Sprint wins multi-billion-dollar federal telecom deal

The federal government could save $3.8 billion on its long-distance phone bills over the next eight years under a multi-billion-dollar contract awarded to Sprint on Friday.

The General Services Administration awarded the FTS 2001 telecommunications contract, which the agency estimates could be worth more than $5 billion over the eight-year life of the contract.

Dennis Fischer, commissioner of GSA's Federal Technology Service, said the government will save at least 60 percent on its long-haul telecommunications costs. Under the government's current FTS 2000 contracts, federal agencies already pay less than anyone else in the country, Fischer said.

The current contracts are held by AT&T and Sprint. They are set to expire next December.

"Today we have achieved the lowest prices ever for telecommunications services," Fischer said.

The prices, however, may go down even more. GSA has decided to open a second round of bidding, allowing Sprint and its competitors to offer even lower prices for telecommunications services. If any of the offers in the second round are lower or equal to Sprint's winning bid in the first round, then GSA will announce another contract award in mid-January.

"Every opportunity we get, we want to promote competition for the benefit of our customers and the taxpayers," Fischer said.

Competition will be a key part of the FTS 2001 era because the contracts are not mandatory for agencies. That means agencies can seek offers directly from commercial providers, rather than going through GSA. Therefore, GSA must prove that its contracts provide the best services at the best price for agencies.

In addition to long-distance service, Sprint will offer the following services under FTS 2001:

• Toll-free and 900 voice services.
• Internet- and intranet-based services.
• Data communications services, including asynchronous transfer mode and frame relay.
• High-availability circuits.
• International services.
• State-of-the-art ordering, billing, network troubleshooting and repair services.

Next spring, GSA will begin awarding local phone service contracts, starting with contracts for the New York, Chicago and San Francisco areas.