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GSA Releases FTS2000 Cost-Effectiveness Study

GSA # 9339

August 1, 1996
Contact: Bill Bearden
(202) 501-1231
Internet: bill.bearden@gsa.gov

Describing it as yet another example of how GSA continues to cut costs while providing quality service, David J. Barram, Acting Administrator of the U.S. General Services Administration, today released a report to Congress stating that monthly charges to the Government for long-distance services used by federal agencies are $9.1 million less than the lowest commercial equivalent offerings.

The report to Congress is on the cost-effectiveness of the agency's Federal Telecommunications Service (FTS) 2000 program, which provides long-distance telecommunications services to Federal agencies. The report compares FTS2000 prices with available public commercial prices negotiated by large corporations and finds that FTS2000 prices are highly competitive and, in the aggregate, the least expensive in the industry.

"GSA contracts FTS2000 services with private sector suppliers at prices that in the current fiscal year are 17.8 percent or $9.1 million per month less than the lowest commercial equivalent offerings," Barram said. "These lower prices mean lower costs to Federal agency users and savings to the American taxpayers. It is an excellent example of how government is operating smarter by taking advantage of its buying power and saving tax dollars."

The FTS2000 prices used in the comparison are the result of a re-bidding last year by AT&T and Sprint and subsequent negotiations that reduced prices by almost 33 percent over the last three years of the contract, further enhancing the competitiveness of FTS2000 with the commercial marketplace.

The report states that the already excellent FTS2000 prices will further reduce next fiscal year. At the current level of usage and with network rearrangements now being made, the total FTS2000 prices will be more than $10 million per month lower than the level used to compute the current $9.1 million per month price advantage.

The FTS2000 program offers integrated voice, data, and video telecommunications services to meet common-user needs government-wide. Services are provided through two 10 year contracts with AT&T and Sprint, and are projected to be valued at $4 to $5 billion in total.

The cost-effectiveness report is available via the Internet at http://post.fts2k.gsa.gov