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FTS 2001

 

STATEMENT OF SANDRA N. BATES
COMMISSIONER

 

FEDERAL TECHNOLOGY SERVICE
GENERAL SERVICES ADMINISTRATION
BEFORE THE
SUBCOMMITTEE ON TECHNOLOGY AND PROCUREMENT POLICY
COMMITTEE ON GOVERNMENT REFORM
AND THE
UNITED STATES HOUSE OF REPRESENTATIVES

 

APRIL 26, 2001

Mr. Chairman, thank you for this opportunity to appear before you this afternoon to continue to discuss one of the key infrastructure challenges facing our increasingly electronic Government. That challenge is assuring the most effective and efficient provisioning of telecommunications services for the agencies and departments of the Federal Government. As you know, telecommunications services needed and used by the agencies and departments include traditional voice services, data networking services including, of course, access to the Internet, video services, wireless and mobile computing services, and many others vital to supporting and carrying out the complex missions of a twenty-first century American Government. Mr. Chairman, you and the members of this Subcommittee, as well as those of the full Committee under Chairman Burton's leadership, have contributed significant insights and have made many creative suggestions to address the acquisition issues we have faced. I look forward today to continuing our dialogue and to working with you and the Membership of this Committee on this important endeavor. I have Mr. Frank Lalley, Assistant Commissioner for Service Delivery, with me here today. In that capacity, Frank is the GSA executive responsible for managing all post-award aspects of the FTS2001 program. He will assist me in addressing questions you and the other Members may have, so that we may be thoroughly responsive to you.

We have heard this morning from the General Accounting Office and they have testified to their recently released report on the FTS2001 program transition. First, let me compliment and commend the GAO. We have known Director Koontz, Mr. Conway, and their colleagues for many years and I have great respect for them and for their high standards of professionalism, their integrity, and the high caliber of their work.

As for the substance of the report, I find it to be fair and balanced. But before I comment further on the report itself and GAO's findings, I want to take us through a bit of history and review how we got where we are today, if I may.

You last heard from one of my predecessors in a setting like this in the Spring of 1997, some four years ago, and about a year after passage of the Telecommunications Act of 1996. At that time, you, many other Members, and staff helped us craft the strategy for what was then known as the "post-FTS2000" environment. Under your leadership and the leadership of many members of Congress in both houses, and with the participation of the many stakeholders involved, we ultimately succeeded in defining a strategy that addressed the interests of all concerned. That strategy for federal telecommunications acquisition gave us a solid and flexible framework for bringing Government's use of telecommunications technology forward into this new century. That strategy, recorded in the Statement of Principles, a document jointly developed and agreed to by all stakeholders, was and is a model of stakeholder collaboration. We worked very hard over many weeks to craft the so-called "Sixteen Principles" that defined the strategy. I have included two diagrams depicting the strategy and the transition schedule as well as a copy of the Statement of Principles as part of my testimony.

The Sixteen Principles specify a two-pronged approach for the Federal telecommunications acquisition strategy - the FTS2001 acquisition for long distance telecommunications services, and the Metropolitan Area Acquisitions (MAAs) for local telecommunications services. The Sixteen Principles state very clearly that maximizing competition is the common thread between FTS2001 and the MAAs and is the hallmark principle of the strategy. To achieve this linkage, the strategy prescribes separate competitions for local and long distance services, with the resulting contracts to contain so-called "crossover" provisions, available at the Government's discretion after a one-year forbearance period.

These crossover provisions mean that, one year following the award of a particular FTS2001 or MAA contract, and at the Government's option, additional competitors could be allowed to offer and, if accepted by the Government, provide services to compete with an awarded contract. Thus, MAA contractors could potentially offer competition to the FTS2001 contractors. Likewise, the FTS2001 contractors could offer competition to MAA contractors. In addition, MAA contractors awarded contracts in the various designated MAA cities across the country might find themselves competing with other MAA contractors as well as with the FTS2001 contractors. Thus, a competitive fabric is envisioned that would evolve over time to afford the Government maximum choice in selecting telecommunications services by allowing industry maximum opportunity to offer their latest technologies and services, and to do so within the bounds of our acquisition laws and regulations.

