Treasury mulls how to buy phone service

The Treasury Department plans to launch a competition for local dial-tone service next year when its Washington, D.C.-area telecommunications contract expires, and the agency is studying whether to conduct similar procurements throughout the country.

''We'll be going on some uncharted ground, and we'll see what happens,'' said James Schminky, assistant director for service delivery with Treasury's corporate systems management office. According to Treasury market research, at least two companies in the metropolitan Washington area might bid for such a pact in addition to Bell Atlantic, the local regional Bell operating company (RBOC), he said.

At the same time, Schminky said, Treasury is studying whether to purchase a variety of local phone and data services in the capital as well as nationwide through the General Services Administration. All 13 of the department's regional voice, data and voice-mail contracts, worth more than $400 million, will expire within the next 18 months, he said, and officials are reviewing ''whether or not it makes sense to keep any of these," Schminky said.

Lucent Technologies Inc., formerly a part of AT&T, supplies equipment for voice, data and videoconferencing to 32,000 Treasury customers in the capital area under the $300 million Digital Telecommunications System (DTS) contract. The nine-year contract was awarded before the 1996 Telecommunications Act paved the way for local competition, and Bell Atlantic has been the only dial-tone provider in metropolitan Washington.

Nationwide, however, some carriers are making inroads in markets dominated by the RBOCs. Earlier this year GSA identified 43 cities where competition for local dial-tone services could be feasible under its Metropolitan Area Acquisition program. The first such competition is taking place in New York.

''I think we're going to see more of this,'' said Warren Suss, a telecommunications consultant in Jenkintown, Pa. "If GSA does a good job on the MAA program, [the fact] that the Treasury Department is talking about [using] GSA is significant because Treasury is one of the biggest telecom users'' in the government.

One factor that could determine the path Treasury takes is whether it can obtain ''number portability,'' which is the ability to keep the same phone number after changing carriers, as part of a new local-service deal.

The Federal Communications Commission has required local exchange carriers to set up ways to provide number portability by the end of this year, but provision of the service is ''not very widespread today,'' said John Okay, senior vice president for telecommunications and special studies with Federal Sources Inc., a McLean, Va., market research firm.

''Number portability requires some investment on the part of the companies,'' Okay said. ''I don't think any company would advance the schedule a year or two just to meet a government requirement.'' But having this service is critical, he said, especially for agencies that have regular contact with the public.

''I don't see myself or any other government entity changing phone numbers every couple of years,'' Schminky said.

In addition to DTS, Treasury runs a voice-messaging contract, which is also held by Lucent, serving 60,000 D.C.-area users, as well as 11 Treasury telecommunications systems contracts to provide telecommunications equipment for 120,000 customers nationwide.

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