FTS 2000:

GSA's Price Redetermination Yields a Reasonable Decision and Lower Prices

IMTEC-93-22: Published: Mar 4, 1993. Publicly Released: Apr 1, 1993.

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Pursuant to a congressional request, GAO reviewed the General Services Administration's (GSA) Federal Telecommunications System (FTS) 2000 Price Redetermination/Service Reallocation (PR/SR), focusing on whether: (1) GSA made a reasonable PR/SR decision; (2) the vendors' proposed prices were fair and reasonable; (3) FTS 2000 prices were below the lowest known commercial prices; (4) adequate controls exist to ensure that FTS 2000 prices will remain competitive with commercial prices; and (5) GSA made, separate from PR/SR, a reasonable determination not to allocate 100 percent of the FTS 2000 business to either vendor.

GAO found that: (1) the GSA approach to conducting PR/SR was appropriate and reasonable; (2) GSA developed government transitions costs from estimates submitted by the agencies comprising the majority of FTS 2000 traffic; (3) GSA determined that the vendors' prices were fair and reasonable after conducting tests to determine the characteristics of the vendors' bids; (4) proposed FTS 2000 prices were generally below the lowest known commercial prices; (5) GSA believes that the new Publicly Available Price Cap agreement will ensure that FTS 2000 prices remain competitive with commercial levels until the next PR/SR; and (6) GSA determined that awarding 100 percent of the FTS 2000 business to one vendor was not advantageous for the government.

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