GSA, Hill at odds over Post-FTS 2000 contract

With just two months to go before a planned August solicitation, an escalating dispute between congressional lawmakers and the General Services Administration has thrown into doubt the future of the follow-on contract to the governmentwide FTS 2000 long-distance network.

GSA's Federal Telecommunications Service and congressional staffs have failed to patch their differences over the legislators' proposal to shorten the span of the Post-FTS 2000 contracts from 10 years to deals that would last three to five years.

"I feel sorry for [FTS commissioner Bob] Woods because he's involved in this conflict at a very late hour," a systems integrator said. "It's very late in the procurement cycle to change direction."

Reps. William Clinger (R-Pa.) and Stephen Horn (R-Calif.) wrote last month to GSA chief David Barram with the recommendation. Clinger, chairman of the House Government Reform and Oversight Committee, and Horn, chairman of the House Subcommittee on Government Management, Information and Technology, believe a shorter contract term would allow the government to take advantage of greater competition in the future, when telecom reform legislation takes hold.

FTS, RBOC Execs See Eye to Eye

Sources close to FTS said officials there - along with users on the Interagency Management Council - claim the congressional plan would result in higher rates. Representatives from long-distance service providers, systems integrators and at least one regional Bell operating company (RBOC) said they agree.

Ron Montague, national account manager for federal services at US West, advocated a five- to seven-year contract as a compromise between the views of GSA and Congress.

"We believe a five- to seven-year contract would strike a better balance between a bidder's ability to offer the most competitive pricing and the federal government's ability to choose from the most competitive bidding field," he said.

Bill Bogart, director of program development at Electronic Data Systems Corp., said he also supports a longer contract, partially because he does not believe the telecom landscape would change sufficiently within five years to the point where RBOCs could compete against long-distance companies.

Bogart added that short-term contracts are ultimately costly to vendors and the government due to the expense associated with frequent procurements and transferring systems from vendor to vendor.

A GSA official who requested anonymity said network transition costs are likely to hit $75 million, a sum that will be difficult to recoup over three to five years. The official said agencies will end up paying twice as much for switched-voice service as they do now under such a plan. Most agencies would be likely to abandon the program altogether and buy their own services, he said.

Despite the criticism, Clinger and Horn show no signs of relenting. A committee staff member said the congressmen believe that competition among the three major long-distance vendors will not result in the lowest possible prices.

The staff member also expressed skepticism about GSA's claims that the Post-FTS 2000 contracts will include built-in mechanisms to allow the agency to award additional contracts as the telecom market and technology evolve.

Representatives from Bell Atlantic, BellSouth and Nynex said they support the Clinger/Horn letter. They said the plan would allow the government to choose from a wider selection of competitors and garner lower rates through competition.

Jim Payne, assistant vice president for FTS 2000 at Sprint, countered that vendors will have to charge more during a short-term contract to recoup funds invested in meeting unique requirements, such as customized billing systems and a service oversight center stocked for use during national emergencies.

John Doherty, AT&T's vice president for FTS 2000 and civilian markets, said a three-year contract would also eliminate the cooperative relationships that vendors and agencies build over the long term.