First AT&T was the winner, then Sprint, then AT&T again. But in the final analysis, as often happens in federal contracting disputes, taxpayers are the losers.
That's the bottom line on a deal cut recently between US Sprint and the General Services Administration, which has agreed to give Sprint up to $1 million in compensation for taking away $20 million in business with the Navy.
Sprint hadn't handled a single phone call for the Navy when the stop-order was issued in June. But the company claims it did a lot of work to get ready to take on the Navy account, and now it wants compensation for its time and trouble -- up to $1 million worth.
According to Robert Dornan, vice president of Federal Sources Inc., a computer consulting firm in Northern Virginia, compensatory packages like the one given to Sprint are an unfortunate fact of life for taxpayers, who wind up shouldering the cost of errant judgments by federal contracting authorities.
"There are always problems when the government tells you to do things they shouldn't have told you to do in the first place," Mr. Dornan said. "And, ultimately, it's always the taxpayer who pays for that."
The American Telephone & Telegraph Co. and Sprint are the two vendors responsible for providing telecommunications services to the federal government as part of the massive FTS 2000 phone contract. The two vendors have locked horns over who should get what business almost since the ink was dry on the 1989 contract.
Things took a turn for the worse last fall when GSA gave the Navy account, which had been assigned to AT&T, to Sprint. GSA said it made the switch to maintain a balance of business between the two vendors. The switch kicked off a storm of protest by AT&T and Congress, forcing GSA to give the Navy business back to AT&T six months later.
Sprint, meanwhile, has yet to make a claim against the $1 million. "The actual amount we receive will depend on the claims we submit for the actual work done," a spokesman said. "GSA verifies those claims, so the ultimate judgment is GSA's."