BNUMBER:  B-276659.2 
DATE:  September 29, 1997
TITLE: MCI Telecommunications Corporation, B-276659.2, September 29,
1997
**********************************************************************

DOCUMENT FOR PUBLIC RELEASE
A protected decision was issued on the date below and was subject to a 
GAO Protective Order.  This version has been redacted or approved by 
the parties involved for public release.
Matter of:MCI Telecommunications Corporation

File:     B-276659.2

Date:September 29, 1997

Thomas C. Wheeler, Esq., and Kevin P. Mullen, Esq., Piper & Marbury, 
and Robin L. Redfield, Esq., MCI Telecommunications Corporation, for 
the protester.
Thomas C. Papson, Esq., and C. Stanley Dees, Esq., McKenna & Cuneo, 
and Nathaniel Friends, Esq., and Robert L. Petersen, Jr., Esq., for 
AT&T Communications, Inc., an intervenor.
Michelle Harrell, Esq., General Services Administration, for the 
agency.
Ralph O. White, Esq., and Christine S. Melody, Esq., Office of the 
General Counsel, GAO, participated in the preparation of the decision.

DIGEST

Modification of dedicated transmission services portion of the 
contract by which the federal government purchases domestic inter-city 
telecommunications services to add an option permitting the contractor 
to design, operate, and maintain custom dedicated networks for 
government agencies is beyond the scope of the original 
telecommunications services contract and must be purchased in 
accordance with the statutory requirements for competition.

DECISION

MCI Telecommunications Corporation protests a decision by the General 
Services Administration (GSA) to modify the FTS 2000 contract held by 
AT&T Communications, Inc.  MCI maintains that the Network Service 
Assurance Plan II (NSAP II), added by modification PS273 to the 
dedicated transmission service portion of AT&T's contract, exceeds the 
scope of the original FTS 2000 contract.  Thus, MCI argues that GSA 
was required to hold a competition for these services.

We sustain the protest.

BACKGROUND

On December 31, 1986, GSA issued request for proposals (RFP) No. 
KET-JW-87-02 seeking offers to replace the existing Federal 
Telecommunications System and to provide all of the federal 
government's domestic inter-city telecommunications services for a 
10-year period.  The resulting contract became known as the FTS 2000 
contract, and is the largest acquisition ever undertaken by a civilian 
federal agency.[1]

The RFP for the FTS 2000 contract set forth six types of services 
covered by the procurement:  (1) switched voice service, (2) switched 
data service, (3) switched digital integrated service, (4) packet 
switched service, (5) video transmission service, and (6) dedicated 
transmission service.  RFP  sec.  C.1.3.1.  Dedicated transmission 
service--the service affected by the modification at issue here--was 
defined in the solicitation as "point-to-point private line 
transmission of voice and data."  RFP  sec.  C.2.1.1.  In essence, this 
means that the transmission capacity is reserved for the user, 
available at all times, and always connected to the same party at the 
other end of the line.  In addition, the RFP explained that "dedicated 
transmission service includes analog, digital, and T1 transmission 
service."  RFP  sec.  C.2.7.  These services "differ primarily in their 
transmission rates."  AT&T Communications, Inc. v. Wiltel, Inc., 1 
F.3d 1201, 1203 (Fed. Cir. 1993).

Three offerors responded to GSA's original RFP:  Sprint, Martin 
Marietta (with MCI as a subcontractor), and AT&T.  At the conclusion 
of the competition, on December 7, 1988, GSA made two awards:  Network 
A, covering 60 percent of federal domestic inter-city service, was 
awarded to AT&T Network B, covering the remaining 40 percent of 
inter-city service, was awarded to Sprint.  Both contracts are 
indefinite delivery, indefinite quantity contracts, and both permit 
federal agencies to order the same comprehensive set of 
telecommunications services.  The maximum value of the Network A 
contract is $15 billion; the maximum value of the Network B contract 
is $10 billion.[2]  The protest here is limited to AT&T's Network A 
contract.

