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Panel Probes Leak of AT&T Bid to Its Rivals

January 19, 1988|Associated Press

WASHINGTON — A government official leaked secret information about American Telephone & Telegraph Co.'s bids for $55 million in telecommunications contracts to at least two competing phone companies, a Senate committee investigating the procurement said Monday.

Officials at Southern Bell Telephone & Telegraph Co. and Chesapeake & Potomac Telephone Co. were given information by a General Services Administration official about the price they would have to beat to win the contracts, according to information the committee turned over to the GSA.

The GSA official, Lal Soni, was removed by the agency last week from his position as director of network engineering and reassigned to a new position outside the telecommunications area. The change was made, the GSA said, because Soni was the focus of its inspector general's investigation.

"These facts cast substantial doubt upon the integrity of the bidding process in the 14 contract awards" and could affect a 10-year contract for a new government telephone system valued at as much as $25 billion and now out for bids, Sen. John Glenn (D-Ohio), chairman of the Senate Governmental Affairs Committee, said in a letter to GSA Administrator Terence C. Golden.

The allegation that information from AT&T's sealed bid was made available to its competitors is being investigated by the Justice Department and Glenn's committee along with GSA's inspector general. The Justice Department is investigating the possibility that illegal gratuities were paid to GSA officials in connection with the contracts.

A spokeswoman for BellSouth Corp., parent of Southern Bell, said the company was still conducting its own internal investigation. "We still don't have all the answers and feel there's no point in commenting on a piecemeal basis," said spokeswoman Kathleen Hughes.

Ken Pitt, a spokesman for Bell Atlantic, parent of C&P, said C&P "never received what it regarded as AT&T bid information and never relied on such alleged information in preparation of its bid in this case."

AT&T Bid on All

The committee said that Soni had been the guest of Southern Bell for at least five meals at restaurants in the Atlanta and Washington areas.

Soni has not commented publicly on the allegations. GSA offices were closed Monday because of the holiday, and officials could not be reached for comment.

Southern Bell and C&P each won two of the 14 contracts for computerized switching equipment. AT&T won seven, and the remainder went to US West Inc. and Pacific Telesis Group. AT&T was the only company that bid for all 14 contracts.

Information Glenn sent to Golden said Soni told an official at each of the two Bell companies what price they would need to beat to win the contract.

The phone companies' officials, who were not publicly identified, told the panel they did not use the pricing information provided by Soni. A C&P official said the dollar amount was so close to the AT&T rates already on file at the Federal Communications Commission that the leaked information provided the company no advantage.

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