Lockheed Leads in Bid for Rich County Contract

Lockheed Martin is the preferred company to handle the county’s potential $260-million data-processing contract for the next 10 years in what would possibly be the largest county contract ever awarded.

A contract evaluation team recommended both Lockheed and San Diego-based Science Applications International Corp. as potential vendors. But county officials are tilting toward Lockheed because it guaranteed it would generate $21 million in revenue for the county by leasing its data center, according to a staff report released Wednesday.

County supervisors, who were lobbied heavily during the search, are expected to make a final decision Tuesday, ending nearly two years of speculation.

Lockheed, which has been handling the county’s data-processing business for the last eight years, recently--and unexpectedly--announced that it wanted out of its contract to operate the county toll roads, saying the deal proved to be a money-loser.

The firm that wins the data-processing contract will be expected to take the county deep into the high-technology world with high-speed data transmission and by bringing government services inside the home via the Internet, said Leo Crawford, the county’s chief financial officer.

“The big thing that was mentioned throughout this process was that a lot of weight was given to thinking outside the box,” said Supervisor Cynthia P. Coad. “We wanted to be inventive and invite in creativity because this is an important contract. You just don’t make widgets the way widgets get made anymore, and you hate to be tied in with some old technology after there’s a big breakthrough.”

Mike Sinkinson, Lockheed’s program director in Orange County, said the firm considered such things as Web applications and high-tech services. Lockheed has already provided E-commerce linkages, on GovernLink, allowing residents in San Diego and San Bernardino counties to make property tax payments online, he said.

But despite Lockheed getting the preferred recommendation, county supervisors could select either company. “We’re glad that [Science Applications International Corp.] is still in the running,” said former Supervisor William G. Steiner, who lobbied on behalf of the San Diego-based firm.

Steiner said the corporation’s overall cost was more economical than Lockheed’s and that the company had enhanced its bid by offering to create a nonprofit foundation to bring venture capital into the county for start-up companies.

Lockheed submitted a base bid of nearly $241 million, compared to Science Applications’ bid of $211 million. However, to upgrade the county’s telecommunications equipment, Science Applications’ cost was $14 million, nearly double that of Lockheed’s.

Systems Management Specialists, a Santa Ana-based corporation recently bought by a British telecommunications company, bid $258 million, but it is not being recommended because its labor and contract terms were “not as good as the other two” corporations, Crawford said.

The county’s bidding system is under board scrutiny because of past problems, including a recent bidding war involving the taxi contract at John Wayne Airport. That contract resulted in the county getting slapped with a lawsuit by a losing firm. The airport job was eventually given to a lobbyist who started his own taxi company.

Sitting in on parts of the bidding process for the data-processing contract were members of the grand jury, Crawford said.

All three data-processing firms had powerful lobbyists, including Randy Smith, who represented Lockheed, Anaheim Mayor Tom Daly, who represented Systems Management Specialists, and Steiner.

The recommendation comes just five months after Lockheed announced its departure from the county toll-roads agency with two years left on its contract.