A deputy D.C. mayor said yesterday that a two-year, $30 million school security contract will go forward July 1 despite a protest filed by a losing bidder.

Edward D. Reiskin, deputy mayor for public safety and justice, said city officials will not hold up implementation of the contract with Hawk One Security Inc. The second-place bidder, Watkins Security of D.C., filed a protest this week with the D.C. Contract Appeals Board, arguing that the bid by Hawk One should have been rejected because of the company's financial problems.

The board often delays the implementation of contracts under dispute for 90 days during its deliberation process. But Reiskin said city officials do not anticipate such a delay in this instance and are confident that the board will not support Watkins's arguments.

"We don't expect any interruption from keeping this [contract] on track for July," Reiskin said. "We believe the likelihood of Watkins prevailing to be very, very slim. We had a very thorough and clean procurement process."

A 17-page report prepared for city procurement officials by Dun & Bradstreet said Hawk One was at high risk over the next 12 months for "severe financial stress, such as bankruptcy" and severe payment delinquency. The report also listed eight tax liens filed against the company in Maryland and the District from 1996 to 2003.

In its protest, Watkins said Hawk One would not be able to meet its obligations to the school system because of its tax liens and credit problems.

City officials have said that after the Dun & Bradstreet report was issued, they received additional financial information from Hawk One that convinced them that the company would be able to fulfill the contract.

Watkins, the current school security contractor, contends that it lost the bid because the company was unfairly blamed for a fatal shooting at Ballou Senior High School in Southeast Washington in February 2004. That shooting prompted the D.C. Council to shift authority over school security from the school system to the D.C. police department.

"We do not believe Hawk One is a stable company," said Watkins spokeswoman Donna Henry. "We do not believe Hawk One won this contract fairly. A lot of lies were circulated about our company that we felt we needed to bring to the appeal board's attention."

Hawk One President Tyrone Thompson, who declined to comment on the Watkins appeal, said in an interview yesterday that his company is correcting its credit problems. He said tax bills of several million dollars that the D.C.-based firm owed have been reduced to about $1 million. He said he is working out a plan with the Internal Revenue Service to pay the balance.

Thompson said the District government -- his major client for about 10 years -- was a major source of his financial troubles. Last year, the city paid Hawk One $7.4 million to provide security for government buildings, according to D.C. contracting records.

"There were times we would go a year without being paid," Thompson said, adding that the government has been prompt with its payments during the last three years or so. "The District was ridiculously slow in payment, creating a terrible situation for us."

Reiskin agreed that the city has a history of delinquent payments to vendors. "When our procurement folks were trying to figure out the problem [with Hawk One's finances], they identified that the District government was part of the issue," he said.

After seeing the Dun & Bradstreet report last week, D.C. Board of Education members expressed concern that a company with such financial problems might be vulnerable to going out of business, leaving city schools without security guards. They directed School Superintendent Clifford B. Janey to seek an explanation from city officials about why they selected Hawk One.

Board member Tommy Wells (District 3), who met with city officials this week about the Hawk One contract, said he was satisfied with the explanation that the company had secured a large enough line of credit to carry out the agreement.

"Even in the event of the District being slow on payment, they have sufficient credit to carry out the contract," he said.