Editor's note: This story was updated at 12:10 p.m. Aug. 10, 2006, to correct information about a lawsuit filed by CW Government Travel. That lawsuit, originally described as on-going, was resolved in late July.

The Defense Department is preparing to recompete a contract to support the Defense Travel System, following a six-month extension of the current arrangement.

Northrop Grumman Mission Systems holds the current DTS contract, which expires at the end of the fiscal year. To date, NGMS has received $264 million to develop, deploy and maintain DTS.

Analysts had predicted that NGMS would be awarded the new contract, based on their experience with the system and their control of the software and source code. But the Army is making it clear that NGMS does not have a lock on the new award.

“The purpose of the extension is to enable NGMS to serve as a transition contractor,” according to a notice published by the Army Contracting Agency, Information Technology, E-Commerce and Commercial Contracting Center, which administers the contract.

NGMS will be required to transfer system documentation and design knowledge to a new contractor, if they lose the award. During the six-month extension, NGMS will also continue to develop the system and conduct software tests.

DTS is DOD’s enterprisewide electronic travel system. DTS uses a Web-based interface to allow DOD’s 3.2 million employees to book travel reservations, purchase tickets, track payments and redeem vouchers.

DOD commissioned DTS in 1998 to be a fee-based system that would use commercial technology. The original contract anticipated full deployment by 2002. But DOD’s requirements for the system changed in the ensuing years. In 2001, the contract was switched to a cost-plus-profit structure.

CW Government Travel sued DOD in federal court regarding the contract change. They alleged that the government violated the Competition in Contracting Act. Late last month, CW Government Travel withdrew their appeal, effectively ending the lawsuit.

According to DOD, the total investment in DTS will total about $440 million by the end of September. At that time, the system will be deployed to about 76 percent of DOD users.

Critics say that DTS usage does not match deployment. But on Army installations that have had DTS fielded for more than six months, 74 percent of travel transactions are now handled through DTS, a DOD spokesperson said.

In June, the Senate Armed Services Committee passed an amendment to the fiscal 2007 National Defense Authorization bill that would prohibit DOD from spending more money on DTS, requiring instead a fee-for-service approach. Sen. Tom Coburn (R-Okla.) sponsored the amendment. The House version of the bill does not include this amendment, so a joint-conference committee will debate the measure some time this fall.

Army contracting officers declined to comment on how new contracts would be structured. No new RFP has been issued yet.