Rep. Jack Brooks (D-Tex.) compelled the General Services Administration yesterday to postpone indefinitely the purchase of a new $4.5 billion telephone system for the government while it figures out how to divide the contract among more companies.
Bids were due next Wednesday for the largest civilian item ever purchased by the government -- a vast new telecommunications network that would handle calls, data and video services. The system would be one of the largest telephone systems in the world.
"We are taking this action because we do not believe the procurement can be successful without your support, and it is evident we cannot reach a consensus on the best way to proceed," GSA administrator Terence C. Golden said in a letter to Brooks.
Brooks, the powerful longtime chairman of the House Government Operations Committee, issued a statement acknowledging that Golden had "decided to adopt my suggestion ... to split the contract into two competitive prime contractor awards."
The decision was a victory for Texas-based Electronic Data Systems Corp. -- teamed with U.S. Sprint -- which earlier had pulled out of the bidding because it said the process had become too controversial and confused. Penny Pasquesi, EDS regional director for public affairs, said yesterday that EDS had a "very strong inclination to get back in, but we need to examine the facts first and make a good business decision."
The existing Federal Telecommunications System is outmoded and costs the taxpayers "$100 million more a year than it should," according to GSA. Many federal agencies have been itching to get out of the expensive FTS system, and yesterday's delay in purchasing a new system may increase pressure to defect -- possibly leading to fragmented federal phone systems.
Brooks has asked the GSA to delay the procurement for no more than six months, but GSA telecommunications officials have questioned whether they can gather the necessary bidding information that soon.
One of the problems with the current system, according to the GSA, is that the government does not always know who has called whom because of inadequate billing information.
"It is critical that this important project move forward as quickly as possible," said Brooks in a statement, "and I plan to do everything I can to make sure this happens." Brooks urged Golden to "work closely" with the three teams expected to submit bids for the project.
Brooks was out of his office yesterday and unavailable for further comment.
Golden said yesterday he planned to "have a vendor conference and ask for their support and cooperation to get this worked out as quickly as possible."
The dispute between Brooks and Golden, which started last summer, has been over the technical details of the bid. When the EDS team pulled out of the bidding, only two competitors were left -- one made up of American Telephone & Telegraph Co. and Boeing Co., the other of Martin Marietta Corp. and MCI Communications Corp.
Brooks told Golden in a public letter that this didn't represent "sufficient competition" under the Competition in Contracting Act, which he wrote. He wanted the procurement divided up 70-30, with continuing competition between the two consortia for the bigger chunk of the business. He said he wanted to make sure that the government was not saddled with the kind of single-supplier situation that plagues the Pentagon.
Golden fought for a winner-take-all, single-contract approach, saying that this would generate genuine competition to win and keep the contract, would clearly fix responsibility for service, and would make the transition to new technology in 6,800 buildings less troublesome for both the GSA and the phone users.
The dispute triggered intense lobbying, according to sources. EDS said at the time that it might re-enter the competition if the contract were split up but denied lobbying "as such," saying it had only responded to requests from both sides of the dispute.
Martin Marietta said during the dispute that it would pull out if the contract were split. "Our position is that if the contract is changed to a two-vendor selection or is in any way changed ... then the Martin Marietta team will be withdrawing," said vice president Jerry Thames at the time.
Yesterday, however, the company changed its position. "While delays in the FTS-2000 procurement continue to be a matter of concern for us, we understand the need for the most recent extension. We are working closely with GSA to help design a two-vendor solution that will be acceptable to all parties involved," according to a spokesman.
Golden said, "It was fundamentally clear from my position that we could not move forward without endless hearings and potentially restrictive language limiting our ability to conduct business.