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Deloitte Sues To Block IBM's $193 Million HUD Contract

The consulting firm has filed a complaint against the federal government that claims bidding was unfair.

Tech and business services contractor Deloitte Consulting has filed a lawsuit against the United States in an effort to block the government's award of a lucrative IT contract to rival IBM.

The lawsuit, filed in December in the U.S. Court of Federal Claims, aims to overturn the Department of Housing and Urban Development's award of a 10-year, $193 million contract to Big Blue. Under the contract, IBM has been tasked with modernizing HUD's computerized financial systems.

Deloitte, however, calls HUD's decision in December to tap IBM for the work a "stunning outcome" and says it wasn't fairly treated in the bidding process, which began in 2006.

"Deloitte alleges that HUD violated law and regulation by failing to follow the stated evaluation criteria, and also by engaging Deloitte in nonmeaningful and misleading discussions," Deloitte says in a highly redacted court filing. Most of the other filings related to the case are under seal.

Deloitte is seeking an injunction that would halt work on the contract until the dispute is settled.

According to Deloitte's filing, the contract is to support HUD's Integrated Financial Management Improvements Project, under which the agency is looking to transform "core financial management processes and systems to improve financial accounting support for the Department and improve financial information accuracy and availability to HUD decision makers."

HUD has long been characterized by critics as a sinkhole of waste and mismanagement, and the new financial accounting system, which is based on PeopleSoft software, is intended help the agency improve its operating efficiency.

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