Rift Imperils New U.S. Telecommunications Network

A standoff between two influential government officials over a proposed $4.5-billion federal telecommunications network is threatening to unravel one of the largest contracts ever put out for bids by the U.S. government, according to government sources.

The two officials, Rep. Jack Brooks (D-Tex.), chairman of the House government operations committee, and Terence C. Golden, chief of the General Services Administration, are at odds over the pending procurement contract for the network, known as FTS-2000, which, if built, would be the largest private telephone system in the world.

The disagreement has raised serious doubts about whether the FTS contract will go forward at all. The FTS network is supposed to deliver voice, data and video services to federal agencies by the 1990s. The existing government telephone network is expensive and outdated.

Bids on the winner-take-all contract are due at the end of August from the two consortia still competing--one led by American Telephone & Telegraph Co., the other by Bethesda, Md.-based Martin Marietta Corp., which has teamed up with MCI Communications Corp. of Washington to make its proposal.

A consortium made up of US Sprint Communications Co. and Electronic Data Systems Corp. withdrew last month when EDS decided the bid process had become too controversial and confused.

Sources on both sides of the controversy said Brooks and Golden appear headed for confrontation over the contract.

Conflicting Approaches

Brooks declined to comment. Golden said: “I’ve talked personally with the chairman (Brooks), and we’re not exactly sure from our perspective where they’ve come out.”

Sources said that Brooks and his staff, as well as their counterparts in the Senate, now want Golden to abandon the winner-take-all approach that GSA has pursued since the contract was opened to bids early this year. Golden, however, has so far stood firm behind his one-vendor approach.

“We’re very comfortable with the existing procurement,” Golden said. “We feel strongly that it is in the best economic interest of the government and the taxpayer.”

Consultants from Robbins-Jioia Inc., which sources said has been retained by Brooks’ government operations committee, met last week with officials at the companies involved in the bidding. The consultants have asked the bidders how they might respond if GSA were forced to change its approach to one that included more than one long-distance carrier in the final contract.

“They came around and played the ‘what if’ game,” said Dave Wanderling, a Martin Marietta official involved in the FTS bid. He added that Martin Marietta’s “primary objective is to submit a proposal on schedule . . . . This process has been going on a long time. There was plenty of time for questions.”

“We have become aware in the last week or so of controversy within the government about the way the (telecommunications contract) proposal has been drafted,” said Herb Linnen, an AT&T; spokesman in Washington. “Specifically, that difference in viewpoint revolves around (a contract) provision which recreates the monopoly supplier relationship” with the government.

Intense Lobbying

Linnen added, however, that AT&T; is pursuing its FTS bid vigorously and will do so until it hears otherwise from the government.

Lobbying by companies involved in the bidding has become intense in recent days. US Sprint, which would like to re-enter the fray and which stands to lose billions in potential revenue if GSA goes ahead as planned, has retained political consultants and others to help push Brooks and other key congressional leaders toward a multivendor approach.

The companies involved have been at each other’s throats away from Capitol Hill as well. AT&T; filed a petition in federal court charging that Martin Marietta and the regional telephone companies that also belong to its consortium will violate rules governing AT&T;’s breakup if they are permitted to go ahead with their proposed bid. Judge Harold H. Greene, who oversees the breakup, has set a schedule for briefs to be filed later this summer in that case.

Sources closely involved in the lobbying effort over the contract said Brooks might go public soon with harsh criticism of Golden’s approach to the contract. But since the congressman lacks a consensus among the bidding companies as to what alternative should be pursued, Golden may decide to fight back, the sources said.

Golden said he is satisfied that while only two consortiums are bidding for the contract, the government will benefit sufficiently from competition between them.

Golden’s position has been weakened in the controversy by an apparent lack of support from the White House, the sources said. But Golden denied this. “We’re of one mind in the executive branch,” he said.

Sources said the consultants working for Brooks have met with officials at the Office of Management and Budget who help GSA develop procurement policy. Gerald Riso, associate director of OMB, said it was backing Golden.