AT&T wins big with veterans agency

Department of Veterans Affairs awards $17.2 million contract for MPLS VPN services to AT&T

AT&T is claiming its first big victory in the U.S. federal market since its merger with SBC, with this week’s announcement of a three-year, $17.2 million award from the U.S. Department of Veterans Affairs.

AT&T will connect 48 Veterans Affairs hospitals and administrative offices to its MPLS Private Network Transport Service. The company says its network is the nation’s highest-bandwidth, all-MPLS network and can support 40Gbps.

The pre-merger AT&T did little business with Veterans Affairs before this award, but SBC provided customer premises equipment, local access and optical services to the agency in its 13-state region.

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AT&T is claiming its first big victory in the U.S. federal market since its merger with SBC, with this week’s announcement of a three-year, $17.2 million award from the U.S. Department of Veterans Affairs.

AT&T will connect 48 Veterans Affairs hospitals and administrative offices to its MPLS Private Network Transport Service. The company says its network is the nation’s highest-bandwidth, all-MPLS network and can support 40Gbps.

The pre-merger AT&T did little business with Veterans Affairs before this award, but SBC provided customer premises equipment, local access and optical services to the agency in its 13-state region.

“When you look at pre-merger SBC and AT&T, SBC had a good relationship with Veterans Affairs, but its relationship with the legacy AT&T wasn’t as strong,” says Quinten Johnson, sales center vice president for AT&T Government Solutions. “This is a significant win because it’s probably the first agency that is utilizing the strength of the combined AT&T. It’s using AT&T’s backbone as well as SBC’s local presence in 13 states.”

AT&T will be the secondary carrier for Veterans Affairs, which has used Sprint as its primary voice and data service provider since the late 1990s. With the AT&T award, Veterans Affairs is moving to a dual-carrier network architecture to improve reliability and redundancy.

More federal agencies are pursing dual-carrier network strategies, says Ray Bjorklund, senior vice president with FedSources, a McLean, Va., market research firm.

“We see in the U.S. Postal Service and now in Veterans Affairs the need to have a high level of continuity of operations. The only way to get it is a high level of network resources,” Bjorklund says.

“The dual-carrier approach has the attention of the government right now because of the reliability it provides,” AT&T's Johnson says. “More and more government customers are looking at taking this approach.”

The Veterans Affairs contract was a competitive bid, with Verizon Business and Qwest thought to be among the other bidders. Neither carrier would confirm that it bid on the Veterans Affairs contract, which was awarded under the General Services Administration’s FTS2001 Long Distance Crossover program.

The Veterans Affairs contract was awarded in December but announced this week. The cutover to AT&T’s MPLS network will occur in the second half off this year.

The Veterans Affairs victory is significant, as AT&T tries to muscle its way back into a larger share of the federal telecommunications market. The former MCI and Sprint dominated this market since 1998, when they won the FTS2001 telecommunications contract that provides most federal agencies with voice and data services.

The FTS2001 contracts will be replaced by Networx, a 10-year, $20 billion telecommunications services program that is due for award in the first half of 2007. All of the nation’s largest carriers -- AT&T, Verizon Business, Sprint Nextel and Qwest -- are bidding on Networx.

With its three-year term, the Veterans Affairs deal with AT&T will cover the agency until it can renegotiate its voice, data and video services with the winning Networx providers.

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