Lockheed Martin asks court to stop EDS contract with HUD

Lockheed Martin Corp. filed for an injunction today in the U.S. Court of Federal Claims in Washington to stop the Housing and Urban Development Department from transitioning a disputed contract to Electronic Data Systems Corp.

EDS of Plano, Texas, last August won the $860 million HUD Information Technology Services contract, known as HITS, to build a nationwide IT infrastructure and provide telecommunications services to the agency.

Lockheed Martin, the incumbent contractor, protested the award, and the General Accounting Office in December said HUD should recompete the 10-year deal.

Lockheed Martin of Bethesda, Md., asked the Federal Claims Court to intervene, contending that HUD is moving work to the contract with EDS, despite telling both companies the agency is going to implement GAO's recommendations, a company spokeswoman said.

"We are disappointed that the Department of Housing and Urban Development continues to forge ahead with transition activities," said Nettie Johnson, a Lockheed Martin spokeswoman.

EDS officials declined to comment on the filing.

"We will continue to provide the highest level of service to our HUD client unless directed otherwise," said Kevin Clarke, EDS spokesman.

In ruling on Lockheed Martin's protest, GAO found that HUD did not justify its choice of the higher bid from EDS over Lockheed Martin. The watchdog agency recommended that the two contractors submit revised proposals to HUD.

Johnson said HUD told the contractors in January that the agency was going to implement GAO's recommendation, but no timeline has been set.

Lockheed Martin filed the injunction request because its contract runs out Feb. 29, and it may have to lay off 200 people, she said.

About the Author

Nick Wakeman is the editor-in-chief of Washington Technology. Follow him on Twitter: @nick_wakeman.

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