Fighting a telecom 'rip off'
The relationship between agencies and their contractors has always been turbulent.
The relationship between agencies and their contractors has always been
But the relationship turned ugly last week when the government's top
telecommunications chief accused information technology vendors of dragging
their feet when turning work over to new contract winners.
Dennis Fischer, the commissioner of the Federal Technology Service at
the General Services Administration, said he has grown "extremely frustrated"
with the slow transition of business from those companies that have lost
contracts to those that have won.
Delays in beginning work on new contracts results in unfair costs to
the government, Fischer said. "We're getting ripped off, and frankly, we're
not going to take it anymore," he said.
Fischer, speaking last week at the 13th Annual Federal Telecommunications
Conference in Tysons Corner, Va., said the situation has become so egregious
that federal contracting officials may take the vendors' poor transitioning
behavior into consideration when awarding future contracts. "Your long-term
interests are going to be damaged, and damaged substantially," Fischer warned.
Fischer declined to cite specific examples of contractors or subcontractors
that have slowed down the contract transition process, but he said the stonewalling has taken place in
long-distance programs and in local telecommunication access programs.
Recent contract changes have brought new vendors onto the federal scene,
such as Qwest Communications International Inc., and given agencies more
choices for telecommunications service.
The largest federal telecommunications contract is the government's
primary long-distance contract: the eight-year, $5 billion FTS 2001 contract,
which was awarded to Sprint and MCI WorldCom Inc. a year ago. The contract
replaces the FTS 2000 contract, which expired in December 1998 and was held
by Sprint and AT&T. Both companies also offer services on a two-year
"bridge" contract that agencies can use while planning their move to FTS
In the switch to FTS 2001, AT&T and its subcontractors stand to
lose business to Sprint and MCI. Sprint also could lose business to MCI
if an agency that had chosen Sprint under the FTS 2000 contract switches
AT&T denies foot-dragging in turning business over to contract
winners. "AT&T remains and will continue to be customer-focused," an
AT&T Government Markets spokeswoman told Federal Computer Week. "We're
putting our energy and resources behind supporting federal agencies. We
continue to work closely with GSA to meet our obligations under the GSA-run contract.
AT&T has won three of GSA's Metropolitan Area Acquisition contracts that supply
local telecom service, including services in the New York City, Chicago
and San Francisco areas. Last month, AT&T, along with Bell Atlantic
Corp., won another MAA contract to offer local telecom services to federal
agencies in the Buffalo, N.Y.
Tony D'Agata, vice president and general manager of Sprint's Government
Systems Division, said he did not believe telecom companies are deliberately
slowing the move from old contracts to new ones. Focus on the Year 2000
problem and other factors have delayed some contract transfers. But, D'Agata
said, "I don't think there's been any intentional slowing down." Telecom
vendors have been trying to pull together a transition schedule "that makes
sense for everyone," he said.
The transitioning problems continue to upset Fischer, however. "I think
there are a lot of relationships that need to get worked out," he said.
"A lot of [the cause for prolonged contract transitions] is technical. Some
of it's relationships."
Fischer added that internal pressure to reach sales goals might contribute
to some companies' tendencies not to hand over work to other companies as
quickly as they could.
Warren Suss, a Jenkintown, Pa.-based federal market analyst and chairman
of the Federal Telecommunications Conference, said Fischer seems to have
government interests in mind. "I think part of the job of the government
is to look out for the interests of the user agencies," Suss said. "It won't
be the first time that the government has used get-tough tactics with industry.
I think there is a tradition at FTS when necessary for them to play hardball."
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