Treasury reopens controversial telecommunications contract

The Treasury Department decided late last week to reopen bidding on its telecommunications contract, known as Treasury Communications Enterprise, rather than use Networx, the General Services Administration's forthcoming program for telecommunications services.

Treasury's telecommunications efforts have been the subject of controversy, after some of the companies that bid on TCE protested the award of the contract to AT&T Corp. last December. The protests, which were sustained by the Government Accountability Office in March, were based in part on an undisclosed agreement between Treasury and GSA to consider moving the contract to GSA in the future. The current status of that agreement is not clear.

David Marin, a spokesman for Rep. Tom Davis, R-Va., chairman of the House Government Reform Committee, said Davis was disappointed by the decision. "Davis thinks it's unfortunate that Treasury has chosen to ignore GAO's findings that the TCE acquisition is fundamentally tainted by irregularities that will not be remedied by merely asking for another round of proposals," he said.

Davis has advocated a centralized telecom procurement, which he has said would be cheaper than agencies procuring telecom services on their own. "We're left wondering why they refuse to consider other options and instead seem oddly intent on moving forward with a flawed acquisition that promises to cost taxpayers valuable money and time," Marin said.

Brookly McLaughlin, a Treasury spokeswoman, said that after the GAO decision in March, Treasury and GSA "evaluated whether any GSA contract vehicle could meet Treasury's telecommunications needs. Based on that review, Treasury determined it was unable to meet its communications needs with any existing GSA contract."

Vendors that previously submitted proposals for TCE will now be able to present revised proposals, she said. Treasury terminated its original TCE contract with AT&T in May, after the GAO decision.

McLaughlin said bidders on the TCE contract were notified of the decision late last week.

GSA spokeswoman Mary Alice Johnson said her agency had been aware of the decision for several weeks. "GSA was fully capable of meeting the technical requirements of the Treasury Department's needs. However, the time to openly compete the task order… was not acceptable to the Department of Treasury," she said.

Treasury's telecommunications network encompasses more than 1,000 locations in the United States, Guam, Bermuda, the Bahamas and Europe. The original proposal for TCE involved managing the network for three years with seven option years.

Northrop Grumman Information Technology Inc., Broadwing Communications LLC, Level 3 Communications Inc., Qwest Government Services Inc. and MCI WorldCom Communications Inc. filed protests with GAO over the original TCE award.

Stefanie Scott, a spokeswoman for MCI, said the company is prepared to respond to the new request for proposals. She said while MCI did not yet know the details of the request, it was satisfied that Treasury is giving vendors an opportunity to bid on the contract again.

A spokesman for AT&T Government Solutions said the company will pursue the contract again. "We intend to remain focused on how we can best meet the Treasury Department's needs for a modern, cost effective network," said Jim McGann. "We submitted a superior proposal last year for answering that need and will do what it takes to win this business again."

Spokeswomen for Northrop Grumman and Broadwing Communications declined to comment on Treasury's decision to continue with the contract. Calls requesting comment from Qwest were not returned.

GSA is currently collecting proposals for Networx, which are due by October.