NSA cancels telecom award to Cisco Systems

The National Security Agency has canceled the award of a controversial contract to buy thousands of high-speed network switches from Cisco Systems Inc.

The agency which rarely comments on any topic publicly did not announce the cancellation of the so-called Light Core contract designed to supply NSA headquarters in Fort Meade Md. with advanced Asynchronous Transfer Mode switches. The switches would help move data throughout the NSA campus including to and from a supercomputer facility that houses the largest concentration of high-powered computers in the world.

In a statement released to FCW late Friday NSA said "Based upon information revealed subsequent to the initial technical evaluation and the evaluation of [best and final offer] submissions the agency has determined that it is in the best interests of the government to cancel the solicitation."

Richard Bibb vice president for federal operations at Fore Systems Inc. which last month filed a suit against NSA over its award to Cisco said NSA "terminated the [Cisco] contract for the convenience of the government " a legal phrase under which the government cancels the contract but not necessarily the underlying procurement.

Jim Massa director of Cisco's federal operations disagreed with that phrase saying NSA only canceled the buy - a distinction that would let Cisco bid on a new pact said Carl Peckinpaugh a lawyer with Winston & Strawn Washington D.C.

Fore Cisco and other vendors expect NSA to reissue the buy. One vendor predicted the new contract would be "more value-oriented than price-based."

Price was at the heart of the controversy surrounding the Light Core award to Cisco. The company won the contract with a bargain bid of $34 million on a procurement that NSA valued at $117 million. The low price led Fore to call the Cisco offer a "buy-in." Bibb said he believed Cisco did not meet all of NSA's technical requirements and that Fore which was compliant should have won the award. Because NSA has canceled Light Core Bibb said Fore does not intend to pursue the suit in court.

"We are gratified by the decision to cancel and look forward to competing again " Bibb said. "Our biggest beef was not with the government but with the extremely low pricing of Cisco."

Massa said Cisco looks forward to the new competition and although he declined to say whether Cisco would offer the same discounts again - including prices discounted up to 96 percent - he did say "We will offer as good a deal as we possibly can. We want to support this customer."