Protests halt Pentagon contract

In reaction to four protests, the Defense Department has canceled the $400 million Defense Research and Engineering Network contract awarded earlier this year to Global Crossing Government Markets.

DOD had announced the award of the follow-on DREN contract to Global Crossing July 9. The deal called for the company to provide one of the world's largest fiber-optic networks, linking more than 6,000 scientists and engineers at Defense laboratories, test centers, universities and industry sites.

The contract was to provide advanced wide-area network services for DREN, the military's prime long-haul communications service provider for the High Performance Computing Modernization Program.

Cassandra White, spokeswoman for the Defense Information Systems Agency, confirmed that four companies — Sprint, WorldCom Inc., Qwest Communications International Inc. and AT&T — have filed protests with the General Accounting Office.

In response, DISA officials sent a letter Aug. 14 to GAO stating they would "cancel and terminate for the convenience of the government" the award and "take corrective action to ensure that the procurement of the DREN complies with the applicable acquisition regulations."

It's very unusual for every losing bidder to submit a protest, said Jim Payne, senior vice president at Qwest. "I don't remember that ever happening before."

John Polivka, spokesman for Sprint, said the company protested because, in areas such as network security and past performance, officials felt they exceeded requirements and could outperform Global Crossing. Natasha Haubold, a spokeswoman for WorldCom, said the company submitted its protest because "we didn't feel the evaluation process considered all the facts." WorldCom officials will be responding to the amended RFP from DISA, she said.

A spokesman for AT&T, the DREN incumbent, confirmed the company's protest but declined further comment.

Kelly Malarkey, Global Crossing spokes.woman, said the protests are not surprising considering the value of the contract, but that the company is confident it will prevail.

"Global Crossing has been notified by the General Accounting Office that the Defense Department intends to take corrective action, but we have not been officially notified of anything by DOD," Malarkey said.

Chip Mather, senior vice president of Acquisition Solutions Inc., said DISA's actions may not bode well for Global Crossing.

"It's probably a pretty good indication the agency didn't feel like it had a defendable position."

Diane Frank contributed to this report.