Well, that was our plan, the plan all of us fashioned together. Let me add, Mr. Chairman, I believe the strategy to be as sound today as it was when we developed it 4 years ago. As we all have witnessed in recent years since the strategy was developed, there has been tremendous upheaval in the technology arena characterized by rapid unprecedented changes, with prospects of more change to come. Yet, by managing ourselves in accord with the principles established in our strategy, we've managed to make substantial progress and to weather that chaos. Have we progressed as quickly and as far as we would have liked? No, we have not. GAO has correctly documented this. Do we want to move faster and get on with implementing the full breadth of the strategy? Of course we do, and GAO has ably pointed the way for us to do so by providing us with sound recommendations.

So, I would like to report to you on what has happened under FTS2001 since we set this overall strategy in motion. Next, I will discuss the FTS2001 acquisition, the transition, the Minimum Revenue Guarantees, the so-called "crossover" or "forbearance" opportunities, and finally I will respond to the questions you sent last week.

FTS2001 Acquisition

Following the collective endorsement of and agreement on the Sixteen Principles, we conducted the FTS2001 competition. The results of that competition were nothing short of breathtaking. The services offered by the winning contractors are advanced, state-of-the-art, commercial-grade services. More importantly, the FTS2001 services will continue to be enhanced so that the latest state-of-the-art commercial grade services will also be made available to the Government users at the same pace as the services are made available to the commercial marketplace. This is a profound change for Government users who, in the past, too often had to be satisfied with older technologies and older services because they were built uniquely for the Government despite their similarities to commercial services. Well, the strategy prescribes and endorses this cultural change to embrace commercial offerings, to stimulate development of newer and more advanced services and capabilities and to share in the benefits derived from their immediate use. The FTS2001 contracts are one of the primary means of implementing this change, and the transition experience reflects all of the challenges associated with such a change. It is certainly much more than merely a change of network providers.

And part of the reward for dealing with the challenges of this change is seen in the reduced prices we'll pay. FTS2001 prices are the lowest in the business. Users of FTS2001 will save billions of dollars, and will see declining prices each year. Over the course of these 8-year contracts, the price of an average basic domestic long distance call made between Government locations will fall to below one penny per minute. Needless to say we are great believers in the forces of competition that yielded these results.

FTS2001 Transition

But, having groundbreaking contracts with state-of-the-art services and unparalleled low prices is one thing. Transitioning FTS2000 services to those contracts, a massive undertaking, is quite another thing. As GAO points out in their report, the FTS2001 transition has two key and distinguishing characteristics. First, GAO describes the transition as "sizeable and complex." Second, GAO recognizes that "several parties share responsibility for transitioning to and implementing these contracts." As one of those parties, GSA has overall responsibility for the FTS2001 program. This includes program management and contract administration, performance monitoring, customer support to agencies, billing and the procurement of new service offerings. And, as GAO indicated, we faced challenges in these areas. We agree with GAO's recommendations to address our shortcomings, and are implementing all of them.

It should also be noted that a significant amount of time and effort expended in the FTS2001 transition was not associated with transition at all. Instead several of our agency customers have been migrating from data services based on older technology under FTS2000 to state-of-the-art services offered under FTS2001. For many agencies, this has been highly complex and has required considerable planning, engineering, budgeting, and collaboration to accomplish.

An excellent example of this is the Social Security Administration's (SSA) data network. In this case, SSA has migrated from their old, less capable, slower, legacy private line network to a modern, high-speed frame relay network using some of the latest technology routers manufactured by Cisco and provided with their service by WorldCom. We assembled a team of GSA, SSA, and WorldCom representatives and developed a modification to incorporate the services of those routers in the WorldCom contract to satisfy SSA's need. No question, if seen as merely a transition, the SSA data network moved from FTS2000 to FTS2001 much more slowly than it would have if the old network were simply moved to a different contractor. And, I believe that any resultant delay was worthwhile because the needs of SSA were appropriately met. We did not just meet an artificial date in some project management schedule. And I'd like SSA and WorldCom to be recognized and to receive credit and congratulations for modernizing SSA's data network in record time. I am very proud of what was accomplished to support the mission of the Social Security Administration.

Nevertheless, we have been behind where we wanted to be with the overall transition. As of today, we are 95 percent complete with our efforts to transition more than 51,000 locations.

