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Post Federal Telecommunications System (Post-FTS2000) acquisition strategy : hearings before the Subcommittee on Government Management, Information, and Technology of the Committee on Government Reform and Oversight, House of Representatives, One Hundred Fourth Congress, first session, March 21; 28; online

. (page 1 of 32)
Online LibraryInformation United States. Congress. House. Committee on GoverPost Federal Telecommunications System (Post-FTS2000) acquisition strategy : hearings before the Subcommittee on Government Management, Information, and Technology of the Committee on Government Reform and Oversight, House of Representatives, One Hundred Fourth Congress, first session, March 21; 28; → online text (page 1 of 32)
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POST FEDERAL TELECOMMUNICATIONS SYSTEM
(POST-FTS2000) ACQUISITION STRATEGY



Y4.G 74/7: T 23/5

Post Federal Teleconnunicitions Sys...

nji«/\j\lNGS

BEFORE THE

SUBCOMMITTEE ON GOVERNMENT MANAGEMENT,
INFORMATION, AND TECHNOLOGY

OF THE

COMMITTEE ON GOVERNMENT

REFORM AND OVERSIGHT
HOUSE OF REPRESENTATIVES

ONE HUNDRED FOURTH CONGRESS
FIRST SESSION



MARCH 21; 28; AND JULY 20. 1995



Printed for the use of the Committee on Government Reform and Oversight




Of,









U.S. GOVERNMENT PRINTING OFFICE
26-900 CC WASHINGTON : 1996



For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402
ISBN 0-16-053649-9



POST FEDERAL TELECOMMUNICATIONS SYSTEM
(POST-FrS2000) ACQUISITION STRATEGY

Y 4. G 74/7: T 23/5

Post Federal Teleconnunications Sys.

niLAivlNGS

BEFORE THE

SUBCOMMITTEE ON GOVERNMENT MANAGEMENT,
INFORMATION, AND TECHNOLOGY

OP THE

COMMITTEE ON GOVERNMENT

REFORM AND OVERSIGHT
HOUSE OP REPRESENTATIVES

ONE HUNDRED FOURTH CONGRESS
FIRST SESSION



MARCH 21; 28; AND JULY 20, 1995



Printed for the use of the Committee on Government Reform and Oversight




U.S. GOVERNMENT PRINTING OFFICE
26-900 CC WASHINGTON : 1996

For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402
ISBN 0-16-053649-9



COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT

WILLIAM F. CLINGER, JR., Pennsylvania, Chairman



BENJAMIN A. GILMAN, New York
DAN BURTON, Indiana
CONSTANCE A. MORELLA. Maryland
CHRISTOPHER SHAYS, Connecticut
STEVEN SCHIFF. New Mexico
ILEANA ROS-LEHTINEN, Florida
WILLIAM H. ZELIFF, JR., New Hampshire
JOHN M. McHUGH, New York
STEPHEN HORN, California
JOHN L. MICA, Florida
PETER BLUTE, Massachusetts
THOMAS M. DAVIS, Vii^nia
DAVID M. MCINTOSH, Indiana
JON D. FOX, Pennsylvania
RANDY TATE, Washington
DICK CHRYSLER, Michigan
GIL GUTKNECHT, Minnesota
MARK E. SOUDER, Indiana
WILLIAM J. MARTINI, New Jersey
JOE SCARBOROUGH, Florida
JOHN B. SHADEGG, Arizona
MICHAEL PATRICK FLANAGAN. Illinois
CHARLES F. BASS, New Hampshire
STEVEN C. LaTOURETTE, Ohio
MARSHALL "MARK" SANFORD, South

Carolina
ROBERT L. EHRLICH, Jr., Maryland



CARDISS COLLINS. Ilhnois
HENRY A. WAXMAN, California
TOM LANTOS, California
ROBERT E. WISE, JR., West Virginia
MAJOR R. OWENS. New York
EDOLPHUS TOWNS, New York
JOHN M. SPRATT, JR., South Carolina
LOUISE MCINTOSH SLAUGHTER, New

