1. Confidential GTE
1
Collaborative Marketing
399 Main Street
Los Altos, CA 94022
650-949-4882
November 1998
Federal Government
Market Opportunity Assessment
A custom research project for GTE Internetworking- Federal Network Systems

2. Confidential GTE
2
Roadmap: Introduction
IntroductionIntroduction
High Level Findings
Conclusions
Detailed Findings

3. Confidential GTE
3
Objectives
Objectives
• Confirm the Federal Government opportunity - how big is the federal market
for internetworking services and who buys them?
• Which other suppliers of internetworking services have successfully sold
these services to the federal government and how did they do it?
• Competitively, what will GTE IS be up against from a price/quality/value
perspective?
Deliverables
• High level need assessment of top five civil agencies
• Market sizing
• Agency buying vehicles
• Competitive matrix
GTE IS has asked Collaborative Marketing to produce a fact base that will help it to decide how to
deploy sales and marketing resources against the Federal Government opportunity.

4. Confidential GTE
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Methodology - Current Situation Analysis
Kickoff meeting with GTE
management
Kickoff meeting with GTE
management
Perform electronic and
secondary research
Perform electronic and
secondary research
Top Agency AnalysisTop Agency Analysis
Competitive AssessmentCompetitive Assessment
This diagram
illustrates the path
Collaborative
Marketing followed
to achieve the
objectives of the
project.
Synthesis and AnalysisSynthesis and Analysis
Final ReportingFinal Reporting

5. Confidential GTE
5
FedGov Project
Fact Base
Agency Websites
&
Virtual
Procurement
Library
FedSources
AFCEA
GovCon
Federal
Computer
Week
Federal
Marketplace
CBD & Contract Search
Government
Procurement
News
Dialog DBs
GovExec.com
Federal
Contractor
Interviews
Federal
Agency
Interviews
Washington
Technology
Online
GSA-FSS
Procurement
Information
Center
Schedules
INPUT GOV
BNA Federal Contracts
Federal Technology Report
ABI/INFORM
DMS/FI Contract Awards
Trade & Industry
Information Sources Used
FedCenter
SEC
10K

6. Confidential GTE
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Contacts - Primary Research Interviews
FedGov Interviews Competitor Interviews
Other Interviews
GTE- Griff Harrison, Business Development
GTE- JimRaffa, Lawyer
GTEI - Kevin Gordon, Account Executive, Mid-Atlantic Region
GTEI - Larry Correy, Regional Sales Director, Mid-Atlantic Region
GTE- Randy Richman, Business Development
GTEI - Frank Doherty, Sales (Fomer MCI)
GTEI - Susan Hartman, Sales (Former MCI)
GTE Interviews
Consultant - Bob Zabloki, Federal Government Consultant
Consultant - TomBuckholtz, Deputy CIO(Regan Administration)
Federal Sources - Bob Dornan, Senior VP
StampMaster - Craig Ogg, SoftwareArchitect
Computer Sciences Corp. - Joe Konapka, Director
Concentric Network - John Lawler, Director, VPN
CSC - Wayne Kelly, Office of the President
Digex - Bob London, VP Marketing
Bay Networks - Tom Seutie, Director, Business Development
IBM - Dave Bolan, Program Manager, CINEMA
Indus Corp - Michael Mullen, Director, Business Development
Khera Communications - Prakekesh Shaw, President
MCI - Edie Dobbs, Sales
Patriot - Tom Fines, VP, Sales & Marketing
Sprint - Marianne Adams, Sr GSA Contract Consultant
US West Fed Svcs - Mike Peterson, Procurement, Subject Matter Expert
US West Fed Svcs - Shirley Menish, Director, Mktg & Business Development
Dept of Agriculture - David Alderdice, Office of the CIO
Dept of Agriculture - Ron Anderson, Office of the CIO / NITC
Dept of Agricuture - Steve Gay, Telecommunications Policy
Dept of Defense - Frank Sovieszcyk, Director, Defense Acquisition University
Dept of Defense - Gary Claypoole, IS Manager, Defense Tech Info Ctr
Dept of Defense - John Whitty, CCS Operation Network Sys, Naval Res Laboratory
Dept of Energy - Michael Raizen, Purchasing Services (Electronic Commerce)
Dept of Energy - Rick Hall, Engineering, Telecom
Dept of Energy - Robert Wilson, Office of the CIO
Dept of State - Jay Fields, Computer Specialist
Dept of Treasury - Scottie Banks, Liason to Jim Flizik
EPA - Dwight Rogers, Project Officer
FCC - Bill Allison, Integration Specialist
GAO - Bill Wright, IS Manager
GAO - Marcia McWreath, Evaluator
GAO - Tom Schultz, Regional Manager
GSA - April Ramie, Program Director, CINEMA
GSA - Peter Schultz, Director, Business Development, FTS
GSA - Rick Kellett, Division Director, Emerging Technologies
GSA - Wayne Brady, Deputy Program Manager, WITS2001
HHS - David Davidson, Director, Nat’l Board of Examiners
HHS - Paul Cromwell, IT Acquisitions, Office of Info Resource Mgmt Services
HHS - Peter Alterman, Dir of Operations for the Office of Extramural Research, NIH
NTIS - Don Johnson, Director (Former)
NTIS - Karen Cummins, Director, FedWorld
Social Security Admin. - Bob Meekin, Procurement (FTS2000)
Social Security Admin. - Jeane Kotoski, Branch Chief, Systems Operations
Social Security Admin. - John Sabo, Internet Services
US Postal Service - Barry Zeal, Communications
US Postal Service - Bill Morrison, Manager, Telecommunications Services
US Postal Service - Carrol Dobbs, Team Leader, Internet Services
US Postal Service - Dan Lord, Information-Based Indicia Program
US Postal Service - Dave Cullen, Program Manager, Shipping Online
US Postal Service - Terry Downer, Headquarters Purchasing (IT)
VA - David Kubaci, IT Management Analyst, Financial Center

7. Confidential GTE
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Roadmap: High Level Findings
Introduction
High Level FindingsHigh Level Findings
Conclusions
Detailed Findings