Over the life of the FTS 2000 contract, the growth of computer 
networks has triggered significant growth in the use, speed, and 
sophistication of dedicated transmission services.  Since the RFP 
anticipated advances in commercial service and required the contractor 
to provide these same advances to the government, RFP  sec.  C.2.1.8, there 
have been numerous modifications to the contract.  Two major 
modifications to the dedicated transmission services portion of the 
FTS 2000 contract--the addition of multipoint service and T3 
transmission capability--triggered legal disputes resulting in 
opinions discussed in detail later in this decision.

The NSAP II Modification

The work added by the June 13, 1997, NSAP II modification to the FTS 
2000 contract is set forth in the modification at paragraph E, 
including sub-paragraphs E.1 through E.7, on pages 2 through 6.  As 
shown in detail below, the general thrust of this modification is to 
permit AT&T to design and maintain customized dedicated networks for 
agencies.  

The text of the modification anticipates that federal government 
customers will order NSAP II using a request for service form, on 
which they will specify the parameters of the service desired.  Mod.  sec.  
E.4.  The form, attached to the modification as Appendix 00.1, allows 
customers to indicate their preferred transmission protocol (choices 
are:  internet protocol, multicast internet protocol, DECNET, ATM, or 
TDM).  Customers also specify their traffic and performance 
requirements.  Under traffic, which is specified in bandwidth (bits 
per second) or throughput (packets per second), customers specify the 
average, peak, burst duration, busy hour, and average packet size (in 
bytes) of their transmission traffic.  Under performance, customers 
specify their requirements for availability, time to restore service 
(mean time and maximum time), lost packet rate, packet group delay, 
and packet group delay variance.  Customers may also specify their 
needs for AT&T engineers and technicians to be available on-site.

Using this information, the modification anticipates that the 
contractor will submit a design, in the form of a quote for service, 
to meet the customer's individual networking needs, and identify the 
equipment needed to accomplish the task.[3]  Mod.  sec.  E.4.  In addition, 
the contractor will assemble the network, including "operations, 
administration, maintenance and network management services."  Mod.  sec.  
E.5.  Further, the contractor will "provide sustaining engineering to 
oversee the ongoing growth, network design, and life cycle engineering 
of the NSAP II network services in meeting the customer's evolving 
requirements."  Mod.  sec.  E.5.2.  Included within these services, the 
contractor will be responsible for providing network security, such as 
risk assessment, illegal entry prevention measures, acceptable use 
policy, and authentication and privacy.  Mod.  sec.  E.5.4.  For example, 
the change pages to the contract's technical manual (identified on 
pages 8 and 9 of the modification, and appended to the text of the 
modification) show that the contractor will design and provide 
security firewalls for agencies as part of these services.  Revised 
Contract Page 5.1.7-29.

With the purchase of NSAP II service, government agencies will be able 
to specify enhanced performance above the levels in the basic FTS 2000 
service.  For example, the table below shows the current performance 
parameters of FTS 2000 service (amended several times since original 
contract award) compared to the maximum performance levels available 
under NSAP II[4]:

      PERFORMANCE
       FEATURES              CURRENT
                            FTS 2000              NSAP II
                                               MODIFICATION

     Availability         99.87 percent     up to 99.98 percent

Trouble Identification
         Time               less than
                             2 hours          up to less than
                                                 1 minute

Time to Repair/Restore
        Service         less than 4 hours
                       mean time to repair   up to less than 
                                            1 minute to restore

      Error Rate         AT&T commercial
                            practice    up to 1 x 10-6 lost packet
                                         rate for a 100 byte pckt.
Although agencies are able to purchase increases in performance with 
NSAP II services, as shown above, and although GSA and AT&T claim that 
the purpose of this modification is to enhance performance, the 
modification clearly permits the purchase of network design and 
maintenance services regardless of whether doing so increases 
transmission reliability.[5]  In fact, during the course of the 
hearing on this protest, AT&T testified that there was no requirement 
to purchase performance above the levels of the standard FTS 2000 
contract, and that AT&T intended to market these services to agencies 
whose performance requirements are not as stringent as the maximums 
specified in the modification.  Tr. at 271-272.  Thus, we find that 
there is no per se requirement to increase transmission reliability as 
part of the purchase of network design and maintenance services 
offered in this modification to the contract.

