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GAO-01-855R 1 (2001-07-02)

handle is hein.gao/gaocrptanph0001 and id is 1 raw text is: 



  SGAO

       Accountability * Integrity * Reliability
United States General Accounting Office
Washington, DC 20548



         July 2, 2001

         The Honorable Tom Davis
         Chairman
         Subcommittee on Technology and Procurement Policy
         Committee on Government Reform
         House of Representatives

         Subject: FTS2001 Implementation Issues

         Dear Mr. Chairman:

         As you know, GSA awarded FTS2001 contracts to Sprint and MCI WorldCom to
         provide long distance telecommunications services to federal agencies. The federal
         government began the sizable and complex effort of transitioning from the existing
         FTS 2000 contracts to FTS2001 in June 1999. This transition is presently nearing
         completion. In your letter of May 3, 2001, you asked that we respond to several
         follow-up questions pertaining to your Subcommittee's April 26, 2001, oversight
         hearing regarding the FTS2001 contracts. My responses to your questions follow
         below.

              Question 1: How feasible would it be to build into future contracts an
              accountability mechanism that may include penalties that the General Services
              Administration (GSA) could apply against the contractors' guaranteed minimum
              revenue over the life of the contract? What is the feasibility of renegotiating the
              current contracts?

         Answer: It is feasible to include an accountability mechanism in future contracts that
         include such civil penalties as provisions for credits or liquidated damages. It is also
         feasible to modify the current FTS2001 contracts to include such an accountability
         mechanism, because federal acquisition law does permit such modification of
         contracts (although such action would require negotiations with, and the agreement
         of, the contractors). We should make it clear, however, that the existing FTS2001
         contracts already include accountability mechanisms, in both specific and general
         terms.

         As we stated in our report of last March,' the existing FTS2001 contracts establish
         specific performance requirements,2 including timeliness of service delivery,

         1FTS2001: Transition Challenges Jeopardize Program Goals (GAO-01-289, March 30, 2001).
         2 These terms are stated at paragraph H. 13 of the FTS2001 contracts.


GAO-01-855R FTS 2001 Implementation

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