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Army settles with IT firms

Firms cut out of $20 billion contract protested and GAO agreed.

The Army awarded its Information Technology Enterprise Solutions-2 Services (ITES-2S) contract in April to 11 companies. The multiple-award contract was worth $20 billion. But five companies - BAE Systems North America, Multimax, NCI Information Systems, Northrop Grumman and Pragmatics -- protested the award, claiming improper technical cost evaluations.

Now, reports Government Computer News, the Army has settled with the protesters.

Earlier this month, the Government Accountability Office sided with the protesters and ordered the Army to take corrective action. A spokesman for the Army's Program Executive Office for Enterprise Information Systems said the Army "was very disappointed in GAO's decision and recommendation," because reopening the bidding would be costly to the Army and the bidders.

The potential settlement would give the Army access to a "much-needed ordering vehicle immediately . . . " and "if additional awards are made, it would increase the potential for competition," the spokesman said.

Under the settlement, the five companies will get a spot on the contract along with the 11 original winners. An industry source said the service gave the five losing companies the choice of receiving a contract award or having the Army pay their bid and proposal costs and legal fees for the protest. And all five decided to be a part of the award.

"Letting us back in the procurement is a no-cost issue for them," the source said. "It does enhance competition as well. And the number of companies will drop because of acquisitions over the next year."