FAA telecom bids in jeopardy

• By Diane Frank, Natasha Haubold, Paula Shaki Trimble
• Apr 03, 2000

The Transportation Department's desire for a departmentwide telecommunications strategy may squelch the competition for a potential multibillion-dollar procurement at the Federal Aviation Administration.

So far, at least three teams have been planning to bid on the potential $2 billion contract, known as the FAA Telecommunications Infrastructure (FTI), but it may be down to one, industry sources say.

The FAA announced last month it would not use the governmentwide FTS 2001 telecom contract to upgrade its air traffic control communications. Instead, the agency is creating FTI to upgrade and consolidate its telecom networks, using the increased competition to lower the cost [FCW, "FTS 2001 not FAA's route," March 6].

By awarding its own contract, the FAA wants to get a lower rate than the already reduced prices offered by MCI WorldCom and Sprint through the General Services Administration's FTS 2001 contract, said David Lantzy, the FAA's deputy director of telecommunications. "We are looking for options to minimize the costs of services to the FAA through other contract means," Lantzy said.

But DOT's plans to implement FTS 2001 agencywide may cause the FAA's plans to backfire.

According to DOT's chief information officer, George Molaski, the agency is committed to using MCI's services under the FTS 2001 contract and is making the transition. "The FAA has asked for a waiver on FTS 2001...[but] it would have to be an extremely strong case for them to get a waiver," he said. "I believe FAA will be moving to FTS 2001 with us."

Without the waiver, the FAA would be forced to use MCI for its telecom services. The agency could still receive bids for FTI and change its telecom equipment a second time, if the winning bidder was not MCI. MCI holds several FAA telecom contracts, including the Leased Interfacility National Airspace Communications System, which serves air traffic controllers.

Ken Geiselhart, FTI capture manager for Lockheed Martin Air Traffic Management, Rockville, Md., said his firm is interested in continuing to pursue the opportunity but is watching the impact FTS 2001 would have on the FTI transition.

"It brings into question the whole FTI program and vendor pricing and the transition-related costs and risks," he said. "The question is, Do they transition to FTS 2001, maintain status quo during the [FTI] solicitation process, and what are the implications for administrative services already provisioned under FTS?"

Harris Corp., Qwest Communications and several other possible bidders said they would not be interested in the FTI contract if the FAA transitions to FTS 2001, because MCI would have "a huge advantage" in the bidding process.

"With MCI hardware already in place, it will be difficult to cut over to someone else," said Bob Coulson, business development lead at Harris. "MCI equipment would already be in place, so there would not be any transition costs or time for them. I would have to go back to my board and apologize for wasting their money."

Replacing MCI hardware would be costly and time-consuming, preventing anyone from underbidding MCI, according to industry experts. One potential contractor, who did not want to be identified, said his company decided not to bid because "it appears that if you are not on MCI's team, you cannot win."

But according to DOT, the FTI transition should require very little equipment, and the contract should not be compromised by the transition to FTS 2001. FTI is a services contract, and it should not matter what equipment a vendor uses, Molaski said.

"People are trying to confuse what FTI is and what FTS 2001 is. They are totally separate," Molaski said. "Just because you switch to MCI long distance doesn't make any difference to the person who does FTI."

On the other hand, vendors find it difficult to believe that MCI would allow its competitors to have access to its technology. "The government doesn't own the equipment, and the records on the circuits are MCI's, not the government's," Coulson said. "It is not like switching your long distance because of all the equipment needed on location."

Roland Fritz, MCI developmental lead for FTI, said vendors' accusations "don't hold water. Under FTS 2001, any prime contractor with FAA's approval can use FTS 2001 equipment.

"We are simply replacing like-for-like services" that AT&T installed under FTS 2000, he said.

Whether real or imagined, the perception that MCI has an unfair advantage may prevent the FAA from receiving a reduced rate, according to Chip Mather, vice president of Acquisition Solutions Inc., a government procurement consulting company.

"Companies must be able to make a convincing argument that they can replace an incumbent, or they won't bid," Mather said. "If they make it difficult to unseat the incumbent, there will be no competition pressure and no incentive to reduce prices."

MCI will not form a team until the FAA receives vendors' final comments in April, a spokesman said.

An updated screening information request is expected this month. The requests are available on the FAA World Wide Web site.