DOD overspends on phone bills

The Defense Department could save more than $3.5 million a month on long-distance phone bills by switching voice traffic from an AT&T DOD-specific contract to the company's FTS 2000 network, according to the General Accounting Office.

The GAO study was ordered by Sen. Bob Kerrey (D-Neb.), ranking minority member of the Senate Appropriations Subcommittee on Treasury, Postal and General Government, and subcommittee chairman Sen. Richard Shelby (R-Ala.). The senators said last week that it was the first contract-by-contract comparison of govern-mentwide telecommunications.

Kerrey focused on a section of the report that said AT&T's FTS 2000 users would pay an average of 1.34 cents a minute for on-net long-distance if DOD users of comparable service were transferred to the network.

He contrasted that with the 5.32 cents per minute DOD pays under AT&T's Defense Information System Network Transition Contract (DTC). DTC is a 15-month extension to AT&T's Defense Commercial Telecommunications Network that will end in May 1997.

Kerrey rebutted claims from DOD that the GAO study did not take into account the agency's unique requirements, which cannot be met through FTS 2000.

"Certainly there are special characteristics at the DOD, but I don't believe those special characteristics justify that kind of differential," he said.

A DOD spokeswoman said officials there had performed "a cursory review" of the report and concluded that GAO had "compared apples to oranges." DOD users need capabilities such as call pre-emption and worldwide access, which are not standard FTS 2000 switched- voice features, she said.

"We need more capability than what can be provided by just an administrative network," she added.

Not Comparable Services

John Doherty, AT&T's vice president for FTS 2000 and civilian markets, agreed that GAO was not analyzing comparable services. However, he said, even if things were equal, DTC would still not achieve the volume discounts available on FTS 2000.

Frank Deffer, assistant director of GAO's Accounting and Information Management Division, said GAO "took into account the differences as much as possible" and only considered "routine" switched-voice traffic on DTC.

GSA officials have long believed that FTS 2000 could accommodate additional traffic from DOD, the largest user of the network.

"We already serve their locations," said Bruce Brignull, assistant commissioner for service development at GSA's Federal Telecommunications Service. "And when you put this additional traffic on top, it becomes extremely economical."

Brignull also noted that the GAO study did not reflect savings that AT&T's FTS 2000 users would accrue when the Treasury Department moves onto AT&T's network later this year. On-net rates for AT&T FTS 2000 users will fall to about 1.5 cents a minute after the Treasury transition, he said, even without additional DOD traffic.

AT&T officials disputed that figure.

Brignull added that the GAO figures also failed to reflect a recent agreement by Sprint to lower rates on its portion of the network.

Doherty said other agencies may have achieved better deals because they "cherry picked" the least expensive connections for their own programs.

"GAO has compared FTS 2000 to contracts with very specific city-to-city pairs," he said. "With FTS 2000, you have to offer ubiquitous service from here to the Grand Canyon, if that's what the Department of the Interior wants."

A second GAO report, providing additional information on DOD's networks and recommendations on how Congress can save money on those systems, will be issued late this week, Kerrey said.

The second report will include the results of a survey of 41 agencies' telecommunications systems.