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5
DEVELOPMENT OF THE FINAL SPECIFICATION AND RFP RELEASE: 1986
In which the final specification is developed, the vendor
teams come together, and the RFP is released.
CONTINUING DEVELOPMENT OF THE RFP
Meanwhile, as the blue-ribbon panel process was leading to accord
with OMB, GSA pressed on with developing the RFP. Releasing the
strawman in October 1985 had been the first milestone to draw vendors
into the project. It was significant enough to lead industry to
believe FTS replacement would happen and vendors began to spend
resources on bid and proposal preparation.
The first vendor to publicly state its interest in the program was
Martin-Marietta, in March 1986. Its enthusiastic public approach to
bidding was a major asset in building up momentum (Note 1~. Another
major event was a public announcement by Martin-Marietta in July 1986
of a special teaming relationship with the Bell Operating Companies
(BOCs) and Northern Telecommunications. They immediately set out to
establish themselves as a credible bidder by meeting with agencies,
presenting their credentials to bid on such a large contract in an area
in which they were not particularly well known, and discussing with the
agencies their probable future requirements.
GSA had always felt that a common carrier would be at the heart of
each bid, whether or not they were the prime contractor. GSA anxiously
watched the activities of MCI, GTE Sprint, U.S. Telcom, Satellite
Business Systems, and U.S. Transmission Systems, which, together with
AT&T, represented the only companies with significant national
nPtwnrkc tithe rnmn~ni I: in the rommon-~nrri or h~in~.c:.~ wart Hi ther
`~ ~ ~ ~ _ ~~ . ~ _~` _ _ .~_` ~ _~^ ~~` _~^ Hi__ _ _. _ ~ ~ ~ _~ ~ ~ ~ ~ _ ~ ~ _ _~ _
resellers or niche carriers with small specialized networks. Studies
by GSA to assess competition indicated that the industry would probably
shake out with mergers taking place between participants, so GSA also
watched
anxiously for such moves.
The first merging move happened in December 1985 as IBM sold SBS to
MCI and took a 16.5 percent position in the resultant company with an
option co increase this to 32 percent. ~ ~
First, it put GTE Sprint in an awkward position facing a much more
powerful adversary in MCI. MCI not only had SBS's network assets and
customers but had the financial backing of IBM.
This merger did two things.
. .
31
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32
The second thing that the MCI/SBS merger did was take IBM out of
the picture. GSA had hoped that one of the results of-divestiture
would be that IBM would become a strong competitor against AT&T and
that each would begin to present major head-to-head competition in each
other's markets. IBM formed a multidivision team to examine the
bidding opportunity that FTS2000 represented and seriously wished to
bid, win, and establish itself in one move as a major player in the
government telecommunications market. However, a realistic analysis of
the inventory of the corporate skills to undertake such a large voice
communications proposal brought IBM to the conclusion that it could not
be the best bidder. IBM met with GSA to announce informally that it
would not be bidding. At that meeting, IBM discussed candidly with GSA
the results of their strategic analysis including probable prices and
major strategic issues. This was most helpful to GSA, particularly in
confirming its estimates of prices and its competitive analysis.
The MCI/SBS merger was followed by GTE Sprint and U.S. Telcom
merging to form US Sprint. For the FTS2000 project, this turned out to
have both positive and negative influences. The U.S. Telcom team had
had a corporate commitment to building a national common-carrier fiber
network. Its bidding team seemed smart, informed, well organized, and
aggressive. The team of GTE Sprint, meanwhile, had-not compared well
with other companies in meetings with GSA. The GSA teem privately felt
that, based on its showing, GTE Sprint could not organize a bid.
However, the merger with U.S. Telcom created a stronger company both in
terms of network assets and finances and it also merged U.S. Telecom's
bidding team with GTE's. -
On the down side, U.S. Telcom and GTE Sprint became immersed in the
details of implementing their merger and so did not really pay
attention to the FTS2000 REP development process in 1986. So, they did
not take advantage of the opportunity GSA presented to all vendors to
resolve specification issues early. US Sprint did not address the
importance of the opportunity until the REP was issued in 1987.
