Two Years After Award, AT&T Protests FTS2001 Contracts

AT&T Corp. filed a formal protest April 27 with the General Services Administration over that agency's award of the FTS2001 governmentwide telecommunications contract.

The company charges that GSA relaxed the performance requirements outlined in the original request for proposal to accommodate contract winners Sprint Corp. and WorldCom Inc.

Although the contracts were awarded more than two years ago, AT&T is asking the awards be overturned and the solicitation reopened with modifications reflecting the contract's true requirements, according to Wayne Jackson, an AT&T spokesman.

Company officials said AT&T's bid on the contract would have been significantly different if the company had known the true performance requirements.

Triggering the protest was information in a General Accounting Office report, "FTS2001: Transition Challenges Jeopardize Program Goals," released April 26. The report's release coincided with a hearing by the House Government Reform subcommittee on technology and procurement policy examining whether FTS2001 has met its goals of providing the best prices and telecommunications services to federal agencies while maximizing competition.

AT&T officials said they were astonished to see the GAO report categorically state that the FTS2001 contract "waives numerous service performance requirements placed on the contractors during the transition period."

Adding to their surprise, the officials said, Sandra Bates, GSA's commissioner of the Federal Technology Service, confirmed in her testimony before the subcommittee that some performance requirements had been waived.

AT&T and Qwest Communications International Inc. both have been lobbying vigorously for GSA to open up the FTS2001 contract to other competitors, specifically telecom companies that hold Metropolitan Area Acquisition contracts to provide local phone services to federal agencies in cities around the United States.

Bates told subcommittee chairman Rep. Tom Davis, R-Va., that GSA intended to open up FTS2001 to the MAA providers this summer.

But the AT&T officials expressed skepticism, noting that Bates did not say whether the commitment referred to opening up the contract, or that criteria for prospective competitors would be released.

The FTS2001 contract was awarded to Sprint in December 1998 and to WorldCom in January 1999. The program was to provide federal agencies with the best services and prices while maximizing competition.

At the time of the award, the contract's potential value was an estimated at $5 billion over eight years, with each contractor guaranteed at least $750 million. The GAO, however, said the contract's potential value has fallen to $2.3 billion.

GAO said that GSA has not yet allowed other contractors to compete for FTS2001 work as originally envisioned because of the need to ensure that Sprint and WorldCom receive their guaranteed minimum revenues from the contract.