AT&T fires off protest against DISN

On the last day before bids were due on the multibillion-dollar Defense Information Systems Network contract AT&T filed a protest against the procurement with the General Accounting Office.

Reaction from DOD was sharp. Emmett Paige Jr. assistant secretary of Defense for command control communications and intelligence called the suit filed Dec. 29 "frivolous.

"We can and we will decide how to competitively procure the service we need " he said. "We will not let AT&T or any other company drive us to their solution when that solution is not necessarily in the overall best interest of DOD. [The Defense Information Systems Agency] is on the right track and they have my full support."

DISA said in statement "It's unfortunate that AT&T has felt it necessary to initiate this action. However we are confident that it will be quickly resolved. We must continue our approach to maintain competition so as to provide the best cost-effective support to our nation's warfighters."

AT&T's protest incorporates complaints that the company has made over the past several months over DISA's refusal to allow the company to provide an integrated end-to-end bid. Instead DISA has split up the DISN contract into various parts including the three pieces AT&T protested last week:

The $400 million DISN Switched/Bandwidth Manager Services-Continental United States contract.

The $5 billion DISN Transmission Services-CONUS (DTSC) contracts.

The $125 million DISN Video Services Global procurement.

DISA has also already received bids on the $2 billion DISN Support Services Global (DSSG) contract from Boeing Information Services Inc. Computer Sciences Corp. teamed with Lockheed Martin Corp. and Government Systems Inc. teamed with PRC Inc.

DISA split DTSC into eight geographic regions as well as a national backbone contract meaning the agency could award as many as nine contracts.

AT&T has repeatedly asked to submit an integrated bid for all the DISN contracts except DSSG. AT&T said in its protest that DISA "unreasonably—and without any justification or rational consideration—has refused to permit even as an evaluated alternative to such multiple piecemeal awards integrated proposals...."

Such a refusal not only violates contracting laws AT&T said but will saddle DOD with a multivendor solution that will "unquestionably incur massive additional `hidden' costs compared to those it would incur administering a single contract for the entire network."

Harry Carr Defense vice president for AT&T Government Markets said many of these additional costs in a multivendor network would result from the integration services DISA would need to acquire from the DSSG contract. Carr said the value of the nine-year DSSG pact "works out to about $225 million a year which is more than DOD spends with us right now [on the Defense Commercial Telecommunications Network contract and its extension]. If we're allowed to submit an integrated bid they can get the whole thing [DISN] for less than they would spend on the support contract."

One industry source described the protest as "truly a case of a dog biting the hand that feeds it." AT&T currently holds two contracts that carry the bulk of domestic DOD traffic.

AT&T's competitors said they viewed the protest as a "stalling" tactic to ensure continuation of AT&T's existing DOD contracts. Diana Gowen director of sales and programs at MCI Federal Systems which has argued for an integrated approach in the past said "We submitted our bid let's get on with it."

Carr said AT&T did submit bids on the three DISN contracts but he viewed that approach "as an artificially constrained solution."

Gowen said she does not expect the protest to delay proposal evaluations adding that MCI does not intend to intervene "because I don't think any information we will gain will be valuable enough.... Also we don't want to delay the process any further."

Joe Draham vice president of market development for Electronic Data Systems Corp. which teamed with Sprint and the Baby Bells on its DISN bids said he wonders "whether this is a true protest or a delaying tactic to continue the DCTN contract." He said the single-vendor strategy AT&T wants to pursue "might give DISA good prices at the start [of the contract] but after that they start to drift off fairly quickly."

DISA has 14 days to respond to the protest and DISA sources said the agency intends to move quickly to dismiss the suit.