Telecom providers push for new way to sell services

The nation's major telecommunications companies are drafting a letter to top executives at the General Services Administration urging the sale of telecom services on GSA schedules, has learned from industry representatives. Placing telecom sales on the schedules, which are a set of pre-competed contracts that all agencies may use to buy a range of products and services, could create a new inter-agency turf war for the government's telecom business. The telecommunications "shared interest group" of the Industry Advisory Council (IAC), a coalition of information technology companies that do business with the federal government, decided unanimously to write the letter at a meeting last Thursday. Currently, GSA's Federal Technology Service (FTS) runs the FTS 2001 contract for the government's long-distance and data service. FTS also runs the Metropolitan Area Acquisition program (MAA), which sells local telecom service to agencies on a city-by-city basis. Since participation in those contracts is voluntary, agencies are free to buy telecom services from other vendors. Another GSA department, the Federal Supply Service (FSS), runs the schedules program. It sold $10.8 billion worth of IT products and services in fiscal 2001, agency officials said. Currently, there is no schedule for telecom services. The IAC's letter is circulating among members of the telecom group, said James Payne, vice president of Qwest Communications' government systems division, who was present at Thursday's meeting. Chris Vasko, director of business development for government markets at XO Communications, who was also present, confirmed that the letter would be sent to GSA Administrator Stephen Perry and representatives of the Federal Supply Service and FTS. The telecom industry has tried for years to sell its products and services to the government through the schedules program. Company representatives said they've been continuously frustrated by FTS' opposition to such a move. FTS buys information technology and telecom products and services on behalf of other agencies through a number of contracts, for which it charges customers various management fees. FTS officials have advocated the use of competition to help the government secure good deals at the best prices. But the placement of telecom services on the schedules could threaten FTS's telecom business, which accounts for about 15 percent of its annual sales, according to agency leaders. Rep. Tom Davis, R-Va., chairman of the House Subcommittee on Technology and Procurement Policy, supported IAC's move. "I'm encouraged that industry seems to be speaking with one voice in advocating a cost-savings solution for government that will let agencies customize their telecommunications purchases," he said. Davis prodded telecom companies and GSA to move quickly on the matter. Congress needs "to encourage GSA to work with Congress and IAC to support this strong vote by following through on the suggestion to establish a schedule," he said. "We need to make sure that we move rapidly to adopt this suggestion and make it work well for agencies." Davis has long advocated using the schedules to sell telecommunications. Officials from MCI WorldCom, an FTS 2001 contractor, said the company does not support the telecom group's proposal. A WorldCom representative attended last Thursday's meeting and didn't object to drafting the letter when the matter was put to a vote. Rick Soifer, WorldCom's director of FTS services, said AT&T and Qwest are the primary backers of the move. Those companies hold MAA contracts for local service, but have failed to win any business on the FTS 2001 long-distance contract. Selling telecom on FSS schedules would increase telecom companies' opportunities to enter the government market for long-distance services. Soifer said the IAC board would probably have to approve the letter, but any IAC member company could pursue the schedules issue without IAC's blessing. A GSA spokesman declined to comment on the telecom group's proposal, except to say, "We take industry recommendations seriously and discuss their recommendations with our customers, [the Office of Management and Budget] and the Hill." Members of FSS attended the telecom meeting last week, but no one from FTS was present.
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