GAO Finds Conflict of Interest with ITT Contract

The Government Accountability Office is suggesting a $500 million U.S. 10-year defense contract awarded to ITT Industries Inc. be reconsidered due to a conflict of interest.

As part of the "spectrum management" contract, ITT would evaluate electronics for the Defense Department to see if they interfere with one another via radio waves. ITT would be required to regularly review its own products, as well as the products of its competitors. The Pentagon found only a 15 percent conflict of interest under the contract's requirements.

The Defense Information Systems Agency is recommending a new competition for the affected services after its failure to properly estimate the extent of ITT's self-interest.

The GAO's ruling is in response to complains from Alion Science & Technology Corp., a McLean, VA-based  company that lost the original competition.

The contract includes a $147.9 million three-year contract, with up to seven one-year extensions. The total proposal by ITT was valued at $500.9 million, according to the GAO.