Lockheed Martin, EDS protest HUD HITS competition

EDS Corp. and Lockheed Martin Corp. filed separate protests this week in their continued battle over the Housing and Urban Development Department's IT Services contract, originally awarded last year. The companies are locked in a recompetition for the contract worth $860 million.

Lockheed Martin filed a protest yesterday with the General Accounting Office to offset what the contractor said was bias toward EDS in the contract solicitation. "The new solicitation, we feel, still favors EDS," said Lockheed Martin spokeswoman Nettie Johnson. She cited numerous ambiguous amendments in the solicitation. "It is important to preserve the integrity of our industry's competitive processes and strive to ensure customers and taxpayers benefit from a best-value decision," she said.

After the company filed the protest, HUD, which plans to award the contract in late April, extended the proposal deadline from March 12 to March 31.

GAO in December agreed with Lockheed Martin's initial protest that HUD did not justify its choice of a higher bid from EDS. HUD awarded the lucrative HUD HITS contract, which could extend to nine years, to EDS in September. Last month, EDS agreed to stop new transition work designed to bridge Lockheed Martin's expiring contract to EDS.

EDS today filed a protest with GAO over the extended deadline, saying it gave Lockheed Martin an unfair advantage. "The playing field has tipped pretty far," said EDS spokesman Kevin Clarke.

"Up until now, we have been willing to abide by the terms of this timeline. But the amended RFP gives Lockheed an unfair competitive advantage by allowing them to change their original proposal, while EDS is locked in," Clarke said.

There's not a lot of room to change the EDS proposal because it already had been doing the transition work on the original contract for seven months. "Lockheed has received extensive insight into our solutions through transition activity and meetings with HUD, while we haven't received the similar insight into Lockheed's solutions," he said.

The two companies often work side by side as Lockheed Martin's contract is about to expire and EDS picks up the work and migrates HUD to newer technologies and applications. Lockheed Martin has had almost seven months to watch its competitor at work and to change its solutions accordingly, Clarke said. By extending the deadline, HUD has exacerbated this situation, he said.

HUD said the extension best served contractors' interests to give them an extended opportunity to bolster their bids, said department spokesman Michael Fluharty. "I think the fact that it's not just one side filing the protests shows HUD is playing this down the middle," he said.

EDS has already assumed responsibility for HUD's nationwide help desk and field support services for 80 offices. The contractor also has transferred HUD's application development platform programs and processes, and the agency's disaster recovery facility to the EDS data center in Charleston, W.Va.

Under the HITS contract, HUD will upgrade desktop systems and servers, enterprise data processing and management, information security, LAN and WAN services, and Web administration. The new contract has a one-year base period worth about $15 million and nine one-year options. Lockheed Martin had been the incumbent IT provider under the HUD Integrated Information Processing Service contract since 1990.

Mary Mosquera writes for Government Computer News magazine.