Postal Service extends AT&T managed VPN pact

AT&T's government marketing arm will announce today that it has received a four-year, $120 million contract extension that will allow the carrier to continue providing managed VPN services to the U.S. Postal Service.

AT&T won the original contract – dubbed PATN for Postal Advanced Telecommunications Network — in 2003.

'Tis the season for the U.S. Postal network to deliver

PATN is a massive network, covering more than 5,500 US Postal Service facilities nationwide with VPN gear and services.

AT&T provides these facilities with managed VPN services using its Multiprotocol Label Switching (MPLS) network along with IP address, firewall and router management services. The PATN contract also features network design, engineering and interactive voice response services.

With the PATN contract, the U.S. Postal Service is now one of AT&T's largest customers worldwide.

"The Postal Service — from its breadth and size and reach across the U.S. and elsewhere — is a very challenging, large and very important customer, not just to AT&T Government Solutions but to all of AT&T," says Stacy Schwartz, sales center vice president for AT&T Government Solutions.

Schwartz says one challenge in supporting AT&T is providing network access to thousands of retail points of sale nationwide.

"Managing that seamlessly and making the customer comfortable in entrusting us with that [capability] is a challenge," Schwartz says. "We have to re-earn their trust every day."

AT&T also provides BlackBerry 8800 series handsets along with voice and data services to 5,400 U.S. Postal Service employees nationwide through a separate contract awarded in 2007.

AT&T has been increasing its share of the U.S. Postal Service's telecommunications budget since 2006, when the agency decided to split its telecommunications services between AT&T and Verizon Business. Previously, Verizon Business – and its predecessor MCI Worldcom – had been the agency's primary carrier. But the U.S. Postal Service decided that it was too risky and too expensive to use a single carrier.

Verizon Business still handles a significant amount of U.S. Postal Service network traffic. Last year, Verizon Business won a three-year, $60 million contract extension from the agency to consolidate three separate networks into a single, managed IP backbone dubbed the Postal Information Technology Network (PITN). PITN supports 300 mail processing facilities and 188 U.S. Postal Inspection Service locations.

FedSources, a market research firm, estimates that the U.S. Postal Service spends $600 million a year on telecommunications services, including voice, data and video. The agency also spends another $135 million on traditional IT services, which is separate from its postal automation investments.

"USPS doesn't report spending on specific contracts, so we don't know for sure what each vendor gets," says Ray Bjorklund, senior vice president of FedSources.

Bjorklund points out that the Postal Service is not required by law to use governmentwide contracts such as Networx for telecommunications services. "USPS usually uses their own contract vehicles and procurement systems," he adds.

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