Smaller firm bests established carriers in $3B DISA circuit buy

Arrowhead Global Solutions, an integrator that graduated from its small-business status three years ago, won a remarkable victory today over established telephone carriers when the Defense Information Systems Agency awarded it part of a $3 billion contract, an analyst said.

DISA chose Arrowhead over BellSouth and Verizon for the Defense Information Systems Network Access Transport Services (DATS) contract in the Northeast and Southeast. Warren Suss, president of Suss Consulting, said Arrowhead must have won its portion of the 10-year, $3 billion contract by undercutting the two carriers on circuit costs. That fits with the agency’s push to commoditize circuit buys, Suss said.

Mark Ritter, Arrowhead’s vice president of telecommunications services, declined to provide pricing details on the company’s bid. But he said Arrowhead would meet DISA’s requirements to provide circuits ranging from voice grade to broadband circuits in the Northeast and Southeast by integrating connections from several sources. Those sources include the two carriers, competitive local exchange carriers, dark and private fiber and cable TV networks.

Suss said the award to Arrowhead raises a lot of questions, including the company’s ability to provide the level of service for critical command-and-control networks that DISA has come to expect from telecom carriers.

DISA intends to use the DATS contract to provide connections from 1,500 Defense Department locations in the United States to its Global Information Grid fiber-optic backbone. The other contract winners, AT&T and Qwest Communications International, will provide circuits in the Midwest, Southwest and Western service areas.

DISA skipped Verizon and reportedly tapped Arrowhead to provide circuits in the northeast DATS region. Ritter said the company also bid on the southeast region served by BellSouth and will use circuits from other carriers and cable companies in its DATS network.

BellSouth and Verizon were unable to comment by deadline.

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