GAO upholds Lockheed protest on HUD services contract

The General Accounting Office has sustained a Lockheed Martin Corp. protest of an IT services contract award, worth $860 million, from the Department of Housing and Urban Development to Electronic Data Systems Corp., the agency announced Dec. 19.

Lockheed Martin of Bethesda, Md., filed its protest in September after HUD picked Plano, Texas-based EDS for the nine-year HUD Information Technology Services contract, known as HITS.

Lockheed Martin contended HUD miscalculated its bid. Lockheed had been the incumbent before the award, delivering IT support to the department under the HUD Integrated Information Processing Service contract since 1990.

"Lockheed Martin challenged the way the source selection process was [handled]," said Dan Gordon, GAO associate counsel.

Scott Riback, the GAO attorney who handled the protest, said the watchdog agency has recommended that HUD reopen negotiations with competitive bidders and re-award the contract. He did not say when that might happen.

HUD spokesman Michael Fluharty said HUD is evaluating the recommendations.

"We are pleased that the GAO has upheld Lockheed Martin's protest of the HUD Information Technology Service contract awarded Aug. 14," said Nettie Johnson, director of communications for Lockheed Martin Simulation, Training & Support. "We look forward to continuing our work with HUD and hope that the agency fully implements GAO's recommendations to ensure the best value decision."

Kevin Clarke, a spokesman for EDS, said the company has not yet received a copy of the comptroller general's decision so it cannot comment on what will happen next. "We are confident the EDS solution will be the best solution for HUD, and we will continue to provide our solution to ? customers while we wait for a resolution," he said.

(Posted 4 p.m. Dec. 19, updated Dec. 22)