New hope for TCE’s losing vendors

Treasury must correct contracting misstep

Vendors that lost their bids for the Treasury Department’s Treasury Communications Enterprise (TCE) contract are awaiting information from Treasury officials after the Government Accountability Office upheld their protests of the award.

GAO auditors faulted Treasury officials for not informing bidders that Treasury might not exercise all the option years available under the TCE contract. The companies prepared and submitted bids based on criteria that department officials changed before awarding the contract and without informing the companies in time for them to adjust their bids.

After issuing a request for proposals and before awarding the contract to AT&T, Treasury officials signed a memorandum of understanding (MOU) pledging to consider moving the department’s future business to Networx, the telecommunications contract that General Services Administration officials plan to award in 2006.

Rep. Tom Davis (R-Va.), chairman of the House Government Reform Committee, has expressed a desire for Treasury to use Networx rather than its own contract.

Bidders received no official notice of the memo, no invitation to discuss its impact on potential extensions beyond the three-year base period and no opportunity to revise their bids, according to the protestors.

“Broadwing was never officially notified that there was an MOU,” said Diana Gowen, president of Broadwing Government Solutions, one of the protestors. “However, Tom Davis was at a breakfast a couple of days before the award, and he very publicly mentioned it. That had everyone’s antenna up, but there was never anything official.”

Companies need to recover their costs and make a profit during the life of an award. Vendors calculate the price of a contract partially based on its anticipated length, Gowen said.

Now, vendors must wait for Treasury officials to respond to GAO’s decision, she said.

“What we hope happens next is that the government issues an amendment to the RFP, where they very clearly lay out what the possibilities for option years are and that they then enter into discussions with all of us,” Gowen said.

Sprint officials chose not to protest because other companies were already pursuing it, said Jeff Shafer, a company spokesman. “We do believe that all interested parties, including Sprint, will be able to re-bid, and we are certainly exploring that,” he said.

Treasury officials are still reviewing the decision and assessing their options, a department spokeswoman said.

Whatever happens next, vendors have a lot of information about their competition, said Warren Suss, president of Suss Consulting. “The cat’s out of the bag in terms of AT&T’s pricing, so it’s going to be a horse race.”

Lou Addeo, president of AT&T Government Solutions, which initially won the TCE contract, said he was disappointed in GAO’s decision to uphold the protests.

The telecom contract

The Treasury Communications Enterprise contract is for a major overhaul and upgrade of the Treasury Department’s telecommunications infrastructure. The winning contractor will be responsible for:

  • Planning and designing a new wide-area network that covers more than 1,000 locations in the United States, Guam, Bermuda, the Bahamas and Europe.
  • Implementing, operating, maintaining and managing the network.
  • Providing managed services at Treasury offices, other government offices and commercial locations as needed.
  • Performing services such as bandwidth management, traffic analysis, network monitoring, security, access control and Web-based ordering and billing.
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