Qwest FTS protest dismissed

Upholding a previous decision by the General Services Administration, the General Accounting Office has dismissed a protest by Qwest Communications International Inc. against GSA's extension of FTS 2000 long-distance contracts held by AT&T and Sprint.

In a decision dated June 25, GAO agreed with GSA's finding that Qwest could not compete for the contract bridge extensions as a result of its 2000 merger with U.S. West Communications Inc., a regional Bell Operating Company providing local phone service in 14 states.

A section of the U.S. Code prevents any BOC or affiliate from providing long-distance service originating in the same region it provides local service—in this case, 14 states, according to the decision.

Because GSA required "ubiquitous, nationwide long-distance service"—and because the law didn't permit Qwest to provide that service in 14 states—the company wasn't in a position to compete for the bridge contract, GAO General Counsel Anthony Gamboa wrote in his decision.

Qwest had said it could avoid the limitation by teaming with Intermedia Communications Inc. to provide services in the 14 affected regions, but GAO found that such an arrangement would not pass muster with the Federal Communications Commission.

In December, GSA extended AT&T's FTS 2000 contract until Dec. 6, 2001 and Sprint's until June 6, 2001 because 27 agencies failed to complete the transition from FTS 2000 to FTS 2001 by the Dec. 6, 2000 deadline. Qwest issued an initial protest with GSA Dec. 15, saying the sole-source bridge awards violated the Competition in Contracting Act of 1984 and the Federal Acquisition Regulations.

In March, a GSA protest official denied the complaint, saying the agency had a compelling reason to conduct the procurement the way it did and that opening it up to competition would have resulted in delays and unnecessary costs to the government.

FTS 2001 contract-holders WorldCom Inc. and Sprint completed the initial agency transition from FTS 2000 in June.

Jim Payne, Qwest senior vice president for government systems, said the GAO decision will mean that agencies will continue to pay high long-distance service rates—at least $1.10 a minute through AT&T. Sprint, the other FTS 2000 holder, has lowered its bridge rates to FTS 2001 levels.

"The consumer is the one that's the big loser in this," he said. "Here we have a decision where we have defeated competition and we are satisfied that's the right answer. That's really telling about the culture."

Payne said GSA didn't expect any vendors to express interest in competing for the bridge contracts, and when Qwest did, it should have opened them up for competition.

Regarding BOC law, Payne said GAO was compelled to side with GSA because the FCC declined to consider Qwest's teaming approach, which is "done all the time in this business," he said.

GSA officials declined to comment on the decision. "The facts speak for themselves," said Hap Connors, GSA spokesman.

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