York
PAUL E. KANJORSKI, Pennsylvania
GARY A. CONDIT, California
COLLIN C. PETERSON, Minnesota
KAREN L. THURMAN, Florida
CAROLYN B. MALONEY, New York
THOMAS M. BARRETT, Wisconsin
GENE TAYLOR, Mississippi
BARBARA-ROSE COLLINS, Michigan
ELEANOR HOLMES NORTON, District of

Columbia
JAMES P. MORAN, Virginia
GENE GREEN. Texas
CARRIE P. MEEK. Florida
FRANK MASCARA, Pennsylvania
CHAKA FATTAH, Pennsylvania



BERNARD SANDERS, Vermont
(Independent)



James L. Clarke, Staff Director

Kevin Sabo, General Counsel

Ellen B. Brown. Procurement Counsel

Susan Marshall. Procurement Specialist

Judith McCoy. Chief Clerk

Bud Myers. Minority Staff Director



Subcommittee on Government Management, Information, and Technology



STEPHEN HORN,

MICHAEL PATRICK FLANAGAN, Illinois
PETER BLUTE, Massachusetts
THOMAS M. DAVIS, Virginia
JON D. FOX, Pennsylvania
RANDY TATE, Washington
JOE SCARBOROUGH, Florida
CHARLES F. BASS, New Hampshire



California, Chairman

CAROLYN B. MALONEY, New York
MAJOR R. OWENS, New York
FRANK MASCARA. Pennsylvania
ROBERT E. WISE. JR.. West Vii>ginia
JOHN M. SPRATT. JR.. South Carolina
PAUL E. KANJORSKI, Pennsylvania



Ex Officio

WILLIAM F. CLINGER. Jr.. Pennsylvania CARDISS COLLINS. Illinois

J. Russell George, Staff Director
Andrew G. Richardson. Clerk
Cheryl Phelps. Minority Professional Staff



(II)



CONTENTS



Page

Hearing held on:

March 21, 1995 1

March 28, 1995 209

July 20, 1995 316

Statement of:

Brock, Jack L., Jr., Director, Information Resources, Management/Na-
tional Security and International Affairs, Accounting and Information
Management Division, General Accounting Office, accompanied by
Frank Deffer and Kevin Conway 10

Johnson, Roger W. Administrator, General Services Administrator, and
Robert J. Woods, Associate Administrator for FTS2000, General Serv-
ices Administration 337

Lombardi, Richard, president of AT&T Government Markets, AT&T Com-
munications; Donald Teague, vice president and general manager of
Government Systems Division, Sprint; and Jerry Edgerton, vice presi-
dent of MCI Government Systems, MCI Telecommunications Corpora-
tion 38

Messier, John, vice president and general manager of Information Sys-
tems Division, GTE Government Systems Corporation; George
Newstrom, corporate vice president and group executive of Government
Services Group, EDS Corporation; ana Milton Cooper, president of
Systems Group, Computer Sciences Corporation 177

Murray, Anthony, president of Bell Atlantic Federal Systems, Bell Atlan-
tic; Pat Lanthier, director of I^iblic Policy and Technology, Pacific
Bell; William Cobb, vice president and general manager for Business
and Government Services, US West Communications 118

Woods, Robert J., Associate Administrator for FTS2000, General Services
Administration, accompanied by Sandra Bates, Office of Space Commu-
nications, National Aeronautics and Space Administration, and chair,
Interagency Management Council; and John Okay, Director, Office of
Information Resources Management, Department of Agriculture, and
former chair. Interagency Management Council; Emmett Paige, Jr.,
Assistant Secretary of Defense for Command, Control, Conununica-
tions, and Intelligence, Department of Defense, accompanied by Albert
J. Edmonds, Director, Defense Information Systems Agency, Depart-
ment of Defense; and D. Diane Fountaine, Principal Deputy, Deputy
Assistant Secretary of Defense for Command, Control, and Communica-
tions, Department of Defense 223

Letters, statements, etc., submitted for the record by:

