In what a company official called a "must-win" situation, Evaluation Research Corp., a Fairfax-based technology services company, has won a four-year, $58 million contract to help the General Services Administration provide data processing services to other federal agencies.

"We knew it would be a very uphill fight to win this contract," said Marshall Mandell, president of ERC's systems engineering group. ERC, a subsidiary of Ogden-Allied Corp., has 500 employees in the Washington area and may hire many more depending on the flow of work, according to Mandell.

"Given the current business climate surrounding the {government contracting} industry, we felt this was a must-win contract," Mandell said. "This gives us maximum exposure to government agencies. It provides us with a nice revenue stream and will be a significant part of our strategic growth plan."

He and other ERC officials feared the worst because they were competing against Arlington-based American Management Systems, which had held the contract for the last eight years. Other competitors included OAO Corp., a Greenbelt-based computer systems integrator and Computer Data Systems Inc. of Rockville.

At AMS, Chairman Charles Rossotti said the company had already discounted the impact of losing the contract before GSA's decision.

"As the incumbent, we felt compelled to bid," he said. "But the truth is that we weren't counting on winning it. ... The government has become so price-oriented and there are so many people willing to do business at very low rates that we didn't think we'd win it."

Rossotti also denied rumors that losing the contract would cause AMS to lay off employees associated with the contract.

Although it downplayed the loss, AMS filed a protest with the GSA Board of Contract Appeals. Larry Seidel, AMS's vice president of federal contract marketing, said the company contended that GSA erroneously evaluated both AMS's technical proposal and ERC's price proposal. But AMS withdrew the protest before the appeals board could rule on it.