Chronology of the Dispute Regarding NSAP II

GSA explains that since 1994 there has been "an explosion of data 
networking" placing a burden on agencies faced with integrating and 
selecting the appropriate transmission approach for dedicated 
networks.  Tr. at 75, 84.  In addition, the record shows that GSA and 
AT&T had been discussing ways to provide technical assistance to 
agencies with their dedicated networks, and also discussing ways to 
address higher reliability requirements for certain government 
networks, such as NASA's requirements for its Earth Observing Systems 
Data Information Systems Backbone Network (Ebnet), which provides 
wide-area communications and facilities between NASA ground stations.  
Tr. at 84; Contracting Officer's Statement, July 23, 1997, at 5.  
These discussions led to a decision to add the NSAP II services, 
described above, to AT&T's FTS 2000 contract.

MCI learned of the discussions, and of GSA's intent to modify the FTS 
2000 contract, via a segment of NASA's Internet Web Page providing an 
overview of the Ebnet project.  MCI apparently asked GSA to keep it 
informed of the agency's actions, and the record shows that GSA 
provided notice of its intent to proceed with the modification on 
February 13, 1997.  MCI challenged the scope of the modification--as 
it understood it--in an agency-level protest filed on February 20.  On 
March 24, MCI's agency-level protest was sustained in part and denied 
in part.

On April 2, MCI filed a protest with our Office challenging both the 
proposed remedy for the sustained portions of its agency-level 
protest, and the portions of the decision denying its protest.  On 
April 14, our Office dismissed the protest without prejudice pursuant 
to an agreement between the parties under which GSA would review its 
actions and advise MCI of the agency's intended approach.  

On June 13, GSA notified MCI that it was executing modification number 
PS273 to AT&T's FTS 2000 contract, and on June 20, MCI reinstated its 
protest here.  MCI's June 20 protest incorporated by reference its 
April 2 protest, and added one additional protest ground.  On June 30, 
GSA provided MCI with the core documents related to the modification 
pursuant to the terms of a protective order issued by our Office.  
This was the first opportunity MCI had to review any of the documents 
related to this issue, including the text of the modification, the 
agency in-scope determination, and the contracting officer's statement 
and AT&T's response to MCI's agency-level protest.

DISCUSSION

Procedural Issue

GSA requests dismissal of MCI's complaint, claiming that it fails to 
state a valid basis for protest and, alternatively, that the issues 
MCI raises are untimely.  AT&T joins the agency in this request.  We 
disagree on both counts.

GSA argues that since MCI did not have a copy of the modification 
until June 30, MCI's protest was necessarily based on "information and 
belief" and not the facts of the procurement.  Although GSA does not 
contend that the protest filed with our Office was initially 
insufficient to challenge the procurement, it argues that MCI was 
required to amend its protest after receiving the text of the 
modification and the other related documents to more accurately 
reflect the details of the modification, and more clearly reflect 
MCI's concerns.  Since the protest was not amended after receipt of 
the documents, GSA urges that it be dismissed.  Alternatively, GSA 
urges that any specific challenges to the modification not expressly 
mentioned in the initial filings be considered untimely at this 
juncture.  MCI answers that it was not required to amend its protest 
because its review of the modification documents confirmed its 
challenge as already filed.

Our Office will dismiss a protest which lacks a detailed statement of 
the factual and legal grounds for challenging a procurement, or which 
fails to state legally sufficient grounds of protest.  4 C.F.R. sec.  
21.5(f) (1997).  In this regard, we have explained that a protester's 
allegation of a procurement impropriety, without an explanation of how 
the procurement was flawed, is insufficient to support a bid protest.  
Federal Computer Int'l Corp.--Recon., B-257618.2, July 14, 1994, 94-2 
CPD  para.  24 at 2. 