Let me break that down for you a bit further. First, for our switched voice users, we have over 26 thousand locations nationwide. Of those 26 thousand locations, 99 percent are now transitioned to FTS2001. Second, we have over 15 thousand locations using our Dedicated Transmission Service. As of today, 93 percent of those locations are transitioned to FTS2001. Third, for switched data services, we have nine thousand locations, of which 85 percent are now transitioned to and using FTS2001.

Minimum Revenue Guarantees

One very important reason for completing transition, is of course, the Government's commitment to the minimum revenue guarantees (MRGs). As you recall, industry informed us during the strategy formation process for FTS2001 that substantial minimum revenue guarantees would provide the greatest possible incentives to competition. We agreed with that assertion based on our analysis of the largest telecommunications contracts being negotiated at the time. As a result, we offered two MRGs of $750 million each to the bidders. Judging from the outcome of the FTS2001 competition, we are even more convinced that we did the right thing. Nevertheless, the extremely low prices offered by the two winning contractors means that more time will be required to fulfill the MRGs than we anticipated prior to award. Transition delays for whatever reason certainly add to the time required to satisfy the MRGs.

Crossover Strategy and Forbearance

Another reason for getting transition behind us is so that we can allow additional competition into the FTS2001 program. In addition to the MRG portion of the strategy, we have provisions in both the long distance (FTS2001) and the local services contracts (the MAAs) that allow for the addition of competitors to those contracts from other contract holders - that is MAA contractors may compete with other MAA contractors and with FTS2001 contractors. Likewise FTS2001 contractors may compete with MAA contractors. Additional competition must wait at least one year from the date of award of a given contract with an incumbent. The one-year period is called the "forbearance" period. Again, this is in keeping with the agreement in 1997.

In the case of the MAA, we are implementing crossover among MAA competitors as those one-year forbearance periods expire. So far, the first three MAAs forbearance periods have expired, and we have been busy reviewing crossover proposals for those cities. In fact, I am pleased to report that the first crossover award was made in New York City on March 30, 2001.

With FTS2001, however, the story is a bit more complex. But, simply stated, completing transition from FTS2000 to FTS2001 and having assurance that we will meet our MRG commitments must have top priority. And, while we had the good fortune to attract extremely favorable prices under FTS2001, those low prices serve to lengthen the time expected to achieve the MRGs.

As I am sure you know, GAO previously validated the reasonableness of our projections for meeting the MRGs. The MRG issue is real. It is born of the tremendous success of the FTS2001 competition and we must be careful to manage it properly to meet our contractual responsibility to the contractors. Unfortunately, this element of our agreed-upon strategy conflicts with another element of the strategy, namely the preference for introducing additional competition to the FTS2001 program. However, I assure you that after transition is complete, this summer, we will move ahead on long distance crossover.

GAO Report

As for the current GAO report and their testimony this morning concerning the FTS2001 transition, let me make a few brief comments that I hope will put things in perspective. The difficulties associated with transition are not unique to the Government. The private sector has many similar problems when they perform transition. What is unique to us is the scope and scale of Government transition, as we have been transitioning the equivalent of over 25 Fortune 500-sized organizations simultaneously.

Conclusion

I have provided a very brief update on the status and outcomes of the major telecommunications acquisitions that comprise our strategy. A new way of doing business with the Federal Government has finally arrived for telecommunications providers. The hallmark of this new paradigm is continuous market-like competition.

But let's be sure we have put this in its proper perspective, especially in the case of the long distance contracts - FTS2001. First, we would never have received the significant price reductions we obtained if we had not offered the right incentives for competition in the acquisition. We would not be able to say that Federal users will pay less than one penny per minute for a telephone call in the not-too-distant future - guaranteed - if we had not offered the tangible reward of the dual $750 million MRGs. That was part of the strategy agreed to in 1997, and represents the Government's part of the bargain. We made this commitment to these firms and we need to carry through on that commitment.

Second, one of the pillars of our strategy has been to buy commercial services and not to have the Government build one-of-a-kind solutions that are far more costly and far less capable using technologies that quickly become obsolete. This has been and will continue to be the correct course of action for Government. The transition is in large measure behind us and the effects of the delays are significant. No doubt, if we could have done it faster, we would have achieved greater savings and benefits. No doubt we need to do better in the future and look for other strategies for future transitions that address the root causes of the delays in this transition. But, at the end of the day, even with the delays and lost opportunities, we will have arrived at the finish line, strategy intact and ready to guide us into the future.

