Competition in local phone service saves money for AF

Competition in local phone service saves money for AF

By William Jackson

GCN Staff

The Air Force has taken advantage of telephone deregulation to trim up to $50 million from the cost of local phone service at its bases.

Since passage of the Telecommunications Act of 1996, the Air Force has recompeted 80 percent of about 500 five-year contracts for local telephone service, said Bob O'Day, chief of the telecommunications service authorization branch at Tinker Air Force Base, Okla. The branch handles centralized procurement of local access for all Air Force bases.

'When we finish recompeting the remaining 100 or so contracts, we estimate we'll see total savings of $55 million or $60 million over the life of the contracts,' O'Day said.

Competition for local phone service is nothing new in the government market, said Barbara Connor, president of Bell Atlantic Federal. She was referring to her company's Washington Interagency Telecommunications System and Tri-Service Infrastructure Management Program Office contracts.

'They are local service, and they were competed many years ago,' she said. 'We're used to competing for everything here,' but the level of competitive activity has picked up recently.

In 1999, Bell Atlantic Federal bid on 21 government contracts, winning 15 and losing four. Its most recent win was for service to McGuire Air Force Base, N.J. Bell Atlantic, the incumbent in that $2 million, five-year contract, in January also won the General Services Administration's Washington Interagency Telecommunications System 2001 contract. WITS 2001 is on hold pending a protest by WinStar Communications Inc. of New York.

GSA has also awarded Metropolitan Area Acquisition contracts for local services in several major cities.

'GSA is certainly not to be outdone,' Connor said, 'but the Air Force was one of the first agencies to leap on the local competition bandwagon.'

The Air Force adopted the policy of competing all its local service contracts right after passage of the telecom act, O'Day said. The first recompetitions took place in June 1996.

Multiple local carriers do not exist everywhere, but competing proposals were received in about 150 of the 400 Air Force contracts put up for bid, and the incumbents were replaced in about 40, O'Day said.

Better service

Lower prices are not the only benefit of competition, O'Day said. 'We're more concerned with service,' he said, and it is improving as new types of providers such as cable companies enter the market.

Cable companies have let some bases replace twisted-pair infrastructure with optical fiber, increase available bandwidth, and integrate voice, data and video applications.

Cox Communications Inc. of Atlanta, one of the cable companies that became a local carrier, is installing an OC-48 backbone, to be upgraded to OC-192, to leverage its local cable plants for voice, data and video service.

Cox won a GSA contract for local service in Oklahoma City in October 1998. It received a contract for service to Langley Air Force Base, Va., in July 1998, and another for Tinker Air Force Base in January 1999. The contracts are worth $3.5 million each over five years, saving the Air Force about 35 percent over former arrangements.

Cox is providing more phone lines and faster switching, along with desktop videoconferencing. The increased capacity let Langley retire 14 Integrated Services Digital Network lines costing $200 a month each.

The advantages of competition do not come free, O'Day said, because of 'the effort and time involved in cutting over to a new provider and changing equipment."

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