Telecom's Government Crusader

Editor's Note: Barbara Connor, one of the most senior women telecommunications executives in the country, became president of Bell Atlantic Federal Systems just over six months ago.

WT: How has your background in finance prepared you to run Bell Atlantic Federal Systems?

CONNOR: It has positioned me for this opportunity to run a business. Pricing on these contracts and bidding proposals are crucial. I am paying particular attention to our cost structure -- to where and how this business is going to grow. I am absolutely relentless about collections. With all deference, the government is not known to be the best paying customer.

WT: What do you think of the government contracting world?

CONNOR: I've not worked in the federal contracting arena before. One of the things I don't have much of is patience. And I have found that working with the federal government requires a great deal of patience. I have become involved in the bid proposal process where the procurements come out, and I am just amazed at the amount of time it takes for the procurement process to fulfill itself. I was somewhat surprised about the amount of competition that exists in the government contracting arena. Not only the amount but the sophistication. The federal government for very good reasons is getting smarter about procurements. I believe it's getting more difficult to increase margins and make money in the federal contracting arena. What used to be a single-award, multiyear contract is now a multiple-award, shorter contract duration.

WT: What kinds of things are you doing to get smarter, too?

CONNOR: First, in bringing a business perspective to this organization, I'm focusing on profitability and service. As a marketing channel we weren't always doing that. I'm focusing on contract project management. We won earlier this year a voice processing contract nationwide to maintain and install voice processing systems in Air Force hospitals. That's another thing. People think of Bell Atlantic as here on the Atlantic coast. I have many contracts that are nationwide. I have some that are very successful in Puerto Rico and we are seeking a procurement in Germany. A number of Army bases in Germany have communications networks that date back to World War II.

WT: So BA Federal is going global?

CONNOR: I believe we have to. Our customers are global, and to the extent we see a legitimate business opportunity for us, we have every right and capability to pursue it. There are some things in the information technology world that we may not be as good at as some of the other niche players. I've got to make sure we're taking a look at these opportunities, determining where our strengths are and assessing where there is a business opportunity for us.

WT: Does this mean you are planning to go into new lines of business?

CONNOR: To date we have not been known as a systems integrator. We may be a network integrator, but we may not be a systems integrator. Many of the procurements look for integrators. We have to assess this. What will it take for us to compete as a systems integrator and then what kind of opportunities against what kind of investments do I need to make in order to be proficient in systems integration. We have to get it decided this year so we can build the appropriate plans. There is a vast amount of opportunity in the systems integration market. Whether we are interested depends a great deal upon what I see as our current capabilities compared with capabilities required and what I need to do to fill that gap. Once we identify that gap, do we fill the gap ourselves or do we bring in a partner to fill in that gap?

WT: What companies do you have in mind for partnerships in systems integration?

CONNOR: We have not settled on any one strategic partner. In every procurement we've seen, they've required different things. If we form a limited number of alliances, we may preclude our ability to play a subcontractor role. Being here in Washington, being the local service provider, there are many companies that want to work with us. My goal right now is to remain flexible.

WT: What are you doing now to compete for the Post FTS 2000 contract?

CONNOR: There's not a day goes by that I don't think about that. Depending on the day, that could be a nightmare or an opportunity. There is no question that the Post FTS 2000 procurement is something we are interested in. In order to compete for this, the timing couldn't be worse for companies like Bell Atlantic. While the legislation [The Telecommunications Act of 1996] was very positive for us, it had what we call checklist requirements that we must satisfy before Bell Atlantic can get into the long distance market.

These checklist requirements are not something you can just read about today and have in place tomorrow. The current thinking of how this will go is that local service will be pulled out and the contract will be shortened. That's something we are in favor of.

WT: How will the acquisition of Nynex affect federal systems?

CONNOR: We've looked at it only on a preliminary basis. Nynex Federal Systems is not as big. We're eight times their size. They've got very few resources. My suspicion would be that when we do merge or acquire, we would roll it into our organization.

WT: How are you able to do so much work outside the traditional local phone business?

CONNOR: We have a subsidiary here at Federal called Bell Atlantic Federal Integrated Systems. It is only through that subsidiary that I'm allowed to compete outside the Bell Atlantic territory. It is only through that subsidiary that I am able to satisfy customer's requirements for switches.

Because of the divestiture, the regional holding companies were precluded from operating outside the region and getting into the equipment game. You figure out how to organize and structure yourself so you do this on a legal foundation. I will tell you that nine out of 10 opportunities I see go to that subsidiary. It's small and it's only two or three years old. It got started so we could sell boxes and switches. It has since grown in scope.

We've got work in California, Texas and the Midwest. I couldn't do that through my regular federal business. It's our only subsidiary. The revenues of the subsidiary are 5 percent of all of Federal.