GSA Awards Sprint the First Round of FTS2001 Long-Distance Service ContractsGovernment Business Under FTS2001 Could Exceed $5 billion Over 8 Years
GSA # 9546
December 18, 1998
Contact: Bill Bearden
Washington, DC -- The U.S. General Services Administration today selected Sprint to provide long-distance telephone service to Federal government agencies in the first of two possible awards in the multi-billion dollar FTS2001 competition. Under FTS2001, the value of government business is estimated to be more than $5 billion over 8 years.
FTS2001 follows the two successful FTS2000 contracts currently held by AT&T and Sprint and retains many key features, especially aggressive price competition. Over the past 10 years, FTS2000 has reduced prices by 80 percent and saved taxpayers billions of dollars.
"This is the first of what we expect will be two very competitive awards," said GSA Administrator David J. Barram, "and we expect to significantly increase the savings we've realized under FTS2000, which has the best prices in the business."
The new prices negotiated with Sprint will save the government approximately $3.8 billion over the life of the contract. This is approximately 60 percent savings over current prices.
"With this award, we are continuing to assemble the components of the new full-service GSA," Barram said. "Over the past few years we've reinvented our agency to provide better services and products to our customers at lower costs. We are investing in high technology to provide the Federal workforce with the latest and the best tools to help them accomplish their missions. As our Federal customer agencies improve service to their customers with technology, these new capabilities and prices will materially help them work better and cost less. We will continue to look to American industry to lead the way with products and services that we will buy using aggressive competition."
The final rounds of competition begin immediately with award expected in January. All companies involved in the first round can compete in the final rounds. Should the second award go to a company other than Sprint the two companies will share the $1.5 billion minimum revenue guarantee -- $750 million each -- over the four base years and four one-year options of the program. Additionally, the two companies will continuously compete against each other for government business over the 8-year life of the program.
"Today we have achieved the lowest prices ever for telecommunications services," said Dennis Fischer, Commissioner of GSA's Federal Technology Service. "We have done this by leveraging the government's combined business needs in the marketplace. The best of American industry is involved in this competition, and we are very pleased with the high-quality proposal put forth by Sprint. In a very tough competition, they have done a magnificent job. I am particularly proud of the tremendous work by our FTS staff and the many involved customers who have gotten us to this point."
FTS2001 Program features
The following are some of the features FTS2001 customers will get under the new long-distance service:
* Comprehensive range of service offerings
* Long distance, toll-free, and 900 voice services
* Internet and intranet based services
* Data communications services from low-speed to very high-speed interconnections using latest technologies like Asynchronous Transfer Mode (ATM) and Frame Relay
* Special arrangements for mission-critical users (e.g., high-availability circuits, national security and emergency users)
* International services
* Wide range of support services including state-of-the art ordering, billing, network troubleshooting, repair capabilities, etc.
* Continuous competition designed to allow agencies to act as "smart shoppers" in a commercial-like marketplace
* Price management mechanisms will ensure continued competitive pricing
* Government customers on par with commercial customers - government gets access to new services at same pace as commercial marketplace
* No up-front payments required
* No opportunity for stranded government investment
"This is a great success for agency customers and American taxpayers," said Ron Hack, Telecommunications Director at the Department of Commerce and chair of the agency telecommunications advisory group for FTS, the Interagency Management Council. Not only have we continued our distinguished record of price reductions, but with FTS2001, we have also positioned the government's telecommunications technology needs alongside those of commercial users. When new services, features, and enhancements are rolled out to the commercial marketplace, then FTS2001 users will have access to those services as well. We are looking forward to the final-round competition for even greater savings."
The FTS2001 acquisition ends a five-year process involving many organizations -- the Congress, oversight groups, industry, Federal customers, and GSA -- that have collaborated in various ways. The Telecommunications Act of 1996, which changed the telecommunications regulatory landscape, significantly influenced the FTS2001 acquisition strategy.
The FTS2001 acquisition has included many discussions with congressional and industry leaders, which prompted adjustments to the approach to reflect the Telecommunications Act of 1996 by encouraging end-to-end competition, not just long distance; enhanced competition strategy; raised the revenue guarantee from $1.0 to $1.5 billion; and limited the number of available awards to two.
As part this strategy and a way of establishing competition for local services, GSA is also conducting local services telecommunications acquisitions in major metropolitan areas across the country. These acquisitions, known as MAAs, are scheduled for award beginning in early 1999 and will help GSA realize the ultimate goal of establishing end-to-end competitive telecommunications services delivery to its customer agencies.
"FTS2001 was designed to meet our customers needs," said Sandy Bates, FTS Deputy Commissioner. "Agencies told us FTS2001 must accommodate government-unique functions -- certain military and critical civilian agency needs -- and emergency needs in disasters, and be ready for the next millennium when technology advances will rapidly change the options for meeting agency missions. With this award, we meet those objectives. We are now ready to enter the 21st century with confidence that we can execute our global missions using the latest and greatest telecommunications technology that American industry can offer."