GSA revises its strategy for Post-FTS 2000
Responding to concerns from Congress and industry the General Services Administration has once again revised its Post-FTS 2000 strategy decreasing the length of the contracts and allowing for a second competition in the third or fourth year of the program.
A memo circulated to members of the Interagency Management Council an advisory committee composed of agency telecom users said GSA's Federal Telecommunications Service hoped to award multiple four-year contracts for long-distance service with four optional one-year periods to follow.
FTS commissioner Bob Woods said he briefed industry groups on the strategy last week and will meet today with IMC members to get their input. After considering their comments he will pitch the strategy to congressional oversight and appropriations committees.
"This isn't locked into concrete yet " Woods said of the strategy. "Once we get somewhere near consensus on it we will take it to the Hill."
Although the initial contracts would not include local service FTS would run another competition three or four years into the program that would include local and long-distance service.
The second competition would give local phone service providers entering the long-distance market a chance to carve out some of the government's long-distance business. It would presumably mitigate criticism by regional Bell operating companies and members of Congress that the Post-FTS 2000 strategy does not take advantage of forthcoming changes in the market resulting from telecom reform legislation.
Meanwhile FTS would continue its Metropolitan Area Architecture competitions in selected cities to obtain lower prices at the local level.
Agencies would ultimately have the choice of buying local and long-distance services separately or purchasing end-to-end service from a single vendor Woods said.
"It's really a three-pronged attack " he said.
He added that GSA would pay up front for agencies to transition to new vendors and recoup the funds through charges to the agencies over a period of 18 to 24 months. Or vendors may waive transition costs altogether in an effort to secure an agency's business he said.
Woods also told telecom vendors last week that he would have to extend the existing FTS 2000 long-distance contract scheduled to expire in December 1998 by six months because of time lost altering the Post-FTS 2000 strategy.
Telecom consultant Warren Suss president of Warren H. Suss Associates said the extension could prove costly. "It's going to cost the government millions of dollars each month the transition to Post-FTS 2000 gets delayed " he said.
Representatives from 16 vendors mostly systems integrators and small telecom firms signed a letter to Woods last week endorsing the new strategy. Of the big three long-distance carriers only MCI signed the letter. None of the regional Bell operating companies has yet endorsed the plan.
Barbara Connor president of Bell Atlantic Federal Systems and one of the staunchest critics of GSA's previous strategy said last week she was encouraged by the changes.
"The alternative approach has significant merit and we look forward to working with GSA to further define he specifics of the proposal " Connor said.
But Dick Coyle director of strategic business development at Sprint said he thought a four-year contract was too short to guarantee vendors a chance to recoup their investments in the network especially when compared against GSA's initial plan to award 10-year contracts.
He also said he had unanswered questions about how GSA would ensure vendors' business with no mandatory-use provisions in place.
AT&T declined to comment.
IMC chairman David Bittenbender director of telecom at the Justice Department said he generally supports the new strategy. But he also said he believes contract terms should be longer.