NTT Data prevails again in battle for $260M Education IT contract

The Education Department continues to run afoul of the Government Accountability Office with its handling of a conflict-of-interest allegation over a $260 million IT services contract.

GAO has twice sent the contract back to the Education Department to address the issue raised by NTT Data.

NTT Data is the incumbent on the current EDUCATE contract originally won by Perot Systems in 2007. The contract went to NTT Data last year when they acquired Dell’s IT services business. Dell had earlier acquired Perot.

For the recompete, the Education Department has broken up EDUCATE into smaller procurements, each called PIVOT. This set of protests involves PIVOT 1 that covers IT services.

NTT Data (then Dell Services) competed head-to-head with SRA International in 2007 for the contract. SRA in 2015 merged with Computer Sciences Corp.’s U.S. public sector business to form CSRA, which was acquired in April of this year by General Dynamics.

For clarity’s sake, I’m going to stick with the current company names of NTT Data for the Dell portion, and General Dynamics for the SRA side. GAO's filings use the old names of Dell and SRA.

The two rounds of protests revolve around the same set of facts. General Dynamics ended up with a copy of NTT Data’s proposal for the EDUCATE contract through a subcontractor employee who had worked for another company hired to monitor and evaluate that procurement.

This employee left that company and joined another company in ClearAvenue, which joined the GD team pursuing PIVOT.

To GD’s credit, they notified the Education Department when they realized what they had and they destroyed the material. The Education Department looked at the situation and said there was no impact on the competition.

But to NTT Data the damage was already done, and GAO agreed.

In its first protest decision last year, GAO said the Education Department should look at the potential conflict again before they make an award.

The Education Department said they did that and decided to again award GD the contract in February of this year.

NTT Data filed another protest one month later and GAO found that Education Department didn’t do enough. In fact, GAO says there is “no evidence to show that the agency considered (or resolved) the potential unfair competitive advantage created by Mr. Y’s access” to NTT Data’s proprietary information.

GAO stops short of telling the Education Department to award the contract to NTT Data. Instead, GAO wants the Education Department to be able to document why there isn’t a conflict of interest or how it will be mitigated if there is one. If they can’t do that, the agency has to cancel the contract with GD.

In an emailed statement to me, NTT Data Public Sector President Tim Conway praised GAO’s “thorough review of this matter and the conclusions it has reached.”

“We look forward to a remedy that provides a level playing field and enables the Department of Education to fairly evaluate the proposals,” he said.