GSA report ups ante in follow-on debate
- By Jennifer Jones
- Aug 11, 1996
Still more heat was introduced into the ongoing battle about the FTS 2000 follow-on procurement with the General Services Administration's annual report to Congress showing even more telecommunications savings for users compared with commercial rates.
Rates for FTS 2000 business averaged 17.8 percent less than those on the commercial market GSA said - nearly two percentage points better than in previous years.
GSA has to justify the government's use of FTS 2000 each year and each year there is an outcry over the numbers. The agency however consults what it considers the best barometer of telecommunications cost: "commercial prices using the traffic and circuit information from October 1995."
Using those numbers GSA calculated that for the most recent period the government saved roughly $9 million a month using FTS 2000.
The July 31 report came at a hectic time for FTS 2000.
A recent General Accounting Office report indicated FTS 2000 prices actually were higher than commercial prices in some areas and the $20 billion Post-FTS 2000 telecommunications services solicitation due last week was postponed while GSA tried to calm the fears of Congress that it would not adequately take advantage of the changing marketplace [FCW Aug. 5].
The GSA report could help reinforce the agency's commitment to pursuing a similar strategy in the Post-FTS 2000 program according to telecommunications analyst Warren Suss. The timing of the report "serves to reinforce the GSA's position that the program is saving the government a lot of money " he said.
GSA would not comment on the report's potential impact on the next iteration of FTS 2000.
"The big story here is that the program rates are 17.8 percent lower than commercial rates " said Micah Goodwin an electronics engineer in GSA's Office of Service Development. "In the past they have been 16 percent or in that neighborhood."
But FTS 2000 vendors AT&T and Sprint were quick to show how such purported savings would validate an FTS 2000 follow-on approach similar to the current arrangement.
"We think the arithmetic is correct " said Dick Coyle director of strategic business development for Sprint. "We hope they follow the same principles in P-F2K. This has been a win-win for the government and two companies."
"We have learned to work together and compete and we think these should be points prevalent in Post-FTS 2000 " he said. "AT&T and Sprint can go at each other's throats for the business but can also work together for interoperability. You can't do that with six or seven players."
AT&T officials agreed saying that the report reflects the benefits of GSA's commitment to retaining competition within FTS 2000.
FTS 2000 critic MCI however argued that the report's pricing comparison is flawed and the numbers irrelevant.
"From a real high level every time you take a snapshot in time and compare these types of deals there is a changing landscape " said Rick Slifer director of FTS 2000 programs for MCI. "The point we make and will continue to make is that there is a need for more competition in the follow-on."
In the end the report could be fodder for all of those awaiting GSA's FTS 2000 follow-on plans.
"A report like this can serve as fuel for both sides " Suss said. "Some will cite the report to prove how well the program is going. Others can point to it as a basis for continuing competition."