Nipping at FTS' heels
- By Bryant Jordan
- Aug 07, 2000
NITAAC home page
The General Services Administration's Federal Technology Service, which
brokered the lowest government long-distance phone rates ever as part of
its FTS 2001 program, may have more competition in telecommunications from
within the federal family.
The National Institutes of Health has issued its recompete of the Chief
Information Officer Solutions and Partners (CIO-SP) contract, a governmentwide
contract that is intended to cover the gamut of IT efforts and includes
some telecom services. Victor Powers, acting director of NIH's Information
Technology Acquisition and Assessment Center, said telecom, including long
distance, is just part of the agency's contract.
NITAAC was established in 1996 as a way to make procurement more efficient
and less costly. In 1998, it added personal computer leasing to CIO-SP.
FTS' deals with Sprint and WorldCom Inc. to supply long-distance service
to government agencies guarantees each company a minimum of $750 million
during the eight-year contracts. The companies may earn more, but if they
fall short, GSA must pay the companies the difference.
For GSA, then, the possibility of losing FTS 2001 customers to another contract — even if it is through the government — could pose a problem.
"We embrace the idea of competition," said Charles Self, deputy commissioner
of FTS. "But that's a bigger issue than just competition between two agencies,
because the government is liable" for the minimum revenue guarantees. "My
position would be that NIH and GSA would have to get together to consider
the governmentwide implications," Self said.
NITAAC does not offer products and services a la carte, but instead packages
them to meet specific needs of customer agencies, according to Powers.
"The [CIO-SP] contract allows vendors to come in with a technical solution
that would fit the needs of the agency," he said. That could include long-distance
services, Powers said.
Telecom analyst Warren Suss said anything that draws federal business
away from Sprint and WorldCom could threaten the viability of FTS 2001.
"It could be a blow to FTS if another agency like NIH initiated a program
for reselling long distance," he said. "This kind of an action would threaten
the ability of FTS to meet the minimum revenue guarantees."
More than that, he said, it would throw into question the FTS strategy of
combining government buying power to negotiate with vendors for products
"Not only in terms of prices going down, but in getting government the
kinds of technical features and management capabilities that a government
needs," he said. "It's in the government's interest to have FTS negotiate
Sprint and WorldCom, meanwhile, could possibly stand to earn more if they
picked up government business via NITAAC — even if it was at the expense
of their FTS contracts.
That's because they would still be guaranteed $750 million under FTS
while they earned revenues under a separate NITAAC-brokered deal.
Rick Slifer, director of FTS 2001 for WorldCom, said he believes NIH
is considering adding telecommunications to CIO-SP, but telecom "is a minor
part" of what NIH is doing.
"The point I would make here is NIH itself has committed to transitioning
all [telecommunications] services to WorldCom under FTS 2001," he said.
Mike Ligas, director of business development with Sprint's government
services division, said Sprint already holds some contracts under the earlier
version of CIO-SP and will also bid for contracts under the latest one.
Ligas said he does not know what kind of work is being done under CIO-SP
but called the contract "a vehicle to fill some gaps."
"It provides another alternative," he said. "FTS 2001 is not a complete
blanket for any telecommunications services — some things are not provided
but Sprint is actively trying to add them."