Local exchange carrier lands AF contract

In a rare case of a competitive local exchange carrier (CLEC) beating out a major regional service provider, GST Government Systems Inc. late last month announced it defeated GTE Government Systems Corp. for a contract to provide local dial-tone service to March Air Reserve Base, Riverside County, Calif.

The contract, awarded by the Air Force's 38th Engineering and Installation Wing, will be worth about $1 million over five years. Heather Sirr, the major federal accounts manager at the company, said the contract will predominantly cover local phone service but also will include assorted special-access services not covered by the General Services Administration's FTS 2000 contract, which is the Air Force's main vehicle for long-distance services.

Sirr said the award marks a major victory for her company, which has faced an uphill battle wresting local service contracts from regional Bell operating companies (RBOCs). "It's a hard fight sometimes because I've got this gigantic elephant I'm trying to figure out how to attack," she said, referring to the entrenched RBOCs. "We're always glad to say that we beat a Bell company because we are a CLEC."

A GST spokeswoman said the company will provide service to about 10,000 phone numbers and will provide local circuits and some point-to-point data services as well.

The award represents one in a series of contracts the Air Force has planned since last year to gauge the competitive environment in the local loop. Although most of the contracts so far have been awarded to RBOCs, which have been the traditional providers of local service to the Air Force, Sirr said the award to GST proves that some degree of competition does exist.

"The whole purpose of this solicitation process was to see how much competition the Air Force could get by competing its requirements," she said. "This kind of lends a happy ending to their reasons for going through this process."

Warren Suss, a telecommunications consultant with Warren H. Suss Associates, Jenkintown, Pa., said contracts for local service awarded to CLECs are still uncommon but appear to be increasing.

"You don't hear about that many significant awards outside of the traditional RBOCs," Suss said. "This award may be a harbinger of things to come.

"I know the RBOCs are feeling the heat," Suss added. "We will know within the next year whether the competition is significant. Even if it is, it may not result in many awards to CLECs initially because the RBOCs are scared and are willing to get very aggressive to maintain their customer base, so it may not lead to a whole new field of players right off the bat."

GST Government Systems was established in 1996 as an arm of GST Telecommunications Inc., Vancouver, Wash. Sirr said the company has since won about 200 contracts worth more than $5 million, mostly within the Defense Department but also in hospitals operated by the Department of Veterans Affairs. Most of the contracts have been for private-line services, she said.

Air Force officials were not available to comment on the award to GST.