8. Confidential GTE
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Competition Buying Vehicles / Channel
Market Size / Readiness
• Government Agencies are spending between 0.5% and 5% of their
IT budgets on Internet-related expenditures.
• The market is small today and will be large in the future.
Top FedGov Agencies
DOD, NASA,Commerce, EPA, Agriculture,
Interior, Energy, HHS, Transportation, Labor,
Treasury, SSA, USPS
• No single ISP dominates this market in the minds of the agencies. It’s not
too late for GTE to establish a position.
• Competition is quickly waking-up to this ripening market
• Top competitors have been MCI WorldCom, AT&T, IBM, BTG/Epoch.
• ID/IQ, BPA, MAS, Large Contracts, Cinema, GSA
• Resellers, NTIS, GSA Advantage
• Enter this market aggressively and swiftly - If GTE wants to be there in the
future, it must be there now since past performance is key.
• GTE must choose to position itself as an ISP, SI, or Prime - Positioning will
be vehicle dependent.
• Quickly put up GSA schedule and sell hard against it
• Educate agencies about what to buy and how to buy. Agencies don’t all
understand what is possible.
• Participation in Pilots is an important way to establish past performance
• NTIS can be a channel for Internet solutions - This DC-based part of the
Dept of Commerce operates on a “fee-for-service” basis and serves as an
incubator for some FedGov agencies
• Buying vehicles don’t sell themselves and must be marketed
• Hidden opportunity - replacing private networks with VPN
RecommendationsRecommendations
High Level Findings

9. Confidential GTE
9
Source: GAO
Market Size Estimate - Federal Government Internet Spending
Dept of Defense
48%
NASA
7%
Dept of Commerce
8%
EPA
5%
Dept of Agriculture
4%
Dept of the Interior
4%
Dept of Energy
3%
Dept of Treasury
2%
Dept of Trans.
2%
Dept of HHS
2%
Dept of Labor
1% Other
14%
The GAO study can serve as a proxy for
how Internet spending spreads across
agencies
Estimated Market Size
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
FY1997 1998 1999
$ (billions)
5% of IT Budget
GAO Extrapolation
1% of IT Budget
FY 1996 FedGov Internet Expenditures ($182M)

10. Confidential GTE
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Market Size Estimate - Federal Government Internet Spending
• Internet Spending is estimated at 0.5 to 5.0% of Agencies’ IT Budgets - At the low end, SSA claims to
spend less than 1% of its IT budget on Internet services - just $4M out of its $600M IT budget. At the high
end, GSA (Division Director, Emerging Technologies) estimates total FedGov Internet spending at 5%+ of
total FedGov IT budgets. Several FedGov agencies (e.g., USDA and Treasury) estimate that they currently
spend less than 5% of their IT budgets on Internet services.
• Extrapolating GAO figures would suggest 1998 Internet spending of approximately $700M.
• Internet Services include more than ISP services - Consultants, Staff, Content Development are
included, much is left out.
• Traditional sources do not accurately track these numbers - Federal Sources and Input do not track
FedGov Internet spending. Beyond the 1997 GAO report, no interviewees were aware of any study tracking
FedGov Internet spending. GAO report was limited and only covered direct costs for Internet access for 42
FedGov agencies.
• Agencies do not track Internet spending as separate line item - Low awareness and much confusion
about what would be included in Internet spending and do not break out Internet spending as separate from
other telecommunications.
• Services through resellers are hard to quantify - Vendors in this situation (e.g. UUNet) have a hard time
quantifying FedGov sales.
• Internet expenditures are a function of how interactive and customer facing agencies are with the public
as well as other government agencies.
1998 Federal Government Internet spending estimated at between $140M and $1.4B1998 Federal Government Internet spending estimated at between $140M and $1.4B
Source: Collaborative Marketing Interviews with senior FedGov staff (e.g., Office of the CIO)

11. Confidential GTE
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Top FedGov Agencies for Internet Adoption
Department Per GAO Report
FY94-96 Total
Per GTE Per Interviews
Dept of Defense $146 M X X
Nat’l Aeronautics and Space
Admin
$30 M X X
Dept of Commerce $25 M
Environmental Protection
Agency
$18 M
Dept of Agriculture $15 M X X
Dept of the Interior $13 M
Dept of Energy $12 M X X
Dept of Health and Human
Services
$7 M X
Dept of Transportation $6 M
Dept of Labor $6 M
Dept of Treasury $5 M X X
Social Security Administration $2 M X
Postal Service NA X
The GAO study completed in 1997 takes a very limited view of federal internet spending. We used it
primarily to rank the agencies but incorporated additional input into our evaluation.
The GAO study completed in 1997 takes a very limited view of federal internet spending. We used it
primarily to rank the agencies but incorporated additional input into our evaluation.

12. Confidential GTE
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Who is the Competition?
GTE faces three types of competitors (1)Network Service Providers, (2)Large Systems
Integrators, and (3) the Federal Government itself.
• Network Service Providers -
• MCI WorldCom
• AT&T
• IBM
• BTG/Epoch
• Sprint
• Erol’s Internet Services
• I-Net
• DLT Solutions
• Systems Integrators - winning large procurements and ID/IQ contracts include:
• CSC
• PRC
• Lockheed Martin
• EDS
• Federal Government - FedGov organizations like NTIS and NITC compete directly against GTE
providing IT services to other FedGov agencies.
No single ISP dominates this market in the minds of the agencies - it is not too late for
GTE to establish a position. Wait a year and it will be too late.
No single ISP dominates this market in the minds of the agencies - it is not too late for
GTE to establish a position. Wait a year and it will be too late.

13. Confidential GTE
13
Total FY97 Federal Telecommunications Purchases: $13 Billion
Parent Company Amount ($000s) Market Share
AT&T 810,999 6.29
GTE Corp. 562,719 4.37
ITT Corp. 527,488 4.09
IBM Corp. 445,355 3.46
Motorola Inc. 346,875 2.69
Litton Industries Inc. (PRC) 320,382 2.49
BTG Inc. 290,526 2.25
MCI Communications Corp. 229,557 1.78
Sprint Corp. 217,323 1.69
Bell Atlantic Corp. 209,571 1.63
TRW Inc. 160,792 1.25
Computer Sciences Corp. 97,220 0.75
General Electric Co. PLC 96,927 0.75
(Expected Growth 5% CAGR for FY98 and FY99)
Source: GovExec Top 200 Federal Contractors ‘98

