HUD splits HITS

The protests are over. Both contractors win, with each getting half of the $800 million contract.

An information technology services contract that EDS and Lockheed Martin fought for in a bitter series of award protests during the past 18 months has been awarded to both contractors.

"The awarding of multiple contracts is the most prudent, cost-effective and efficient manner to transform [the Department of Housing and Urban Development's] IT systems," HUD deputy secretary Roy Bernardi said in a statement.

The $800 million HUD Information Technology Services contract, (HITS) will be split into two contracts, each worth about $400 million. EDS officials will operate a data center and provide disaster recovery, while Lockheed Martin officials will provide direct IT services for HUD's headquarters and field offices.

The Solomonic solution is agreeable to both contractors, according to company officials. EDS first won the contract in August 2003, but Lockheed Martin officials protested, initiating a series of protests and counter-protests through 2004.

"We are pleased with this agreement," said Jim Duffey, EDS vice president of global sales and client solutions for the U.S. government division. "Now, together, we can get down to the business of helping HUD modernize its IT infrastructure."

Dan Crowley, president of simulation, training and support at Lockheed, said his company also approves of HUD's solution. The two companies can now build on their combined capabilities and expertise, he said.

Consultant Bob Guerra, of Guerra, Kiviat, Flyzik and Associates, said HUD's decision to not use a performance-based contract facilitated the string of protests.

"In the time that HUD HITS has been announced, solicited, protested, overturned, rewarded, reprotested, reoverturned and now essentially settled, they could have done a performance-based approach and saved everybody, including the taxpayers, a bunch of money," he said. It "speaks to why we all need to move to performance-based acquisitions as a standard, not an alternative."

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