Despite critics, Treasury stays committed to TCE

IG highlights poor planning as major shortfall in $1 billion telecom contract

Despite intense scrutiny from Capitol Hill and a blistering report from its internal watchdog, the Treasury Department plans to move forward with its controversial telecommunications contract.

Treasury spokeswoman Brookly McLaughlin last week said the agency is still planning a spring award date for the $1 billion, 10-year Treasury Communications Enterprise contract, despite warnings from the inspector general that the process thus far has been disorganized and poorly executed.

'We appreciate the IG's findings and are taking appropriate corrective actions to address their recommendations,' McLaughlin said.

The decision did not sit well with House Government Reform Committee chairman Tom Davis (R-Va.), who has persistently opposed the Treasury procurement.

'The Treasury Department should carefully consider the IG's recommendations,' Davis said.

Davis said he plans to hold a hearing on TCE in the spring, and has threatened to cut Treasury's funding for the project.

The IG report, released earlier this month, follows Treasury's contentious decision to move ahead with the standalone telecommunications contract instead of signing on to a governmentwide vehicle administered by the General Services Administration.

When Treasury first awarded the contract to AT&T Corp. in December 2004, the deal was overturned after the agency disclosed a private agreement with GSA and the Office of Management and Budget to migrate to GSA's Networx contract when the Networx deal was finalized.

But shortly thereafter, Treasury reversed course and said it would move ahead with TCE, claiming that none of the GSA programs suited its needs.

In its report, the IG said Treasury, before moving ahead, must achieve a wholesale improvement in how it manages and documents the procurement process.

Treasury could not demonstrate how it arrived at the $1 billion cost estimate, the report said, adding that the 800-plus pages of additional documentation Treasury provided the IG late in the audit process 'were neither cohesive, comprehensive nor complete.'

'I hate to say I told you so, but the IG report reveals exactly what I have been saying consistently for the last year: TCE is a disaster and ought to be abandoned before Treasury wastes even more precious taxpayer funds,' Davis said. 'It's a total mystery why the department has so stubbornly tried to move forward with TCE.'

But even with the latest criticism, some industry experts believe Treasury has no choice but to move forward.

'With Networx not going to be awarded until March 2007 at the earliest, that means Treasury would have to go back to the drawing board and wait until then to get the added capabilities of that contract vehicle,' said Warren Suss, president of Suss Consulting Inc. of Jenkintown, Pa.

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