Clinger, Horn ask GSA to pare Post-FTS 2000

Key members of the House Government Reform and Oversight Committee this month asked acting General Services Administration chief David Barram to reduce the duration of the Post-FTS 2000 contract from 10 to three years and to prohibit companies that win the contract from offering local services.

The request sparked criticism from Bob Woods, commissioner of GSA's Federal Telecommunications Service, as well as from officials of long-distance companies and other observers. The request was applauded by the regional Bell operating companies, which have long supported the position the House has adopted.

Committee chairman Rep. William Clinger (R-Pa.) met Barram for the first time this month and delivered a letter outlining the changes he advocated to GSA's strategy for providing telecom services after the current FTS 2000 contract expires.

The letter was also signed by Rep. Stephen Horn (R- Calif.), chairman of the House Subcommittee on Government Management, Information and Technology.

Clinger and Horn wrote that the enormous recent growth of the telecom industry, combined with the recent enactment of telecom reform, create an unsure landscape for the future. "We can only conclude that it is ill-advised for the government to enter into long-term, comprehensive contracts for tele-communications service from a limited vendor base at a time when the market is not at its maximum competitive level."

At a panel discussion last week sponsored by the Association for Federal Information Resources Management, Woods said he believes Clinger's position represents a lack of understanding about how the government buys telecom services.

"I think the attitude that we can spend three years doing a procurement, transition [to the new network] for half a year and run a three-year contract is naive," Woods said. "A $50 million up-front investment on a contract that runs for 18 months is silly."

Telecom consultant Warren Suss, president of Warren H. Suss Associates, Jenkintown, Pa., said the Post-FTS 2000 strategy already addresses the concerns of a changing telecom marketplace by allowing GSA to award specialized "niche" contracts as new services, products and players appear on the scene.

Suss also disagreed with Clinger's suggestion to "revise" minimum-revenue guarantees to vendors who win the three-year contracts, ensuring them a greater incentive to bid. "If you raise the revenue guarantees substantially, then you are moving back in the direction of mandatory use," Suss said. "That means you are tying agencies down."

But a member of Clinger's staff argued that the government will be able to take advantage of greater competition within five years and should not lock itself into deals with vendors beyond that point. "The competition is just not there yet to do a long-term contract," she said. "It's just too soon before telecom reform has taken effect." She added that commercial telecom users normally enter into contracts for no more than three to five years.

According to Barbara Connor, president of Bell Atlantic Federal Systems, local service companies will be in a better position to compete for federal business in the coming years, and the government will be able to choose from a wider array of vendors after a short-term contract expires.

"This is about more competition," Connor said. "The government customer could be better served."

But Dave Bittenbender, chief of telecom at the Environmental Protection Agency, said the recommendation could hurt the objectives of agencies that have legitimate requirements for long-term relationships with vendors. "Part of the problem we deal with is that the federal government is large," Bittenbender said. "And a three-year contract might be good for one agency but might be the worst thing in the world for another agency."

The major long-distance companies were unanimous in their opposition. Rick Slifer, director of Post-FTS 2000 programs at MCI Government Markets, said shorter contracts could drive up rates, and frequent transitions could prove costly to the government.

According to an AT&T spokeswoman, company officials were concerned that the changes espoused by Clinger and Horn would draw the follow-on program further away from a strategy based on the structure of the current FTS 2000 program.

"We have consistently stated that we believe the Post-FTS 2000 program should build on the success of the current program model," the spokeswoman said. "In addition, we believe the government should compete local services for the first time sooner than later."

Jim Payne, assistant vice president for FTS 2000 at Sprint, said he would oppose Clinger's recommendations if they would not allow companies like Sprint to offer service directly to user premises. "If customers have a service issue, they want to call one vendor," he asserted.

"As Sprint evolves, we may be able to [offer local and local-distance service] as a single company," he said.

Woods said he hopes to issue a final request for proposals for Post-FTS 2000 early in August. But he said it may be delayed if substantial changes are ordered by Congress. "It is an awfully late time in the game to be doing this," he said.

The committee staff member said she plans to meet with Woods this week to further discuss the proposed changes.

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