House chairman calls on Treasury to nix telecom contract

House Government Reform Committee Chairman Tom Davis, R-Va., has admonished the Treasury Department not to develop its own telecommunications system, which would be the largest secure civilian network in the federal government, and instead to rely on services provided by the General Services Administration.

Davis' spokesman said Thursday, "it is now time for Treasury to put aside" a $1 billion contract called the Treasury Communications Enterprise. Davis does not support agencies erecting stovepipe infrastructures that are too costly and don't foster governmentwide information sharing, said Drew Crockett, the committee spokesman. Davis would prefer that agencies across government sign on to GSA's Networx telecom contract, slated for award next year.

Davis, whose committee is responsible for overseeing federal telecom issues, has chastised Treasury publicly for using TCE, which the department awarded to AT&T Corp. in December. But the latest comments were aimed specifically at the next steps in the contract's life, and constitute a higher level of public involvement by the influential lawmaker in the contract's future.

"It is now time for Treasury to put aside TCE stovepipe intentions and work toward a Networx strategy that is in the broader government interest," Crockett said. "Treasury's leadership in full participation in this program would contribute greatly to its success."

The remarks come at a time when previously undisclosed documents show that Davis was involved in private negotiations with federal officials over how Treasury should proceed with its telecom strategy.

Several bidders protested the TCE award on the grounds that Treasury officials had agreed to consider using Networx when TCE's first three-year base period expired, in 2008. That agreement was documented in a memorandum of understanding signed by officials at Treasury, GSA, the Office of Management and Budget, and the Office of Federal Procurement Policy. Last week, the Government Accountability Office sustained the protests, deciding that the memorandum materially altered the basis of the TCE award.

Before the TCE protests, Davis had said he favored a central buying approach for telecom. But according to legal briefs filed by the protesters after GAO held hearings, redacted copies of which were obtained by Government Executive, Davis and his staff were key players in negotiations between Treasury and GSA before TCE's award.

The critical element of those negotiations, the memorandum of understanding, was "negotiated with the active oversight and interest of the House Government Reform Committee and its chairman, Congressman Davis," attorneys for Northrop Grumman Information Technology Inc. stated in their brief, citing testimony by officials during the protest hearing.

"Pressure brought to bear by Rep. Davis' committee persisted throughout the negotiation of the MOU," Northrop's lawyers said. They cited testimony by an official, whose name was redacted, that Davis "threatened to terminate funding for the TCE contract."

Several companies' lawyers asserted that, on more than one occasion, Davis' office requested that Ira Hobbs, the Treasury Department chief information officer, attend meetings with senior GSA managers and David Safavian, administrator of the Office of Federal Procurement Policy, about TCE. Safavian also favors centralized buying of telecom services.

"So concerned was Treasury with respect to the impact of any possible dissatisfaction on the part of [GSA], OMB, or the House Government Reform Committee, that it agreed that award of the TCE contract would be held in abeyance, pending execution of the MOU and the provision of a copy of that agreement to Congressman Davis," Northrop's lawyers said.

"Chairman Davis did not craft the MOU," Crockett said. But he acknowledged the congressman was "informed by participants about the efforts to draft one. On some occasions we were asked for our opinion-they're free to ask and we're free to give it-but that's not the same as actively crafting the MOU. Everyone involved was aware of Chairman Davis' objections" to Treasury's plans, Crockett said.

The companies' briefs also shed new light on the circumstances that led to the memorandum's creation. A redacted version of GAO's decision sustaining the TCE protests said some Treasury officials saw it as a way to "appease GSA to get on with" the award.

"What the parties learned during the hearing, however, was that the MOU's very existence was the result of a lack of trust of the Treasury Department by OMB, GSA and Congressman Tom Davis," said attorneys for Level 3 Communications LLC. Throughout other briefs, there were references to official testimony that the parties involved wanted a firm commitment from Treasury that it would consider using Networx.

In September 2004, for instance, Hobbs met with Safavian and told him that when the TCE base period expired, that would "be a good time for us to look at and consider whatever it is that GSA has on the table." Safavian replied, "We think we can live with that, but we want something in writing." GSA and Treasury officials then began crafting the memorandum.

OFPP and Treasury officials had no comment on Davis' remarks or information in the documents.

Davis' office also signaled that other telecom plans might disrupt Networx, referring to "TCE and like procurements in other agencies."

The GSA official overseeing the Networx contract, when asked about Davis' views, said he hadn't formed an opinion yet on whether agencies should be required to purchase from Networx, instead of doing so voluntarily, as is the current plan.

"I believe there are certain merits on both sides," said John Johnson, the assistant commissioner for service development and delivery at GSA's Federal Technology Service. "We don't write that policy. . . . My objective is to develop as attractive a contract as possible."

Johnson also said GSA will delay the release of a final request for proposals on Networx by one month, until the first week of May. The delay accounted for the time it took GSA to incorporate more than 1,000 responses from likely bidders to a draft version of the request.