With TCE, Treasury fought authority and authority won

'When you have similar requirements, you will have to play ball with the rest of government.'

'Former FTS commissioner Bob Woods

Rick Steele

After a three-year process of developing and awarding a contract for what it considered its unique needs, the Treasury Department has bowed to the will of the Office of Management and Budget and Congress. It will shun departmentwide contracts and buy telecommunications and network services as commodities.

Treasury late last month canceled its $1 billion, 10-year networking contract with AT&T Corp. in favor of the General Services Administration's anticipated Networx governmentwide vehicle. GSA plans to award the $20 billion contract in April 2006 to replace the FTS 2001 contract.

'When you have similar requirements, you will have to play ball with the rest of government,' said Bob Woods, president of Topside Consulting LLC of Vienna, Va., and a former commissioner of GSA's Federal Technology Service. 'They're shopping at Costco.'

Despite different missions, Treasury and many other departments generally have similar communications requirements and service levels. OMB is focusing on centralized, volume buying to extract savings.

The Defense Department, however, has unique communications requirements for warfighting, so it will continue to do its own procurements, Woods said.

Treasury notified the Government Accountability Office last month that it intended to terminate the Treasury Communications Enterprise contract with AT&T and to use GSA vehicles to meet its next-generation network needs, David Grant, director of Treasury's procurement office in the IRS, said in a letter.

Treasury would not say how it plans to bridge its networking needs until Networx is available, whether through GSA's existing telecommunications FTS 2001 contract or negotiating to extend the existing contract with Northrop Grumman Corp., which expires later this year.

Despite having the lucrative TCE contract snatched from its grasp, AT&T said it still wanted to work with Treasury to develop its next-generation network.

'We will be an aggressive bidder however Treasury plans to proceed,' said AT&T spokesman Jim McGann. AT&T can bid on FTS 2001 procurements through the 'crossover' provision under the Metropolitan Area Acquisition contract it holds.

'Many of the TCE bidders will have a part in Networx. From that standpoint, they will see this business again,' Woods said.

OMB would not comment on Treasury's decision to cancel TCE.

But the administration made it clear during the contracting process that it would steer agencies toward the Networx contract instead of letting them strike separate deals to modernize their networks.

Rep. Tom Davis (R-Va.), chairman of the House Government Reform Committee, also declined to comment on the TCE aftermath. But in a March 22 letter to Treasury secretary John Snow, Davis urged him to drop the TCE contract and support the Networx initiative.

If Treasury had followed his recommendation from the beginning to use the existing FTS 2001 contract and work on Networx, 'Treasury would likely have recorded immediate savings, met its short-term requirements and provided leadership to a most important governmentwide initiative,' Davis said in his letter.

About the Author

Mary Mosquera is a reporter for Federal Computer Week.

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