Our review of MCI's protest filings shows that the April 2 filing 
raises six specific challenges to the scope of the NSAP II 
modification and that the June 20 filing incorporates the challenges 
raised in April and adds one more.  While certain of MCI's issues were 
addressed between the April 2 filing and the June 20 filing--for 
example, after GSA sustained MCI's agency-level protest claim that the 
NSAP II modification improperly permitted the purchase of network 
hardware from AT&T for the first time since the award of the FTS 2000 
contract, the purchase authority was deleted from the 
modification--other contentions continued to accurately reflect MCI's 
view of the procurement.  In this regard, we note that the April 2 
protest argues that the modification will permit AT&T

     [t]o become a single point of contact for change, fault, 
     performance, accounting and security management.  These types of 
     management services go well beyond what is contemplated under the 
     FTS 2000 contracts, and are not merely incidental to providing 
     the telecommunications services.

                    .     .     .     .     .

     [t]o provide a centralized Network Management System in which 
     AT&T will have total responsibility for all NASA equipment and 
     circuits, and become the single point of contact for all NASA 
     network modifications.  There is nothing comparable to this 
     sweeping scope of work under the FTS 2000 contracts.

MCI Initial Protest, April 2, 1997, at 3-4 (emphasis in original). 

While we agree with the agency that the better practice would have 
been for MCI to amend its protest to more precisely reflect the issues 
remaining in dispute after reviewing the actual text of the 
modification, we do not think it was required to do so in this case, 
given that the April 2 filing, in most respects, continued to 
accurately reflect MCI's concerns about this procurement.  In fact, 
the protest was sufficient to permit the agency to prepare a response 
in defense of its actions.  With respect to the alternative contention 
that any detailed grounds of protest about the modification first 
raised in MCI's comments should be considered untimely because they 
were not raised within 10 days of MCI's review of the modification 
documents, see 4 C.F.R.  sec.  21.2(a)(2), we view the initial allegations 
as sufficiently detailed to cover the arguments subsequently 
developed.  As a result, we will consider the merits of MCI's protest.

Standard of Review

The Competition in Contracting Act (CICA) requires "full and open 
competition" in government procurements as obtained through the use of 
competitive procedures.  41 U.S.C.  sec.  253(a)(1)(A) (1994).  Once a 
contract is awarded, however, our Office will generally not review 
modifications to that contract, because such matters are related to 
contract administration and are beyond the scope of our bid protest 
function.  4 C.F.R.  sec.  21.5(a); Stoehner Security Servs., Inc., 
B-248077.3, Oct. 27, 1992, 92-2 CPD  para.  285 at 4.  The exception to this 
rule is where it is alleged that a contract modification is beyond the 
scope of the original contract, since the work covered by the 
modification would otherwise be subject to the statutory requirements 
for competition (absent a valid determination that the work is 
appropriate for procurement on a sole-source basis).  Neil R. Gross & 
Co., Inc., 69 Comp. Gen. 292, 294 (1990), 90-1 CPD  para.  212 at 2, aff'd, 
The Dept. of Labor--Recon., B-237434.2, May 22, 1990, 90-1 CPD  para.  491. 

In determining whether a modification triggers the competition 
requirements in CICA, we look to whether there is a material 
difference between the modified contract and the contract that was 
originally awarded.  Neil R. Gross & Co., Inc., supra, 90-1 CPD  para.  212 
at 2-3; see AT&T Communications, Inc. v. Wiltel, Inc., supra, at 1205.  
Evidence of a material difference between the modification and the 
original contract is found by examining any changes in the type of 
work, performance period, and costs between the contract as awarded 
and as modified.  Neil R. Gross & Co., Inc., supra, 90-1 CPD  para.  212 at 
3.  We also consider whether the solicitation for the original 
contract adequately advised offerors of the potential for the type of 
change found in the modification, CAD Language Sys., Inc., B-233709, 
Apr. 3, 1989, 89-1 CPD  para.  342 at 4, or whether the modification is of a 
nature which potential offerors would reasonably have anticipated at 
the time of the original award.  American Air Filter Co.--DLA Request 
for Recon., 57 Comp. Gen. 567, 573 (1978), 78-1 CPD  para.  443 at 9-10.

