TCE terminated

The Treasury Department has canceled Treasury Communications Enterprise (TCE), a controversial network communications contract that the department had awarded to AT&T. Instead, the agency now plans to use General Services Administration contracts to meet its wide-area network communications needs.

David Grant, director of Treasury's office of procurement, detailed the agency's decisions in a May 20 letter to the Government Accountability Office. Although the letter does not specifically refer to the current FTS 2001 contract and its successor, Networx, those are the contract vehicles likely to meet the agency's needs.

Treasury officials have been reassessing the agency's telecom options after GAO upheld losing vendors' protests of the TCE award.

The only real choice that Treasury officials have to make in using GSA contracts is whether to move now or later, said Warren Suss, president of Suss Consulting. They could move to FTS 2001 now and then transition to Networx when it is awarded next year, or Treasury could extend its own current contracts until Networx is awarded and make the move then.

The decision also further solidifies GSA's position as the primary provider of telecom and network services to government agencies, he said.

Treasury was "one of a handful of civil agencies that went out on their own for big network buys," Suss said. "Most of the rest of the government worked within the framework of GSA and GSA contracting vehicles. The fact that an agency as large and powerful, and as independent as Treasury, is now back in the fold of GSA, suggests that it’s going to be tougher in the future for agencies to do their own thing.”

AT&T officials issued a brief statement today reacting to Treasury's decision. "We intend to remain focused on how we can best meet the Treasury Department's needs for a modern, cost-effective network," the written statement reads. "With that in mind, we'll be awaiting further word on how it plans to proceed with this acquisition. We'll do what it takes to win this business again."

Rep. Tom Davis (R-Va.) had urged Treasury officials several times to use the Networx contract.

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