HUD considers rebidding IT contract

The Housing and Urban Development Department is trying to decide the next step it should take on an $860 million IT services contract successfully protested at the General Accounting Office.

A decision is not due until mid-February, HUD spokesman Michael Fluharty said. "We're talking with administrators, IT and contracting people. It's all internal discussions now," he said.

HUD is studying GAO's recommendation that the department rescind the contract it awarded to EDS Corp. this summer and reopen bidding for the HUD IT Services deal.

HUD has 60 days from when GAO upheld the protest on Dec. 18 to follow the rescission and rebid recommendation or respond with what actions it will take, said Scott Riback, senior attorney in GAO's Procurement Law Division.

"It's a recommendation rather than an order. But in the majority of cases, agencies do follow our recommendations," Riback said. GAO reports annually to Congress the results of contract protest bids, including whether agencies have followed GAO's advice or not.

HUD did not justify its choice of the higher bid from EDS over Lockheed Martin Corp., GAO said in its recommendations. The two contractors should submit revised proposals to HUD, which will then make a new award decision, GAO said.

Lockheed Martin protested the August award to EDS and argued that HUD had miscalculated its bid.

GAO agreed with the Lockheed Martin claim. "HUD essentially applied a more exacting standard in reviewing one proposal than it did in reviewing the other proposal," GAO said in its findings.

Lockheed Martin is pleased with GAO's decision and awaits HUD's response, said Lockheed Martin spokeswoman Nettie Johnson.

The company had been the incumbent IT provider, having won the HUD Integrated Information Processing Service contract in 1990. That contract expired at the end of November but was extended through mid-February.

The HITS contract awarded to EDS has a one-year base period worth about $15 million and nine one-year options.

Mary Mosquera writes for Government Computer News magazine.