Navy will spend $2.9b on its nets

The winners of the Voice, Video and Data (Vivid) contracts were AT&T Government
Markets of Washington, Bell Atlantic Federal Integrated Systems of Washington, GTE
Government Systems Corp. of Needham, Mass., and Lucent Technologies Inc. of McLeansville,

After receiving news they had won contracts to provide only local telephone services,
AT&T and Bell Atlantic withdrew. GTE won a contract to provide long-haul hardware,
software and services. Only Lucent won a contract to supply all goods and services.

"We spent a lot of time and effort on this bid, and we were very eager to work
with the Navy to modernize its communications systems,'' said Barbara Connor, president of
Bell Atlantic Federal Systems. ""However, we feel we could not effectively serve
this important customer while meeting our business needs.''

AT&T spokeswoman Joyce Van Duzer said, ""What we got was a partial award,
and from our perspective it just didn't make good business sense to stay with it.''

Through the 10-year Vivid contracts, Navy installations worldwide will buy
telecommunications hardware, software and services such as digital switching systems. The
support services offered will include planning, design implementation and maintenance.

"We think that the Vivid contract has the scope to provide the Information
Technology for the 21st Century program in terms of base-level infrastructure," said
Ed Hudson, GTE's Vivid program manager.

The base-level infrastructure will consist of digital telephone switches linked to a
fiber-optic backbone and a universal building wiring scheme for integrating the
communications systems at Naval bases. Gateways at the bases eventually will plug into the
emerging Defense Information Systems Network.

Vivid is open to all Defense Department agencies and the Coast Guard. It includes
several buying, outsourcing and leasing options for its telecom products and services.

The request for proposals outlines how lease-to-own allows amortization of and
investment in hardware and infrastructure, Hudson said. Although agencies cannot lease
assets such as cable plants, he said, they can lease routers, Ethernet switches and the

The Vivid contracts each have one base year and nine one-year options. The first eight
years of Vivid will cover all equipment, support and services. The last two years will be
for services, outsourcing support and lease-to-own purchases only.

The RFP allows customized outsourcing that would let an offerer charge for both
hardware costs and personnel requirements to run and maintain the equipment, Hudson said.

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