Harris wins FTI contract
Loss of FAA telecom project another blow to WorldCom
- By Patience Wait
- Jul 26, 2002
"Because of what's going on the commercial side, WorldCom is really crippled ... They're in OK shape on the government side, but ... until they get their [house back in order] there is a perception of risk." ? Warren Suss, Suss Consulting Inc.
(Washington Technology photo by Olivier Douliery)
Harris Corp. scored a major coup last month, besting both Lockheed Martin Corp. and incumbent WorldCom Inc. to win the Federal Aviation Administration's multibillion-dollar telecommunications infrastructure project, called FTI.
The five-year base contract is estimated at $1.7 billion, and with options to extend it to 15 years it could grow to as much as $3.5 billion.
The defeat was another blow to WorldCom, Clinton, Miss., which had held the contract for a decade. The company filed for bankruptcy protection July 21, citing more than $30 billion in debts.
The FAA's telecommunications network is made of both owned and leased systems, many of which are nearing the end of their contract and service lives. FTI will phase out these older systems during the first five to six years, the agency said.
The new FTI network will primarily support the FAA, Defense Department and Coast Guard, connecting some 5,000 locations over 14,000 separate connections and replacing more than 30,000 circuits.
Harris won the business with a teaming approach that assembled numerous national and regional telecommunications companies to provide nationwide coverage for FAA facilities. Included on the team are Sprint Communications Inc. of Westwood, Kan.; Qwest Communications International Inc. of Denver; and regional Bell operating companies BellSouth Corp., Atlanta; SBC Communications Inc., San Antonio; and Verizon Communications Inc., New York. Raytheon Co. of Lexington, Mass., rounded out the team and will provide onsite technical services and support across the country.
"I credit it to our partnership-based approach and business model," said John O'Sullivan, vice president of programs for Harris Corp. O'Sullivan spent years leading the team that pursued FTI. The idea of partnership was a theme and a way of business that the FAA wanted for FTI, he said.
Several factors guided Harris to assemble the team it did, O'Sullivan said.
"The nature of the FAA's network [is that] a lot of communications are needed in the local and regional kind of dimension, as opposed to the long-haul nationwide stuff," he said. "Second, we saw all along that safety and stability were primary factors. After all, you're talking about the most critical network outside [the Defense Department] in the world."
Harris also wanted a broad-based team that could provide both diversity and flexibility in order to respond to rapid technological change and minimize potential disruptions in an industry suffering from overcapacity, regulatory issues and economic problems, O'Sullivan said.
Sprint representatives saw FTI as a validation of their reputation for reliability and security.
"We play a very critical role. The whole backbone of the network is Sprint," said Mike Ligas, region vice president, business development.
"This is a giant victory for Harris, [but] not a surprising one," said Warren Suss, president of Suss Consulting Inc., a Jenkintown, Pa., market research and consulting firm. "This competition has gone for so long, with so many questions and answers and resubmissions of proposals and so much interaction, [that] has a tendency to level out the bids. If there's a problem with one of the bids, over time it gets worked out."
Lockheed Martin, Bethesda, Md., for the past several years the largest systems integrator in the government marketplace, declined to comment on the loss. However, shortly before the FAA announced the FTI award July 15, Lockheed Martin mistakenly sent to reporters a press statement announcing it had won the contract. The company retracted the statement moments later.
WorldCom's ongoing financial crisis may have removed it from serious consideration, even though the company is the incumbent on the Leased Interfacility NAS Communications System, or LINCS, the major telecom contract to be folded into FTI.
"Because of what's going on on the commercial side, WorldCom is really crippled," Suss said. "They're in OK shape on the government side, but ... until they get their [house back in order] there is a perception of risk" in doing business with them.
WorldCom officials did not return phone calls seeking comment.
The loss of FTI may provide an early warning for what WorldCom can expect in its government-sector business, where it is the single largest telecom provider to federal agencies, Suss said. Harris' tactic of putting together a multifaceted telecom team is likely to be seen more frequently.
"With the turmoil in the telecom industry right now, and with the uncertainty about the future of the carriers, I think these kinds of strategies will take the risk out of the deal," he said.