Treasury TCE contract to be re-competed

The Treasury Department has reopened its controversial network and telecommunications contract to new offers from the original bidders. AT&T Corp. won the initial 10-year, $1 billion award in December 2004.

The new proposals are due Nov. 17. The contract has a base period of 33 months, with seven one-year options, Treasury said in its posting last week.

The re-compete is the result of an award protest that the Government Accountability Office sustained. Unknown to the bidders at the time, Treasury had signed an agreement with the General Services Administration and the Office of Management and Budget to pave the way for a move from the Treasury Communications Enterprise contract, when the base period expired, to the governmentwide Networx contract when it became available.

That agreement was no longer in force when Treasury decided in August to re-open the bidding with the original vendors as GAO recommended, a Treasury spokeswoman said.

OMB made it clear during the original contracting process that it would steer agencies toward Networx instead of letting them strike their own deals to overhaul their networks.

Following GAO's ruling for the bidders in March, Treasury said it was going to use a GSA FTS 2001 telecommunications service provider and then move to Networx, but backpedaled in August, saying that the existing governmentwide contract did not meet its needs and that it would reopen the contract.

House Government Reform Committee chairman Rep. Tom Davis (Va.) has long supported the Networx contract and has been a harsh critic of Treasury for wanting to continue stovepiped infrastructures that are not interoperable with other agencies.

"The amendment to the [request for proposals] is exactly what Treasury had to do per the GAO protest ruling. This move represents the department's stubborn effort to continue ahead with the TCE program," said Drew Crockett, a spokesman for the House Government Reform Committee. "TCE fosters the perpetuation or creation across government of duplicative procurement functions that are far more costly and far less efficient than centrally managed core infrastructure procurements," he added.

Besides AT&T, the vendors that previously submitted proposals are Broadwing Communications LLC, Level-3 Communications Inc., MCI Inc., Northrop Grumman Corp., Qwest Communications International Inc. and Sprint Corp.