USPS delivers $3 billion MNS contract to MCI

The U.S. Postal Service last week awarded the largest telecommunications contract in its history to MCI.

Called Managed Network Services the contract may be worth as much as $3 billion over 11 years as MCI builds manages and owns the telecommunications infrastructure that will support retail terminals in thousands of post offices. Once deployed the network will improve the postal service's ability to track packages and express mail and control inventory by monitoring sales.

MNS is also noteworthy because it will be one of the largest intranets ever built. It will use standard Internet-based protocols and services to connect systems and networks but the backbone will be shielded from the public Internet.

MCI beat out teams led by Computer Sciences Corp. TRW Inc. and IBM/Advantis to win MNS its largest single contract award ever. Industry sources said MCI offered the strongest technical proposal.

MNS will replace the existing Postal Routed Network which only connects 900 sites with a high-speed data communications net that will deliver new applications to nearly 34 000 sites nationwide. The program will help USPS compete against UPS and Federal Express which are pioneers in the use of information technology to speed mail delivery.

"We expect anyone doing business today to present customers with the fullest set of capabilities possible " said Richard Weirich vice president of information systems at USPS. "Our intent is to be as good as anyone."

At first MNS will connect 7 000 of the largest postal sites to a communications backbone joining retail and delivery offices for the first time. But the system should grow to 34 000 sites within two years.

On the retail side MNS will connect 60 000 new retail terminals being installed under a separate Point of Service ONE contract awarded last year. Older terminals at post office counters are stand-alone machines but POS ONE will provide access to information stored in other databases. This will allow customers for example to go to a post office and track Express Mail packages and check on the balance of their mail box rentals.

"For the external user when he or she gets service at the USPS it will be supported by a network that enables faster delivery of transactions. MNS and POS ONE will enable that to happen faster " said Tony Bardo director of civilian networks at MCI. MCI will install the circuits and provide the frame-relay service to build MNS.

Delivery centers from which letter carriers operate will get direct access to database information about workloads.

MNS will also support inventory control and administrative applications and will centralize software distribution help desk and remote management.DynCorp an MNS subcontractor will link the POS ONE terminals to the MNS backbone test and install any local-area network equipment ordered by post offices through MCI and provide training. DynCorp expects $350 million to $400 million worth of work from MNS most of it coming in the first four years.

"From a company standpoint this puts us on the map in terms of large-scale communications infrastructure deployment " said Mark Filteau president of the information and engineering technology unit at DynCorp. "Our overall IT business was a little over $300 million this contract will push us up well over $400 million next year."

MCI expects to take around 600 initial orders starting almost immediately.

MNS is significant because it is based on Internet technology which is the "next technology that agencies are looking for in their high-speed data networks " said Warren Suss president of Warren H. Suss Associates. "MNS will set the high-water mark for doing this. The scale of the network is so enormous [that] it dwarfs anything out there."

Suss added that the contract was awarded to MCI as a carrier while other bidders were integrators. "Outsourcing to date has been an area where integrators have taken the lead " he said. "Now we see carriers moving into outsourcing business and beating integrators. I think a lot of the future competition in this marketplace is going to be in the high end.