Jacking in from the Congressional Ire Port:

[David Farber <farber () central cis upenn edu>]

Date: Thu, 14 Apr 1994 16:19:02 -0700
From: "Brock N. Meeks" <brock () well sf ca us>




CyberWire Dispatch//Copyright (c) 1994//


Jacking in from the Congressional Ire Port:


Washington, DC -- Procurement procedures for a vital link in the
government's long-range plan to foster the development of high speed
computer networks are under congressional investigation, Dispatch has
learned.


The House Government Operations Committee is investigating allegations
that the National Science Foundation (NSF) rigged the bidding in favor
of MCI when it awarded that company $50 million and the right to build
and operate its so-called Very High Speed Backbone Network Services
(vBNS), the successor to NSF's frequently controversial NSFNet.


MCI is part of team that currently runs NSFNet, which until recently
never delivered on promises to provide a network that trafficked data
at 45 Mbps. Despite that fact, the team responsible for running NSFNet
has received close to $40 million.  Under the looser "cooperative
agreement," which is the document that underlies NSFNet and also
the future vBNS, there is no penalty clause for nonperformance as
there is with standard federal contracts.  Under federal law, if
a government contractor doesn't deliver as promised, it can be fined
and payment for goods or services withheld.


NSF, under pressure from user community and a congressional oversight
committee to better manage the government funded NSFNet, revamped its
strategy and decided on the vBNS type network. Bidding for rights to
run vBNS were stalled for more than year as NSF refined network's
design in response to public comments.


When the vBNS solicitation finally hit the streets, it drew numerous
proposals, including ones from AT&T, Sprint and MCI.  While vBNS
didn't carry much in by way of actual funding, $50 million over 5
years, it does carry clout.  Winner of the vBNS could claim bragging
rights to running nation's fastest, most sophisticated high speed
computer network.


When NSF announced it had awarded MCI the rights to run its vBNS, the
user community was outraged.  That ire stemmed from the fact that MCI
was co-founder of current NSFNet provider, Advanced Network & Services
(ANS), which has been heavily criticized for its mismanagement of that
network.  Further, MCI was seen by industry experts as technologically
inferior to at least 2 other bidders, AT&T and Sprint.  Both of those
companies have viable ATM technology, with Sprint being the only
company in the country running a commercial ATM network.  MCI has no
such technology and has refused to talk about its future ATM plans.
ATM is a complex technology that is widely regarded as the engine for
the emerging information superhighway.


Sprint filed a protest of the MCI award claiming, among other things,
that the NSF was in reality using taxpayer money to underwrite MCI's
development of commercial ATM technology.  That protest is still
pending.


With the Administration's emphasis on building a nationwide
information superhighway as a means of launching U.S. competitiveness
into the next century, the lack of progress on such governmental
efforts has been astonishing, industry experts have claimed.


And now congress has jumped into the act, launching its own
investigation in hopes of kick-starting an effort that's been stalled
for too long.


GovOps Chmn. John Conyers (D-Mich.) said he has "received numerous
allegations questioning the propriety" of NSF's efforts to obtain
computer networking services.  In April 12 letter to NSF Director Neal
Lane obtained by Dispatch, Conyers wrote that those allegations
"suggest that NSF has entered into a $50 million cooperative
agreement... in a manner that, by design, ignored the tenets of fair
and open competition" as outlined by Federal law.


NSF's Director of Computer Networking Steve Wolff, who is responsible
for overseeing the NSFNet and future vBNS effort, said he hadn't seen
Conyers's letter.  He declined to comment on allegations made by
Conyers because Sprint's protest is still pending.


Conyers said he was "particularly troubled" that NSF used a
cooperative agreement rather than a contract to acquire the vBNS
service.  Conyers called this "an apparent effort to circumvent
Federal acquisition regulations."


"[E]ven more troubling," Conyers said, are allegations that NSF gave
MCI the rights to run the vBNS only after it ran "a sham competition."
He said NSF's competition was allegedly marked "by unfair contacts"
with MCI during bid evaluation phase, a move that gave MCI
"preferential consideration."


Conyers went on to say that "painting an even darker picture" are
allegations that bidding was "further tainted" by inappropriate
relationships between a senior NSF official who failed to recuse
himself from involvement with the process "despite an apparent
conflict of interest caused by his affiliation" with MCI's subsidiary,
ANS.


The allegations being investigated by Conyers' committee "raise
serious policy questions," he said, "about whether the vBNS
procurement was fair and in the best interest of the taxpayers.
Conyers also said that allegations raise "serious policy questions"
about the manner in which the future NSF network is being developed.


Because high speed networks are seen as a critical, strategic weapon
for U.S. global competitiveness, their development is "a high stakes"
venture that "must be open to competition from all U.S.
telecommunications companies," Conyers said.  "To do otherwise is to
court disaster; to risk building a network that is unnecessarily
costly; limited in functionality, difficult to modify and in the end,
unacceptable to its users."


Conyers asked NSF to respond to 9 pointed questions.  Among them: (1)
Does MCI currently offer in the commercial marketplace ATM services
that NSF is buying in this procurement? (2) If MCI is unable to meet
the delivery goal, or exceeds the original funding amount, what
recourse will the NSF have?  (3)  Are any members of the National
Science Board also on the Board of Directors for MCI, its subsidiaries
or subcontractors?




Meeks out...