Responses to Questions

Mr. Chairman, you have addressed several important questions to GSA regarding the program strategy and the transition experience. Let me next address those questions individually.

Question: In your view, have you achieved the primary goals for this program, namely, (1) ensuring the best service and price for the Government and (2) maximizing competition for services?

Answer: The answer to both parts of your question is yes. As for services, FTS2001 has available a complete and comprehensive collection of state-of-the art service offerings covering the globe. This is the most extensive contract of this type in the Government (and probably in the commercial sector as well). These offerings are being provided by two of the leading carriers in the business. Moreover, if a new service is introduced to the commercial market, or if an existing service becomes available to a new location for commercial users, our providers are free and, in some cases, are even required by the contract to make that service available to the Government. Mr. Chairman, our whole strategy, as you know, has been to make services available to Government users at the same pace as in the commercial markets. If you stop and consider this concept, it is truly revolutionary for Government users and implementers of high technology solutions, but we've done it. It is here today and scores of agencies and millions of users are now taking advantage of FTS2001.

Regarding prices, I have touched on this topic in my statement, but let me again cover the highlights of the value established under FTS2001 for FTS2001 users and for the taxpayers as well. First, we have locked in declining prices until 2006. This is considerably better and longer term than typically found in commercial contracts. Second, we have the lowest prices in the business. The significant competitive incentive of $1.5 billion in minimum revenue guarantees offered during the initial competition worked as we expected to motivate the competitors, and in the end, produced prices even lower than we could have predicted.

Regarding the second part of your question, the FTS2001 competition was a landmark achievement under modern acquisition regulations. There can be no question that it maximized competition during that event. Moreover there has been day-to-day competition since award from the two very capable contractors beginning with the agency selection process. As you know FTS2001 is a non-mandatory program. And agencies are free to select from either contract to satisfy some or all of their needs and to revisit those decisions at any time.

In addition, the contract encourages the contractors to continually update their service offerings and prices to reflect their latest technology platforms and their best prices. This is done through various terms and conditions such as the Price Management Mechanism under which the contractors must maintain FTS2001 prices on par with their best comparable commercial contract prices.

We have developed and deployed web-based tools for agencies to use that help them understand the complex pricing structures of the contracts and to find out the cost of services at their specific locations. We receive tens of thousands of hits at these web pages each month. Thus, the contractors know that their existing and potential customers are examining their prices every day.

Finally, there is crossover. This summer when transition is completed, we will move ahead to open up the program to additional competitors.

We had a sensational initial competition, and we have all of the ingredients needed for continued robust market-like competition throughout the program life. Notwithstanding the additional benefits expected from crossover, we already have two very capable and very competitive contractors already competing head to head each day. The process under which agencies decided where to transition their services from FST2000 to FTS2001 is a great illustration of this competitive vitality. The web tools I mentioned earlier were used extensively by agencies and were supplemented in many cases with our support so that they could fully analyze and appreciate prices and costs. In addition, there was considerable technical analysis of alternative transition options. The two contractors had many opportunities to explain their alternative solutions and dialogue with the agencies as part of the decision process, promoting competition.

Question: What were the most significant problems agencies encountered in transitioning to FTS2001?

Answer: Mr. Chairman, certainly the agencies should speak to this themselves, but in my view there were five types of problems:

• Problems associated with new characteristics of FTS2001
  
• Planning problems
  
• Problems associated with execution of transition
  
• Problems associated with provisioning access
  
• Problems associated with establishing billing codes

New characteristics of FTS 2001

FTS2001 is quite different from FTS2000 in several important respects. In particular, customer agencies have greater freedom and flexibility to choose from an expanded menu of suppliers, products and services, and the opportunity to schedule activities so they occur at times that are convenient to them. Under FTS2001 agencies were challenged to select their supplier(s) giving fair consideration to both candidates. The initial transition plan called for the selection to take one month, but the process involved complex analysis, evaluation of several options, and development of consensus within agencies. In fact the process of selection took six months or longer for many agencies and required all parties to change their plans and schedules. In retrospect we should have anticipated a longer selection process and done more to help our customers.

