MCI wins DISN bandwidth manager

After years of fighting for a place in the federal telecommunications market MCI last week won the Defense Department's continental United States switch and network management contract ending AT&T's decades-old hegemony over military long-haul services.

One industry analyst called the MCI win "an enormous opportunity for MCI and a crushing blow to AT&T."The Defense Information Systems Agency awarded the Defense Information Systems Network (DISN) Switched/Bandwidth Manager Services-CONUS (DS/BMS-C) last Wednesday to MCI Government Markets. MCI submitted the low bid of $88 million with a discounted life-cycle cost of $66 million on a contract with a ceiling price of $400 million according to Peter Smingler the DISN contracting officer. AT&T and an Electronic Data Systems Corp./Sprint team submitted bids roughly double the MCI price industry sources said.

Diana Gowen director of DOD sales and marketing for MCI Government Markets said the DS/BMS-C contract "will be the heart and brains of [DISN] for the next nine years.... We [also] have a significant chance of winning the really big one: the transmission contract."

Army Col. Marlin Forbes DISA's DISN program manager said the DS/BMC-C contract will provide the agency with the "intelligence" needed to manage the long-planned DISN network which eventually will hook together more than 500 DOD sites over a Synchronous Optical Network backbone running at speeds as high as OC-48. Forbes said DISA plans to call for a final bid on the transmission contract which will provide those circuits in November.

Under DS/BMS-C MCI will supply 12 voice switches and 34 bandwidth managers from Nortel Inc. gear designed to control operation of the backbone and local-access lines from DOD users nationwide. Forbes said DS/BMS-C will "allow us to look into all our networks allowing us to control the bit flow. It gives us capabilities we just do not have today."

Besides serving as the critical management element for the DISN CONUS network DS/BMS-C will permit the Pentagon to better manage other networks including satellite systems supporting troops deployed overseas Forbes said. MCI also will provide network security as well as priority and pre-emption override services for top commanders on DISN.

DOD could issue "a couple of hundred thousand" calling cards for DISN that would permit users to dial into the network from anywhere in the world Gowen said.

Transition Plan Needed

MCI's first task on the contract will be to develop a detailed transition plan for DOD circuits and services riding on AT&T's CONUS network the Defense Commercial Telecommunications Network (DCTN). The AT&T contract expires in July 1997 by which time DOD wants DISN up and ready to go.

Developing a transition plan especially for the DOD voice networks will be a complex task Gowen said. "There are 506 bases each with its own dialing and calling plans.... This is a big coordination job and we're going to have to work with the transmission guys. Of course it will be much easier if we win the transmission contract."

Boeing Information Services which holds the DISN Support Services-Global contract "will provide transition support " Forbes said.

The structure of MCI's DS/BMS-C bid as well as the location of the switches and bandwidth managers will help determine "the final network topology" for the Defense transmission contract Forbes said. DISA will furnish this information to the transmission contract bidders - AT&T MCI and Sprint - before November so they can submit best and final offers based on that topology.

Smingler said that while MCI came in with the lowest bid it also provided the "best-value" solution. "The [request for proposals] specifically states that we might pay a higher price for a better technical solution " Smingler said. But he quickly added DISA did not have to pay "an excessively large delta for such a difference. No one was that much better than [MCI's] proposal. [The award] was not simply a matter of price."

Gowen said she viewed the winning $88 million bid as MCI's floor rather than ceiling. "This is a $400 million contract...and the customer has made clear they expect augmentations and additions " she said. This includes increased security requirements quick insertion of Asynchronous Transfer Mode technology and calling cards.

Protest Rumored

Within hours of the DS/BMS-C award rumors started circulating that either AT&T or EDS would file a protest about what they viewed as "unbalanced pricing" by MCI. According to Smingler DISA already has done its homework on that issue. Before making the award the agency evaluated all offers "for reasonableness and realism. We also evaluated financial responsibility [for all the bidders] and had no problem with any of them."

Warren Suss a Pennsylvania-based telecommunications analyst said he would "not be surprised if someone protests this award." Suss viewed the award to MCI "as a real David and Goliath story."One executive called the DS/BMS-C contract "the crown jewel of DISN. It puts [MCI] in real control of the network. If they win the transmission contract they will be in an excellent position to maximize their revenues."

Besides Nortel MCI's subcontractors on DS/BMS-C include I-Net Inc. Bethesda Md. and Data Systems Analysts Fairfax Va. In addition to Nortel switches Gowen said MCI will supply Titan 5500 digital cross-connects from Telabs and use the Net Expert network management system from Objective Systems Inc.An AT&T spokeswoman said the company was disappointed but would reserve any further comment until after it received its debriefing later this week. Sprint and EDS officials were not available for comment.