[9193] in Commercialization & Privatization of the Internet
ESNet protest Background
daemon@ATHENA.MIT.EDU (Brock N. Meeks)
Mon Dec 20 17:58:07 1993
Date: Mon, 20 Dec 1993 14:55:43 -0800
From: "Brock N. Meeks" <brock@well.sf.ca.us>
To: com-priv@psi.com
The following is an article I wrote on the GAO decision upholding the
AT&T protest of the *first* award DoE made to Sprint for ESNet.
It's provided as background for the current discussion:
COMMUNICATIONS DAILY
Friday April 9, 1993
May not be distributed in any other medium, hard copy or electronic
for personal use only.
GAO VOIDS SPRINT $50-MILLION CONTRACT
TO BUILD HIGH-SPEED COMPUTER NET WORK
by Brock N. Meeks
General Accounting Office (GAO) has overturned $50-million
contract Dept. of Energy (DoE) signed with Sprint (CD July 19 p2)
to build high-speed computer network called ESnet, as result of
arguments in protest by losing bidder AT&T. GAO decision, which
ended 8-month proceeding, requires DoE restart bidding process.
ESNET, in which Sprint had intended to use emerging technology called
Asynchronous Transfer Mode (ATM), would have been nation's
fastest computer network and first leg of Administration's
much-heralded data superhighway.
GAO requirement that DoE restart bidding means network
probably will be delayed 12-18 months, Dept. sources said. "At a
time when everyone from the President to educators are calling
for so-called data superhighways, delaying the building of this
network doesn't make much sense," said Energy Dept. official
familiar with contract: "But I wouldn't expect AT&T to do
anything different. Their tactics worked. They stopped the
network from being built, giving them a chance to bring their own
ATM technology to the market. It was a smart move on their
part."
Decision by GAO is recommendation and doesn't hold force of
law. DoE officials can choose to follow ruling or proceed with
contract award. DoE spokesman Steven Wampler said: "Our people
are studying the GAO decision and are not ready to comment at
this time." Scenario of DoE "freaking out" and not following GAO
recommendation "would shock me," said GAO attorney John Melody
who co-wrote decision. Though GAO decision has no force of law,
"in reality, very few agencies ever ignore our recommendations,"
he said. Within last 10 years, "only a handful" of GAO's
recommendations haven't been followed, Melody said.
GAO sided with AT&T charges that Sprint bid based on
prototype TRW ATM technology violated specifications in DoE's
original request for proposal (RFP). AT&T said TRW switch didn't
met "current availability" requirement in RFP. However, several
Energy sources said Sprint bid clearly met all of evaluators'
requirements. Original specification -- cited in GAO decision --
said: "ATM access may be proposed... if significant advantages
will result."
GAO said decision was based on "imperative language" in
letter that Energy Dept. sent to potential bidders that sought to
clarify acceptability of ATM technology. Letter said DoE's
initial specification "is quite clear" on ATM's being acceptable
technology, but appeared to broaden original requirement: "The
proposal must conclusively demonstrate current availability" of
ATM technology. Because TRW switch wasn't yet in production, GAO
said, it upheld AT&T claim that it didn't meet current
availability test. Energy Dept. disagreed, saying requirements
outlining specific technologies were for "relative evaluation
only" and not meant to "constitute mandatory pass/fail
requirements."
GAO decision said that according to AT&T's testimony, it was
"likely" company would have bid ATM technology "had the
solicitation accurately reflected" DoE's intentions. In
decision, GAO said record showed AT&T, at time of bid, did have
"operational, but preproduction ATM network," that it was
testing. Instead, AT&T chose to bid Switched Multimegabit Data
Service (SMDS), saying it would migrate to ATM in 1994. Sprint
proposal said it would begin ATM service by late 1992.
GAO also upheld protest on DoE officials' trip to inspect
TRW switch, saying AT&T was put at competitive disadvantage
because it wasn't given equal opportunity to make pitch for its
own ATM switch. DoE did say in hearing that its evaluators made
trip to TRW to "verify" ATM switch "to assure ourselves that they
did have the capability... and to find out... [on] what kind of
schedule they could produce that kind of technology." DoE said
evaluators were "favorably impressed" with TRW capabilities and
were convinced TRW and Sprint could deliver it on schedule.
Sprint subsequently became first company to demonstrate TRW ATM
switch at Interop, networking show last month in Washington.
DoE source told us AT&T already was "out of the running"
when trip to TRW was made and Dept. already had scored all bids,
with Sprint emerging as winner. Trip was made to ensure that
agency wasn't "giving away" $50 million "for smoke and mirrors
technology," source said. Despite testimony to that effect by
DoE, GAO still sided with AT&T, saying trip had placed AT&T at
competitive disadvantage.
Concerns were raised within DoE during 8 month long protest
deliberation about possible ethics violation involving AT&T
attorney, Steven DeGeorge, who handled case. According to GAO
personnel records, DeGeorge worked in same GAO office that
decided case just prior to taking job with AT&T. Records show
DeGeorge left GAO Aug. 8, 1992 for AT&T, less than month after
DoE awarded contract to Sprint. Less than 45 days later,
DeGeorge filed protest on AT&T's behalf before his previous
colleagues, "guys he played golf with," as one GAO source said.
According to Office of Govt. Ethics, top level officials are
banned for life from representing clients in matters before
agency they served. Lower level officials are banned for up to 2
years. However, such rules dont' apply to personnel at level
DeGeorge held during his 2 year stay at GAO. According to GAO's
Office of Policy, employees at DeGeorge's level can leave agency
one day and begin representing clients back to same agency the
next.
--end--
