First of two FTS 2000 contracts goes to Sprint

The multibillion-dollar FTS 2001 first-round contract that the General Services
Administration awarded last month to Sprint Corp. promises voice and data savings of up to
60 percent, or $3.8 billion, over eight years.

Under the decade-old FTS 2000 contract, Sprint has had 24 percent of federal voice and
data business. AT&T Corp. has had 76 percent.

“It’s been sort of frustrating” under FTS 2000, said Sprint spokesman
James Fisher. “Our marketplace for government long-distance services has expanded

How much of the business Sprint will get depends on a second bidding round now under
way. The Federal Technology Service is evaluating new price proposals from the original
bidders. Dennis J. Fischer, commissioner of GSA’s FTS, said he expects a decision by
mid-January. FTS could award a second contract to Sprint or to a competitor, or make no

If a contract goes to a second company, the two vendors will share $1.5 million in
guaranteed revenues and compete for business worth an estimated $5 billion. The
nonmandatory buy will have four base years and four option years.

Although Fischer would not give details while bidding continues, he said overall prices
are 30 percent lower than under FTS 2000. The greatest savings come in newer services such
as data communications, which make up a growing percentage of federal telecommunications.

The FTS 2000 contracts held by Sprint and AT&T expired Dec. 7, but GSA has
negotiated a two-year extension to tide agencies over during the transition. Some agencies
likely will remain with their current contracts as long as two years while they
concentrate on year 2000 fixes. Others are interested in moving to FTS 2001 soon, Sprint
assistant vice president Jim Payne said.

FTS asked the contractor to brief agencies on the offerings Dec. 22, four days after
the contract award.

“We were not expecting much turnout,” Payne said, but a number of agencies
and high-level representatives showed up. He said full transition for some agencies could
begin in late spring or early summer.

FTS deputy commissioner Sandra Bates said several agencies have indicated willingness
to move to FTS 2001, among them the Environmental Protection Agency.

The new contract offers Internet and intranet services, data communications,
international service and high availability for mission-critical applications, in addition
to standard long-distance, toll-free and 900-number services.

Payne said Sprint’s proposal got a boost from the company’s strategic
decision to merge local and long-distance voice and data services into a single Integrated
On-Demand Network, announced last June 1.

Because the announcement came months after FTS 2001 specifications were made public,
“ION as a product was not in the bid and could not be considered,” Payne said.
But the groundwork laid for the project helped achieve cost advantages, he said.

Sprint now expects to add ION to its contract offerings. “What we turned in was an
ION-ready bid,” Fisher said.

As manager of the nonmandatory FTS 2001 program, FTS also must make its pricing more
competitive to draw customers, Fischer said. The agency puts an 8 percent surcharge on
agency bills under FTS 2000.   

About the Author

William Jackson is a Maryland-based freelance writer.


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