TCE still alive

In a deep sleep but apparently not dead, the Treasury Communications Enterprise (TCE) contract re-emerged last week when the Treasury Department confirmed it will rebid the controversial contract.

The decision to proceed with TCE reverses a notification that department officials sent earlier this year to the Government Accountability Office after GAO sustained a protest in March against Treasury's decision to award the departmentwide data, voice and video technology network contract to AT&T.

Although it told GAO that it would use General Services Administration contract vehicles, Treasury decided that GSA is "unable to meet [its] communications needs with any existing contract," Treasury spokeswoman Brookly McLaughlin said. "Treasury is proceeding with the TCE procurement process [it] began last year."

Only the six bidders who previously participated in the TCE request for proposals will be able to submit revised bids, McLaughlin added. Ira Hobbs, the department's chief information officer, had no comment.

GAO's investigation into the first procurement process found many flaws, including a secret memorandum of understanding among Treasury, the Office of Management and Budget, and GSA. The memo pledged to include Treasury in planning activities for GSA's forthcoming Networx telecommunications procurement and bound Treasury to switch to Networx at the end of three years if an analysis weighted in favor of Networx determined that the latter offers the best value.

That memo has been rescinded, a Treasury official familiar with the situation said. The department never decided to rule out proceeding with TCE, the official added.

GSA didn't have to approve Treasury's withdrawal from the Networx memo, but "we did agree to it," said Mary Alice Johnson, a GSA spokeswoman.

Given the contract's troubled history, the risk of further bid protests is possible, said Ray Baxter, business development director of Sprint's Government Systems Division. That could put Treasury in the position of resolving a new round of complaints to GAO while the Networx contract will have proceeded.

"Why that agency can't wait six to nine months, only they can present that argument," he added. Sprint will likely resubmit its TCE bid, Baxter said.

So will Qwest Government Services, said Diana Gowen, a Qwest senior vice president.

But because Treasury officials say that no existing GSA contract meets their needs, Gowen said she wonders whether Treasury is still planning to switch to Networx. If the memo among Treasury, GSA and OMB requiring the department to compare its TCE procurement to Networx has been rescinded, "we would like to know that officially," she said.

The Treasury Department's decision to reopen its Treasury Communications Enterprise (TCE) procurement is likely to cause ire in the House Government Reform Committee, whose chairman, Rep. Tom Davis (R-Va.), right, has repeatedly questioned why Treasury is not using a General Services Administration contract for telecommunications.

"Had Treasury been able to jump ship on this, you would have had probably half a dozen agencies looking for a way to set up their own stovepipes as well," Davis said in June, when most people thought the procurement had been canceled.

A congressional source familiar with the committee's concerns reacted hard last week against Treasury's decision to continue with TCE.

"It's unfortunate that they're proceeding with this poorly planned and executed acquisition," the source said. TCE has fundamental problems, meaning that "no matter which firm is finally selected, there will likely be another round of protests and even more delay," the source added.

— David Perera