14. Confidential GTE
14
Competitive Matrix
Item
MCI
Worldcom
AT&T Sprint IBM
Federal
Revenues
15% of $19.2 Billion
(estimate)
$292 million GSA Revenues: $8.2
Million
$748 million - $1.2
billion
Size of
Salesforce
• 55,000
Employees
worldwide
• UUNET has no
outside sales but
are building one.
127,000 Employees
Worldwide
FedGov internet
sales TBD
• 180 Federal
Systems
Employees
• 105
Sales/Marketing
• 3 GSA Schedule
Contract
Consultants
• 7,000 Sales
Force World-wide
• 6,000 Customer
Engineers @ 50
service centers
• 2 CINEMA
Employees (1
Tampa & 1 D.C.)
Agencies
Penetrated
USPS, FAA, National
Air Space
Communications
Systems, DISN, State
Dept., NOAA, NSF
DOD, GSA, SSA,
IRS, NASA, FAA,
Navy, Army, Air
Force, DISN
DOD, GSA, DOE,
DOC, DOI and Navy
DOE, DOD,
Veteran’s Affairs,
TVA, FHA, SSA,
GSA Seat Mgmt.,
USDA, NIH, NASA
Breadth of
Offering
• Data services
• Mission-critical,
mission-sensitive
operations
• Backbone
Network Services
for Internet2
• FTS 2000 (voice,
data & video
services)
• EDI
• End-to-end long
distance & local
telecommunicatio
ns services
• Video
Conferencing
• Long-distance
telephony
• Electronic
Commerce/EDI
• Integrated data
communications
services
• High-
performance
computing
• Digital imaging
• E-business
• Desktop Seat
Management
• ADP Services

15. Confidential GTE
15
Competitive Pricing
BTG
(ISP services by EPOCH)
IBM Global Network
(formerly Advantis)
IAS, EM & EC/EDI
Setup/Monthly
Commercial
Price
Setup/Monthly
IAS, EM & EC/EDI
Monthly
Commercial
Price
Setup/Monthly
Analog Dial-up
(56K)
$25.25/$21.21
$0/$19.95
incl. 60 Hrs.
+ Hrs. $.03
$122/$18.86
$0/$19.95
incl. 100 Hrs
+Hrs. $
ISDN BRI Dial-up $25.25/$41.41 $100/$250 $0/$$85.58 $2K/$1K
Dedicated DS0 $0/$363.00
$350/$25 per port
+ $.09 per MB
$0/$388.00 $2K/$1K
Fractional T1 (256K) $0/$666.00
$2.K/$100 per
port
+$.02 per MB
$0/$712.00 $3K/2.3K
Fractional T1 (512K) $0/$1,040.00
$2.K/$100 per
port
+$.02 per MB
$0/$1,131.00 $3K/$2.8K
Fractional T1 (768K) $0/$1,570.00
$2.K/$100 per
port
+$.02 per MB
$0/$1,707.00 $3K/$2.9K
T1 (1.544M) $0/$2,080.00
$2.K/$100 per
port
+$.02 per MB
$0/$2,358.00 $3K/$3K
T3 (45M) $0/$41,410.00 $7.3K/42K $0/$42,243.00 ---
MCI pricing
Discounts 20-30% off commercial price list and varies by service. Sample pricing:
Government Commercial
• Fractional T-1 128Kb $905 / mo. $1,295 / mo.
• T-1 $2,025 / mo. $2,700 / mo.
Cinema Pricing Overview

16. Confidential GTE
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FedGov Usage of Different Procurement Vehicles
Buying Vehicle Today FY 2000
GSA Schedule 5 - 30% 10 - 35%
Blanket Purchase Agreements 0 - 30% 10 - 30%
In-House ID/IQ Contracts 5 - 80% 15 - 80%
In-House Non-ID/IQ Contracts 10 - 80% 10 - 65%
Government-Wide ID/IQs <5 - 5% <5 – 25%
• GSA Schedules - Will play a larger role in acquisition of IT products and services. Vendors are
increasingly offering services (e.g., integration and maintenance) on schedules must make FedGov
agencies aware of the buying vehicles that they have. GSA Advantage will become increasingly
important. Agencies that have implemented mandatory buying rules based on existing in-house ID/IQ
vehicles will see only minor increases in schedule use. Others expect to satisfy their needs via
schedules. In 1994 GSA schedules were 20% of federal IT spending, by 1997 they had grown to 51%.
• ID/IQ Contracts - Popular and expected to remain so.
Source: Input and CM interviews
There is a general trend towards procurement vehicles
that take less time and that provide commodity solutions.
There is a general trend towards procurement vehicles
that take less time and that provide commodity solutions.

17. Confidential GTE
17
Buying Trends
• Challenging Market for New Entrants - 85% of all contracts (GSA schedules and negotiated bids) are renewed.
• GSA Schedules are “Table Stakes” - Schedules, along with competitive bids, are major buying vehicles for the FedGov.
GTEI does not currently have a schedule in place - GTEI’s sales and marketing organizations are very concerned about
this issue.
• Shift in Focus from “Unique” Projects to COTS - To keep costs low and to increase efficiencies, FedGov agencies are
moving to “industry-standard” IT solutions whenever possible. This is key as outside parties increasingly access legacy
agency databases and applications via extranets and the Internet.
• Incumbency / Past Performance are Extremely Important - Agencies report that up to 95% of Internet access contracts
are renewed. FedGov suppliers are touting their past successes in bidding for new business. Successful incumbents
have a very strong position. Alternatively, missteps by prime contractors are harshly punished to the extent of refusing to
do business with specific companies (e.g., GTE) in some instances.
• Importance of Pilots - FedGov suppliers are actively participating in a range of pilot programs - often taking a financial
“hit” in hopes of being better positioned for upcoming contracts. These firms are also involved in setting project
performance parameters in conjunction with agencies. By helping define what an Investment Review Board (e.g.,
Treasury) measures, a supplier can make sure that its efforts are viewed in the best possible light - setting the stage for
follow -on business.
• Push Towards Outsourcing - This appears to be growing trend, but issues like union considerations and expected
reliance on internal staff to maintain and modify legacy systems may slow outsourcing adoption.
• Typically lags commercial sector (except for DOD), longer buying cycles
• Intranet deployment is more widespread
• Behind in supplying Internet access to most employees
• Extranet initiatives is very limited
• “IP enabling” old private networks and upgrading from terminals to PCs
How is the Federal Government Different ?