Bates, Sandra, Office of Space Communications, National Aeronautics
and Space Administration, and chair. Interagency Management Coun-
cil, prepared statement of 244

Brock, Jack L., Jr., Director, Information Resources, Management/Na-
tional Security and International Affairs, Accounting and Information
Management Division, General Accounting Office, prepared statement
of 13

dinger, Hon. William F., Jr., a Representative in Congress from the
State of Pennsylvania:

Letter dated July 18, 1995 382

Prepared statements of 3, 211, 332

Questions and answers for the record 99

Cobb, William, vice president and general manager for Business and
Government Services, US West Communications, prepared statement
of 151

(III)



IV

Page

Letters, statements, etc., submitted for the record by — Continued

Collins, Hon. Cardiss, a Representative in Congress from the State of
Illinois, prepared statements of 27, 215, 328

Cooper, Milton, president of Systems Group, Computer Sciences Corpora-
tion, prepared statement of 195

Edgerton, Jerry Edgerton, vice president of MCI Government Systems,

MCI Telecommunications Corporation, prepared statement of 79

Horn, Hon. Stephen, a Representative in Congress from the State of
California:

Chart of 'Tossible Post-FTS2000 Bidders By Maricet Segment" 391

Prepared statements of 7, 221

Johnson, Roger W. Administrator, General Services Administrator, pre-
pared statement of 341

Lanthier, Pat, director of Public Policy and Technology, Pacific Bell,
prepared statement of 129

Lombardi, Richard, president of AT&T Government Markets, AT&T Com-
munications, prepared statement of 41

Maloney, Hon. Carolyn B., a Representative in Congress from the State

of New York, prepared statements of 37, 214, 320

Messier, John, vice president and general manager of Information Sys-
tems Division, GTE Government Systems Corporation, prepared state-
ment of 179

Murray, Anthony, president of Bell Atlantic Federal Systems, Bell Atlan-
tic, prepared statement of 121

Newstrom, George, corporate vice president and group executive of Gov-
ernment Services Group, EDS Corporation, prepared statement of 189

Okay, Dr. John, Director, Office of Information Resources Management,
Department of Agriculture, prepared statement of 235

Paige, Emmett, Jr., Assistant Secretary of Defense for Command, Con-
trol, Communications, and Intelligence, Department of Defense, pre-
pared statement of 258

Teague, Donald, vice president and general manager of Government Sys-
tems Division, Sprint, prepared statement of 63

Woods, Robert J., Associate Administrator for FTS2000, General Services
Administration:

Information concerning a letter dated June 19, 1995 272

Information concerning GSA's analysis 270

Prepared statement oi. 225, 352



POST FEDERAL TELECOMMUNICATIONS SYS-
TEM (POST-FTS2000) ACQUISITION STRAT-
EGY



TUESDAY, MARCH 21, 1995

House of Representatives,
Subcommittee on GtOvernment Management,
Information, and Technology,
Committee on Government Reform and Oversight,

Washington, DC.

The subcommittee met, pursuant to notice, at 1:03 p.m., in room
2154, Rayburn House Office Building, Hon. Stephen Horn (chair-
man of the subcommittee) presiding.

Present: Representatives Horn, Davis, Fox, Tate, Clinger,
Maloney, Wise, and ColHns.

Staff present: Ellen B. Brown, committee procurement counsel; J.
Russell George, staff director; Susan Marshall, procurement spe-
cialist; Andrew G. Richardson, clerk; Bud Myers, minority staff di-
rector; Ronald Stroman, minority deputy staff director; Cheryl
Phelps, minority professional staff member; and Elisabeth Camp-
bell, minority staff assistant.

Mr. Horn. One o'clock having arrived and a quorum being
present, the Subcommittee on Government Management, Informa-
tion, and Technology is called to order.

Before we call our first witness from the General Accounting Of-
fice, would you like to make an opening statement Mr. Chairman?

Mr. Clinger. Thank you very much, Mr. Chairman, if I may. I'm
pleased to be here today to hear testimony from the Greneral Ac-
counting Office and well-respected individuals and officials rep-
resenting many facets of the telecommunications industry on the
Post-Federal Telecommunications System Acquisition Strategy.
What a mouthful that is.

