MCI apparent winner of DOD telecom prize
The Defense Department last week tapped MCI WorldCom as its long-distance telecommunications service provider under the General Services Administration's FTS 2001 program, the company confirmed.
Diana Gowen, executive director of DOD and national information infrastructure programs at MCI WorldCom Government Markets, said the deal will cover all DOD agencies and military services for nonclassified, nonmission-critical traffic. She said the company's preliminary estimates indicate that the deal will bring in about $400 million over eight years for voice service alone.
If the FTS 2000 contract is an indicator, DOD's share of FTS 2001 traffic will constitute the largest single chunk of business associated with the telecommunications program. Gowen said DOD traffic makes up more than 20 percent of all transmissions on FTS 2000. "It certainly is business we are happy to have," she said.
A Defense Information Systems Agency spokeswoman last week declined comment until the agency issues a formal announcement regarding its selection of an FTS 2001 provider.
MCI WorldCom won one of two FTS 2001 contracts in January to provide long-distance service governmentwide. GSA awarded an FTS 2001 contract to Sprint in December, and agencies have been meeting with the two vendors over the past two months to determine which could best meet their needs.
FTS 2001 will replace FTS 2000, a GSA telecom program awarded to AT&T and Sprint. AT&T carries about three-quarters of agency traffic, including DOD, on FTS 2000 but lost in its bid to win an FTS 2001 contract.
Rick Slifer, director of FTS 2001 programs at MCI WorldCom, said DISA selected MCI to offer only switched voice service, which - unlike the current FTS 2000 offering - will include international service. Slifer added that the company is negotiating with Defense agencies to offer advanced services associated with data, such as Asynchronous Transfer Mode and frame relay. In addition, Slifer said MCI WorldCom hopes to offer DOD users Internet services, which also are not available under the current contract.
Slifer said he did not know how much DOD would save by using the FTS 2001 contract, but he said MCI's prices "were viewed quite favorably" by DOD officials who compared them against AT&T's current prices.
Officials at GSA said in January that the new contract would undercut prices by more than 60 percent. Dennis Fischer, commissioner of GSA's Federal Technology Service, said MCI's pricing for an average phone call would be about 5.5 cents a minute and will decrease to about 2 cents a minute by the end of the contract.
Gowen said MCI's performance on DOD's Bandwidth Manager contract for the Defense Information Systems Network (DISN) program, in which the company had to shift Defense users off an existing AT&T network, convinced DISA officials that MCI was up to the job of moving DOD users off AT&T's FTS 2000 network.
Telecom consultant Warren Suss, president of Warren H. Suss Associates, said MCI was the logical choice for DISA because of its work on the Bandwidth Manager contract. Suss also said the selection of MCI opens up opportunities for DISA to make greater use of public network services for DISN as new technologies make those services more secure in the future.
Suss added that DISA's decision also represented a victory for GSA's FTS, which runs the FTS 2001 program. "It demonstrates that FTS is able to maintain the commitment of its largest user when making the move to FTS 2001," Suss said. "If DOD, the largest user with a history of independence, is making the commitment, it's likely that other agencies will follow."
Unlike its predecessor, FTS 2001 is not mandatory for agencies, which can choose to buy long-distance services from any telecommunications vendor.
Gowen said she and other MCI personnel will meet today with DISA officials to discuss a transition plan. She said she expects to focus first on high-volume areas such as Washington, D.C., San Diego and Norfolk, Va., and then cut over smaller facilities later in the year. She added that officials at the Defense Telecommunications System-Washington, who oversee telecommunications at DOD sites in the Washington, D.C., area, want to move to the new contract as soon as possible.