Treasury Department taps AT&T for new telecom system
Contract for Treasury Communications Enterprise could be worth $3 billion over a decade.
The Treasury Department has awarded a much anticipated contract to build a new telecommunications system to industry heavyweight AT&T Corp. Known as the Treasury Communications Enterprise, or TCE, the contract could be worth up to $3 billion over its potential 10-year lifespan.
The new network will replace the Treasury Communications System, which uses multiple networks connected through a distributed framework. That system is the largest encrypted network of any civilian agency. The new system will require AT&T to provide service and technical support at more than 850 Treasury locations.
AT&T beat out incumbent Northrop Grumman Corp., whose contract expires next year.
The Treasury deal has been closely followed and controversial. The department selected AT&T after receiving one round of offers from potential bidders. While it's not uncommon for an agency not to ask for subsequent offers, which might contain modifications to pricing or technical specifications, industry experts have noted that it's rare to do so with a procurement as technically complex and valuable as TCE.
In the request for proposals for TCE, Treasury reserved the right to make an award based on initial offers.
Other government agencies are in various stages of procuring multibillion-dollar telecom packages. Chief among them is the General Services Administration, which is contemplating a $10 billion deal called Networx that will offer services to agencies across the government.
But Treasury isn't the only agency taking telecom services into its own hands. In October, the Postal Service awarded a contract potentially worth $3 billion to Lockheed Martin Corp. to provide managed network services for the agency. As part of that wide-ranging deal, Lockheed will provide voice, video and security services at more than 37,000 postal locations and will integrate the agency's data networks into a single network.
It's unclear how these and other telecom systems might complement or interfere with the larger Networx deal, which will replace the government's largest contract for long-distance telephone and data services, known as FTS 2001.
An AT&T spokesman said the company had "assembled the best companies in the industry" to build the new network, and indicated that the TCE contract would not affect any future plans the company may have to bid on Networx.