As you are aware, Mr. Chairman, these hearings today and next
week represent the beginning of the Government Reform and Over-
sight Committee's commitment — my personal commitment — to en-
suring that the Federal Grovemment receives technically effective
and cost-efficient telecommunications services in the Post-FTS2000
environment; and I really thank you very much for holding these
hearings.

The current FTS2000 program, which expires in December 1998,
has proven that a centrally managed program can be highly suc-
cessful in providing excellent services at below market prices.

The Government and the taxpayer reap the benefits of the best
prices and excellent service quality, which helps the executive

(1)



agencies to do their jobs of serving the citizens more efficiently and
effectively; but this program was structured to meet the Federal
Government's needs at the beginning of the program and those
needs have changed dramatically, as has technology, as we move
into the next century and into the next millennium.

The question for all of us is, how can the Post-FTS2000 program
be ever better? How can we build on the model that we've had for
the FTS2000 program and make it better and, hopefully, more effi-
cient? The successor program must be capable of accommodating
an industry undergoing great change — and I think we'll hear about
those changes today — having new players, new technologies, and a
potentially new environment.

At the same time, the Post-FTS2000 program must be capable of
meeting the agency users' needs, which also are changing, as our
views about the role of Government change — a great deal of fer-
ment and upheaval going on in Government generally — and that,
I think, is also reflected in how we deal with the Post-FTS2000 en-
vironment.

While we in Congress can raise these and other issues, it is real-
ly up to you, a number of people in this room, the users and man-
agers of this program, and the vendors supplying the services, to
make this program a success, and we have to have this program
be a success.

We take our oversight role of Federal procurement very seriously
in this committee and we view this program as one of the most im-
portant oversight responsibilities that we have. It certainly is, I
think, the No. 1 priority of need for care and diligence and caution,
as we go about it.

We hope to facilitate, through these hearings, further dialog be-
tween the Grovernment and industry on how best to provide tele-
communications services to Federal Government users following
the expiration of the current FTS2000 contracts.

Mr. Chairman, again I applaud you for holding the hearings and
I look forward to hearing from our witnesses today.

[The prepared statement of Hon. William F. dinger, Jr. follows:]



Opening Statement of the

Honorable William F. Clinger, Jr.

Chairman

Committee on Government Reform and Oversight

March 21, 1995



Mr. Chairman, I am pleased to be here today to hear testimony
from the General Accounting Office and well-respected officials
representing the telecommunications industry on the Post Federal
Telecommunications System (Post-FTS2000) Acquistion Strategy.

As you know, Mr. Chairman, these hearings today and next
week represent the beginning of the Government Reform and
Oversight Committee's commitment to ensuring that the Federal
government receives technically-effective and cost-efficient
telecommunications services in a Post-FTS2000 environment. And
I thank you for holding these hearings.

The current FTS 2000 program, which expires in



December 1998, has proven that a centrally managed program can
be highly successful in providing excellent services at below market'
prices. The government and the taxpayer reap the benefits of the
best prices and excellent service quality which helps the executive
agencies to do their jobs of serving the citizens more efficiently and
effectively. But this program was structured to meet the Federal
government's needs at the beginning of the program, and those
needs have changed dramatically, as has technology, as we move
into the next century.

The question for all of us is "how can the Post-FTS2000
program be even better?" The successor program must be capable
of accommodating an industry undergoing great change - having
new players, new technologies - in a potentially new environment
At the same time, the Po8t-FTS2000 program must be capable of
meeting the agency users needs which also are changing, as our
views about the role of government change.

While we in Congress can raise these and other issues, it is up
to you - the users and managers of this program, and the vendors



supplying the services - to mal(e this program a success. We talte
our oversight role of Federal procurement seriously, and we view
this program as one of our most important oversight
responsibilities. We hope to facilitate, through these hearings,
further dialog between the government and industry on how best to
provide telecommunications services to Federal government users
following the expiration of the current FTS 2000 contracts.