18. Confidential GTE
18
Private Sector Internet Application Evolution
Stage 1 Stage 2
Stage 1 Stage 2
Stage 1 Stage 2
-Web Presence
-Email
-Database
access
-Database
driven
-Online ordering
-Server side
applications
-eCommerce
-Secure
transactions
Level 1
Publishing/ Presence
Level 2
Database Integration
Level 3
Commerce
CommerceInteractiveInformative
Most agencies are at level 1 with plans to be at level 3 -- Process can take 2-3 years

19. Confidential GTE
19
How is the Federal Government’s use of IT Solutions Changing?
FY 1998 FY 2000
Electronic Mail
Electronic Funds
Transfer
FACNET
GSA Advantage!
All Agencies
Transactions > $100K
All Levels-
Primarily DoD
Transactions < $100K
All Agencies
All Agencies
Will be phased out
Transactions < $100K
Activity
Source: INPUT Gov and OMB

20. Confidential GTE
20
Agency Vision Applications
Current Situation Vision Applications
• Internet awareness and deployment across
the FedGov varies widely
• Early Stage - USPS, State
• Advanced Stage - DOD, USDA
• Nearly all agencies have developed web sites
and are using e-mail internally.
• Very limited VPN deployment today
• Simple intranets are becoming common but
Internet access is not.
• Security / privacy concerns are hampering
deployment of sensitive Internet and extranet
applications
• Deployment of extranets and secure,
database-driven transaction applications
(both financial and informational) is limited
• Consolidate Internet access / services within
agencies
• Build on or initiate video conferencing /
streaming multimedia applications for
training (Cuts travel cost and saves time)
• USDA - very interested
• DOD, Defense Acquisition Univ - Pilot started
now
• Expand electronic commerce efforts
• DOE - Move from VANs t o true Internet EC
• USPS - Sell postage and money orders online
• Grow secure, database-driven applications
• USPS - Generate and mail letters from the
location nearest your intended destination
(regardless of where you are)
• SSA - Access to earning benefits and history
• Build VPNs and managed network services /
extranets to enable interagency
communications and remote access. IBM is
very interested in supplying this

21. Confidential GTE
21
Adoption Drivers
• Private Sector Success
• Paperwork Reduction Act of 1995
• Electronic Freedom of Information Act Amendments of 1996
• Telecommunications Act of 1996
• National Performance Review
• Customer Service Orientation
• Customer-Facing Push
• One Face to Industry
• Outsourcing Initiatives
• Presidential Decision Directives
• May 1998 PDD 63 requires FedGov agencies to inventory computer systems and physical assets
• Agencies must develop a plan to protect from “cyberattacks” the systems deemed as critical to the
agencies’ operations.
• IP-Based Model Advocated - GSA advocates migration to an Internet / Intranet-based
procurement model using digital signature technology (designed around PKI) given its
superiority in terms of process flow, cost, and security over paper-based models and credit
cards.
• Procurement Time Savings - GSA tracked different process flow in different procurement
models (flow charts follow) and found that Internet-based models were approximately 1/6th as
expensive as paper-based processes and that processing time dropped from nearly 40 days
to fewer than five.
• Key, Enabling Technology - As PKI standards solidify, Internet-based procurement models
will become increasingly important to the FedGov.

22. Confidential GTE
22
Obstacles to Internet Deployment
• Education - Many FedGov Contracting Officers with IT / networking responsibilities are not “IT aware”
and confused about applications and services. According to vendors (e.g., IBM and Bay Networks), this
is the major issue slowing FedGov agency Internet deployment.
• Heavy Congressional Oversight and Guidance - are slowing Internet adoption.
• Key Vendors Not Clearly Known - Key personnel in FedGov agencies have limited vendor awareness.
Senior-level staff often do not know which firms supply Internet access for their agency and don’t know
which firms might be able to supply Internet solutions. This is changing as vendors get their acts in
gear.
• Buying Vehicles are Hard to Use - The purchase process for Internet services can be very
complicated for FedGov agencies and not all buying vehicles are available.
• Slow Implementation of Public Key Infrastructure (PKI) - Adoption of PKI standards will serve as a
key building block for growing FedGov Internet services with strong security requirements.
• In 1997 USAToday surfaced security issues by exposing the vulnerability of the SSA site.
• Key players in this area (e.g., IBM and Sterling) are advising and supporting FedGov PKI efforts.
• Failure to supply sufficient security can push back Internet deployment efforts. SSA had to “pull
the plug” on its web site that formerly provided individuals’ earning histories.

23. Confidential GTE
23
What is the Federal Government Buying with its Internet Dollars?
• ISP Spending is only one part of Internet-related spending. Internet
spending includes: access, hosting, security, application development
and hosting, professional services, and personnel.
• The government’s concept of Internet spending has not included
conversion of private networks to IP networks.
• Testing New Technologies - GSA, the Federal Public Key
Infrastructure (PKI) Steering Committee, and other government
electronic commerce-affiliated groups are actively evaluating and
testing encryption, digital signature, PKI, and smart cards to improve
costly, paper-based procurement processes.
The 1997 GAO study only captures expenditures for access, site development, and
hosting. It does not include indirect costs or expenditures for application development
(e.g., intranet or extranet applications).

24. Confidential GTE
24
So, you want to buy a T-1 … Theory vs. Reality in Federal Acquisition
Procurement Vehicle Theory Reality
GSA Schedules
Any agency can buy against any existing Multiple
Award Schedules (MAS)negotiated by the GSA
as the Federal Government’s Purchasing Agent.
Hard to use - Most IT providers with serious plans
to sell to Fed Market have developed schedules.
No easy way to know who sells what.
1994 - 20% of FedGov IT spending
1997 - 51% of FedGov IT spending
GSA Advantage
Online catalog of all GSA schedules providing
one-stop shopping for federal employees through
secure, shopping-cart-based EC website.
Only a few of the GSA’s schedules have actually
been added to the database/catalog to date.
Currently only, Metricom and Wang Federal
Systems offerings for IAS are listed.
1997 Overall Sales - 28 million
1998 Overall Sales - 62 million
CINEMA
Provides consulting on requirements and needs
assessment before directing agency personnel to
IBM or BTG/Epoch
Pricing for IAS via ISDN, dial-up, or Dedicated
Transmission services between IBM and BTG is
comparable with the exception of analog pricing.
FTS2000
Makes available integrated data and voice
telecommunication services for all agencies.
Incumbents: AT&T and Sprint hold contracts that
any agency can order against.
AT&T is suing GSA for $170 Million, representing
lost revenue due to Dept. of Treasury’s non-
participation in FTS2000 services.
ID/IQ
Several dozen major Indefinite Delivery contracts
exist across several agencies (e.g. DOE, DOJ,
NIH, DOT, etc.). Agency-specific contracts that
MAY be available to other agencies. Provide
vendors with some certainty of sales volume.
You go with a contract or vendor that you already
know. Mindshare is important. Many ID/IQ carry
restrictions and come with SOW and task orders
that are meted out competitively.
Blanket Purchase
Agreements (BPA)
Should I buy from any enrolled vendor there’s an
expedited and routine process for ordering and a
relationship established.
Guaranteed price with no certainty of sales. For
buyer it means guaranteed prices and lots of
choices, but no guaranteed availability.
Sole Source
Firm-fixed pricing and guaranteed availability. Moving away from this vehicle type. Infrequently
used for IT. However, USWest has some of these
with BLM and Forest Service for remote, rural
areas out west.
Government-Wide
Acquisition Contracts
(GWACS)
Contracts available to all Government agencies. Difficult to determine actual offerings. Requires
heavy marketing.
In reality Buying Vehicles are not as easy as people think

