Tech firm stands accused of contract manipulation

Three Texas companies filed a motion on Wednesday in a Dallas district court against federal technology provider GTSI for misuse of a cooperative purchasing agreement to secure a government contract for services the company is not qualified to provide.

The plaintiffs argued the contract should have been competitively bid, according to the motion.

Dallas County awarded GTSI a $17.5 million firm-fixed contract in April for "professional book and documents preservation and maintenance services," the motion stated. GTSI was awarded the contract under a U.S. Communities Master Intergovernmental Cooperative Purchasing Agreement, which allows participating state and local agencies to purchase products and services from vendors under pre-fixed terms, conditions and pricing. Under GTSI's cooperative purchasing agreement, the company is authorized to provide technology hardware, software, peripherals and services.

"There's zero technology in this process, which has been done the same way for 40 years," said Thomas Hurtekant, prosecuting attorney in the case.

Specifically, services required under the contract would involve manual processes for document restoration such as removing tape, fixing tears, spraying a chemical sealant on the documents and inserting them in protective sleeves to prevent further deterioration, Hurtekant said.

The general requirements of the contract state GTSI "represents that it is a qualified firm engaged in the scope of services covered."

According to the motion, "GTSI has willingly participated in a scheme designed to manipulate, abuse and peddle its status as a qualifying vendor of U.S. Communities in order to sell to Dallas County services that are not provided by GTSI." Plaintiffs alleged GTSI will subcontract the full scope of services to "nonaffiliated, out-of-state companies," presumably for a fee.

"GTSI has wrongfully used its status ... as a conduit to transmit unearned profits [and] in the process, induced Dallas County to violate its obligation to comply with competitive bidding requirements," the motion noted.

In opposition to the motion, GTSI and Dallas County, which is listed as a co-defendant, argued they did not have to comply with the competitive bidding requirements because Dallas County was permitted to "piggyback" existing U.S. Communities contracts held by GTSI to provide Fairfax County, Va., with computer equipment, software products and related technology services. Plaintiffs countered that the services GTSI provided to Fairfax County were not the same as the book preservation services covered by the contract under question, nor did GTSI agree to provide services on the same terms and conditions as the Fairfax County contracts.

GTSI could not be reached for comment in time for publication.

Plaintiffs in the case requested that the court prevent GTSI and the company's partners from performing under the contract and pay legal fees and damages.