DOD selects MCI for $4B telecom pact

MCI WorldCom last week captured one of the biggest federal telecommunications prizes, a Defense Department contract that could be worth up to $4 billion to provide service to U.S. forces operating over 52 million square miles in the Pacific, Indian and Caribbean oceans.

Industry sources speculated that MCI won the Defense Information Systems Agency's 10-year Defense Information Systems Network Transmission Services-Pacific (DTS-P) contract with a bid from $750 million to $800 million.

Diana Gowen, vice president of MCI Government Markets, described the win as key to the company's strategy within DOD. "It gets us back in the transmission game," she said.

MCI already provides switching and bandwidth management to DISA for the domestic version of the Defense Information Systems Network, with AT&T providing the transmission. Switching and bandwidth management are the brains of a network, while transmission is the work of pumping data through network channels and is therefore a potentially much bigger financial prize.

DISA originally put the ceiling price of DTS-P at $2 billion, but doubled it to $4 billion in the pre-proposal phase to account for unplanned contingency operations, including peacekeeping operations in East Timor where U.S. Army and Navy units are providing communications support.

Army Col. Mike Harvey, commander of DISA-Pacific, said in an interview last year that the agency decided it was important to add the capacity for contingency operations that could be rapidly expanded during crises. "We can be much more responsive by having this [capacity] on call," he said. By incorporating surge capacity into DTS-P, "we can structure it so it's cheaper than [buying circuits] in the midst of a crisis."

Warren Suss, a communications analyst who follows the federal government, said the surge capability built into DTS-P will provide DOD with the capacity it requires to respond to contingencies "at bargain rates," compared with what DISA would have to pay to acquire such capacity on-demand in the midst of a crisis.

According to solicitation documents, DISA wants MCI to provide a network capable of supporting voice, video and data services "delivered from the lowest tactical level to the highest strategic level as a result of secure connectivity across the entire warfare spectrum."

The network must handle speeds ranging from sub-T-1 circuits (64 kilobits/sec) to 2,488 megabits/sec OC-48 service.

Although the bulk of DTS-P traffic will use undersea fiber-optic links to serve bases in locations such as Japan, South Korea and Singapore, MCI will have to use satellites to serve more remote locations such as a logistics base on Diego Garcia, an isolated island in the Indian Ocean.

One industry source said this requirement will test the company's ability to provide Asynchronous Transfer Mode services via satellite.

Sprint and AT&T formed teams to bid on DTS-P, but last year, AT&T withdrew from the competition. Sprint made no official comment by FCW's deadline on whether it intended to protest, but sources close to the company viewed it as unlikely because Sprint and MCI have reached an agreement to merge within the next year.

DISA delayed award of DTS-P for more than two weeks because of concerns that Sprint pulled its punches on its bid as a result of that pending merger, industry sources told FCW.

The agency required Sprint to sign a letter saying it independently pursued its DTS-P bid to the end, the sources added."