Treasury studies outsourcing ATM

The Treasury Department is studying whether to purchase highspeed Asynchronous Transfer Mode transport services from commercial carriers through its telecommunications contractor rather than build a private backbone network as initially planned for its $425 million Treasury Communications System (

The Treasury Department is studying whether to purchase high-speed Asynchronous Transfer Mode transport services from commercial carriers through its telecommunications contractor rather than build a private backbone network as initially planned for its $425 million Treasury Communications System (TCS).

The study was ordered last month by the chief information officers at Treasury's 14 bureaus, who think outsourcing the backbone could be less expensive than owning and maintaining it themselves.

So far only the Secret Service, which had a private network before TCS was awarded three years ago, has chosen to use the contract to develop a dedicated ATM-based network. Two other Treasury agencies that have upgraded their networks, the U.S. Mint and the Bureau of Alcohol Tobacco and Firearms, have purchased frame-relay services through TCS contractor TRW Inc. from the FTS 2000 contracts held by Sprint and AT&T, respectively, but are not using ATM technology.

''The technology, both in terms of products and services, has been maturing,'' said Brian Carman, acting director of corporate systems management for Treasury. ''We've known for some time that we were interested in ATM as a basic transport technology for the backbone, but there's been an ongoing dialogue on how best to implement the new technology in the network.''

Treasury awarded its communications system to TRW in 1995 to provide desktop-to-desktop data services for the entire department. Treasury planned for the high-speed networks to support applications that include upgraded e-mail, electronic commerce, security services and videoconferencing.

Although Treasury officials had planned to migrate most of its 150,000 network users to the new ATM backbone by the end of this year, half are still using the X.25 packet-switched network built by Computer Sciences Corp. in the 1980s. The schedule has slipped largely because Treasury has diverted the TCS budget to pay for checking the network for any Year 2000 bugs, according to Carman.

In addition, it is not clear how much demand there is within Treasury to obtain the high-bandwidth services at this time. Although the largest Treasury telecommunications users, U.S. Customs Service and the Internal Revenue Service, are expected to adopt ATM technology, both are developing their modernization plans and have not fully defined their future network requirements.

Patrick Schambach, chief information officer with ATF, said his agency would probably want to deploy ATM eventually, but ''we don't have the volume to justify that now.''

Warren Suss, a telecommunications consultant who has been tracking TCS, said it makes sense for Treasury to purchase ATM services instead of constructing a private network. ''To some degree there has been a shift in the initial concept,'' he said.

Jim Amodeo, TCS program manager with TRW, said upgrading the backbone is the ''No. 3'' priority for the contract, behind operating the network and making century date fixes. ''We're not engaged in an upgrade plan, but a lot of bureaus will go through an upgrade through service requests,'' he said.

For years, Treasury has used commercial circuits to carry its data traffic, but has always maintained its own switches. If the department chooses to outsource the network backbone, a vendor would provide the switching services instead.

''Treasury's initial proposal was buying a lot of switches and frame-relay access devices,'' said Brian Ogle, a Customs Service supervisory computer specialist who heads the agency's network control center team. ''But that's just one way of doing it. We want to keep it as simple as possible. We don't want to do all the management ourselves.''

''I like to think that ATF pushed the issue by breaking away first,'' Schambach said. ATF ordered frame-relay services for its wide-area network about two years ago, he said, because it needed to upgrade its wide-area network before the new TCS backbone would be in place. ''Now the rest of the TCS world is waking up to the same thing.''

The approach Treasury is considering represents an emerging trend in federal telecommunications management, said John Okay, senior vice president for telecommunications and special studies at Federal Sources Inc. ''What seems to be happening at the basic level is [that] agencies have found out that running your own private network and being your own telephone company and data network company is not as much fun in today's high-demand environment.''

He added, however, there are still economies of scale in purchasing services through a single integrator such as TRW because agencies can share the cost of installing communications lines and other equipment and get volume discounts on services by buying them in bulk.

Treasury plans to issue a request for quotations from vendors who want to supply telecommunications services at the end of August.

NEXT STORY: Life after buyouts

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