DISA fires back at AT&T

In a sharply worded response to AT&T's protest of the multibillion-dollar Defense Information Systems Network procurement, the Defense Department struck back, airing myriad complaints about the long-haul AT&T Defense Commercial Telecommunications Network (DCTN) contract, first awarded to that company in April 1982.

AT&T filed a protest against DISN late last year in an attempt to prod the Defense Information Systems Agency into making a single, integrated award. But in a filing with the General Accounting Office last month, DISA said it specifically designed its multiple-award DISN strategy to avoid the problems inherent in an inflexible, unwieldy, long-term contract with a single vendor, such as those encountered in the current DCTN pact.

While DCTN was "satisfactory" in its early years, DISA said "several problems have become more evident in recent years...summarized as...high prices...sluggish technological innovations...difficulty [pinpointing] responsibility for delays and interruptions of service...cumbersome integration with other networks...and unwieldy contract administration."

On pricing, DISA said a survey it conducted showed it could obtain better prices for circuits from its bulletin board system than from DCTN. It further contended that when AT&T submitted bids to the BBS, the company itself undercut prices on DCTN.

Even when AT&T did agree to cut prices, the company "extract[ed] a heavy quid pro quo," according to DISA. In exchange for an agreement on the DCTN extension contract—designed to run until the summer of 1997, when DISN is in place—and related price reductions, DISA claims it had to make a written commitment "to support the use of DCTN as the DOD's common-user network for consolidating DOD voice, data and video...except where prohibited by law." DISA said this put AT&T in a position to "demand" that the agency "sharply curtail" its use of the BBS for circuit procurements.

DISA added that after the agreement was signed, it canceled 22 solicitations on the BBS for which it had already received price quotes—all lower than the DCTN prices.

DISA said that by locking itself into DCTN and a sole provider, it has "been deprived of the prompt infusion of technology which could be obtained in the competitive marketplace. As the lone contractor, AT&T has had no incentive to provide such new technology unless it conforms to its overall network—and then at higher, nonmarket prices."

DISA also called DCTN an "administrative nightmare" due to its long life span and numerous changes to the basic contract.

These problems figured strongly in the development of its multiple-contract approach to DISN, DISA said. The agency asked GAO to dismiss the AT&T protests against the DISN Transmission Services-Continental United States, DISN Video Services-Global and the DISN Switched/Bandwidth Manager Services-CONUS contracts.

Industry Weighs In

Harry Carr, who until last month managed the Defense Network Division of AT&T Government Systems and who is handling the protest, said he "did not believe that [the DISA GAO filing] is the official position of the leadership of DISA. I don't think the people who wrote this have had a lot to do with the DCTN contract."

But, Carr added, "they structured DISN to reduce our chances of winning.... We did not want to file this protest, but we do not want to go forward without a level playing field."

Warren Suss, a federal telecom consultant and president of Warren H. Suss Associates, agreed with DISA's argument that a single integrated contract would not best serve the government's needs. "There are more cases than DCTN where the government has run into trouble with a single-contractor approach," he said.

Bill Brougham, director of strategic business development for Defense programs at Sprint, said he viewed the AT&T protest as "an attempt by them to stop things.... I think DISA has got it right, and we should move forward."

Brougham said Sprint, which has protested DCTN and the extension, was pleased to see DISA's comments about DCTN, adding that he wished "DISA had made them a year ago."

Diana Gowen, director of DOD sales and marketing at MCI Government Markets, said she has argued for five years that DCTN was too expensive and hindered innovation. "Multiple awards are good for customers because they force prices down," she said.

"AT&T's motivation here is to delay," she added. "If they are successful in getting the GAO to cause DISA to have one contract, it would require an extension to the current DCTN. It's just what they want."

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-- Brad Bass contributed to this article.