Planning

Inventories of FTS2000 services were the starting point for FTS2001 transition planning. FTS2000 contractors maintained these inventories and agencies expected that they would be readily available when requested and accurate. This was not the case. Customers estimated that contractor maintained inventories were no better than 60 percent accurate. Considerable additional effort was required to determine sites served, and the types and amounts of services provided to furnish the baseline for planning.

Next came the decision of whether to transition like-for-like or to upgrade service to meet future needs. Like-for-like transition was a known and relatively safe choice. A decision to upgrade required more time to analyze and plan, required budget decisions, involved negotiations, was more risky and was less likely to be finished on time. During future transitions GSA will do more extensive contingency planning that anticipates worst case scenarios so that we can improve our support of agency transitions.

Execution

The most significant problem related to execution was difficulty getting information on schedules and status of local cutovers so agencies could be ready in advance. Cutovers at local sites require coordination and cooperation among several groups of people to be successful. These groups include the long distance carrier, the local carrier, the customer, GSA, and often an equipment provider. When schedules are coordinated properly, all parties are available at critical moments to resolve any difficulties that arise. Lack of notification was a recurring problem. Too often, agencies complained that carriers arrived without prior coordination or didn't arrive when scheduled, and cutovers had to be rescheduled.

Access Provisioning

Besides the coordination issues, the most significant physical impediment to transition execution was the provisioning of access. Second to that and the single most significant impediment from a procedural or support perspective would be billing issues. Let me address each of these a bit further.

Access provisioning connects the long distance provider's network to the customer's location. Generally, this is accomplished by subcontracting that portion of the service to the Local Exchange Carrier, or LEC, since they have facilities directly to the customer location, unlike the long distance provider. The delays in provision access came in several forms. First, there were the scheduling delays with the LECs. We know the contractors worked hard to get priority treatment for FTS2001 installations, but ultimately, the LEC scheduling delays caused transition delays. As you know these delays were further exacerbated by the Verizon strike last year. While Verizon does not serve the entire country, any circuit to be transitioned that had one end in Verizon territory was subject to delay. The TTF reported that as of late summer last year they were about six months behind in clearing the backlog created by the strike among business customers.

There were additional delays associated with access provisioning beyond just scheduling. There were delays because of insufficient capacity to a location to satisfy the application needs of the agency. This could occur because the agency was upgrading to a higher capacity service, for example. Another cause of delay was insufficient access needed to perform the actual cutover which is normally done in parallel. In this case, let us say that an agency was transitioning from AT&T to MCI WorldCom. AT&T's service was using the access lines, but MCI Worldcom's service also needed the access lines so that the customer's service would not be disrupted during the cutover acceptance testing period. Another reason, though not entirely due to access provisioning, was equipment provisioning at the customer site or somewhere between the customer site and the network. Various connection points may require new equipment to complete a connection or carry it to the network, and there were delays associated with waiting for the equipment to arrive and then to be installed and tested. Finally, another significant cause of delay was the manner in which certain data network transitions are accomplished. Frame relay data service, in particular, often requires hundreds of locations to be transitioned, but since they all feed central hub locations, the overall transition is not actually effected until the hubs are cutover. Thus, a significant transition effort is required over many weeks before any transition progress can be recorded since the data network is not operational until all locations are able to use it.

Billing

Now let me address the billing issues. The FTS2001 contract requires enormous flexibility of the contractors in allowing agencies to establish billing structures. While this serves the agencies' widely diverse needs for their individual accounting and bill-back procedures, it caused delays at the outset since each individual agency and, in most cases, sub agencies and subcomponents, had to coordinate among themselves to decide what structure they wanted to implement. Once they decided this, they then had to coordinate with one or both contractors to implement their respective billing schemes. Then the contractors had to coordinate and implement the solutions within their ordering and billing systems. This was not trivial, and did not always work as designed or expected. While our requirements never changed, it took longer than we expected for the billing systems requirements to be met. GSA authorized the contractors to use interim procedures to enable transition to proceed and to minimize delays. In addition, GSA facilitated the exchange of information on successful alternative billing solutions.

Question: What has it cost the Government for transition delays? What has it cost agencies that were delayed in transitioning?

