The government's telephone system has come full circle in the last 25 years: born amid crisis, it is going out the same way.

The Federal Telecommunications System (FTS) was established after the Bay of Pigs, the Cuban missile crisis and the Kennedy assassination so swamped the city's phone lines that Washington was as isolated as the moon.

Today the government is maintaining the FTS, which connects federal offices via private lines, with the equivalent of baling wire and elbow grease while telephone calls take longer to get through, static gets louder and computer transmission becomes less reliable, according to users. Even worse, it costs at least $100 million too much every year, according to the General Services Administration.

But the effort to replace it with something called FTS-2000 has turned into an exercise that threatens to make the procurement of the B1 bomber look effortless.

On Monday, the GSA, responding to a General Accounting Office study ordered by Sen. John Glenn (D-Ohio), set back the date for final bidding on the largest civilian contract ever advertised by the federal government. Bids will now be received Sept. 30, the agency said, so that some of the recommendations in the GAO report can be implemented.

But the delay also means that the bid process will occur when Congress is back in town, and provides some breathing room for a compromise between the GSA and the chief FTS contract critic, Rep. Jack Brooks (D-Tex.). Brooks, the chairman of the House Government Operations Committee, suggested earlier this month that the government go back to the drawing board.

In a letter to GSA Administrator Terence C. Golden that he sent to potential bidders on the contract, Brooks proposed that the GSA "restructure" the procurement, dividing the work instead of awarding the contract to the low bidder.

"I believe a multi-vendor award with continuing competition throughout the life of the contract will greatly reduce the risks inherent in the project and will ensure that the future telecommunications needs of the government are met economically and efficiently," Brooks said.

Without this, he said, "enormous economic power" would be concentrated in the hands of one company and the government would be "locked in" to one company's services for 10 years.

Golden replied that the change would delay the process for at least a year, and possibly two, cost the government between $150 million and $250 million, and overburden his agency with handling the complicated transition to two companies.

The GSA yielded on some points -- for example, it agreed to clarify an existing provision to make it plain to bidders that the government was "locked in" for only about four years, during the transition to the new system. But the agency refused to budge on the winner-take-all arrangement, leaving Golden and Brooks in a standoff.

Brooks, a 35-year member of the House who placed the first call on the existing FTS system, has an extensive arsenal at his disposal as chairman of the Government Operations Committee.

When he decided that Attorney General Edwin Meese III, for example, had failed to comply with his Competition in Contracting Act, he introduced legislation to eliminate all funds for Meese's office.

Brooks has been described by a former aide to the late President Lyndon B. Johnson as "one of the few men Johnson was ever afraid of," by President Richard M. Nixon as "the executioner" during the House Judiciary Committee's impeachment hearings, and by a colleague as a "loner."

Aides say Brooks wants nothing out of the telecommunications contract except what is best for the government. But one departmental telecommunications director says Brooks likes throwing his weight around on this subject.

Golden, a multimillionaire businessman who has achieved a considerable reputation in his four years in Washington as an assistant Treasury secretary and head of the GSA, is sitting atop a fragile coalition of federal telephone users who have agreed to buy FTS-2000 services.

The GSA wants to buy the state of the art in telecommunications. Brooks believes it hasn't properly assessed future telephone needs.

The agency thinks the dog-eat-dog competition in the phone industry will keep prices down and quality up because major companies have been pouring capital into providing "excess capacity" and need the business. Brooks wants the work divided up and rebid periodically to see which bidder should get the larger share of the business, based on quality of service and price.

When the GSA started to prepare its specifications in 1983, it expected up to six bidders, because six companies were competing to offer nationwide telecommunications services at that time. The field has shaken down to three. And one of them -- Sprint -- pulled out of the federal bidding after its major partner backed out, leaving only Martin-Marietta, which is allied with MCI, and the American Telephone & Telegraph Co.

But all three companies have been lobbying furiously: Sprint to get back into the game; Martin-Marietta to preserve the current winner-take-all regulations under which it thinks it can win, and AT&T to protect its myriad interests -- including its competitive position vis-a-vis its old subsidiaries, the "Baby Bells," which it claims are illegally lining up to help Martin-Marietta.

AT&T provides about 47 percent of the government's current service under FTS, and its competitors are quick to note that the longer FTS-2000 is delayed, the more money AT&T makes by selling "overpriced" service on FTS. The current FTS services cost $505 million a year, according to the GSA.

Brooks and Golden see the issue differently: Brooks is concerned about competition, Golden is concerned about continuity of phone service.

The true test of FTS-2000 will come in 47,000 government offices around the country, from Alaska to the West Indies to Guam. More than 1.3 million civil servants conduct thousands of government businesses each day, from pumping oil into the Strategic Petroleum Reserve to launching a new space shuttle, from ordering new nuclear stockpiles to replacing the gilt in the Old Executive Office Building.

Each lost work day costs taxpayers an estimated $62 million.

The FTS dates back to the 1960s, when the GSA leased "switches" in remote areas of the country from AT&T, then the monopoly long-distance phone company, to set up its own dedicated phone system so that federal offices could communicate infallibly in time of crisis.

The government paid a tariff, a flat rate no matter what the traffic. The FTS paid only about half of what the public paid, and the cost stayed essentially the same from year to year.

In 1977, MCI filed suit with the Justice Department asking to buy service from AT&T at the same rate as the government and to resell long-distance service to the public at a discount.

When the special government tariff expired in 1982, the government's costs nearly doubled. The switches were the same, the lines the same, the service the same, but the cost went from 13 cents a minute to 26 cents a minute.

In 1985, after deregulation, new access charges raised costs again to about 31 cents a minute, and the government's telephone bill went up another $95 million virtually overnight as public utility commissions across the country approved thousands of access rates, all different, all implemented on different schedules, with differing amounts retroactive.

Suddenly the government's phone bill became big business, with agencies launching what appeared to employes to be penny-ante witch hunts to punish personal calls and to reduce phone use.

Meanwhile, the Department of Energy came to the GSA with the need to transfer nuclear stockpile information from computer to computer at high speeds. It couldn't be done under the FTS. The department had to set up an outside system to handle the traffic.

Other agencies considered withdrawing from the system, and some did. The Navy will have completely pulled out by Oct. 1, and plans on buying available service to save money rather than sticking with FTS' "uncontrollable costs." Neither the Army nor the Air Force chose to sign up for FTS-2000.

After awhile, each agency that pulls out raises the costs for the remaining ones, creating a potential undertow that could sink the system.

In this battle, many questions remain unanswered. Should a member of Congress decide who gets the government's phone business? Should Golden have gotten Brooks on board long before now? Can the GSA manage the transition from the old phone system to the new without a hitch?

Don't hang up.