Lockheed Martin, EDS spar over HITS recompete

Incumbent contractor Lockheed Martin Corp. today filed for an injunction in federal court to block rival EDS Corp. from revving up activity on its HUD Information Technology Services contract at the end of this month.

The Housing and Urban Development Department said in January it would recompete the $860 million IT services contract, as the General Accounting Office had recommended (Click for GCN story). The current HUD Integrated Information Processing Service contract expires Feb. 29.

Lockheed Martin asked the U.S. Court of Federal Claims in Washington, D.C., to halt EDS activities such as equipment transition during the recompetition. HUD plans to re-award the contract in April, HUD spokesman Michael Fluharty said.

In September Lockheed had protested the award to EDS of the potentially nine-year HITS contract. The department did not justify its choice of EDS' higher bid over Lockheed's, GAO said in December.

Lockheed Martin will have to lay off 200 employees connected to the current contract, mostly at its Lanham, Md., facility, spokeswoman Nettie Johnson said, whereas EDS is building up its workforce to support the follow-on HITS. 'It puts us at a disadvantage, allowing one company to build up while the other has to let its personnel base erode,' she said. 'If we're going to recompete, let's do it on a fair footing.'

HUD's spokesman disagreed, saying the department would take the effects of transition activities into consideration. 'HUD will award the contract to the one that best meets the department needs,' Fluharty said. 'We can't shut down what we're doing. The department needs to move on with its system. Work will continue as planned until the contract is awarded.'

GAO made no recommendations about the transition activities and typically doesn't get involved in contract performance questions. Scott Riback, senior attorney in GAO's procurement law division, said that 'the majority of the time, agencies suspend performance and await the outcome.'

Meanwhile, EDS 'will continue to provide its highest level of service to our HUD client unless directed otherwise,' spokesman Kevin Clarke said. When asked whether HUD consulted with the new contractor about transition activities, Clarke said he'd rather not answer. 'We have met with HUD and understand the direction they are taking, and we continue to evaluate all of our options,' he said.

The HITS contract will upgrade desktop systems and servers for 18,000 HUD users at 80 locations, as well as provide enterprise data processing and management, information security, LAN and WAN services, and Web administration. (Click for GCN story)

About the Author

Mary Mosquera is a reporter for Federal Computer Week.

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