FTS chief is angry over slow telecom cutovers

By GCN

| March 3, 2000

Saying he's fed up with the slow transition to the government's new telecommunications contracts, Federal Technology Service commissioner Dennis J. Fischer last week warned incumbent contractors that foot-dragging now could cost them future government business.

'We're frustrated, and of course the winners are frustrated,' he said.The largest long-distance incumbent is AT&T Corp., which held about 80 percent of government business under FTS 2000; Sprint Corp. had the remainder.Sprint and MCI WorldCom Inc., which plan to merge, won the current FTS 2001 contracts last year.AT&T has since won MAA contracts for local service in New York, Chicago, San Francisco and Buffalo, N.Y. In those cities, the incumbent local providers are the regional Bell operating companies.Fischer warned that misrepresentations, missed deadlines and failure to sign necessary agreements would be factored in to bid evaluations, which could cost the offenders future contracts.AT&T spokesman Jim McGann said, 'We remain customer-focused and will put our energy and resources behind supporting federal agencies.'In remarks at the conference, analyst Warren H. Suss, president of Warren H. Suss Associates of Jenkintown, Pa., blamed the slow rate of transition to FTS 2001 on government timidity.But Fischer said angrily that the blame falls on incumbent contractors that are behaving like poor losers.'I think companies put intense short-term pressure on managers for numbers,' he said. When they lose a contract, the managers try to compensate by hanging on to old customers as long as possible, he said.Suss said agencies could save up to $300 million this year if all FTS 2000 services shift to the new contracts' lower prices. As of Jan. 1, only 10 percent of FTS 2000 business had moved to FTS 2001, he said.FTS deputy commissioner Sandra Bates said the figure now has reached about 35 percent. Agencies are well on the way to meeting the cutover goal of June, she said. The old contracts expire at the end of the year.Bates said agencies have to depend on the cooperation of incumbent providers when moving services to a new contract. 'It requires a lot of coordination,' she said. 'They can't afford to have a service disruption when they cut over.'FTS, a fee-for-service agency within the General Services Administration, earns its budget from fees charged on the contracts it administers. Despite the slow rate of transition, FTS had revenues of $4.5 billion in fiscal 1999 and expects to bring in $5 billion this year.The lion's share last year, $3 billion, came from information technology services.

By William Jackson

GCN Staff

Saying he's fed up with the slow transition to the government's new telecommunications contracts, Federal Technology Service commissioner Dennis J. Fischer last week warned incumbent contractors that foot-dragging now could cost them future government business.

Fischer, speaking last week at the Federal Telecommunications Conference in Falls Church, Va., accused local and long-distance providers of trying to block agencies' attempts to get more competitive rates by moving to new service providers. Fischer would not name vendors but said the dawdling was coming on both the local and the long-distance sides of the two largest FTS telecommunications programs: FTS 2001 for long-distance service and the Metropolitan Area Acquisitions for local service.

FTS' Dennis Fischer accuses incumbent contractors of dragging their feet.

Enough is enough

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