25. Confidential GTE
25
Buying vehicles are not marketing vehicles
• The Buying Vehicles must be marketed - Vendors must make FedGov agencies aware of the buying
vehicles that they have available.
• GSA Schedules are Hard for Vendors to Implement - Given restrictive “lowest price” requirements
and product content regulations, some vendors opt to not sell to the FedGov via GSA schedules.
Gathering sales price information (direct and indirect) to prove the “lowest price” is being offered on the
GSA schedule is a time-consuming and costly process.
• ID/IQ Contracts Offer Major Advantages for FedGov and “Team” Members - For the FedGov,
ID/IQ contracts offer low prices and a high level of flexibility. They are also a key selling vehicle for
contract “team” members and don’t entail large sales / marketing costs once the contracts are
established. The prime contractor, however, must organize the team and manage the process and
costs.
• Resellers are a major channel for FedGov Internet Sales - FedGov Internet providers (e.g., access,
hardware, etc.) use resellers extensively to sell to the FedGov. Key resellers include: Anixter,
Presidio, Lucent, BTG, and CSC. As a result, the suppliers are not sure themselves how much they
are selling to the FedGov because they are shielded from the enduser by the reseller.

26. Confidential GTE
26
Revenue Certainty
Selling
Effort
Required
Buying Vehicles -- Post-Award Comparisons
High
Low
HighLow
ID/IQ
Contracts
GSA
Schedules
BPAs
FTS 2000
GWACs
CINEMA

27. Confidential GTE
27
The Five Prong Market Assault
GTE Federal Systems StrategyGTE Federal Systems Strategy
II
DD
II
QQ
&&
BB
PP
AA
L
A
R
G
E
P
R
O
C
U
R
E
M
E
N
T
S
PP
II
LL
OO
TT
SS
&&
NN
TT
II
SS
RR
EE
SS
EE
LL
LL
EE
RR
SS
GSA ScheduleGSA Schedule
This 5 prong program creates an underlying sales infrastructure and uses the strengths of GTE to build up
near term opportunities to establish past performance to win larger long term opportunities
This 5 prong program creates an underlying sales infrastructure and uses the strengths of GTE to build up
near term opportunities to establish past performance to win larger long term opportunities
The market
is small
today but
will be large
in the future.
If GTE wants
to be there in
the future, it
must be
there now.
Past
performance
is key.

28. Confidential GTE
28
GTE Positioning
Vehicle Positioning Value Proposition
ID/IQs and
BPAs
• Prime
Contractor
• Sub-contractor
• Strong
engineering with
ISP capability
GSA/FSS
Schedules
• Internet
Service
Provider
• Best Value
• Co-Marketing
GWACs
• Prime
Contractor with
Strong 8(a)
relations
• Past Performance
• Agency
Experience
• Best Value
EC Pilot
Projects
• Value-Adding
Prime
Contractor
• Full-Service
ISP
• End-to-End COTS
Solutions
• Integrated
Managed Network
Services
• Security
Postioning should match vehiclePostioning should match vehicle

29. Confidential GTE
29
Education: How do Federal Agencies Learn about New Technology?
Product
Solutions
Price
Policy
Channel
+ C.O. Market Research
+ C.O. Tech Rep Consultation
+ Federal Agency Peers
+ Trade Shows, Conferences & Expos
+ Vendor Oral Presentations
+ IMC & GSA “Best Practices” Notices
+ Vendor Websites
+ Vendor Marketing Materials
+ Agency CIOs
+ GSA Schedules
+ GSA Advantage
+ ID/IQ Contract Program Mangers
+ GWAC Program Managers
+ FSS Schedules
+ Interagency Management Council
+ Inter-Agency Internet Council
+ Office of Federal Procurement Policy
+ Office of Management & Budget
+ Administrative & Agency Directives
+ Federal Acquisition Regulations
+ Legislative Mandates (e.g. FARA, FASA)
+ Vendor EC storefronts for Contract Vehicles
+ GSA Program Managers for CINEMA, WITS,
FTS2000
+ Incumbent Systems Integrators and Vendors
“Making Life Easier for
Contracting Officers by
providing them with
useful and pertinent
information about IT
solutions is a great way
to gain MINDSHARE and
GOODWILL.”
(source April Ramie, Cinema
Program Director)
Opportunities to help educate
and inform Agency Personnel
increase as the journey from
VISION to IMPLEMENTATION
progresses.

