Senators seek six-month delay

Just as the General Services Administration was close to an agreement with key members of its oversight committee in the House about how to conduct the Post-FTS 2000 telecommunications procurement, two members of the Senate Appropriations Committee have weighed in with their own criticisms and recommended that GSA delay the program for six months to a year.

In a letter received by GSA's Federal Telecommunications Service early this month, Sens. Bob Kerrey (D-Neb.) and Richard Shelby (R-Ala.) said GSA should postpone the program while industry reacts to the new environment created by the Telecommunications Act of 1996. The request echoed similar concerns expressed in a May letter to GSA from Reps. William Clinger (R-Pa.) and Steven Horn (R-Calif.).

Like their colleagues in the House, the senators asserted that deregulation of the telecom market will allow for a greater number of competitors for Post-FTS 2000 and will drive prices down. "While this process is under way, it seems premature and potentially wasteful for GSA to initiate the Post-FTS 2000 enterprise," they wrote.

In addition, Kerrey and Shelby questioned why GSA was not sticking with the procurement strategy used so successfully on the existing FTS 2000 contract.

Adding to GSA's woes, sources said Sen. Ted Stevens (R-Alaska), chairman of the Senate Governmental Affairs Committee, plans to ask for an even longer postponement of one to two years.

FTS deputy commissioner John Okay said late last week that he was awaiting approval from GSA Administrator David Barram of a response to Kerrey and Shelby. He said the response would include an invitation to discuss "the pros and cons of a delay" to the program with FTS personnel.

Okay said he believes a postponement would be a mistake because FTS could stand to lose the assistance it has received from agencies throughout the government that have helped design the strategy. "A year delay will mean agencies will pull those people back out of FTS and have them work on other things," he said. "That will impair our ability to move forward."

FTS commissioner Bob Woods said the delay will hurt industry more than GSA because of the investment companies have put into bidding. "They are burning cash while they wait," he said.

Woods said he has come close to an agreement with staff members representing Clinger and Horn on how to restructure the procurement strategy. He indicated a willingness to embrace some of the recommendations outlined in their letter.

For example, he said he might endorse the suggestion that Post-FTS 2000 services could be offered on contracts similar to GSA's multiple-award schedules.

Woods said dedicated transmission services and other services not sensitive to volume discounts would be appropriate for schedule contracts managed by FTS.

However, he said, aggregated services such as switched voice that go down in price as volume increases should not be bought through schedules.

Woods also said FTS personnel have met with the regional Bell operating companies to discuss "obstacles that are keeping them from competing" for Post-FTS 2000 contracts. He said FTS is encouraging the Bell companies to consider "co-priming arrangements" that would allow them to team up as prime contractors.