Fighting a telecom 'rip off'

The relationship between agencies and their contractors has always been

turbulent.

But the relationship turned ugly last week when the government's top

telecommunications chief accused information technology vendors of dragging

their feet when turning work over to new contract winners.

Dennis Fischer, the commissioner of the Federal Technology Service at

the General Services Administration, said he has grown "extremely frustrated"

with the slow transition of business from those companies that have lost

contracts to those that have won.

Delays in beginning work on new contracts results in unfair costs to

the government, Fischer said. "We're getting ripped off, and frankly, we're

not going to take it anymore," he said.

Fischer, speaking last week at the 13th Annual Federal Telecommunications

Conference in Tysons Corner, Va., said the situation has become so egregious

that federal contracting officials may take the vendors' poor transitioning

behavior into consideration when awarding future contracts. "Your long-term

interests are going to be damaged, and damaged substantially," Fischer warned.

Fischer declined to cite specific examples of contractors or subcontractors

that have slowed down the contract transition process, but he said the stonewalling has taken place in

long-distance programs and in local telecommunication access programs.

Recent contract changes have brought new vendors onto the federal scene,

such as Qwest Communications International Inc., and given agencies more

choices for telecommunications service.

The largest federal telecommunications contract is the government's

primary long-distance contract: the eight-year, $5 billion FTS 2001 contract,

which was awarded to Sprint and MCI WorldCom Inc. a year ago. The contract

replaces the FTS 2000 contract, which expired in December 1998 and was held

by Sprint and AT&T. Both companies also offer services on a two-year

"bridge" contract that agencies can use while planning their move to FTS

2001.

In the switch to FTS 2001, AT&T and its subcontractors stand to

lose business to Sprint and MCI. Sprint also could lose business to MCI

if an agency that had chosen Sprint under the FTS 2000 contract switches

to MCI.

AT&T denies foot-dragging in turning business over to contract

winners. "AT&T remains and will continue to be customer-focused," an

AT&T Government Markets spokeswoman told Federal Computer Week. "We're

putting our energy and resources behind supporting federal agencies. We

continue to work closely with GSA to meet our obligations under the GSA-run contract.

AT&T has won three of GSA's Metropolitan Area Acquisition contracts that supply

local telecom service, including services in the New York City, Chicago

and San Francisco areas. Last month, AT&T, along with Bell Atlantic

Corp., won another MAA contract to offer local telecom services to federal

agencies in the Buffalo, N.Y.

Transition Woes

Tony D'Agata, vice president and general manager of Sprint's Government

Systems Division, said he did not believe telecom companies are deliberately

slowing the move from old contracts to new ones. Focus on the Year 2000

problem and other factors have delayed some contract transfers. But, D'Agata

said, "I don't think there's been any intentional slowing down." Telecom

vendors have been trying to pull together a transition schedule "that makes

sense for everyone," he said.

The transitioning problems continue to upset Fischer, however. "I think

there are a lot of relationships that need to get worked out," he said.

"A lot of [the cause for prolonged contract transitions] is technical. Some

of it's relationships."

Fischer added that internal pressure to reach sales goals might contribute

to some companies' tendencies not to hand over work to other companies as

quickly as they could.

Warren Suss, a Jenkintown, Pa.-based federal market analyst and chairman

of the Federal Telecommunications Conference, said Fischer seems to have

government interests in mind. "I think part of the job of the government

is to look out for the interests of the user agencies," Suss said. "It won't

be the first time that the government has used get-tough tactics with industry.

I think there is a tradition at FTS when necessary for them to play hardball."