30. Confidential GTE
30
Department of Agriculture
• Food and Consumer Services Electronic Benefits Transfer
• National Finance Center Trusted Certification Authority at the
National Finance Center
Department of Commerce
• National Institute of Standards and Technology Purchase Order
Request System
• National Institute of Standards and Technology Root Certification
Authority Reference Implementation
• National Technical Information Service Secure Web and
Certification
• Patent and Trademark Office International Patent Document
Exchange Project
• Patent and Trademark OfficeElectronic Patent Application Filing
System (EPAFS)
Department of Defense
• Defense Information Systems Agency Defense Travel
Management System
• Defense Logistics Agency/AQAC Standard Procurement System
• National Security Agency Multi-Level Information Systems
Security Initiative
• Department of Energy Electronic Research Administration
Demonstration
Department of Energy
• Lawrence Livermore National Laboratory Badges and
Security Clearances
• Department of Energy/Lawrence Livermore National
Laboratory Public Key Infrastructure
Department of the Treasury
• Secure Electronic Messaging System
• US Customs Service North American Trade Automation
Project
Department of Transportation
Federal Railroad Administration US Electronic Grants
Federal Bureau of Investigation (FBI)
• Internet Communications Security
• Investigation Secure E-mail
National Science Foundation
Collaborations in Internet Security
General Services Administration
Paperless Federal Transactions for the Public
National Aeronautics and Space Administration Public
Key Infrastructure
National Institutes of Health
Electronic Research Administration/ Public-Key Infrastructure
Small Business Administration
Electronic Lending Program
Social Security Administration
Annual Wage Reporting (AWR) Pilot
Pilots are one way to build Past Performance
The following is a sample of PKI pilots being run by Federal Agencies
The following is a sample of PKI pilots being run by Federal Agencies
Successful pilots help the FedGov get comfortable with new
technology and give supporting vendors an inside track
Successful pilots help the FedGov get comfortable with new
technology and give supporting vendors an inside track

31. Confidential GTE
31
NTIS’s new role deserves attention
• NTIS Handles Traffic-Intensive and Cutting Edge Internet Applications for FedGov Agencies -
At its high security facility, NTIS is currently or has hosted “most cabinet-level agency sites.” Service
examples range from hosting all of the IRS public access servers which on April 14th this year got
18 million hits to hosting a sophisticated distance learning application for the Defense Acquisition
University which will ultimately link 170,000 DOD acquisition employees and provide them with text-
based and streaming multimedia content. Senior sources (DOD, NTIS, FedSources) tout several
factors why NTIS is chosen to provide Internet services for their applications:
1) Impressive security
2) “Big pipe” to the web
3) Ease of doing business given “inter-agency agreements”
4) Demonstrated professional capability
Of these items network security is the key reason why outside service providers were not chosen.
• NTIS and NITC Compete with Vendors but also Can Serve as a Channel - In addition to NTIS,
the National Information Technology Center (NITC) is a key player influencing FedGov IT/Internet
efforts. NITC functions as a key integrator and IT resource within the USDA. NITC also counsels
other FedGov agencies on IT issues (e.g., hosting) and bids on government contracts. NITC won a
$250M FAA contract. Senior level FTS2000 staff came from NITC.

32. Confidential GTE
32
The Status of Outsourcing
• Shift towards Outsourcing - FedGov agencies are increasingly outsourcing IT functions
and relying on COTS-based solutions. FedGov staff reductions / workforce downsizing
combined with NPR initiatives and the need to cut costs are driving this trend.
• In Addition to Private-Sector Firms, FedGov Agencies are Outsourcing with NTIS
and NTIC - NTIS develops applications and hosts sites for several FedGov agencies
(e.g., IRS). Similarly, NITC won a $250M+ FAA contract.
• Complex/Nonstandard Legacy Systems Slow Adoption - Expected reliance on
internal staff to maintain and modify legacy systems may slow outsourcing adoption.
SSA uses 2000 COBOL programmers to maintain benefits databases.
• Union Pressure to Limit Outsourcing - Issues stemming from FedGov employee
unions and associated Congressional pressure will impact the shift to outsourcing when
job cuts are involved.
• Service Market Growth - FedGov spending on systems integration services is growing -
expected to grow from $3.9B in FY 1997 to $5.2B in FY 2002. (Source: Input)
• Seat Management Contract with IBM is being closely watched - as a model for future
outsourcing.

33. Confidential GTE
33
An Organization Designed to Address this Market
Business Development at the front end to prime the pump
• Top Down - establish senior relationships with primes to get portfolio
discussions
• Bottom up - When you are selling at the application level you understand
the visceral applications.
Agency Focused Organization
• Find applications
• Find buying vehicle
• Look for new procurements over the next 24-36 months
• Form bidding strategy
Prime - who are my subs and why is my team different?
Sub - as a sub you want people dying to be your partner
Let’s take a look at how other companies have structured their sales and marketing
organizations to address the FedGov opportunity
Let’s take a look at how other companies have structured their sales and marketing
organizations to address the FedGov opportunity

34. Confidential GTE
34
Telco/ISP: MCI WorldCom Government Sales Organization
M C I W o r ld c o m G o v e r n m e n t M a r k e t s O r g a n iz a t io n
E x e c u t i v e D i r e c t o r
D o D / N I I N e t w o r k s
D i a n a G o w e n
E x e c u t i v e D i r e c t o r
D o T / U S D A / C A N e t w o r k s
M i k e S e r b o u s e k
D i r e c t o r F T S P r o g r a m s
R i c h a r d S l i f e r
D i r e c t o r C i v i l i a n N e t w o r k s
T o n y B a r d o
D i r e c t o r V A N S y s t e m s
N a n c y C o l l i n s
D i r e c t o r U S P S N e t w o r k s
W a y n e D a v i s
D i r e c t o r P r o g r a m M g m t .
C r a i g H e n e s s y
D i r e c t o r P r o p o s a l M g m t .
W i l l i a m A d e
D i r e c t o r I n t e r n a t i o n a l G o v 't .
R o b e r t S a h a g u n
D I S N D S / B M S - C D e p u t y P r o g r a m
S r . V P
J e r r y E d g e r t o n

35. Confidential GTE
35
Systems Integrator: BTG Sales Organization
B T G O r g C h a r t
G r o u p V P S y s t e m s E n g .
D e f e n s e a n d I n t e l l .
C a l S h i n t a n i
V P S a l e s a n d M k t g .
J e f f W il s o n
G r o u p V P a n d G M
M i k e G e n e b a c h
B u s i n e s s D e v .
J a m e s S c a m p a v i a
S r . V P C o m m e r c i a l S v c s
M i d - A t l a n t i c
L i n d a H i l l
S a l e s R e p .
R o b G r e y
S a l e s R e p .
S t e v e L e c h o lo p
D i r . H e a lt h c a r e In f o S v c s .
J o h n S c a r c e l l a
V P t , ID / I Q
K e v i n A p s l e y
D e e R u s s e l l
G S A S c h e d u l e
S h e r y l M c C u r n i n
J a c k L i t t l e y
S r . V P S t a t e g i c In i t i a t i v e s

36. Confidential GTE
36
VAR: GTSI Sales Organization
A r m y
A i r F o r c e
M a r i n e s
N a v y
C a b i n e t L e v e l I n d e p e n d e n t A g e n c i e s
C i v i l i a n A g e n c i e s P r i m e C o n t r a c t o r s
G T S I S a le s O r g a n is a t io n

