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AT&T Seeks Pacts It Lost After Bids Allegedly Leaked

February 17, 1988|Associated Press

WASHINGTON — Lawyers for American Telephone & Telegraph argued Tuesday that the company should be awarded government telecommunications contracts worth millions of dollars because a General Services Administration employee leaked secret AT&T bid information to competitors.

AT&T attorney C. Stanley Dees told the GSA board of contract appeals that the federal agency had received information on at least three occasions suggesting that AT&T's price had been disclosed, but the GSA let the bidding proceed anyway.

GSA attorney Edward Gregorowicz defended the contracts to upgrade the federal telephone system, known as FTS, saying there was no basis for AT&T's charges.

"The real issue is that AT&T has been the queen mother of the FTS network for 25 years. . . . It got fat, fell asleep and lost its throne," Gregorowicz said.

The contracts, worth $55 million for 12 large electronic switches, are being investigated by the GSA's inspector general's office, the Justice Department and the Senate Governmental Affairs Committee.

Won 5 Contracts

The procurement has been watched closely because the GSA also is handling the bidding on contracts for a new federal phone system worth as much as $25 billion over 10 years.

AT&T, the only company to bid for all 12 switches, protested after it won contracts for only five switches. It had been the sole bidder for four of the five.

Regional Bell phone companies won contracts for the other seven--Bell Atlantic, BellSouth and US West each got contracts for two switches in their areas, and Pacific Telesis got one.

AT&T says it should get the contracts for all 12 switches because of the alleged GSA improprieties.

After the contracts were awarded in October, AT&T charged that the GSA had misled the company during bidding and evaluated AT&T's bid differently from the regional companies' proposals in an effort to give the contracts to companies other than AT&T.

Later, AT&T added another charge--that GSA engineer Sureshar L. Soni provided confidential AT&T price information to Bell Atlantic, BellSouth and US West.

BellSouth has offered to withdraw from its contract because its own internal investigation found that its bid may have been compromised by information passed to the company.

Soni has refused to answer questions about his role in the procurement, invoking his Fifth Amendment right against self-incrimination in a deposition earlier this month. He also refused to answer questions about his daughter, Neelam, who was hired by BellSouth as a manager trainee last April when bids were being formulated.

Bell Atlantic and US West deny that they received proprietary information and used it to develop their bids. Bell Atlantic has said the information Soni offered was of no value because he appeared to be restating AT&T's current rates, which are publicly available.

The GSA alleges that AT&T also may have received confidential information and used it to develop its bids. AT&T says that when Soni told an AT&T official the company's initial bid for the Washington switch was "not good enough to win," he was stating the obvious because AT&T knew its initial bid did not reflect the GSA's required 10% discount of current prices.

Gregorowicz said AT&T could have raised alleged improprieties with the board of contract appeals during the bidding but did not.

"This conduct cannot be rewarded by the board," he said.

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