The Scope of FTS 2000

At the outset, we recognize the broad nature of the FTS 2000 contract 
and that the competitors for the contract clearly contemplated that 
extensive modifications would be made to the contract over its 10-year 
life.  AT&T Communications, Inc. v. Wiltel, Inc., supra.  On its face, 
the RFP explained that the procurement was designed to permit the 
government "[t]o obtain a comprehensive set of telecommunications 
services" and "[t]o obtain telecommunications services through two 
prime service contractors responsible for providing all services and 
network management."  RFP  sec.  C.1.3.  To achieve these objectives, the 
RFP explains:

     The government intends to procure the following six 
     telecommunications services:  switched voice service, switched 
     data service, switched digital integrated service, packet 
     switched service, video transmission service, and dedicated 
     transmission service.  This solicitation describes these 
     services, as well as specific features of these services that the 
     government is likely to procure.  It is the government's intent 
     that these services conform as closely as possible with those 
     offered commercially.

RFP  sec.  C.1.3.1 (emphasis added).

In addition, the solicitation's expansive Service Improvements clause 
advised offerors that after award:

     the Government may solicit, and the Contractor is encouraged to 
     propose independently, improvements to the services, features, or 
     other requirements of the contract.  These improvements may be 
     proposed to save money, to improve performance, or for any other 
     purpose which presents a service advantage to the Government.

RFP  sec.  H.16.  

Despite the broad nature of this contract, however, we do not agree 
that the kind of networking services at issue here reasonably fall 
within the scope of the original FTS 2000 contract.  Our reasons for 
this conclusion are set forth below.

Focusing first on the type of work at issue, the discussion above 
shows that the original FTS 2000 contract purchased telecommunications 
services, and for purposes of this review, dedicated transmission 
services.  RFP  sec.  C.1.3; C.1.3.1.  Under the FTS 2000 contract, as 
awarded, transmission services ended at a government facility's 
"service delivery point."  RFP  sec.  C.2.1.7.  Beyond this point (or in 
some cases a "secondary service delivery point"), a facility's network 
was not the responsibility of the telephone services contractor.[6]  
Id.

In contrast, the kind of effort purchased by the NSAP II modification 
is described in common industry parlance as "network outsourcing."  
Outsourcing of an entity's network design and management is a business 
not traditionally performed by the companies that provide transmission 
services like those purchased under the FTS 2000 contracts.  For 
example, a list of the "Top 10 Network Outsourcing Vendors" published 
in a leading trade magazine and appended to MCI's Comments on the 
Agency Report, identifies companies like Hewlett-Packard, Computer 
Sciences Corporation, and I-NET.[7]  In addition, network outsourcing 
can generally be purchased without regard to any changes in dedicated 
transmission capabilities.  

While the type of work purchased by the NSAP II modification is 
different from dedicated transmission services as procured to date, we 
recognize that there is some ambiguity about whether the original FTS 
2000 contract anticipated that the contractors would perform some 
network management services.  Specifically, the RFP states that one 
purpose of the FTS 2000 contract is to procure from two contractors 
all of the government's telecommunication "services and network 
management."  RFP  sec.  C.1.3.

In our view, however, the term "network management" as used in the 
original FTS 2000 contract has a different meaning from the term as 
used in the NSAP II modification.  As the court pointed out in 
reversing the GSA Board of Contract Appeals's Wiltel decision 
(discussed further below), certain of the terms used in the FTS 2000 
contract have more than one meaning.  See AT&T Communications, Inc. v. 
Wiltel, Inc., supra, at 1206-1207 ("The Board erred in assuming that 
the term 'service' has one and the same meaning in various contexts.  
To the contrary, the FTS 2000 contract uses 'service' in many distinct 
ways.").  

The original management requirements for the FTS 2000 contracts were 
identified at RFP  sec.  C.3, entitled "Management and Operations."  Within 
this section, 12 functional management tasks are identified, one of 
which is entitled "network operations and management."  RFP  sec.  C.3.1.3.  
In the section describing network operations and management, the RFP 
identifies service continuity, and "the development and execution of 
restoration and contingency plans covering the loss of facilities or 
switching capabilities, network overload, and other service-disrupting 
conditions."  RFP  sec.  C.3.2.5.  None of these services, however, cross 
the threshold from the publicly available transmission network, into 
an agency's "private" network.  Under NSAP II, however, AT&T's network 
management will move from managing its own assets--i.e, its domestic, 
inter-city long distance calling network--to designing and managing 
customized agency networks for conducting federal government business.  
Mod.  sec.  E.5; see Tr. at 90.  Thus, we conclude that, notwithstanding 
the use of the term "network management," the type of work performed 
under the modification is different from the work procured under the 
original contract.