37. Confidential GTE
37
Telco/ISP: Sprint Sales Organization
S a l e s R e s o u r c e s
A s s i g n e d b y A g e n c y
F T S 2 0 0 0 S a l e s
S a l e s R e s o u r c e s
A s s i g n e d b y A g e n c y
C i v i l i a n A g e n c y S a le s
S a l e s R e s o u r c e s
A s s i g n e d b y A g e n c y
D o D S a le s
T y p e t it le h e r e
S p r in t G o v e r n m e n t S y s t e m s D iv is io n

38. Confidential GTE
38
Competitive Selling Strategies for Marketing the Buying Vehicles
IBM Fills the Information Gap
• IBM’s Institute for Electronic Government provides
online resources and links to state and federal
governments and initiatives furthering the IT revolution
in government.
• Given the paucity of information on Government IT
Policy, IBM’s IEG site provides needed information on
policy and technology issues to help educate
customers.
• The IEG website (http://www.ieg.ibm.com/) provides
information on IT policy and implementation issues
relating to state and federal governance and operation.
US West Marketing Past Success
Epoch Battles for Mindshare
• Realizing the increased importance of “past
performance” in contract award evaluation processes,
US West helps COs keep track of its past successes
by highlighting past awards and project milestones
online (www.uswest.com).
• Past performance narratives stress US West’s core
competencies in rural areas and in total network
management.
• Profiles highlight good working relationships with the
DOE, DOI and BLM.
Sprint Takes Charge of its GSA Schedule
• After unsuccessfully nudging GSA Advantage staff to
incorporate Sprint schedule information online, Sprint decided
to put up its own catalog/price list on an IMPAC card-enabled
storefront through DCC’s FedCenter portal.
• The new website was launched in early November in
partnership with DCC and has already logged 10,000 inquiries.
• Sprint’s example has prompted the CINEMA Program Director
to explore the possibility of doing the same for the CINEMA
schedules to increase sales and profitability which YTD is
about 1% .
• Epoch attempts to win mindshare among federal
employees by offering them discounted internet
access services under a program named GovDial.
• Service is available to federal employees for $14.95
per month: includes mail pop account and personal
web page and access to special resources for
acquisition information.
• Service is in support of CINEMA contract under
BTG’s prime leadership.

39. Confidential GTE
39
Case Study: Sprint
• Headquarters: Kansas City, MO
• 1998 GSA Revenues: $8.2 Million (Total $15 Billion)
• Number of Employees: 48300 world-wide
Gov’t. Systems: 180 Total; 105 Sales/Marketing; GSA
Contract Consultants 3
• Primary Procurement Vehicles: GSA Schedules (since
1996) and FTS2000
• Principal Competitors: MCI, AT&T and GTE
• Key Competencies: Video conferencing services, data
security and encryption and LD services.
Snapshot
75% Telecom Services
25% Value-added Professional Services
• 50% of Revenues come from Video Equipment &
Services (DoC and DoD)
• 30% Security & Encryption (DoD primarily)
Sprint is actively seeking 8(a) partners for
multimedia streaming technology and content
management to add to GSA/FSS.
• Services: Video Conferencing and Multimedia content
management and transmission services
• Driver: Interagency activity and Increased procurement
activity expected from beyond Beltway regional
Procurement Offices
• IAS is seen as a commodity but increased sales expected in
COTS Communication Services, especially E-Mail Migration
Technology
• EC adoption by Civilian Agencies is not expected to grow
much for the next two years because of Y2K issues
• E-mail and messaging migration is high on agency contacts’
minds and discussion during monthly Sales force visits.
• Strong Management commitment to Total Customer Service
initiatives: Salesforce has recently received training in TCS and
Relationship Selling
• DoD is seen as an early adopter and champion of EC and IAS projects
and intiatives
• Civilian Agencies suffer from high COTR turn-over and painfully slow
adoption of online procurement channels like GSA Advantage for IT
• Sprint has yet to make it onto GSA Advantage database because of
agency foot-dragging and incompetence
• In response to slow GSA response to online availability of Schedule
info, Sprint has contracted with DCC’s FedCenter for an online store
front launched in late October ‘98.
• While GSA schedules sales are relatively small, management feels it
can’t afford not to be there to gain mindshare beyond FTS2000 phase
Expected Areas for Sales Growth
1998 GSA Revenues $8.2 Million (YTD)
Marketing & Sales to Fed Gov’t: Relationships are Key!

40. Confidential GTE
40
Case Study: IBM Government Industries
• Headquarters: Tampa, Florida
• 1998 Federal Revenues: $758 Million (Total $78 Billion)
• Number of Employees: 7,000 world-wide
• Primary Procurement Vehicles: GSA Seat Management,
CINEMA and GSA Schedule
• Federal Sector Head: John Nyland
• CINEMA Program Manager: Dave Bolan
• Global Government Head: Ken Thornton
• Principal Competitors: Sprint, MCI, AT&T and BTG
Snapshot
9% Systems Operations & Maintenance
15% PC/Desktop Managment
25% Professional IT Services & Business Process
Re-engineering Service
23% Software
28% Hardware
45% of all current sales through IDIQ contracts
• Driver: Desire for inter-agency communication
and collaboration & dissatisfaction with x.12 EDI
solutions
• Services: VPN, Managed Network Services
and Seat Management
• IAS is seen as a commodity, big push planned
for integrated managed network services,
especially for outside Beltway locations.
• Single Biggest Problem: Marketing to agency COs and
Technical Reps, who have high turn-over rates
• Salesforce for CINEMA is highly frustrated with long sales
cycle and eligibility confusing on GWACs and IDIQs
• 110 Federal Government Sales and Marketing Organization
• CINEMA Team: 2 FTE (1 in D.C. Marketing Mgr. And 1
Program Mgr. In Tampa
• Current Marketing Initiative focuses on Agency Customer
Education through Product Demos and Oral Presentations
• IBM has a 100% award renewal rate
Expected Areas for Sales Growth Marketing & Sales to Fed Gov’t: Deep-sea Fishing
1998 Federal Sector Revenues $758 Million

