DREN held up again, but winner may already be picked

The Defense Information Systems Agency has asked bidders on the controversial Defense Research and Engineering Network contract to extend their bids to April 18, but the agency may have already picked a winner, according to industry sources.

Sources close to the process told Washington Technology that DISA has informally told Global Crossing LLC it will again win the DREN contract. However, the agency is assessing the impact of the company's bankruptcy filing on its resources.

Global Crossing had been selected for the contract in July, but the award was withdrawn following protests from the losing bidders.

A DISA official, however, said at a government telecommunications conference March 1 that the agency is still evaluating bids from Global Crossing, AT&T Corp., Qwest Communications International Inc., Sprint Communications Corp. and WorldCom Inc.

This is the second bid extension DISA has requested. The bids were to expire March 4 after a 30-day extension the agency requested in January.

The DREN network provides long-haul communication service for the Defense Department's high-performance computing modernization program. Global Crossing was awarded a three-year, $137.3 million contract for the DREN network July 9, 2001. The contract included seven 1-year options, bringing the estimated value to more than $400 million.

But the award was rescinded by DISA less than two weeks later when all four of the unsuccessful bidders filed protests with the General Accounting Office. The protests argued, among other issues, that Global Crossing did not meet mandatory security clearance requirements for the network.

The agency asked all five companies to recompete for the contract. According to sources, DISA modified the security requirements, easing the hurdle for Global Crossing the participate.

Adding to the uproar of the DREN award, Global Crossing filed for bankruptcy Jan. 28, three days after DISA missed its first target date for announcing the new award.

Since then, the company has come under increasing scrutiny from Congress and law enforcement agencies. The Securities and Exchange Commission and the FBI are investigating the company's accounting and business practices.

Members of Congress became alarmed after the company announced that two Asian firms, one with extensive ties to China, had made an offer to rescue it from bankruptcy.

At the telecom conference, Anthony Montemarano, DISA principal director of network services, told industry representatives he did not know when the DREN winner would be announced and that it is being considered at the highest levels of the agency right now.

"It's a hot potato," he said.

The telecom conference was put on by market research and consulting company Suss Consulting Inc. and TeleStrategies Inc.

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