CyberWire Dispatch // Copyright (c) 1994 //

Jacking in from the Congressional Ire Port:

Washington, DC -- Procurement procedures for a vital link in the government's long-range plan to foster the development of high speed computer networks are under congressional investigation, Dispatch has learned.

The House Government Operations Committee is investigating allegations that the National Science Foundation (NSF) rigged the bidding in favor of MCI when it awarded that company $50 million and the right to build and operate its so-called Very High Speed Backbone Network Services (vBNS), the successor to NSF's frequently controversial NSFNet.

MCI is part of team that currently runs NSFNet, which until recently never delivered on promises to provide a network that trafficked data at 45 Mbps. Despite that fact, the team responsible for running NSFNet has received close to $40 million. Under the looser "cooperative agreement," which is the document that underlies NSFNet and also the future vBNS, there is no penalty clause for nonperformance as there is with standard federal contracts. Under federal law, if a government contractor doesn't deliver as promised, it can be fined and payment for goods or services withheld.

NSF, under pressure from user community and a congressional oversight committee to better manage the government funded NSFNet, revamped its strategy and decided on the vBNS type network. Bidding for rights to run vBNS were stalled for more than year as NSF refined network's design in response to public comments.

When the vBNS solicitation finally hit the streets, it drew numerous proposals, including ones from AT&T, Sprint and MCI. While vBNS didn't carry much in by way of actual funding, $50 million over 5 years, it does carry clout. Winner of the vBNS could claim bragging rights to running nation's fastest, most sophisticated high speed computer network.

When NSF announced it had awarded MCI the rights to run its vBNS, the user community was outraged. That ire stemmed from the fact that MCI was co-founder of current NSFNet provider, Advanced Network & Services (ANS), which has been heavily criticized for its mismanagement of that network. Further, MCI was seen by industry experts as technologically inferior to at least 2 other bidders, AT&T and Sprint. Both of those companies have viable ATM technology, with Sprint being the only company in the country running a commercial ATM network. MCI has no such technology and has refused to talk about its future ATM plans. ATM is a complex technology that is widely regarded as the engine for the emerging information superhighway.

Sprint filed a protest of the MCI award claiming, among other things, that the NSF was in reality using taxpayer money to underwrite MCI's development of commercial ATM technology. That protest is still pending.

With the Administration's emphasis on building a nationwide information superhighway as a means of launching U.S. competitiveness into the next century, the lack of progress on such governmental efforts has been astonishing, industry experts have claimed.

And now congress has jumped into the act, launching its own investigation in hopes of kick-starting an effort that's been stalled for too long.

GovOps Chmn. John Conyers (D-Mich.) said he has "received numerous allegations questioning the propriety" of NSF's efforts to obtain computer networking services. In April 12 letter to NSF Director Neal Lane obtained by Dispatch, Conyers wrote that those allegations "suggest that NSF has entered into a $50 million cooperative agreement... in a manner that, by design, ignored the tenets of fair and open competition" as outlined by Federal law.

NSF's Director of Computer Networking Steve Wolff, who is responsible for overseeing the NSFNet and future vBNS effort, said he hadn't seen Conyers's letter. He declined to comment on allegations made by Conyers because Sprint's protest is still pending.

Conyers said he was "particularly troubled" that NSF used a cooperative agreement rather than a contract to acquire the vBNS service. Conyers called this "an apparent effort to circumvent Federal acquisition regulations."

"[E]ven more troubling," Conyers said, are allegations that NSF gave MCI the rights to run the vBNS only after it ran "a sham competition." He said NSF's competition was allegedly marked "by unfair contacts" with MCI during bid evaluation phase, a move that gave MCI "preferential consideration."

Conyers went on to say that "painting an even darker picture" are allegations that bidding was "further tainted" by inappropriate relationships between a senior NSF official who failed to recuse himself from involvement with the process "despite an apparent conflict of interest caused by his affiliation" with MCI's subsidiary, ANS.

The allegations being investigated by Conyers' committee "raise serious policy questions," he said, "about whether the vBNS procurement was fair and in the best interest of the taxpayers. Conyers also said that allegations raise "serious policy questions" about the manner in which the future NSF network is being developed.

Because high speed networks are seen as a critical, strategic weapon for U.S. global competitiveness, their development is "a high stakes" venture that "must be open to competition from all U.S. telecommunications companies," Conyers said. "To do otherwise is to court disaster; to risk building a network that is unnecessarily costly; limited in functionality, difficult to modify and in the end, unacceptable to its users."

Conyers asked NSF to respond to 9 pointed questions. Among them: (1) Does MCI currently offer in the commercial marketplace ATM services that NSF is buying in this procurement? (2) If MCI is unable to meet the delivery goal, or exceeds the original funding amount, what recourse will the NSF have? (3) Are any members of the National Science Board also on the Board of Directors for MCI, its subsidiaries or subcontractors?

Meeks out...