Toward FTS 2001: A phone odyssey

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The glimmer you see up ahead is the light of a new dawn in federal
long-haul telecommunications services. It’s called FTS 2001.

After a series of delays, the General Services Administration is finally set to award
two new contracts for services under FTS 2001—possibly by the end of next
month—to replace the current FTS 2000 contracts, held by AT&T Corp. and Sprint
Corp., which expire Dec. 7.

GSA plans to award two contracts, each worth $750 million annually. Each will run for
four base years and have four one-year options. Core services covered by the contracts

Optional services include wireless services, satellite services and value-added
services such as electronic commerce and videoconferencing.

Without a doubt, FTS 2001 portends a new era for federal telecommunications procurement
and services that will see more competition, better prices, greater flexibility and
choices, and easier ways to acquire new technologies.

But getting there isn’t going to be a piece of cake, said Robert J. Woods, former
commissioner of the Federal Technology Service and now head of Federal Sources Inc., a
McLean, Va., company that specializes in government information technology market

GSA is preparing for a complicated transition from current contracts under FTS 2000 to
the new agreements under FTS 2001. In some respects, agencies are feeling their way
through the dark.

“The word that comes to mind is frustration because there are still a lot of
unknowns, and the pieces don’t start falling into place until the contracts are
signed and until planners can see what’s available from the contracts,” said FTS
2001 guru Frank Lalley, assistant commissioner for service delivery at GSA’s Federal
Technology Service. “The shoe is about to drop, so we’re all very thoughtfully
doing whatever we possibly can to get ready—making sure people understand what the
preliminary plans are and getting teams in place.”

Overshadowing the transition to FTS 2001 is the specter of year 2000 date code
problems. Some agencies struggling to get ready for year 2000 have told GSA that they
don’t want to move their current services, especially toll-free services and data
networks, to new contracts until after Jan. 1, 2000, according to Lalley.

“We had been planning for a transition of up to a year,” he said. “Now
we’re planning for transition of some networks to occur during the year 2000 and
typically after an agency’s peak workload period is finished.”

GSA’s current schedule calls for an intense planning period of up to six months
after the contracts are signed, furnishing a cushion of sorts as agencies gear up to move
to new services.

“It is an enormous undertaking whether we swap out the contractors or not,”
Lalley said. “During the planning period we’ll be evaluating ordering and
billing procedures, that sort of thing. We already have a great deal of activity under way
with the agencies, analyzing their requirements for the future and getting ready to place

GSA also is hammering out continuity-of-service agreements with the current vendors to
carry agencies through the transition period.

“We need to hold those vendors in place until the transition is complete,”
Lalley said. “We’re in the final stages of negotiating the terms and conditions
of those agreements right now and hope to have that done in the very near future.”

That potential for trouble is illustrated by the Treasury Department’s experience
after officials decided four years ago to cut costs by switching the agency’s
long-haul services from Sprint Corp. to AT&T Corp. under FTS 2000.

During the cutover, circuits got scrambled and callers got miffed. Some beleaguered
taxpayers who dialed the IRS’ toll-free number for help got Dial-a-Prayer; others
were connected to catalog sales at J.C. Penney Co. Inc.

AT&T and Treasury officials concede they didn’t work closely enough on the
transition and never formulated a detailed plan.

The bottom line: a lack of communication between agency and vendor. Neither understood
each other’s needs.

Woods offered these guidelines for the FTS 2001 transition: Make sure your new service
provider understands your particular telecommunications needs, create a comprehensive
transition plan and be certain there are clear lines of communication among your agency,
the current provider and the future provider.

In the end, only a small portion of Treasury’s circuits were switched to AT&T.
Most stayed with Sprint under an extension agreement.

So don’t think that the transition will be easy, cautioned Candace Hardesty, the
liaison for Treasury’s chief information officer. But it’s still worthwhile
because the FTS contracts—both 2000 and 2001—were structured to generate vendor
competition, save money and trigger creative solutions, she said. Just get the transition

FTS 2000 has succeeded far beyond expectations, GSA officials say, saving the
government more than $6 billion over its 10-year life. Prices for long-distance service
dropped from about 38 cents per minute to about 5 cents per minute between 1988 and 1998.

One of the promises of FTS 2001 is that it will offer additional procurement
flexibility. Timothy Fleming, who heads up FTS’ new European business development
office in Heidelberg, Germany, said FTS 2001 will help agencies build “location-based
alliances rather than isolating their requirements” for telecommunications services.
He dubs it the optimization-aggregation model.

“The real price breaks will come from aggregation of services, either agencies
buying circuits in a building or campus together, or agencies or groups of agencies buying
voice and data network services together,” Lalley agreed. “That’s not the
way we’ve typically done it the past. So if folks think it through, there are
opportunities for big savings.”

FTS 2001 also promises to further simplify acquisition of new technologies as agency
requirements evolve.

“We’ll have a suite of contracts available to us that ought to give us the
flexibility to accommodate pretty much any technology that comes along,” Lalley said.

One emerging technology that’s likely to turn up on FTS 2001 contracts soon is
voice-over-IP technology: An Internet connection makes long-distance calls practically

Current drawbacks of voice over IP include imperfect sound quality, poor security and
lack of interoperability. And prices could rise if the Federal Communications Commission
imposes tariffs on Internet service providers.

Major hardware vendors, however, are moving full steam ahead, acquiring smaller
companies in the voice-over-IP business and developing new platforms in anticipation of
rising demand for IP telephony.

On another front, FTS officials envision good synergy between FTS 2001 and other
programs, such as FTS’ Metropolitan Area Acquisitions of local telephone service. In
fact, as vendors begin providing end-to-end telecommunications services, they anticipate
offers for the two programs to merge.

It’s all part of the great expectations for FTS 2001.  

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