GAO ruling stalls HUD's plans'again

The protracted battle over a massive IT services contract has left the Housing and Urban Development Department in limbo, unable to move forward with its systems modernization.

The department has twice awarded the $750 million HUD IT Services contract to EDS Corp. But following each HITS award, the Government Accountability Office upheld protests from incumbent Lockheed Martin Corp., citing missteps HUD made in the procurement process.

After the first ruling in August, HUD reopened the buy.

Last month, GAO ruled that HUD conducted improper discussions in the late stages of the procurement before re-awarding the contract to EDS.

Correspondence between EDS and HUD, after the department had received revised proposals from both bidders, led to significant changes in the EDS proposal, GAO said. The audit agency also found that HUD failed to conduct meaningful discussions with Lockheed Martin about weaknesses the department had identified in its proposal.

GAO is again recommending that HUD re-open the procurement from the point of the contested discussions, seeking revised proposals. HUD has 60 days to decide if it will once again re-open the competition.

The delay means HUD must maintain older systems while paying both vendors for work allowed under GAO's previous decisions. The department wants to upgrade servers and desktop systems that support 18,000 users.

HUD has put on hold plans to update and refresh hardware and software, such as implementing a Java 2 Enterprise Edition platform with an Oracle Corp. relational database, a HUD official said. The department also has delayed moving some systems, such as its Computerized Homes Underwriting Management System, from its 20-year-old Unisys Corp. mainframe environment to a new host.

HUD has extended Lockheed Martin's existing contract until the new HITS contract is in place. Meanwhile, EDS continues with transition work OK'd by GAO. During the past year, EDS has assumed responsibility for HUD's nationwide help desk and field support services for 80 offices.

Lockheed Martin is performing other IT services under its HUD Integrated Information Processing Service contract, which the company has held since 1990.

The two vendors are working at the same sites to provide some services. EDS officials said that working in proximity with Lockheed Martin employees can compromise EDS' contracting strategy. 'The longer that this is protracted, the more information Lockheed is able to gain on our proposal and tailor theirs accordingly,' EDS spokesman Kevin Clarke said.

About the Author

Mary Mosquera is a reporter for Federal Computer Week.

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