Treasury seeks another round of bids for telecom contract

The Treasury Department wants another set of "best and final" offers from companies for its Treasury Communications Enterprise project.

This is the third round of final offers or clarification bids Treasury has solicited from telecommunications companies. Treasury officials sought re-bids following their decision to resurrect the procurement after the Government Accountability Office invalidated AT&T's winning bid of $1 billion in March 2005.

The latest proposals were due Aug. 28. A Treasury spokeswoman said the agency couldn't comment on the contract while it remains in the evaluation process.

In an earlier bid solicitation amendment, Treasury told bidders to assume a contract award date of June 30, with transition from Treasury's existing voice and data contracts beginning by Oct. 1. Observers say the evaluation process is taking longer than expected due to political and industry pressures.

"There's nothing normal about this process," said one telecommunications executive, speaking on condition of anonymity. "They're just getting pushed and pulled by all the politics."

Early this year, the Treasury inspector general called on the department to consider canceling the procurement. On Capitol Hill, Rep. Tom Davis, R-Va., has threatened to seek to remove TCE funding from Treasury's budget, although he does not sit on any appropriations subcommittee. He also has asked the Office of Management and Budget to block the contract.

Industry executives are monitoring the contracting process closely for evidence of what some allege is a bias at Treasury in favor of telecom giant AT&T. Treasury "will fall over themselves to give this back to AT&T, but that's not what they're going to say," said one executive, also speaking on condition of anonymity. AT&T has provided voice communications service at the Internal Revenue Service, a Treasury unit, for many years, despite initially not winning a spot on FTS 2001, the General Services Administration's governmentwide telecom procurement vehicle. "There's a good bit of history with IRS that's favorable," the industry executive said.

It's likely that no matter the outcome, the final award will lead to another round of protests, some industry executives say. "The competition already is writing the protests, or at least has written the file," said one.

Other observers urge caution. "My advice would be for all parties to wait for the award and wait for the contracting officer's debrief," said John Okay, a former GSA telecommunications executive, now a partner with Topside Consulting Group in Vienna, Va.

The multiple rounds of best and final offers are not out of the ordinary, Okay said. "It's not unusual to have at least a couple BAFO rounds for the purpose of getting even better prices," he said.