Telecom disconnect

"Telecommunications: Metropolitan Area Acquisition ProgramImplementation and Management"

Federal offices operating outside the nation's capital may not be choosing local telecommunications service contracts because the fees are not clearly stated, according to preliminary findings of a review by the General Accounting Office.

The General Services Administration has awarded 37 Metropolitan Area Acquisition contracts in 20 cities nationwide, but many agencies have delayed their transition to the contracts because they "do not have complete information to help them determine whether using GSA's services is their most economical option," said Linda Koontz, director of information management issues at GAO. Koontz this month testified before the House Government Reform Committee's Technology and Procurement Policy Subcommittee. Agency leaders are confused because GSA does not clearly state the fees for its services, Koontz said. GSA charges several fees, including a basic contract management fee and a fee to perform ordering, billing and management on an agency's task order (see box). But fees, which range from 9.5 percent to 60 percent of the contract's total cost, are not separated from the vendors' charges on the bills that agencies receive. Rep. Tom Davis (R-Va.), chairman of the subcommittee, requested that GAO review the cost structure because he is concerned that the delay in moving to the new contracts may be costing the government money. GAO last month started the review in the New York City region and will complete its review of other cities by year's end.

GSA's contracting offices function on a cost-recovery basis, covering the expense of managing the governmentwide contracts by charging fees to agencies and vendors who use them. On all other contracts, GSA workers disclose the amount of the fees so agencies have the information to compare against other sources and to make sure GSA is charging the appropriate amount against the service provided, Koontz said. But officials at GSA's Federal Technology Service, which manages the MAA contracts, told GAO that they decided to embed the fees in the total cost "to focus agencies' attention on making decisions based on the total cost of services." And the agencies that so far have placed orders on the contracts are impressed by the overall lower costs they are paying.

The U.S. Attorney's Office group in Islip, N.Y., is paying almost $25 less per telephone line per month under the MAA contract than under its old contract. The U.S. Coast Guard's New York region is saving an average of 76.5 percent with its new MAA contract.

Although the offices understand a fee is tacked onto their bills, they do not know the percentage or the precise dollar amount going to GSA, officials said.

Knowing the fee in advance would be helpful, said Louis DeFalaise, acting director of the executive office of the U.S. Attorney's Office — especially when it comes to selling the contract to other offices within the agency.

Coast Guard officials, however, said it is enough just knowing a fee is char.ged because "we consider it a management fee" so the agency doesn't have to deal with day-to-day details, said Cmdr. Robert Day, commanding officer of the Coast Guard's electronic support division in Boston. FTS Commissioner Sandra Bates said that although GSA's quality of service has not decreased, and so neither have the fees, the cost of the telephone lines has decreased significantly from the previous local telecommunications contracts. This means the percentages are going up, she said.

"The fee is not at all related to the cost" of the line, she said.

The GAO review is continuing, and it is too early to judge if agencies are being charged too much for the services rendered by GSA, Davis said. "But I strongly disagree with keeping the amount of these fees hidden from user agencies," he said.