MCI hits AT&T on pricing, past performance in protest

MCI protested the General Services Administration's award of a $50 million international telecommunications contract to AT&T charging that AT&T's bid was based on "unrealistic" pricing and that the agency failed to take into account AT&T's unsatisfactory past performance on other federal contracts.

Although GSA initially stopped work on the contract after the protest was filed Bob Woods commissioner of GSA's Federal Telecommunications Service late last week signed an order allowing AT&T to continue its work a GSA spokesman said.

AT&T won the International Direct Distance Dialing (ID3) contract July 1 beating out MCI and Sprint for the deal. ID3 will replace an existing Defense Department contract for International Switched Voice Service held by MCI.

In addition to concerns about AT&T's pricing and past performance the protest filed with the General Accounting Office charged that GSA acquisition personnel did not give MCI credit for "fully corrected discussion items" that GSA initially identified in the company's proposal.

"It is inconceivable that AT&T's proposal would have received the highest overall rating given AT&T's suspect pricing and poor performance record on federal procurements " the protest said. "The members of GSA's evaluation panel fully apprised of AT&T's track record on such major procurements as [the Defense Information Systems Network] and FTS 2000 should have been alert of AT&T's offering of an unrealistic `bargain basement' price."

The protest cited AT&T's cost proposal of $43.8 million over five years as "dramatically and unreasonably" lower than international rates published in AT&T's tariff filings with the Federal Communications Commission. It also cited articles published in FCW as evidence of AT&T's past-performance problems on the DISN and FTS 2000 contracts.

An AT&T spokeswoman issued a statement that said company officials were "disappointed" that MCI protested but they remain confident AT&T offered the government the best deal possible. The statement said AT&T believes GAO will uphold GSA's award.

Woods said the arguments presented by MCI "seem sketchy " and he said the agency would fight the protest. "We think we are right " he asserted. "Based on our evaluation it was a clear choice."A spokesman for Sprint said his company will not join in the protest but he added that officials there were "sympathetic to the concerns MCI has expressed in its protest.

"The ultimate negotiated price was surprising to us " the spokesman said of the rates bid by AT&T. "All of our information would not have projected a price near that level. And we are interested to learn how much of a role past performance played in this decision because we think [AT&T] has had performance concerns that are widely known."

Another industry source not involved in the protest argued that MCI's pricing argument is flawed. "Think about what they are arguing - that the government got too good of a deal " he said. "This is another instance of MCI acting as the outsider that feels locked out of GSA telecom contracts."

MCI officials refused to comment on the protest.

"We've been advised by our attorneys to let the protest speak for itself " a spokeswoman said.

"A Long Shot"

Warren Suss a telecom consultant with Warren H. Suss Associates Jenkintown Pa. called MCI's protest "a long shot."

"I would think it would be difficult to use these arguments against a company like AT&T " Suss said. "But as the incumbent MCI has a lot to lose. So from that point of view it makes sense for them to protest at lower odds of winning. And certainly if the protest leads to delays in the progress of ID3 it would be to MCI's benefit."


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