Controversy embroils award of Defense network contract

As five major telecommunications companies wait to hear which firm has won a prized Defense Department contract to improve a research network used by scientists across the country, confusion surrounds the government's handling of the bidding process. Last July, the Defense Information Systems Agency (DISA) awarded work on the Defense Research and Engineering Network (DREN), a high-speed linkage for more than 5,000 scientists at universities and Defense Department locations across the country.

The initial award went to Global Crossing, a telecommunications firm based in Hamilton, Bermuda. However, DISA rescinded the contract weeks later amid protests from losing bidders AT&T, MCI WorldCom, Sprint and Qwest Communications. The losing bidders contended that Global Crossing failed to meet specific security requirements spelled out in the terms of the contract. DISA issued new requirements and reopened the competition in October. On Jan. 28, Global Crossing filed for Chapter 11 bankruptcy protection. The losing bidders claim that in the second competition, many of the contentious security requirements were eliminated or eased to favor Global Crossing, a newcomer to the federal market. DISA denies that allegation. Much of the controversy surrounds a requirement that DREN contract personnel have secret-level security clearances. A DISA spokeswoman said last week that those secret clearance requirements were included in the contract to expedite individual background checks, not because contract personnel would need to have access to classified information or systems. "That's very strange," said Steven Aftergood, a senior research analyst at the Federation of American Scientists in Washington and an authority on security clearances. "Background checks are performed in order to grant security clearances, not the other way around." Aftergood said an agency might use such a reverse process to vet prospective contract employees, but he said that did not make sense to him. Aftergood also said that such a technique is "not a legitimate use of the security clearance process, which is severely backlogged." Prospective contractors spend months getting coveted security clearances for their employees. If a company has a cleared pool of employees, it's in an advantageous position to bid on certain contracts, Aftergood said. Global Crossing is still working to get appropriate DREN security clearances for its employees, said Mary Moore, a company spokeswoman. If a company didn't initially have the right clearances for a specific contract, it would be "more or less out of the running," said Aftergood. Numerous industry officials and observers remain puzzled as to why Global Crossing won the DREN contract without having a fully cleared pool of employees. In DISA's first set of contract requirements, contract personnel were required to maintain the confidentiality of information on DREN according to Executive Order 12958, which President Clinton issued in 1995. The order divides classification levels into "confidential," "secret" and "top secret." That would mean all contract personnel would have to have security clearances to access classified information, Aftergood said. However, clearance requirement was eliminated in the second round of competition. DISA said reference to the executive order was made in error, and that DREN should be viewed as a "sensitive but unclassified" network. But Aftergood said that such networks are "usually only [found] in classified environments" and that personnel working on those classified portions would still need to have security clearances. A spokeswoman for the Defense Department's inspector general said the IG office isn't investigating the DREN contract or any of the bidders, nor has it been asked to. A spokesman for the Defense Contract Audit Agency also said his office hasn't opened any investigations about DREN. DISA also refused to say whether it was examining any of Global Crossing's financial records. The Securities and Exchange Commission and the FBI are investigating the company's accounting practices. The General Accounting Office, which hears all contract protests, never had a chance to examine the DREN contract because DISA rescinded the award, said Dan Gordon, GAO associate general counsel. According to the DISA spokeswoman, the agency felt "the protestors had some chance of success, which would most likely have resulted in a GAO order to take corrective action." She added that "by terminating and proceeding with corrective action, [DISA] saved the time which would have been expended litigating the issues and awaiting the GAO decision." But by rescinding the award without an investigation, DISA denied Global Crossing's competitors access to procurement documents. DISA is expected to issue an announcement on the award of the DREN contract by March 4.

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