GSA sizes up competition for local telecom services

Local telecommunications providers and long-distance carriers alike are for the first time preparing to compete for the same federal contracts and are putting together their responses to the General Services Administration's Metropolitan Area Acquisition for telephone service in dozens of major cities.

GSA's Federal Technology Service late last month issued a request for qualification statements asking vendors to describe the areas in which they will offer service by 2000. GSA will use the responses to form a pool of vendors eligible to bid on MAA solicitations during the next two years.

The acquisition serves as a preliminary sign to federal agencies and telecom vendors that sell services to them that the new era of telecommunications reform is at hand.

"The MAA is intended to position the government to take advantage of broadened competition as it emerges " said Margaret Binns assistant commissioner for regional services at FTS. "Competition will emerge selectively in metropolitan areas as opposed to nationwide all at once. We are selecting the MAA cities and in particular the first three [New York Chicago and San Francisco] and determining whether we have adequate competition in those areas. Clearly we believe that long-distance carriers can be part of that."

GSA will issue solicitations for bids on contracts covering New York Chicago and San Francisco before April 1998. GSA expects to award the contracts by the end of June. Can Long-Distance Firms Compete? Long-distance vendors said privately they fear they might not be able to compete with the incumbent regional Bell operating companies (RBOCs) already serving federal agencies in the first three cities. They said the RBOCs have not fully complied with federal mandates for issues such as number portability which will allow agencies to retain their phone numbers even if they switch to a new company for local service.

"I don't think this amounts to anything but a sole-source award to the incumbent local exchange carriers " one industry official said. Other industry officials also expressed concern. "MCI commends GSA on the considerable progress it has made in creating a viable local services program " said Rick Slifer director of MCI's FTS 2000 program. "There are still however areas of the MAA which are noncompetitive and if not revised will limit competition."

Spokespersons from AT&T and Sprint said they were monitoring the MAA program but had not decided whether they would bid on the first three contracts. Kent Crawford executive director of policy and business development at SBC Telecommunications Inc. said he believes GSA's strategy gives long-distance providers a fair shot at MAA business. "On the converse side we have concerns about getting into the long-distance market " he said. Crawford added that SBC will submit a bid for the San Francisco contract.

In a written statement Barbara Connor president of Bell Atlantic Federal Systems confirmed that her company would bid on the MAA in New York. Consultant Warren Suss president of Warren H. Suss and Associates said he believed the long-distance companies would bid on the MAA contracts. "I think the government is absolutely committed to competition " he asserted. "The trouble is that the MAA program is trying to create competition for local services and the market is not there yet in many ways."

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