GSA defends Post-FTS 2000 revisions

Members of the House Government Reform and Oversight Committee last week challenged the General Services Administration's decision to amend its acquisition strategy for the $5 billion FTS 2000 follow-on program and questioned why the agency discarded the widely supported previous strategy.

Many members reiterated arguments raised by the regional Bell operating companies (RBOCs) that the new strategy will give long-distance companies an opportunity to compete with local carriers for their local-service contracts long before the local carriers have a chance to compete for long-distance services.

GSA has found itself caught between the two houses of Congress each of which appears to be pursuing the interests of different sectors of the telecommunications industry. Sources said the amended strategy developed in response to concerns raised by Sen. Ted Stevens (R-Alaska) was partially the result of intense lobbying by AT&T. In response the RBOCs have asked House members to seek changes to what they view as an unfair strategy.

"There is definitely tension between the House and Senate " said consultant Warren Suss president of Warren H. Suss Associates Jenkintown Pa. "There is some anger within the House that a single senator took actions that created a significant change in the program."

Although the majority of the House committee members at the hearing said they had reservations about GSA's revision committee chairman Dan Burton (R-Ind.) has taken no official position on the issue a committee source said.

Members apparently were angered that GSA did not consult them before revising the previous strategy one that their committee had helped to develop. Rep. Bob Barr (R-Ga.) said it appeared that GSA "abruptly" changed a strategy that enjoyed "fairly broad agreement among industry participants." The agreement was reached after Stevens chairman of the Senate Appropriations Committee raised objections to the strategy.

The new strategy unveiled last month will allow winners of Post-FTS 2000 long-distance contracts to offer optional local services. It also would allow vendors who win local-service contracts many of which will be awarded after the long-distance contracts to provide optional long-distance services. The previous strategy did not allow vendors to offer end-to-end services until about four years into the program.

Committee members on both sides of the aisle repeatedly expressed concerns about the revised strategy to Robert Woods commissioner of GSA's Federal Telecommunications Service. Rep. Rod Blagojevich (D-Ill.) said he was concerned that GSA rushed into the new strategy without forethought. "It seems there was not enough time to explore the ramifications of this new strategy " he said.

Woods staunchly defended the revision which he called a "policy interpretation" of last year's Telecommunications Reform Act. He told the committee that Stevens approached the Office of Management and Budget with the idea to promote competition for federal contracts sooner among long-distance and local carriers. "To be honest we couldn't see any reason not to do it " Woods said.

"We are trying to get [competitors] in earlier and bring more players to the table " he told the committee.

While AT&T and Sprint sources said they support the revised strategy the local-service providers uniformly objected to it. Representatives from the baby Bells said the revision would allow long-distance companies to compete in their territories long before they get an opportunity to widely offer network transport services. "Through the FTS 2001 and MAA contracts the government could give multiple vendors the capability to compete in my territory before I even have a chance to compete for it " said Ron Montague national account manager for federal services at US West Inc.

Frank Lalley associate deputy assistant secretary for telecommunications at the Department of Veterans Affairs testified that agency representatives on the Interagency Management Council "strongly support" the revised strategy. Lalley who became IMC chairman last month said the strategy will give agencies leeway to choose among a variety of services and vendors will be responsive to changing telecom requirements and technologies and will result in nationwide interoperability and the best prices.

Although House members were clearly riled by GSA's revision industry sources said they may not have the stomach to argue the issue with Stevens one of the most powerful members of Congress and a participant in the development of telecom reform legislation. "If you put a few sophomore representatives up against someone like Ted Stevens I'd bet on Stevens every time " one source said.

But Suss said he believes GSA will be forced into some kind of a compromise between the views of the House and Senate. For example GSA may need to undertake formal competitions in areas where a long-distance provider decides it wants to offer local service within a specific region.