Work continues on ID card program despite bid protests

The winning proposal for the General Services Administration's $66 million contract for managing employee identification cards failed to comply with the technical requirements of a governmentwide mandate, according to protests filed with the Government Accountability Office.

The two protests, both filed on May 1 and obtained by Government Executive, forced GSA to stop work on the contract with the Plano, Texas-based Electronic Data Systems Corp., but the agency elected to override the stop work order on Monday due to what officials described as "national security interests."

GSA is attempting to provide standardized high-tech ID cards for about 420,000 federal employees from 42 agencies as part of its shared service offering under Homeland Security Presidential Directive 12. GSA awarded EDS the contract on April 23.

"The current heightened security level initiated by homeland security clearly shows that the threats to our national security are real," a GSA spokeswoman said in a statement. "Enhanced security of personnel and facilities is of the utmost importance to the government."

Industry sources said if GSA is forced to recompete the contract, agencies would tear up the memorandums of agreement they have signed with GSA for providing HSPD 12-compliant ID cards.

GSA decided in October 2006 not to exercise the remaining options of a five-year, $104 million contract with BearingPoint after three companies filed bid protests charging that the award was made improperly.

"If GSA has to recompete the contract again, then 90 percent of the agencies are going to bolt," a source familiar with the matter said. "And most of them are ready to bolt now."

Redacted versions of the protests from Xtec Inc. and Computer Literacy World Inc. say that EDS should have been excluded from consideration for the new contract award because its proposal failed to meet the technical specifications outlined by GSA.

Computer Literacy World's protest stated that neither EDS nor Xtec submitted technically compliant proposals because neither included a GSA-approved provider for putting employees' photographs and electronic information on the card. At the time bids were submitted, the Arlington, Va.-based Gemalto was the only firm on GSA's list of approved providers for both services.

Industry sources familiar with the matter said Gemalto was aligned solely with Computer Literacy World and BearingPoint Inc., the company that won the first HSPD 12 contract from GSA.

A spokesman for EDS said the company "strongly disagrees with the allegations in the protests and supports GSA's position in this dispute." He said he does not know if Gemalto was included in the company's bid proposal and that restrictions on public statements related to the protest prevent the company from disclosing the information.

Neville Pattinson, vice president of government affairs and standards for Gemalto North America, told Government Executive that the company has relationships with all of the identity management integrators that have approached it.

"We were approached by many integrators, EDS included," Pattinson said.

But he said he does not know if EDS included Gemalto's product for graphical and electronic personalization in its bid proposal: "That's their choice. They may or may not have bid with us."

Rick Sullivan, executive director for services for EDS' government service business, said that he was not surprised GSA overrode the work stoppage. He would not comment on whether EDS used Gemalto's electronic and graphical personalization services in its bid.

"GSA took the opportunity to ensure that the best value would be achieved for the dozens of agencies that it signed up for this shared service," Sullivan said. "The overall goal of the program has been quite clear: reduce security threats. Secure various areas with technology."

Sullivan said his team is focused on meeting the October 2007 deadline for all federal employees with less than 15 years of service to have HSPD 12-compliant identity cards.

EDS' partners for the HSPD 12 contract include Northrop Grumman, L1 Identity Solutions and Identification Technology Group.

GSA must rule on the protests within 100 days of the filing, which means a decision will be made by August 9. Industry sources said GAO is moving aggressively toward a ruling.

Computer Literacy World also argued in its eight-page protest that GSA failed to consider small businesses in its procurement.

Xtec's protest argued that in addition to EDS lacking the technical capabilities, the contract was improper because GSA failed to conduct meaningful discussions, failed to disqualify EDS for proposing one solution for demonstration purposes and pricing a different system, and failed to properly evaluate the proposal prices.