DOD dials up phone savings

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The Defense Department is expecting to save about $160 million in local

phone service over the next eight years, the result of signing up for the

WITS2001 contract brokered this year by the General Services Administration's

Federal Technology Service.

DOD will use Verizon Federal as its service provider under the Washington

Interagency Telecommunications System contract, GSA announced Oct. 4. Verizon — formerly Bell Atlantic — provides local telecom services to DOD's Washington,

D.C.-area locations under the Defense Telecommunications Program, which

expires in November 2001.

Michael Newton, director of the Defense Telecommunications Service, which

adopted the GSA-brokered contract, predicted a significant cost savings

under WITS2001.

"The estimated DOD annual savings for telephone lines is $20 million per

year compared to the current DOD...contract rates," Newton said in the GSA

announcement of the deal.

Joining WITS2001 is a significant move for DOD, according to Kevin Irland,

a spokesman for Verizon.

"DOD has always had its own contract," he said. "This is the first time

DOD is using a contract vehicle on the civilian side. It underscores the

fact that [WITS2001] is a contract that offers the entire federal government — not just the civilian side — a complete array of products and services."

GSA and Verizon officials were unable to say how much the DOD-Verizon contract

is worth, although the overall contract — which serves DOD and civilian

agencies — is expected to net Verizon at least $25 million over eight years.

That amount represents the minimum revenue guarantees included in the deal.

If Verizon falls short of the mark, GSA makes up the difference. On the

other hand, the WITS2001 contract permits Verizon to earn more than $1 billion

over its eight-year life span, according to Bill Beardon, a spokesman for

GSA.

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