Panel dismisses AT&T; complaints over U.S. contract


WASHINGTON -- A government tribunal dismissed arguments yesterday by American Telephone & Telegraph Co. that the General Services Administration unlawfully favored a rival for federal phone business.

AT&T; accused GSA of cutting a secret deal with US Sprint in connection with FTS 2000, the government's fancy,advanced-technology phone network.

AT&T; and Sprint are responsible for building and servicing FTS 2000 through the turn of the century. The network serves 1.3 million customers governmentwide, including 135,000 people in Maryland.

Without ruling on the merits of AT&T;'s argument, GSA's Board of Contract Appeals rejected the complaint because it did not fall within its jurisdiction. As a federal mediator, the board is responsible for handling disputes over contract awards.

News of the dismissal was announced yesterday in the middle of a public hearing on FTS 2000 by the Senate Governmental Affairs Committee.

The hearing is the first of several scheduled by Congress on the subject of FTS 2000. Similar hearings are expected to be held by the House Government Operations Committee as soon as next month.

Congressmen on both sides of the aisle are looking at a host of issues related to the massive contract -- pricing and management among them.

In testimony yesterday, Richard Lombardi, head of government systems for AT&T;, said taxpayers are paying too much because of GSA's formula for pricing FTS 2000 services.

Likewise, Mr. Lombardi complained that AT&T; wasn't getting its fair share of revenues under the contract, which was awarded to AT&T; and Sprint in a 60-40 split. He suggested GSA should give AT&T; more business to compensate.

Richard Austin, GSA administrator, disagreed. He said pricing was structured to cover GSA's administrative costs and to balance out the prices of the two vendors so agencies pay about the same for services.

Mr. Austin suggested that AT&T;'s lack of marketing prowess, and not GSA's pricing formula, was primarily to blame for the company's depressed FTS revenues. He noted that Sprint wasn't experiencing similar problems.

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