Mr. Chairman, I look forward to hearing from our witnesses
today.



Mr. Horn. Thank you very much, Mr. Chairman. You have set
out what the purpose is. We are meeting today to hear testimony
regarding the Federal Government's Post-Federal Telecommuni-
cations System (Post-FTS2000) Acquisition Strategy.

Currently, the multi-billion dollar FTS2000 program provides
long distance telecommunications services to approximately 1.7
million users across the Federal Government. However, current
FTS2000 contracts will expire in 1998 and the Government, in an
effort to provide a smooth and orderly transition to a Post-FTS2000
environment, already has begun its acquisition program develop-
ment.

As part of this effort, the General Services Administration's
Interagency Management Council, a group of executive agency tele-
communications and acquisition professionals, attempted to define
a cost-efficient and technically effective program concept.

In 1993, the Interagency Management Council began floating
their program ideas in draft acquisition strategies and, in Decem-
ber 1994, the Interagency Management Council released its final
acquisition strategy. This was done after incorporating input from
a broad spectrum of interested parties, including industry, execu-
tive agency users, universities and colleges, and others.

Arriving at the final strategy was no easy task. Obviously, when
the Grovernment undertakes an acquisition program as large as
this one could be, there will be much criticism of the decisions
made. I commend the executive branch, especially the General
Services Administration, for beginning to make these decisions
early enough in the process to allow for sufficient debate and dis-
cussion of the issues raised.

Today, we begin our review of the Post-FTS2000 program and,
although we know there are many issues surrounding the Federal
Government's purchase of telecommunications, today we will focus
on those issues raised by the program strategy itself. I do look for-
ward, as Chairman dinger does, to hearing from all the witnesses.

[The prepared statement of Hon. Stephen Horn follows:]



Opening Statement of the

Honorable Stephen Horn, Chairman

Subcommittee on Government {Management,

Information and Technology

March 21, 1995

The Subcommittee on Government Management, Information
and Technology will come to order.

The Subcommittee is meeting today to hear testimony
regarding the Federal government's Post Federal
Telecommunications System (Post-FTS2000) Acquisition Strategy.

Currently, the multi-billion dollar FTS 2000 program provides
long distance telecommunications services to approximately 1.7
million users across the Federal government However, current FTS
2000 contracts will expire in 1998, and the government, in an effort
to provide a smooth and orderly transition to a post FTS 2000
environment already has begun its acquisition program
development



8

As part of this effort, the General Services Administration's
(GSA) Interagency Management Council (IMC) - a group of
executive agency telecommunications and acquisition professionals
- attempted to define a cost-efficient and technically-effective
program concept.

In 1993, the IMC began floating their program ideas in draft
acquisition strategies, and in December 1994, the IMC released its
final acquisition strategy. This was done after incorporating input
from a broad spectrum of interested parties including industry,
executive agency users, academia, and others.

Arriving at a final strategy was no easy task. Obviously, when
the government undertakes an acquisition program as large as this
one could be, there will be much criticism of the decisions made. I
commend the executive branch, especially GSA, for beginning to
make these decisions early enough in the process to allow for
sufficient debate and discussion of the issues raised.

Today, we begin our review of the Post-FTS2000 program.



Although we know there are many issues surrounding the Federal
governments purchase of telecommunications, today we will focus
on those issues raised by the program strategy itself. I look
forward to hearing from all of our witnesses.



10

Mr. Horn. Let me give you a few general gfuidelines that we ask
all witnesses and members of the committee to abide by today. The
statement you file with us will automatically be put in the record
and we would like you to summarize those statements in 5 min-
utes. We are going to strictly enforce the time rule today, because
of the many witnesses, on both witnesses and Members.

You will find that you will have a green light for 4 minutes and,
in that last minute, it will turn yellow. Wind it up because, at the
fifth, the gavel is coming down on everybody, including the chair-
man and Uie other chairman.

Each Member will be limited to 5 minutes for questions, and
there won't be a second round, as we've had in our leisurely hear-
ings to date. Gret it all in in five.