Answer: Initially, the Government had the best of both worlds. The FTS2000 incumbents, AT&T and Sprint, lowered their prices to FTS2001 levels early on in transition and continued to track FTS2001 prices until late last year. At that point, AT&T and Sprint bridge contract prices rose significantly. We estimate that those customers that had not transitioned by December 6, 2000 will pay $74M more for service than they would have for the same services on FTS2001.

Question: Have agencies been able to acquire up-to-date goods and services through FTS2001 in order to maximize Government efficiency and benefits to the taxpayer?

Answer: The latest available technology is added to the FTS2001 contracts by negotiating contract modifications and additional offerings. Throughout the transition period, GSA, customer agencies, and contractor negotiating teams gave priority to modifications and offerings that were critical to transition. As customers assessed their future needs, they determined that new circuit speeds, network management, security features and the latest equipment were essential components of their network upgrades. These were added to the contract.

Our contract modification process took too long. The GAO report amply documents the issues and the steps we have taken to improve the process. We've challenged our contractors and staff to reduce the time required to process and negotiate a modification for commercial services to 15 days or less, with positive results in the past two months. We have completed all transition-related modifications.

Question: What further actions do you think are needed to achieve the programmatic goals of FTS2001?

Answer: We need to press ahead by completing transition according to our latest schedule so that we can invoke the performance requirements of the contract, and assure contractor accountability. We need to implement crossover and keep stoking the fires of competition.

Question: What specific steps has GSA taken to identify and eliminate transition challenges?

Answer: GSA and its customer agencies established a $98 million transition fund to help defray transition costs. As I mentioned in my response to your first question, we have made available a comprehensive array of planning, engineering, pricing, and customer support services during the transition. We've used every available mechanism to inform and support our customers and their decision-making processes and to then expedite transition activities once they have decided how they wish to proceed.

Through our Transition Coordination Center, we've worked closely with the Interagency Management Council (IMC) and their Transition Task Force throughout the transition. We've also established working groups to address specific problems. Let me review some of these activities in more detail with you.

First, GSA established the Transition Coordination Center (TCC) to manage the government transition. The TCC serves as a clearinghouse and coordinating component for transition. The TCC provides resources for supporting transition and coordinates assignment of action items within GSA and across agencies and contractors. One of the principal tasks of the TCC has been to identify problems and obstacles to transition and take action or assign responsibility as appropriate that will remove the obstacle if possible or otherwise reduce the severity of the problem. One of the key groups with whom the TCC coordinates is the IMC. The agency representatives to the IMC participate in monthly meetings at which information is shared between GSA and the agencies on progress and issues associated with transition. The work of the TCC is published on the TCC website. The website is used extensively to communicate and coordinate.

Second, and after recognizing that the transition was not moving as swiftly as desired, the IMC established the FTS2001 Transition Task Force (TTF). The purpose of the TTF whose membership included the agencies, service providers, and GSA, was to identify significant issues and problems confronting the transition effort, and to share information amongst all the players. Information was distributed at each monthly meeting and on the TTF Website. GSA met regularly with the chairman of the TTF and the IMC to share and discuss transition related issues, reconcile differences in contractor-provided data, and set priorities for activities related to billing issues.

Another example of a special group is the Billing Issues Team. In April 2000, GSA established a Billing Issues Team composed of members representing the Interagency Management Council (IMC) agencies as well as several smaller agencies. The team, which is sanctioned by the IMC, updates the IMC regularly on the team's progress in resolving FTS2001 billing issues. The team serves as the focal point for all FTS20001 billing issues. Since its inception, the team has resolved 23 of 28 billing issues.

Question: What have you done and what are you doing to ensure up-to-date information is available to agencies regarding the transition? How cooperatively have you worked with the IMC to share problems experienced from agency to agency and maximize the success of the program?

Answer: The history of our relationship with the IMC is a long and successful one. I personally believe that the IMC-GSA model is a pioneering one that is seen today in a number of Government-wide collaboration efforts. For the FTS2001 transition, the relationship has been as strong and successful as ever. The monthly IMC meetings, the meetings of the TTF, in which we participated, and the various web-based forums that were established provided a new and unparalleled communications path to and from GSA, the IMC and the contractors, as well as anyone else that wishes to observe. They are all public forums. Overall, I think the relationship was characterized by freely flowing information under a general spirit of cooperation. We have always provided the latest available information to all who needed it. Naturally, for certain statistics associated with transition progress, the most current information could only come from the contractors, so for example, the TTF worked with the contractors to analyze, assemble and disseminate data developed by the contractors.

