EDS gets $750 million HITS contract

The Housing and Urban Development Department Friday awarded a contract to EDS Corp. to provide HUD with its information technology infrastructure.

The contract is the result of a re-compete after the original award was steeped in controversy.

Under the HUD Information Technology Systems contract, EDS will furnish personnel, hardware and software, telecommunications, facilities and services needed to deliver HUD's basic IT functions at more than 80 HUD offices nationwide.

The contract has a base period of four months, followed by nine option years with a total potential contract value of $750 million.

HUD will upgrade the desktop systems and servers for its 18,000 users, enterprise data processing and management, information security, LAN and WAN services, and Web administration.

Lockheed Martin Corp. had been the incumbent IT provider under the HUD Integrated Information Processing Service contract since 1990.

When HUD initially awarded the follow-on HITS contract to EDS in August, Lockheed filed a bid protest with the Government Accountability Office. GAO agreed with Lockheed that HUD did not justify its choice of the higher bid from EDS.

Subsequently, both companies filed dueling complaints. HUD reopened the competition in February.

EDS had started transition activities, working in tandem with Lockheed's IT staff as its original contract approached expiration but which was extended until the contract was re-awarded.

During the past year, EDS had 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.

"It has been a long and arduous process but the new award by HUD reaffirms that EDS offered the superior solution - twice," said Jim Duffey, EDS' newly appointed vice president, Global Sales and Client Solutions - U.S. Government.

For HUD, "EDS was the best value for the government," said HUD spokesman Jereon Brown.

Lockheed Martin requested that HUD debrief the contractor this week to determine why it chose EDS.

"We find HUD's new HITS decision even more surprising than its first award to EDS considering the important level of IT services HUD is entrusted to provide citizens across our nation and since the public record indicates that EDS' program performance and financial stability are even weaker now than when the HITS contract was initially awarded," said Nettie Johnson, spokeswoman for Lockheed Martin Simulation.

After the debriefing, Lockheed Martin can choose to accept the decision or to protest the bid again. If Lockheed Martin chooses to protest, the process is the same as under the original award, GAO said.

Lockheed would have to request a debriefing within three days of the award and file a protest with GAO within 10 days from the debriefing.

(Posted Aug. 9 and corrected Aug. 10)