WASHINGTON-In a move that could chill other potential bidders, Sprint Corp. has taken itself out of the running for a multiyear federal government wireless provision contract that could be worth “a few hundred million” because it claims the General Services Administration already has decided on a cellular-only format.
The carrier, which recently spent billions on personal communications services licenses, currently is a co-provider with AT&T Corp. of government-wide voice, data and video services under the Federal Telecommunications Services 2000 contract that runs out in December 1998.
GTE Corp., AT&T, Motorola Inc. and the regional Bell holding companies remain the probable contenders for the upcoming wireless contract. The multivendor deal could be awarded as early as March 1997, but the process is approximately six months behind. The actual request for proposals is due to be circulated sometime this summer, and potential bidders have until March 29 to indicate whether they are in or out.
The RFP originally was geared to attract all categories of wireless service providers-cellular, paging, PCS and enhanced specialized mobile radio-but when the preliminary text was released late last fall, the emphasis was on the provision of cellular-only systems because those networks already are in place. However, the RFP did not take into account that while many PCS and ESMR networks still are being built, they could be up and running by the time the new government contract was set to transition-December 1998.
“This is not a wireless procurement; it is a cellular procurement,” said Jim Payne, Sprint’s assistant vice president for FTS 2000/strategic marketing. “I resent calling it `wireless,’ which I regard as being PCS and digital services.” Sprint modified its current FTS 2000 contract to include providing PCS.
According to a Feb. 5 letter from Audrey Hallett, manager/contract administration for Sprint’s Government Systems Division, to GSA’s contracting officer Christine Costello, Sprint’s decision to not offer a bid on the government’s post-FTS 2000 interim wireless procurement contract was based on two factors.
First, that the procurement “does not fit with Sprint’s overall wireless strategy, which involves the provision of personal communications services on a nationwide basis through our relationship with the Sprint Telecommunications Venture. The GSA wireless procurement is based largely on the older cellular technology and does not fully incorporate the newer and more advanced PCS technology which those in the industry have just advanced more than $9 billion to purchase the spectrum rights to this technology.”
Second, that Sprint already was in the process of spinning off its cellular properties in accordance with Federal Communications Commission regulations that prohibit a carrier from owning more than a 40 percent PCS interest in a market in which it already provides cellular service.
To Payne, the RFP is a move backward. “I’m selling my cellular operations to move forward,” he said. “The government put a great incentive on us to bid for PCS licenses, and now we can’t use them to compete.” He continued, “I’m comfortable with our role in technical leadership. I’m not going to `dummy down’ my system.”
GSA’s preliminary wireless services RFP is broken into three general categories: basic service, features and equipment-all based on a cellular backbone. Sections that described the core wireless service stated: “For the core wireless services, all wireless voice and data requirements shall be satisfied through commercial cellular telephone networks.”
And because the contract calls for multiple vendors of multiple services, interoperability could be a problem.”
The agency also asked bidders to be ready to submit fixed price schedules for all specified basic services, and for all features and equipment for each applicable fiscal year of an eight-year contract period. The real question is: In light of the Telecommunications Act of 1996 and its emphasis on competition and emerging services, should any entity-even a network of government agencies-be tied to multiyear telecom contracts that could exclude new technologies?
“This is an elusive issue,” he said. “Sometimes you have to test the waters. My services still are being built, and it’s too premature to judge what the marketplace will be.”
Payne and his colleague Hallett hope GSA will reconsider the RFP as it stands today, even to the point of throwing it out and starting all over again.