We would ask you to be so kind as to reply to other questions
we have in writing. We will put those all in the record. But we do
want to permit oral questions. We will make one round of the
whole committee and then go to the next panel.

As I said, we have a lot of witnesses, so the follow-up is really
important to us and if you think, on the way home, "Gee, I should
have said this," don't be bashful, write us a letter, and we'll put
that in the record, also. We want a very thorough record on which
to base legislative judgments.

If our first witness will come forward, who is the Director of In-
formation Resources Management, General Accounting Office, Mr.
Jack Brock, we will swear you in. I might say that we nave a tradi-
tion on this committee. All witnesses take the oath or their testi-
mony is not permitted.

So if you will, raise your right hand gentlemen.

[Witnesses sworn.]

Mr. Horn. Thank you. The clerk will note that all three wit-
nesses affirmed the oath.

We will start with Mr. Brock, and if you would identify your col-
leagues, it would be helpful.

STATEMENT OF JACK L. BROCK, JR., DIRECTOR, INFORMA-
TION RESOURCES, MANAGEMENT/NATIONAL SECURITY AND
INTERNATIONAL AFFAIRS, ACCOUNTING AND INFORMATION
MANAGEMENT DIVISION, GENERAL ACCOUNTING OFFICE,
ACCOMPANIED BY FRANK DEFFER AND KEVIN CONWAY

Mr. Brock. Thank you, Mr. Chairman. On my far right is Mr.
Frank Deffer. He's the Assistant Director of my group in charge of
telecommunications issues. Mr. Kevin Conway, immediately next to
me, is the Project Director on this project.

With your permission, I will forego the usual background stuff.
I'm already intimidated, with the green light here. We will just get
immediately to the issues we see.

I would like to second, though, your commendation of GSA. This
is an extremely open process that GSA has followed. I cannot recall
a Grovernment procurement that I've looked at over my career at
GAO that has been so open to review by both the users and by the
vendor community.

We've identified eight issues that we think should be addressed
by GSA and the IMC before the final RFP is released. I'm just
going to very briefly go through these.



11

First, mandatory use. Mandatory use is the most controversial
aspect of the current program. Even though the GSA has indicated
that it will not have mandatory use in Post-FTS2000, rather, it will
establish minimum revenue guarantees, the stated strategy, we be-
lieve, is ambiguous and appears to leave room for mandatory use
under certain conditions.

There needs to be a balance between meeting minimum guaran-
tees and agencies having maximum opportunities to have flexibility
in getting the best price possible. We do not support mandatory use
at all in the next contract.

Program management. We identified this in last year's testimony
before the Senate, that this was a critical area to resolve — who
should manage it, how should they manage it, what are the rela-
tionships between the agencies, GSA, the relationships of GSA and
the IMC; what should go on? This has clearly not been established
yet and is a point that needs to be reconciled again before the final
RFP is released.

The third issue that we've identified in the testimony is long dis-
tance versus local telecommunications services. For most users,
they don't distinguish between local and long distance. They do a
video conference, they transmit data, they pick up the phone, they
want it to be seamless.

It's not practical, from either the user point of view or the man-
agement point of view, to separate these as they are now within
GSA. The strategy recognizes the need to integrate but is really si-
lent on how to achieve its integration.

The fourth issue is the packaging of services. GSA, the IMC
strategy calls for comprehensive bundles of telecommunications
services. These bundles may be easy or convenient for agencies to
use, for agencies to manage, but they may well limit opportunities
for specialized vendors to bid and it may limit users ultimately
from achieving the best mix of overall price and service combina-
tions.

GSA further did not identify the clear benefits for users by fol-
lowing this strategy.



Online LibraryInformation United States. Congress. House. Committee on GoverPost Federal Telecommunications System (Post-FTS2000) acquisition strategy : hearings before the Subcommittee on Government Management, Information, and Technology of the Committee on Government Reform and Oversight, House of Representatives, One Hundred Fourth Congress, first session, March 21; 28; → online text (page 1 of 32)