GSA taps AT& T for local service in 3 cities

The General Services Administration announced today that it has selected AT& T to provide local telephone communications services to federal agencies in the New York, Chicago and San Francisco metropolitan areas.

The three contracts, awarded under the Metropolitan Area Acquisitions (MAA) program, are estimated to be worth as much as $680 million over eight years.

The win could help AT& T jump back into the federal long-distance market. Earlier this year, AT& T lost its bid to win one of GSA's long-distance FTS 2001 contracts when GSA awarded Sprint and MCI WorldCom the contracts, with a combined value of $5 billion. AT& T held about 75 percent of the long-distance federal business on the previous federal contract. The MAA awards give AT& T an opportunity to provide long-distance service to federal agencies if GSA deems it appropriate based on AT& T's performance on the MAA contracts.

AT& T beat out the local regional Bell operating company in each city—Ameritech in Chicago, Bell Atlantic in New York and Pacific Bell in San Francisco. WinStar Communications Inc. bid in all three cities as well.

Dennis Fischer, commissioner of GSA's Federal Technology Service, said AT& T's pricing will save the government about 66 percent over current rates in those cities. For example, in New York GSA currently pays about $248 million for the same service that AT& T will provide for $95 million.

"The reductions are precedent-shattering in terms of prices that have been obtained by any business entity for local telecom service," Fischer said.

Fischer also announced that GSA will issue in July nine MAA requests for proposals for local service for Baltimore, Cincinnati, Cleveland, Dallas, Denver, Los Angeles, Miami, New Orleans and St. Louis.