FTS 2000: GSA Must Resolve Critical Pricing Issues
IMTEC-91-79
Published: Sep 11, 1991. Publicly Released: Oct 03, 1991.
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Highlights
Pursuant to a congressional request, GAO assessed the effectiveness of General Services Administration (GSA) efforts to obtain competitive rates for telecommunications services under the Federal Telecommunications System (FTS) 2000 contracts.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| General Services Administration | The Administrator of General Services should direct the FTS 2000 program staff to develop an accurate measure of comparable commercial rates that takes into account the value of any services provided under the FTS 2000 contracts that are not typically provided under commercial contracts. This measure should then be used during pricing redetermination to evaluate the vendors' bids. Further, GSA needs to make sure that it has an effective process in place to keep prices at a favorable rate throughout the life of the contract. |
Closed – Implemented
GSA agreed with the recommendation. GSA used the results of a study comparing FTS 2000 and commercial service prices in making its price redetermination decision. GSA completed negotiations with vendors on mechanisms to keep FTS 2000 rates comparable to commercial rates. GAO reviewed these mechanisms, found them reasonable, and concluded that they should ensure the government pays competive rates.
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| General Services Administration | If price redetermination fails to yield prices that are favorable to the government in comparison to commercial prices, GSA should consider alternatives, including reallocating all FTS 2000 traffic to one vendor if appropriate or conducting a new, full, and open competition. |
Closed – Not Implemented
GSA was satisfied with the results of price redetermination and thus, did not consider other options proposed by GAO. GAO reviewed GSA's price redetermination process and found it to be reasonable. GSA expects prices resulting from price redetermination to save about $450 million over the final 6 years of the contracts.
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IT acquisitionsComputer equipment contractsContract modificationsContract negotiationsCost analysisCost controlFederal procurementProgram managementTelecommunications equipmentFederal telecommunications system