Qwest FTS protest dismissed

Upholding a previous decision by the General Services Administration, the General Accounting Office dismissed a protest by Qwest Communications International Inc. against GSA's extension of FTS 2000 long-distance contracts held by AT&T and Sprint.

In a June 25 decision, GAO agreed with GSA's finding that Qwest could not compete for the contract bridge extensions as a result of its 2000 merger with U.S. West Communications Inc., a regional Bell Operating Company providing local phone service in 14 states.

A section of the U.S. Code prevents any BOC or affiliate from providing long-distance service originating in the same region it provides local service — in this case, 14 states, according to the decision.

Because GSA required "ubiquitous, nationwide long-distance service" — and because the law prohibited Qwest from providing that service in those 14 states—the company wasn't in a position to compete for the bridge contract, GAO General Counsel Anthony Gamboa wrote in his decision.

Qwest had said it could avoid the limitation by teaming with Intermedia Communications Inc., but GAO found that such an arrangement would not pass muster with the Federal Communications Commission.

In December, GSA extended AT&T's FTS 2000 contract until Dec. 6, 2001, and Sprint's until June 6, 2001, because 27 agencies failed to complete the transition from FTS 2000 to FTS 2001 by the Dec. 6, 2000, deadline. Qwest issued an initial protest with GSA Dec. 15, saying the sole-source bridge awards violated the Competition in Contracting Act of 1984 and the Federal Acquisition Regulation.

In March, a GSA protest official denied the complaint. FTS 2001 contract holders WorldCom Inc. and Sprint completed the initial agency transition from FTS 2000 in June.

Jim Payne, Qwest senior vice president for government systems, said the GAO decision will mean that agencies will continue to pay high long-distance service rates—at least $1.10 a minute through AT&T. Sprint, the other FTS 2000 holder, has lowered its bridge rates to FTS 2001 levels.

"The consumer is the one that's the big loser in this," Payne said. "Here we have a decision where we have defeated competition, and we are satisfied that's the right answer. That's really telling about the culture."

GSA officials declined to comment on the decision. "The facts speak for themselves," said spokesman Hap Connors.