DoE PROCUREMENT OF HIGH SPEED NETWORK UNDER INVESTIGATION [please note distribution restriction (sub

[David Farber <>]

COMMUNICATIONS DAILY
Copyright 1993
December 17, 1993


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DoE PROCUREMENT OF HIGH SPEED NETWORK UNDER INVESTIGATION
by Brock N. Meeks




     Dept. of Energy (DoE) has awarded Sprint $50-million contract
to build what may be world's fastest computer network, called
Energy Services Network (ESNet).  It's 2nd time around for Sprint.
Company first won contract in July 1992 (CD July 19/92 p2), but was
denied go-ahead when GAO upheld protest by failed bidder AT&T (CD
April 9 p2).  But latest award is being investigated by
congressional oversight committee because of alleged bidding
improprieties.


     At heart of network is Asynchronous Transfer Mode (ATM) switch
widely regarded as engine that will drive national information
infrastructure (NII).  Within 5 years, ESNet is expected to be
capable of transmitting data at 622 Mbps -- equivalent to 8,000
pages per sec.  Network was designed by DoE's Lawrence Livermore
National Lab (LLNL), and it's viewed by DoE officials view as
prestige, high-visability project.


     Handling of AT&T protest has held up development of high-speed
data networks crucial to Administration's goal of building national
information superhighway by more than 18 months, according to some
specialists.  AT&T's protest criticized LLNL's original bid
specification, claiming Lab hadn't made clear that ATM technology
could be bid, so it offered slower, less advanced data transfer
technology.  GAO told LLNL that it should rework bid to address
concerns, allowing all bidders to submit new deals as "best and
final offers."  It was after 2nd round of amended specifications
that Sprint again was chosen.


     Now ESNet contract has aroused congressional inquiry.  Dec. 13
letter to Energy Secy. Hazel O'Leary from House Energy Subcommittee
Chmn. Synar (D-Okla.) obtained by Communications Daily said:
"There appear to be a number of flaws in the manner in which this
contract has been handled."  Synar asked O'Leary to "immediately
suspend" contract. WilTel, Okla.-base company, and MCI were other
failed bidders.


     Synar letter is based on GAO's original finding during bid
protest and claims that LLNL "did not revise" solicitation, as
GAO had recommended. Energy Subcommittee staffer David Berick
told us LLNL "has been trying to award this to Sprint forever and
a day."  He said Synar letter was written before lawmaker knew
that Sprint had been re-awarded contract, "but the fact that they
[DoE] have awarded it to Sprint again isn't really a surprise, is
it?"


     Berick said Synar request to suspend contract stems from fact
that LLNL "didn't recompete, didn't resolicit."  However, GAO
Contract Board of Appeals documents show that agency asked LLNL to
"revise the solicitation to accurately describe" acceptable
equipment "proposed for the initial implementation, open
negotiations with all offerors and then request best and final
offers."  Further, letter went out Sept. 9 from LLNL to all
original ESNet bidders incorporating what it called "the
information and instructions necessary to proceed in compliance
with the GAO recommendation."


     DoE also conferred with GAO throughout revised bidding
process, according to Nov. 19 letter to Sprint we obtained from
Grover Allen, DoE acting deputy asst. secy. for procurement.  DoE
worked with GAO "regarding the corrective action taken" by LLNL
in amending solicitation and seeking revised offers, DoE told
Sprint.  DoE also continued to "periodically advise GAO of the
procurement process," letter said.  "We are confident that the
procurement process has been consistent with GAO's decision...
and treated all offerors equally," it said.


     Sprint said that it was aware "that questions have been raised
once again" about ESNet contract and that LLNL had complied with
all GAO concerns stemming from AT&T's original protest.  "We are
confident that any additional questions will be resolved
expeditiously," Sprint said.


     AT&T said it submitted "technically sophisticated" bid, this
time based on faster ATM technology.  "We are confident that our
proposal was solid, competitive and in full compliance," with DoE's
needs, AT&T said.  Company said it plans to "aggressively pursue"
future high speed data contracts with govt.  Company declined to
say whether it would protest current contract:  "We plan to keep
our options open," spokeswoman said.


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