In addition to being concerned about who would actually bid, GSA
was equally concerned with who would decide not to bid and who might
decide that a strategy of upsetting the procurement was more to its
market advantage. The most obvious vendor who might adopt this
strategy was MCI, which showed little overt interest in bidding yet
seemed to have much to lose. GSA worried for several months until MCI
was announced as one of Martin-Marietta's teaming partners in September
1986 (Note 2~. As with the announced participation of all companies,
GSA took this as only a positive signal, not necessarily the whole
picture. In procurements of this size with so much at stake, GSA
recognized that "double agent" games were possible where companies with
market interests could both appear publicly to support the procurement
yet work assiduously behind the scenes to stop it.~ GSA watched
carefully for any such signals.
But in general the response by vendors to the strawman
specification was as expected and companies began to come into GSA to
submit formal comments. They took part in long meetings with GSA
discussing points. Thus, they became part of the broad government and
industry team that was collectively to accomplish the procurement.
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33
There were rumors in July 1986 that AT&T would be teaming with
Boeing, but it remained until December before there was any kind of
formal announcement (Note 3~. US Sprint made no public announcement at
all that year, but indicated to GSA that it was considering to bid.
A CHANGE IN THE GSA TEAM
At the end of 1985, with the strawman specification behind them,
Bushelle resigned to return to Chicago. At the time, this looked like
a severe blow to the project. Bushelle's creativity had been essential
to getting FTS2000 structured and started. He appeared at the right
time and was the right person to do the job. It is hard to imagine
what would have happened to the FTS if he had not joined GSA when he
did.
Replacing him would be a problem, but the project was now at a
different stage and hence it was a different kind of problem from when
he had been hired. In his two-year tenure as head of Network Services,
Bushelle had not only put in place the FTS2000 replacement strategy,
but had also mapped out the possible initiatives that should be
undertaken to extend the life of the current network. So he left GSA
with a legacy of an interim plan as well as the strawman specification
and FTS2000 strategy. So after the initial shock of his resignation,
GSA's problems were reduced to needing:
.
.
0 A good implementing manager to run the old system, to carry out
the cost-cutting and quality control program to extend the
system life, and to begin to prepare the organization for
FTS2000. This person did not need to be a strategist or even an
engineer. The most important thing was the ability to carry out
a plan.
Part-time access to Bushelle as a consultant to review any
remaining changes to the FTS2000 strategy and to help think
through integration problems.
A talented manager who could continue the development of the
FTS2000 REP. This person had to be a cut above normal, open to
innovation, but did have to possess Bushelle's creativity.
The first need was filled internally within GSA by an established
line manager. The second need was easily filled by assigning Bushelle
as an expert-consultant on the administrator's staff. This allowed him
to work part time for GSA.
For the third need, serendipity provided the right person at the
right time. This was Walter Irvine, who had been recently hired as a
key manager in a longer term project concerning meeting agencies
requirements once the FTS2000 service was available. Irvine's key
contribution to the project was developing a first-class REP according
to schedule. As with Bushelle, Irvine was also an early retiree from
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34
the Bell system, although unlike Bushelle his background was at AT&T
rather than the Bell operating companies. Most recently he had been on
AT&T's Datanet-1000 service team. He was a mature manager,
experienced, hard working, knowledgeable about data and voice services,
privy to AT&T service strategy, and he carried himself well -- perfect
for the job.
EVENTS CONVERGE TOWARD RELEASE OF THE RFP
As 1986 progressed, development of the RFP continued as GSA worked
with any vendor organization that wanted to discuss the project,
provide input and criticism to draft specifications, or in any way
contribute to the development of the RFP. GSA fully intended that the
final RFP would represent the efforts and interests of the anticipated
competition and that consequently award would flow smoothly. GSA did
expect some jockeying and positioning as the vendors suggested changes
to the specification, but in general the concerns espoused were common
to all and rarely did GSA have to take on the role of tie breaker. The
rapid progress of 1986 was later to prove misleading. Two of the three
main contenders had not been paying much attention and missed items in
the specification that were later to cause them and GSA great concern.