We next consider the cost of the NSAP II service and the performance 
period involved for these services.  Currently, NASA is the only 
agency that has placed orders against AT&T's FTS 2000 contract for 
NSAP II service.  As a result, GSA has estimated the cost of NSAP II 
as $7.8 million.  On the other hand, several factors lead us to 
conclude that the relatively small cost estimate for NSAP II services 
should not control our determination of whether the modification is 
within the scope of the original contract.  

For example, AT&T's technical representative stated during our hearing 
on this protest that the company intends to market this service 
throughout the government to agencies that may not need increased 
reliability, but would like to purchase assistance with network design 
and maintenance--i.e., outsourcing.  Tr. at 271.  If AT&T is 
successful in its efforts, the value of this modification could be 
significantly higher than GSA's current estimate.  In addition, we 
reject GSA's contention that this modification occurs so late in the 
10-year life of the FTS 2000 contract that it is unlikely that enough 
purchasers will order the service to cause the modification's value to 
become a significant portion of the overall cost of the original 
contract.  Clearly, the opportunity to design, choose equipment for, 
and manage an agency's communication network could have value--and 
opportunities for extended performance--beyond the life of the FTS 
2000 contract.  

In sum, in light of the significant difference in the type of services 
to be performed under the NSAP II modification, we conclude that the 
modification is outside the scope of the original contract.

Finally--and as an overlay to the analysis above--we review this 
modification with an eye to the two prior legal disputes in which MCI 
alleged that modifications to the contract's dedicated transmission 
services exceeded the scope of the original contract.  

In 1992, AT&T's FTS 2000 contract was amended to add multipoint 
service to the contract's dedicated transmission service.  MCI's 
challenge to the addition of this service was considered and denied in 
MCI Telecommunications Corp. v. General Servs. Admin., GSBCA No. 
11963-P, 93-1 BCA  para.  25,541, 1992 BPD  para.  287.  While the original RFP 
described dedicated transmission service as "point-to-point private 
line transmission of voice and data," RFP  sec.  C.2.1.1., multipoint 
service is used to link three or more locations together on a single 
dedicated circuit.  MCI, 93-1 BCA at 127,219, 1992 BPD  para.  287 at 9.  
The GSA Board concluded that multipoint service was a foreseeable 
improvement to dedicated transmission services, and was well within 
the scope of the original contract.  Id. at 127,222, 1992 BPD  para.  287 at 
14.

Also in 1992, AT&T's contract was amended to add T3 transmission 
service to the dedicated transmission portion of the FTS 2000 
contract.  The GSA Board sustained a challenge to this modification 
filed by Wiltel, Inc. (with MCI as an intervenor).  Wiltel, Inc. v. 
General Services Admin., GSBCA No. 11857-P, 93-1 BCA  para.  25,314, 1992 
BPD  para.  201.  The T3 service considered in Wiltel uses fiber-optic cable 
to transmit dedicated data and voice signals at a rate of 45 million 
bits per second, approximately 28 times faster than the T1 
transmission rate (the rate identified in the original contract) and 
672 times faster than a voice grade circuit.  Id. at 126,104, 126,106, 
1992 BPD  para.  201 at 2, 5; Tr. at 34.  Since the GSA Board considered T3 
service a new service, as opposed to an improvement to an existing 
service, it concluded that the modification adding the service 
violated the scope of the original FTS 2000 contract.  Wiltel, 93-1 
BCA at 126,113, 1992 BPD  para.  201 at 19-20.

The GSA Board's Wiltel decision on T3 transmission service was 
reversed by the United States Court of Appeals for the Federal 
Circuit.  AT&T Communications, Inc. v. Wiltel, Inc., supra.  The court 
concluded that the GSA Board erred in focusing on the differences 
between T1 and T3 service, and should have instead recognized that T3 
service was an improvement to dedicated transmission service.  Id. at 
1207.  Thus, the court considered the addition of T3 transmission 
services to be within the scope of the original FTS 2000 contract.  
Id.

