Digital Equipment Corp. Files Protest Over $1 Billion TAC-4 Contract Award to Hewlett-Packard

Strategic Insights -

The surprise move by Digital Equipment Corp. to protest the Tactical Advanced Computer-4 (TAC-4) contract awarded to Hewlett-Packard has raised eyebrows in the industry, with the protest citing concerns over the commercial availability of key HP deliverables. The protest, filed late last month, has left the Navy without comment, while HP has remained tight-lipped about the situation. The TAC-4 contract, worth $1 billion, was awarded to HP in January, and the protest has sparked fears of a lengthy and contentious dispute.

Key Takeaways:

  • Digital Equipment Corp. has filed a protest with the Navy over the award of the $1 billion TAC-4 contract to Hewlett-Packard.
  • The protest cites concerns over the commercial availability of key HP deliverables, which the company believes do not meet the definition of "commercial" offerings.
  • HP was the only bidder willing to take a loss and offer the lowest price for the contract, an industry source added.
  • The protest was filed after the 10-day grace period for most protests, which means a stop work order has not been issued to HP by the Navy.
  • DEC may file an additional protest with the General Services Board of Contract Appeals, the company said in a prepared statement.
  • The TAC-4 contract is a high-value contract, with industry and military officials predicting that the award would be protested due to the fierce competition leading up to the award.

Statistics:

  • The TAC-4 contract is valued at $1 billion.
  • The protest was filed late last month by Digital Equipment Corp.
  • The 10-day grace period for most protests has expired, meaning a stop work order has not been issued to HP by the Navy.
  • Hewlett-Packard was the only bidder willing to take a loss and offer the lowest price for the contract.
  • The three firms that bid for the contract were Hewlett-Packard, Digital Equipment Corp., and Hughes.

Sources:

  • "Digital Files Protest Over $1B TAC-4 Contract Award" (Defense Daily, Jan. 20)
  • "HP Wins $1B TAC-4 Contract" (Defense Daily, Jan. 20)
  • Prepared statement from Digital Equipment Corp. (Jan. 27)
  • Industry source, anonymous (Jan. 20)