EDS, Lockheed Martin to split HUD $800m IT contract

The Housing and Urban Development Department yesterday awarded the $800 million IT services contract to both Lockheed Martin Corp. and EDS Corp., ending the protracted battle over the lucrative contract.

The settlement allows HUD to finally move forward on the planned IT modernization that had been stuck in limbo over continuous bid protests.

'HUD, EDS and Lockheed Martin have settled the disputes relating to the HUD Information Technology Services procurement,' said HUD deputy secretary Roy Bernardi. 'The awarding of multiple contracts is the most prudent, cost-effective and efficient manner to transform HUD's IT systems,' he said.

Both EDS and Lockheed Martin will receive prime contracts to provide HUD with IT services. Each contract will be worth about $400 million, HUD said. EDS will operate a data center and provide disaster recovery, and Lockheed Martin will provide direct IT services for HUD headquarters and HUD's field offices.

"We are pleased with this agreement," said Jim Duffey, EDS vice president, Global Sales and Client Solutions-U.S. Government. "Now, together, we can get down to the business of helping HUD modernize its IT infrastructure."

"Lockheed Martin looks forward to working with Electronic Data Systems to seamlessly deliver information technology services to HUD under the HITS program by leveraging our combined capabilities and expertise,' said Dan Crowley, Lockheed Martin Simulation, Training and Support president.

The contract has a base period of four months, followed by nine option years.

The department has twice awarded the HUD Information Technology Systems contract to EDS. But following each HITS award, the Government Accountability Office upheld protests from incumbent Lockheed Martin, citing missteps HUD made in the procurement process.

After the first ruling in August, HUD reopened the buy. In November, GAO ruled that HUD conducted improper discussions in the late stages of the procurement before reawarding the contract to EDS. GAO again recommended that HUD reopen the procurement from the point of the contested discussions, seeking revised proposals. HUD had 60 days to decide if it would once again reopen the competition.

The delay resulted in HUD holding up plans to update and refresh hardware and software. The housing agency also has had to 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 had extended Lockheed Martin's existing contract until the new HITS contract was in place. Meanwhile, EDS continued transition work that GAO approved. During the past year, EDS had assumed responsibility for HUD's nationwide help desk and field support services for 80 offices.

Lockheed Martin has been performing other IT services under its HUD Integrated Information Processing Service contract that the company has held since 1990. The two vendors are working at the same sites to provide some services.

About the Author

Mary Mosquera is a reporter for Federal Computer Week.

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