The year 1986 saw another major participant added to the GSA team
as the MITRE Corporation was brought in to fill an important and
expanding role. One area of concern that they were to address was the
bid evaluation process, including the identification of evaluation
factors, scores, and the evaluating scheme. The evaluating scheme
consisted of a wide variety of tasks, from the organization of a team
to the computerized cost evaluation models. There was also the
question of bid security and how bid materials would be controlled.
Early estimates had indicated that as many as 50 people would be
required for the evaluation team, and GSA had asked the FTS2000
Interagency Steering Committee to provide resources for the evaluation
team. The customer agencies indicated that they could not release
people of sufficient calibre and recommended that GSA seek outside
support. The MITRE Corporation as a noncompetitive entity was a
candidate for such support because of its isolation from potential
conflict of interests.
In October 1986, one year after releasing the initial strawman, GSA
was ready to release the final draft RFP. Allowing vendors access to
drafts and concepts throughout the development of the document produced
a specification of exceptional quality and one that was a pioneer in
the industry in the way it addressed buying services, not hardware.
The RFP spelled out specifications for all types of services from voice
to data to video, it specified packet and circuit switching services as
well as dedicated transmission, and it specified a service oversight
center. With no surprises for the vendors in the final draft, 30 days
proved adequate for review, allowing GSA 30 more days to make changes
(Note 41.
l
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35
This was a delicate stage for GSA. Someone could emerge at the
last minute and either stop the project or use the threat of stopping
the project to negotiate some kind-of major change. However, the only
manifestation of outside interest apart from GSA's continued dialog
with OMB was from the National Communications System. Its
representatives appeared on November 24 with a demand that GSA include
in the specification the requirements for their National Emergency
Telecommunications System (NETS), a multibillion dollar effort. This
request was described in approximately two paragraphs of technical
specification and there was no identified source of funds (Note 5~.
This was addressed without delay as agreement was reached to omit NETS
from the FTS2000 RFP.
GSA reached the final days of agreement with OMB and on December 1,
1986, GSA presented the program to Joe Wright, deputy director of OMB,
as part of his program of major system reviews. With the exception of
very minor concerns, he indicated he was prepared to let GSA go ahead.
Agreement was quickly reached with OMB staff. On December 22, in a
final letter from GSA to OMB, Golden indicated that agreement had been
reached on all.items and that he intended to issue the RFP. ..
THE RFP IS RELEASED
The team had committed to Golden a year earlier that GSA would have -.
the RFP ready for release before the end of 1986 and it was ready and
printed for release on December 31.. This was due to the exceptional
efforts of Irvine, his team, and MITRE,.all of whom worked through the
Christmas holiday to ensure the release. .
All of the efforts with the customer agencies, the vendors, the
press, OMB, and other interests had paid off. GSA was ready to release
a first-class RFP for one of the most complicated replacement projects -
in the history.of Computerland telecommunications just.two years after
publicly announcing its intention to do so. The specification had been
formed by means of a debate between all interested parties including
the users, the vendors, and the central oversight agencies. The.
remaining schedule called for proposal submission in six months and all
the expected teams, AT&T, Martin-Marietta, and US Sprint, had indicated
that they could meet it. The submission of bids was to be followed by
a six-month evaluation and award cycle.leading to an award in January
1988. In the euphoria of having met the schedule for releasing the
RFP, GSA felt that nothing could stop them meeting the award schedule.
Administrator Golden called a press conference for January 7, 1987,
at which the RFP was released officially and made available to the ;
bidders (Note 6~. . - .
Representative terms from entire chapter:
strawman specification
