Telecommunications:

Costs Reported by Federal Organizations for Fiscal Year 1995

AIMD-96-105: Published: Jun 17, 1996. Publicly Released: Jul 3, 1996.

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Pursuant to a congressional request, GAO provided information on governmentwide fiscal year (FY) 1995 telecommunications costs for: (1) Federal Telecommunications System (FTS) 2000 services; (2) non-FTS 2000 long distance services; (3) local telecommunications services; (4) wireless services; and (5) telecommunications support contract services. GAO also provided information on local access costs associated with FTS 2000 telephone calls and reported FY 1995 costs for the Purchase of Telecommunications and Services (POTS) contract.

GAO found that: (1) the 41 federal agencies that responded to the survey spent about $2.4 billion for telecommunications services in FY 1995; (2) these agencies paid $761 million for FTS 2000 services, $379 million for non-FTS 2000 long distance services, $700 million for local telecommunications services, $33 million for wireless services, and $511 million for support contract services; (3) about 50 percent of the agencies reported cost estimates for at least one service category because their actual FTS costs were unknown; (4) the total costs reported were understated because some agencies did not report complete cost information for all telecommunications services; (5) some federal agencies reported different costs than the General Services Administration (GSA) reported for FTS services; (6) FTS 2000 vendor pricing information did not separately identify local access charges, but GSA estimated that, based on a 1994 analysis, as much as 40 to 50 percent of the cost of an FTS 2000 telephone call was for local access; (7) local access costs may have decreased since 1994 because of cost reductions for certain FTS services; and (8) for FY 1995, federal agencies spent about $41 million for telephone-related equipment and services under the GSA POTS contract.

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