The network design and management services purchased under NSAP II are 
distinguishable from the services procured in these earlier 
modifications.  Both multipoint transmission and T3 transmission were 
technological improvements to dedicated transmission services, and as 
such, were anticipated by the FTS 2000 contract's stated intention of 
remaining current with developing technology.  By comparison, while it 
is clear that an entity can obtain improvements in reliability by 
redesigning its network, the design, maintenance, and operation of a 
customized data network for agency-specific use is a distinctly 
different effort from improving the reliability of the transmission 
service connecting it.  In short, the ability to improve reliability 
through better networking cannot reasonably be termed an improvement 
in dedicated transmission.

RECOMMENDATION

We conclude that the modification to the FTS 2000 contract adding NSAP 
II services is beyond the scope of the original contract, and that GSA 
was required to procure these services in accordance with the 
competition requirements of CICA, 41 U.S.C.  sec.  253(a).  Accordingly, we 
recommend that GSA terminate the NSAP II services added to the FTS 
2000 contract pursuant to modification number PS273, and either hold a 
competition for these services or prepare the appropriate 
justification required by CICA for a sole-source procurement.[8]  

We also recommend that the protester be reimbursed the reasonable 
costs of filing and pursuing its protest including attorneys' fees.  4 
C.F.R.  sec.  21.8(d)(1).  In accordance with 4 C.F.R.  sec.  21.8(f)(1), MCI's 
certified claim for such costs, detailing the time expended and the 
costs incurred, must be submitted directly to the agency within 60 
days after receipt of this decision.  

The protest is sustained.

Comptroller General
of the United States

1. Staff of House Committee on Government Operations, FTS 2000:  
Management Reforms and Intensive Congressional Oversight Ensure 
Savings of $500 Million for the Taxpayers, H.R. Doc. No. 102-1056 at 2 
(1992).

2. Despite the magnitude of these contracts, their value does not 
represent the majority of federal spending on telecommunications 
services.  During fiscal year 1995, the General Accounting Office 
concluded that the federal government spent at least $2.4 billion on 
telecommunication services, of which 32 percent, or $761 million, was 
spent via the FTS 2000 contracts.  GAO, Telecommunications Costs 
Reported by Federal Organizations for Fiscal Year 1995 at 2, 5 
(AIMD-96-105, B-271967, June 17, 1996); Hearing Transcript (Tr.) at 
209-210.

3. In response to MCI's earlier agency-level protest of this 
modification, discussed in greater detail below, which GSA sustained 
in part and denied in part, the equipment identified by the contractor 
will be provided as government furnished equipment (GFE).  

4. The stringency of the maximum performance parameters available in 
the NSAP II modification have been designed to meet certain unique 
requirements related to the National Aeronautics and Space 
Administration (NASA).  Since NASA was involved in developing the 
performance requirements, it is the first agency to have placed an 
order for NSAP II services.  To date, no other agency has ordered the 
NSAP II services.

5. For example, on the request for service form, described above, 
government customers may specify any level of availability between the 
current FTS 2000 standard of 99.87 percent and the NSAP II ceiling of 
99.98 percent.  Modification, Appendix 00.1, at fourth unnumbered 
page.

6. This distinction is also present in home telephone service.  
Generally, without the purchase of an additional service, the 
telephone company's responsibility for wiring does not extend beyond 
the point where the telephone lines enter the home.

7. For the record, however, the list also includes AT&T Solutions and 
MCI/SHL.  

8. During the course of this protest, GSA determined that it was in 
the best interests of the government to continue performance 
notwithstanding the protest and executed a "best interest" override of 
the statutory stay of AT&T's performance of this modification to the 
contract.  See 31 U.S.C.  sec.  3553(d)(3)(C)(i)(I) (1994).  In such cases, 
CICA requires our Office to make our recommendation "without regard to 
any cost or disruption from terminating, recompeting, or reawarding 
the contract."  31 U.S.C.  sec.  3554(b)(2).