HUD contract for IT services may be delayed

The Housing and Urban Development's IT Services contract, scheduled to be awarded by the end of the month, may be delayed again.

The competition for the $860 million contract, which has been embroiled in controversy since last September, got even murkier earlier this month when Moody's Investors Service of New York lowered its rating of EDS Corp.'s debt rating to junk status. The lower rating could make it more difficult for EDS to win new business, analysts said. EDS has said it disagrees with the rating.

EDS last September won the 10-year HITS contract to upgrade desktop systems and servers for 18,000 HUD users at 80 locations and to provide other IT services. But Lockheed Martin Corp., which has provided IT services under the HUD Integrated Information Processing Services contract since 1990, protested the decision.

HUD reopened the competition in February and is considering proposals from EDS and Lockheed Martin. Michael Fluharty, a spokesman for the department, said the contract is still on schedule for award later this month but noted that HUD has missed procurement deadlines on HITS in the past.

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