Competition or market allocation: the $1.5 billion bet
- By Harry Carr
- Mar 31, 1996
The Defense Information Systems Network (DISN) acquisitions are being much talked about these days, especially the domestic acquisitions and whether the current acquisition strategy for the domestic DISN procurements is the best way to ensure that the warfighter needs will be met in the most reliable, seamless and cost-effective way over the life of the program.
We think not, principally because the current strategy artificially constrains the competition and will, in the end, cost taxpayers and warfighters an unnecessary $1.5 billion on a $7.5 billion program. That's real money. It also precludes potentially more reliable and seamless solutions for the warfighter. Finally, the Defense Information Systems Agency, which is the procuring agency, has publicly admitted that its DISN strategy reduces one—and only one—company's chances of winning an enormously important procurement: AT&T's.
First, let's deal with what AT&T has actually been advocating about DISN and what it hasn't.
Contrary to much of what has been said by the lawyers and others in this debate, what AT&T is not advocating is a nine-year, winner-take-all, single contract for the DISN program. That's right: That's what we are not advocating.
What we actually have been advocating and continue to advocate is simply this: DISA has laid out, in its latest DISN acquisition strategy, three services procurements for the domestic portion of DISN: one for switching and bandwidth management services, one for transmission services and one for video management and reservation services. Each of these three procurements has its own contract periods, allowing for periodic recompetitions. Each also has its own evaluation criteria. We believe that the taxpayers and warfighters would be better served if the "competition" allowed all competitors—even AT&T—to submit an aggregated bid for all three if the relevant competitor chooses, either in addition to or in lieu of separate bids for the three buys.
In addition, our view is that an aggregated bid should win only if it beats the best of the rest—specifically, the best combination of all other bids. In other words, using DISA's existing evaluation criteria, not new ones, let's find out through head-to-head competition which bids are actually in the government's best interest. Consultants, experts and others can speculate what might be, or even what they believe will be, but the only way to know for sure is to conduct the head-to-head competition. Let us, and others if they care, put our money where our mouth is.
Aggregated Bid: A Win-Win for All
If an aggregated bid were selected as the result of this competition, nothing about DISA's recompetition plans would need to change. DISA would initially award three services contracts to the winning contractor, thus achieving their multiple-contracts objective. The initial aggregate bidders would bid understanding that the domestic DISN services contracts have periodic recompetitions planned at certain intervals and that the winner would have to live with its prices on any remaining parts if it lost any of the planned recompetitions. These recompetitions are currently prescribed as annual, beginning after contract year one for the transmission services and after contract year three for bandwidth and video. Presumably, after seeing the benefit of allowing an aggregated bid in the initial competition, DISA could not only do the separate recompetitions but could again allow and evaluate aggregated bids.
And, since our proposal uses the existing evaluation criteria, the existing specs, the existing multiple-contract approach and the existing recompetition plan for the program, to borrow a phrase, "where's the beef?" Or better yet, where's the delay?
That is what AT&T has actually been advocating. Head-to-head competition throughout the life of the program and a level playing field in which even AT&T has an unfettered opportunity to win. We believe that such an approach will save the taxpayer money and provide more reliable, seamless communications. And with no delay in the procurement award or contract implementation schedule. We think that's real money and a win-win for the taxpayers and the warfighters.
If the current DISN approach is the best bet, then why are these three DISN procurements the only acquisitions in the global DISN program that use it? In each of the others—HITS, DSS-G (the support contract), CSCI, DISC, DMS, etc.—DISA uses instead the exact opposite approach: a single-contractor, winner-take-all approach that doesn't even include the periodic recompetitions that we are advocating. Hmmm.
Carr is market development vice president, local services, Atlantic States Region of AT&T. He remains involved in the company's DISN strategy.