Vendors in dispute over HUD IT deal

The Housing and Urban Development Department intends to continue work on its IT overhaul despite a protest dispute with incumbent contractor Lockheed Martin Corp.

HUD's decision on Sept. 12 to lift a stop-work order'and Lockheed Martin's subsequent filing of an objection to that lifting of the order'marked the latest step in a complicated protest dance that began last month after the department awarded EDS Corp. the $860 million HUD IT Services contract.

In its Sept. 9 protest to the General Accounting Office, Lockheed Martin argued that HUD officials had not given enough consideration to the company's proposal.

EDS' bid was 'significantly higher' than the Lockheed Martin bid, said Lockheed Martin spokeswoman Nettie Johnson.

Lockheed Martin said the award might not represent the best-value decision. 'We were concerned that the agency had not properly evaluated our proposals or considered all the items included as part of our fixed-firm price,' Johnson said.

Lockheed Martin asked GAO to determine if evaluation of the proposals was sufficient, said Scott Ribek, a senior attorney in GAO's Procurement Law Division. GAO must issue a ruling by Dec. 18.

'Typically, a contract does not always go to the lowest bidder. The government looks at all components of the contract'that's the basis of the award,' HUD spokesman Michael Fluharty said. 'We're confident that everything will come out on the government's behalf.'

HUD must submit a protest response to GAO by Oct. 9.

Lockheed Martin first protested the contract immediately after HUD announced its plans to award EDS the 10-year contract. But GAO rejected the initial complaint because HUD had not debriefed the company yet. It resubmitted its protest following a written exchange of questions and answers with HUD officials that took place after the department debriefed the company.

Stop and go

When GAO agreed to consider Lockheed Martin's second protest, HUD issued a stop-work order to EDS on Sept. 10. It rescinded the order two days later after the department's senior contracting officials reviewed the complaint, Fluharty said.

EDS spokesman Bill Ritz said, 'The important thing is our customer has told us to go back to work.'

EDS' information service group will revamp the department's nationwide infrastructure under the HITS contract. The contract has a one-year base period worth $15 million and nine one-year options. EDS is supposed to take over help desk and support services across the department and put in place a disaster recovery capability during HITS' first year.

HITS is a follow-on to the HUD Integrated Information Processing Service contract awarded to Lockheed Martin in 1990.

About the Author

Mary Mosquera is a reporter for Federal Computer Week.

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