Question: What challenges did GSA face in identifying the necessary data agency to agency [sic] to smooth transition and ensure accurate information was provided to the vendors? What Government-wide mechanisms can be implemented to address these challenges?

Answer: FTS2001, like its predecessor, FTS2000, is a program that offers commercial services to its users. As such it replaced the previous Government-owned and operated network. With some exceptions for special dedicated networks built using FTS2001 components, the contractors provide and manage the infrastructure, not the Government. As part of the FTS2001 contracts, the contractors are required to take leadership roles in transition to the maximum practicable extent. As such, specific activities are required to be performed by the contractors including developing transition plans, performing site surveys, and managing cutovers. GSA and the Government's responsibility was to provide such databases as we had that might assist them in their transition efforts. We did that very soon after the contract awards. In addition, the FTS2001 RFP included a substantial and detailed traffic database used to develop price proposals. This database was based on the actual traffic recorded on FTS2000.

Nevertheless we faced two significant unanticipated challenges. First there was a significant lack of available information on agency service locations, equipment configurations, services carried to and from customer locations, and other data critical to analyzing existing services and planning for future needs. Second, while we provided analytical tools for use by the agencies, the lack of data coupled with inadequate training of users and ease-of-use issues hindered the utility of the tools.

We have taken steps to address these challenges by refining the tools, and by establishing a Government-wide database to collect and maintain location information for our customers. This Service Delivery Point database was established and is maintained by a GSA-selected contractor who established a Uniform Agency Location Numbering Plan. This numbering plan includes data such as Location Code, Agency Code, FTS2001 Vendor and FTS2001 Service Type. The SDP data base is accessed and updated daily by FTS2001 contractors and provides Internet access to user agencies for the purpose of establishing new service locations as well as for requesting special reports on existing service inventories. We expect this system to provide significant improvements to our customers in many future activities including future transition efforts.

Question: in your view, what impact has transition delays had on allowing competition into the FTS2001 program? How does GSA intend to foster greater competition in the program?

Answer: I hope I have already addressed this question. First, there is no need to "allow" competition into the FTS2001 program, as there are already two competitors "slugging it out." As for allowing additional competition into the FTS2001 program, I'll repeat that we fully intend to initiate the crossover process this summer. This will result in local service providers offering additional services in competition with the FTS2001 contractors.

Question: Overall, GSA's management role seems to have yielded mixed results. What goals has GSA identified to implement for greater success in managing the program.

Answer: Let me review three goals we have identified.

First, we knew before and appreciate even better now the importance of developing and collecting hard facts and solid information on which we can make the most informed business decisions. I have asked my team to develop a plan for assuring that FTS-wide we are requiring, receiving, and making use of appropriate management reporting metrics. Such metrics include data that is used to evaluate program technical characteristics such as the following:

• Time to install services
  
• Time to repair or restore service outages
  
• Causes of service outages
  
• Level of service availability and reliability
  
• Pricing levels compared to commercial contracts

Second, we must think ahead to future transitions. There are plenty of lessons to be learned from this one, and of course we would like to avoid all pain associated with transition if possible in the future. So, I have directed my team, once transition is complete, to prepare a comprehensive post-mortem report on transition to develop recommendations for easing the burden on all parties for future transitions.

Third, we need to take a more active role in compiling overall data on our customer's installations. In particular, we appreciate the need for and difficulty of constructing inventories of information about agency sites. As such, we are stepping up our data collection and analysis efforts to assure that future transitions will benefit from more complete and more accurate data collected during this transition.

Closing

Mr. Chairman, I have touched on numerous activities that we have pursued since we were last invited here and I have responded to your specific questions. I trust you will appreciate from my remarks and responses that we have substantial achievements to report along with considerable challenges. We have been challenged before, and, we have managed to meet those challenges so far. We appreciate your leadership and that of the committee in helping us to do that. I look forward to your continued leadership and support and I am happy to address any questions you have at this time.

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