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Government IT contracts bring bucks, bureaucracy

As companies such as Cisco and Microsoft debut a new IT operation for the federal government, AT&T and Sprint miss another deadline in transitioning federal agencies to new telecom contracts.

WASHINGTON--A telecommunications company has the potential to make billions of dollars when signing a government agency as a customer--assuming it doesn't get bogged down in bureaucracy and intra-company sniping during the implementation of the deal.

The federal government's Social Security Administration (SSA) and a coalition of information technology companies such as Cisco Systems, Microsoft, Sybase and Unisys will unveil Thursday a pilot project on how advanced IT can be used at a government agency to better serve taxpayer needs.

The SSA will be used as a model, the companies say, for how a government agency can use Internet-based systems to streamline how citizens interact with the federal bureaucracy.

However, the unveiling follows by one day the failure of the federal government yet again to transition its phone and data services to new multibillion-dollar contracts signed with WorldCom and Sprint.

The difficulty the federal government's General Services Administration (GSA) has had in getting federal agencies to transfer their telecom accounts serves as a warning for any IT company seeking government business--even if there are billions of dollars, in this case as much as $5 billion, at stake.

In an age when telecom companies are reporting lower-than-expected earnings in part because their customers are going bankrupt, a federal government contract provides an enviable level of revenue stability, usually over multiple quarters. But the logistics of dealing with a federal bureaucracy can come as quite a surprise to a carrier or IT provider unfamiliar with the government's myriad rules and procedures.

CommerceNet, a nonprofit consortium of IT companies, worked with the SSA to develop a model of how telecom businesses can work with federal agencies more effectively.

"The way people interact with government will fundamentally change as customer service options increase as a result of implementing systems with advanced technology capabilities," CommerceNet president Mark Resch said before the pilot program's debut.

In a controlled trial over a six-week period with SSA personnel, the companies above were joined by BroadVision, CosmoCom, Microlog, Nortel Networks, Oracle, Quintus, Sideware, Siebel Systems and Vignette in testing Internet-based technologies that will let individuals interact with the SSA.

Included in the project were technologies that stored a person's history, which is useful for repeat visitors but also something privacy advocates will keep a close eye on. In addition, the trial included voice-over-Internet capability, something not found on many commercial Web sites.

Those involved in the project said the SSA was the perfect agency to test because as baby boomers retire, the number of Americans receiving Social Security will double. Already the SSA receives more than 60 million calls annually on its 800 number and receives more than 26 million visits to its field offices.

CommerceNet and representatives of many of the participating companies planned a day-long demonstration of the technology Thursday at GSA headquarters in Washington.

Where to assign the blame?
The GSA's efforts to transition the federal government to a new eight-year telecom contract has not been met with the same level of cooperation between telecom companies and government agencies.

Wednesday marked the final day before every federal agency was to have transitioned to a new contract with either WorldCom or Sprint under what's known as the Federal Technology Service (FTS) 2001 contract.

"Of about 50,000 sites, we're lacking about 10,000, with orders being developed for 7,000 of those," said GSA spokesman Bill Bearden.

FTS 2001 includes not only local and long-distance phone service, but also high-speed data services, switched 800 service, frame relay and ATM technology, video teleconferencing, and security services. FTS 2001 was outlined as a $1.5 billion contract, but GSA officials have said from the beginning that it could easily grow to $5 billion or more.

Bearden said the delay in transitioning agencies to the new contracts is complicated mostly because of complex database systems in remote field offices.

Dan Smith, WorldCom's director of government network solutions, said a multitude of factors have led to delays, including size issues in some of the larger federal agencies and some difficult database changes.

Smith added that several agencies submitted their orders only recently, although in some cases delays were due to agencies needing to get past Year 2000 concerns.

At a ceremony last month recognizing 89 federal agencies that successfully transitioned to FTS 2001, GSA administrator David Barram said the federal government had learned how to play the telecom market.

"The market power of federal agencies working together has set a new standard for competition and prices in telecommunications markets," he said, "that will ultimately be reflected in the commercial and residential sectors."