American Telephone & Telegraph Co. has won a $1.4 billion contract from the Treasury Department to provide computers, workstations and software to the Internal Revenue Service, AT&T said yesterday.
The computer contract, one of the largest awarded by the federal government, calls for AT&T to provide 3,200 computers and 50,000 workstations based on the UNIX operating system.
Though the contract is aimed at the IRS, other Treasury offices, such as the Customs Service, may also buy equipment under the contract, AT&T said.
The contract represents the first major victory for AT&T since computer-maker NCR Corp. agreed to merge with the phone giant. The merger is expected to be completed this fall.
Robert Dornan, vice president of Federal Sources Inc., a computer consultancy based in Fairfax, Va., said that it will be "interesting" to see how much of the NCR product line is used in executing the contract. The combined computer lines of AT&T and NCR, he said, cover a "broad range of demand."
The Treasury contract, in government parlance, is an "indefinite delivery" contract. That means the Treasury Department doesn't have to buy all $1.4 billion worth of equipment. In these open-ended types of contracts, the government promises a sales potential, then buys according to its needs.
To date, AT&T has not done well with open-ended contracts in the federal arena.
But Mr. Dornan said that AT&T should have better luck with the Treasury Department contract, in part because it is aimed at meeting a stated, critical need at the IRS for computer upgrades.
"Demand is certainly there," he said.