Desktop V ready to go

The Air Force's Desktop V contract got back on track last week after Government Technology Services Inc. and Sysorex Inc. withdrew their protests, which had delayed the program for nearly a month.

As part of an out-of-court settlement, GTSI and Sysorex will receive cash settlements from winning vendors Hughes Data Systems and Zenith Data Systems, and GTSI also will join both Desktop V teams as a subcontractor, according to industry sources close to the program.

The withdrawal of the protests from the General Services Administration's Board of Contract Appeals clears the way for the Air Force to begin acceptance testing this week and open up the $1.3 billion program for purchasing in time for the summer buying season.

"In the interest of the customer, GTSI has withdrawn its protest," a company spokeswoman said.

However, the four vendors declined to comment on any settlement associated with the decision to drop the protests.

No one in the Desktop V program office was available for comment.

Concerns about missing out on large volumes of business reportedly helped to prompt the settlement, which will bring GTSI onto Desktop V through technical refreshes once acceptance testing is complete and the program is open.

According to sources familiar with the terms of the agreement, GTSI will offer PCs and monitors as part of Hughes' contract. The portables - expected to be from Compaq Computer Corp., GTSI's Army Portable-1 teammate - will replace the Zeos International Ltd. systems originally bid by Hughes. The Zeos model in question was already cited in the Sysorex protest as having been discontinued.

Compaq officials refused to comment.

Additionally, the reseller will offer advanced servers from Hewlett-Packard Co. - a teammate on GTSI's Desktop V bid - on the ZDS contract.

However, it is not clear whether GTSI will offer servers based on Intel Corp. or reduced instruction-set computing (RISC) processors. Although GTSI is believed to favor adding Intel systems, which it already carries, Zenith reportedly is pushing for RISC-based systems, which would not compete directly with its own Pentium Pro-based Desktop V servers, sources said.

"I have never seen a [protest settlement] nearly so complex," said Bob Dornan, senior vice president of Federal Sources Inc., a Vienna, Va., market research firm. "There have been deals in the past, but it has usually been just one prime and one protester."

The Air Force apparently helped spur the vendors into action May 31 by closing GSA Schedule B/C to all Air Force personnel in lieu of the availability of the Desktop V vehicle.

"They all looked around and said, 'We can fight over nothing and watch this buying season go by, or we can all take a smaller chunk of nothing,' " Dornan said. "I guess they realized it is a better way to go."

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-Anne Armstrong contributed to this article.