NSA award for switches faces protest

The National Security Agency late last week was poised to award a contract for thousands of high-speed network switches to Fore Systems Inc., even as the deal becomes tangled in a lawsuit between Fore and another bidder.

Fore late last month filed a complaint at the U.S. District Court in Pittsburgh claiming that a former employee leaked proprietary bidding information to competitor Cisco Systems Inc. The suit, along with previous controversies, increases the likelihood of a protest, sources said.

The hotly pursued contract, previously known as Light Core, will provide Asynchronous Transfer Mode switches to NSA, the FBI and other members of the law enforcement community, according to sources familiar with the program.

Cisco initially won the contract for ATM switches last fall. But NSA revoked the award after Fore charged that Cisco's proposal was "technically deficient." The agency early this year initiated a new competition with basically the same requirements under the name Painterly. NSA initially estimated the contract's value at $117 million.

Officials at Fore were unavailable for comment late last week, and an NSA spokesman said he had no information available on the contract. But John Howland, director of federal systems at Optical Data Systems Inc., which also bid on Painterly, said he received "a courtesy call" last week from NSA's contracting office informing him of the agency's intent to award to Fore.

A Cisco spokeswoman said officials at her company also were told that Fore would receive the award. She had no further comment on NSA's decision.

Howland said he is conferring with attorneys over what he perceives as a "tainted" procurement. "Fore Systems was given Cisco's pricing during the protest phase [last year], so Fore had a pretty good grasp of what Cisco's strategy was," he said. "Now it turns out that Cisco might have been privy to all of Fore's proposal going into the second round. Yet the government is going forward with the award."

In addition, Howland said the requirements in the solicitation were skewed in favor of larger businesses, such as Cisco and Fore, and were extremely weak in regard to security.

Fore's complaint claims that company personnel discovered e-mail messages left behind by a former employee that contained evidence that the employee disclosed trade secrets to Cisco.

The suit said the employee left Fore on June 10 after attending a meeting with representatives from a federal "intelligence agency."

The lawsuit said one of the e-mail messages to Cisco contained a description of Fore's technical discussions with the agency, which sources identified as NSA.

A source close to the case said the court has ruled that the case has merit and will allow it to proceed.

The Cisco spokeswoman said the employee identified in the suit does not work for the company, but she said he was employed "two or three years ago," before his employment at Fore. She refused to comment on Fore's lawsuit. "That's an issue between Fore and [the individual]," she said.

John Riddle, vice president of federal operations at Cabletron Systems Inc., said his company, which bid on Light Core, did not bid on Painterly.

"It appeared that NSA wanted either Cisco or Fore, so it was just an exercise," Riddle said. "It was our opinion that NSA would prefer Fore."

-- Daniel Verton contributed to this article.