EDS wins GSA HSPD-12 managed services work

Electronic Data Systems Corp. has won a $66.3 million contract from the General Services Administration to run its Homeland Security Presidential Directive-12 managed-service office.

EDS will replace BearingPoint Inc., which won GSA's initial HSPD-12 contract in August 2006. The Plano, Texas-based company beat six bidders to secure the deal, industry sources confirmed.

"EDS had to demonstrate their abilities to meet the government's requirements," said John Johnson, assistant commissioner for GSA's Integrated Technology Services. "They were successful in testing and that was one factor in our decision."

GSA's decision to go with EDS could save the government as much as $40 million. GSA canceled its $104 million contract with BearingPoint in October 2006. But GSA and BearingPoint officials said the two contracts' requirements are very different.

"We did take this opportunity in the second procurement to add in the lessons learned from the first one," said Steven Kempf, acting deputy assistant commissioner at ITS. "The requirements are not the same. We did add in several things that are new, such as the way we would deliver services."

EDS' team on the HSPD-12 Shared Services Provider II contract includes Northrop Grumman Corp., ActiveIdentity Corp., Data Systems Analysts Inc., Identification Technology Group, L-1 Identity Solutions Inc., Oberthur Card Systems and Tibco Software Inc., EDS said.

GSA narrowed the field of bidders earlier this month to three from six, but it received proposals from only two companies, EDS and Xtec Inc. BearingPoint, the other finalist, chose not to submit a pricing proposal, company and industry officials said.

Under the newly awarded contract, EDS must provide 200 fixed-enrollment stations and 25 mobile ones to be deployed nationwide in the next 10 months. The mobile stations will move eight times in the first year to support 200 additional government locations. GSA officials recently said they expect to issue 420,000 smart identification cards for employees and contractors by October 2008.

Kempf said the cost of the cards should be less than $100 each, down from the original contract's cost of about $110 each.

"As we increase the number of users the price will go down," he said. "We expect to grow from our current customer base."

The new contract has a ceiling of 1.5 million cards, GSA officials said.

GSA expects the first enrollment stations to be operational by July in the Washington, D.C., metro area, Kempf said.

Under the BearingPoint contract, GSA issued 227 HSPD-12 identity credentials to 42 customer agencies in time to meet the government's Oct. 27, 2006, deadline for demonstrating that capability. GSA then canceled BearingPoint's contract. But delays in awarding the follow-on contract forced GSA to extend the company's agreement through May 31.

GSA already has agreements to provider services for large agencies, including the departments of Agriculture, Commerce and Energy, and is working with the Justice and Treasury departments on pilot programs to determine if they will move to GSA's managed service office, Johnson said.

Industry sources say GSA decided to reopen the contract because it feared losing a protest that Lockheed Martin Corp., EDS and XTec filed with the Government Accountability Office.

By choosing EDS, GSA went with experience and lower cost, Jeremy Grant, an analyst with the Washington Stanford Group, wrote in an e-mailed report on the award.

"With this latest win, EDS is the prime contractor for HSPD-12 smart cards at the Department of Defense, the Department of Veterans Affairs and now the GSA," Grant wrote.

"We increased our requirements in terms of improving the integrity of the service, and reducing its cost," GSA's Johnson said. "We are hopeful because of those two ingredients, lower price, higher quality, we can sustain the customers we have and attract new ones."

EDS has about 119,400 employees and had annual sales of $21.3 billion in 2006. The company ranks No. 8 on Washington Technology's 2006 Top 100 list of the largest federal IT contractors. The 2007 list is due out May 14.

Jason Miller writes for Government Computer News, an 1105 Government Information Group publication.