Wireless Contract Means More Than Just Revenues

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The federal government is planning to buy up to $1 billion in wireless services over the next several years under one colossal deal being procured by the Defense Information Technology Contracting Office.

For the cellular phone company that wins the agreement, the buy will be worth much more than just the revenues from providing telephone service to an enormous user base. The winner will have a chance to shape the development of future wireless technologies, such as personal communications services -- a market expected to explode in the late 1990s.

he federal government is planning to buy up to $1 billion in wireless services over the next several years under one colossal deal being procured by the Defense Information Technology Contracting Office.

"This will be another case where the federal government is the first customer for a new market, such as with electronic mail and the first high-speed computers," said a telecommunications consultant who asked to remain anonymous.

Initially, the wireless contractor will offer basic cellular phone service to the military and civil federal governments, as well as state and local governments that want to buy wireless services under the deal. The contract is designed so that a federal agency doesn't have to purchase through the contractor if they can find another wireless provider that is cheaper. The goal is to keep the contractor from becoming stagnant and to stay in line with the marketplace, said James Kane of GTE Government Systems in Chantilly, Va.

The winner of the contract, which is expected to be awarded late in 1995, will probably be the first company to be required to meet a new federal goal that all purchases be done electronically, using electronic data interchange.

It's not clear exactly which companies will be bidding for the deal. Many of America's regional cellular providers will be excluded because the government wants its contractor to be able to provide services to 90 percent of the U.S. population. GTE, which is the second-largest cellular service provider in the United States, says it is bidding for the deal and McCaw/AT&ampT, America's largest cellular provider, is expected to respond to the request for proposal coming out early next month.

The company that is awarded the contract could also become the government's long-term wireless supplier. The General Services Administration has promoted the Federal Wireless Procurement as the initial wireless services agreement for the Post FTS2000 program, the next large phone services contract for the federal government.


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