury is now in, and it's not a very encouraging verdict."
 Rollwagen testified that Japanese supercomputer vendor NEC was awarded the bid to install a supercomputer at Japan's National Institute for Fusion Science (NIFS), even though Cray Research offered a "clearly technically superior system" and was within budget. "This was a political decision, not a technical one," he said.
 Accusing the Japanese government of weighting technical benchmark results to favor NEC, Rollwagen cited evidence similar to that communicated to Secretary of Commerce Barbara Franklin in a June 30 letter:
 -- Cray Research recently won a U.S. Environmental Protection Agency bid in competition with NEC. Cray offered a CRAY Y-MP supercomputer with two processors, while NEC bid its SX-3 system, also with two processors. Officials associated with the unsuccessful NEC bid were quoted afterward in Federal Computer Week, acknowledging that they were unable to meet the competition's technical requirements. In capturing the NIFS bid, NEC offered the same SX-3 system with at most four processors, or twice the computing power of the EPA bid; but Cray Research was able to offer, within budget, its latest "C90" supercomputer with 16 processors, or at least 20 times the performance of the Y-MP system that won the EPA bid.
 -- During the bid briefing, NIFS procurement officials indicated that systems must have "automatic parallelization," a capability that speeds up the machine's problem-solving performance, but in post-award discussions with Cray these officials indicated that they had not required NEC to demonstrate this capability. Failure to provide this required feature should have been grounds for disqualifying NEC.
 -- A test was included to measure theoretical "peak performance," as opposed to actual performance on computing problems. The U.S.-Japan Supercomputer Procurement Agreement of 1990 specifically forbids use of theoretical peak performance as a selection criterion.
 Rollwagen stressed in his testimony that Cray Research welcomes fair competition and is seeking only "a fair game, not favored treatment or protectionism." Rollwagen concluded by saying that Cray Research intends to protest the NIFS decision in Japan, in accordance with procedures set out in the bilateral trade agreement.
 Cray Research, Inc., based Eagan, creates the most powerful, highest-quality computational tools for solving the world's most challenging scientific and industrial problems.
 -0- 7/1/92
 /CONTACT: Steve Conway of Cray Research, 612-683-7133/
 (CYR) CO: Cray Research, Inc. ST: Minnesota IN: CPR SU:


AL -- MN012 -- 5863 07/01/92 16:08 EDT
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Date:Jul 1, 1992
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