The optimal design problem for networks with 3-state components is the following: select from a given class of networks with n components, each of which can he operative or experience an open-mode or a shorted-mode failure state, the network with maximum reliability. We present an algorithm for solving this problem in the case of 2-stage series-parallel networks, i.e., networks consisting of a number of series configurations linked in parallel or vice versa. For practically relevant network sizes (up to 100 components), the algorithm is fast