41. Confidential GTE
41
Case Study: US West Federal Services
Federal Agency Contract Value Performance Period Services or Product
Department of Defense
(Air Force)
$1,600,000
October 1994-September
1999
Self Healing Network Services at Hill Air Force
Base, Utah
Department of Energy $47,500,000 October 1991-October 2001
Total Managed Network Services for the Hanford,
WA site's Integrated Voice & Data
Telecommunications System
Department of Energy $108,000,000
May 1994
3yrs implementation
10yrs operations &
maintenance
Design, installation and management of Federal
Integrated Communications Network at Oak
Ridge, TN Facility
Department of Treasury
(IRS)
$38,000,000 May 1991-September 2000
IRS Midwestern Region Telecommunications
System
General Services
Administration
$30,500,000
January 1992-September
1999
Integrated digital voice and data
telecommunications service and equipment to
establish a centralized Western Region TMS.
UC-Los Alamos National
Laboratory
76,000,000
November 1992-November
2001
Complete installation of a new 5ESS CO switch
and three remote switch modules, outside plant
distribution system, all new inside plant
distribution facilities, and the installation of 400
ISDN sets
• Headquarters: Englewood, Colorado
• 1998 Revenues: $125,000,000
• Number of Employees: 175
• Dedicated Campus Personnel: 3 Three-person teams at 3
DOE facilities and dedicated personnel at Treasury, Interior
(BLM & BIA), Air Force and US Postal Service
• Civilian Agencies account for 75% of Revenues
• Defence Agencies account for 25% of Revenues
• Primary Procurement Vehicles: GAS-MAS, IDIQ Sole,&
FSS-IT
Snapshot
Internet and Data Services currently Provisioned to Fed
Market through IT/GSA Schedule
Internet Services
DSL/ADSL
Domino HostingElectronic Commerce
ISDN Primary Rate Service
ISDN Single Line ServiceLotus Notes
MegaBit Services
Web Services
Data/Access Services
DS1
DS3
DSL/ADSL
Digital Data Services
Digital Switched Service
Frame Relay Service
ISDN Primary Rate Service
ISDN Single Line Service
MegaBit Services
SONET Services
1997 Internet/Data/Access Revenues $37.5 M

42. Confidential GTE
42
Case Study: Computer Sciences Corp.
• Headquarters: El Segundo, CA
• 1998 Revenues: $1.7 Billion (Total $7.5 Billion)
estimates for 1999 $7.8 Billion, for 2000 $9.3 Billion
• Number of Employees: 16,000 (44,000 Total)
• Primary Procurement Vehicles: 20 current IDIQs and DoD
Schedules
• Reorganized Federal Sector into two units: Defense and
Civilian w/ Milton Cooper as Fed Sector President
• Principal Competitors: EDS, UNYSIS, SAIC, Lockheed
• Key Competencies: Security, Legacy DB Extraction, RAD
and commercial workflow process management
Snapshot
10 %Systems Operations & Maintenance
60 %Systems Integration
20% Professional IT Services
10 %Business Process Re-engineering Service
50% of all current business comes
from 20 current IDIQ contracts
No specific Internet Services provisioned
currently to any agency.
•Dept of Defense: InteliLINK
•NASA: Center for Excellence, E-commerce site
at Marshall Space Center
•NAIS: Electronic Acquisition Information
Management System for Vendors
•Grater Atmospheric Research Center: Grant
Management System
•Currently Bidding for IRS’s Prime Systems
Integration Services Contract
•Key Competitor: Lockheed Martin
•Award Size: $8 Billion over 15 years
•Differentiation: Expertise in commercial
outsourcing and workflow management
Expecting over $16 Billion in Fed Sector
Revenue through March 2000
1998 Federal Sector Revenues $ 1.7 Billion
Current Contracts

43. Confidential GTE
43
Case Study: Bay Networks Federal
Experience Selling to Federal AgenciesSnapshot
Growth Expectations:Competitive Outlook
• Federal Market Revenues: $110 Million (1997)
$147 Million (1998)
• Sales Growth of 15% expected for 1999
• Civilian Agencies account for 60% of Revenues;
• Defense Agencies account for 40% of Revenues
• Federal Sales Force of 27: 16 (civilian); 8 (defense)
3 on campus in Hawaii
• Currently not on GSA Schedules and also without ID/IQs
• Sales come primarily through VARs that list Bay
products on their schedules with GSA
• Three VARs account for 80% of Sales: Presidio, Anixter,
and Lucent Technologies
• Uninterested in getting on any GSA schedule themselves,
will let VARs and SIs continue to push products
• Schedule sales require too much by way of content
regulations and discount monitoring: prefers to avoid
• Main competitors: Cisco, Lucent and AT&T
• Product Mix: 60% product; 40% service
• Frustrated by experience: little support from HQ,
especially after Merger
• Sales force churn is quite high: 60-70% per year
• Frequently encounters Contracting Officers who know
very little about the technology they are purchasing and
sometimes even less about the true work requirements
from Statements of Work
• Sales forces provides a great deal of customer education
about products on visits to sites
• Agencies are contacted about twice a month about
upcoming requirements and needs
• Sales teams comprised of two members: one technical,
the other sales/business process oriented
• Joint client calls with VARs and SIs are very common
• Sees greater opportunities in outsourcing and leasing,
especially in DOD and DOE
• Not much leasing activity currently but hoping to expand
offerings in this area since Agencies are quite interested
in leasing arrangements in order to mitigate risk in
technical obsolescence and maintenance costs
• Expects leasing to account for 40% of business in next 3
years

44. Confidential GTE
44
Case Study: The Experiences of two 8(a) companies:
• Supplier of Internet and Extranet Services, primarily
web site hosting and site management
• Special Competencies: web-enablement of legacy
RDBMS, Geographical Information Services and WAN
operations
• 1998 Sales to Fed Market: $4 Million
• Local DC area firm with 20 employees
• Accounts: DOC, ARMY, Border Commission
• Channels: actively seeks prime-sub relations with
SAIC, EDS and BULL
• Currently sales are through sole-source contracts for
web site design and hosting
• Listed on GSA schedule as SAIC subcontractor
• Supplier of Internet and Intranet applications
development services
• Special competencies: Graphics design, legacy DB
extraction and web-enablement
• Provides hosting for GovSales Net through DOC ID/IQ
for $1 Million
• Local DC area firm with 8(a) status through 2003
• Channels: no current GSA schedule, sub-contractor
for BTG only
• Currently sales of $2 Million are through work
outsourced through BTG though ID/IQ with DOC
• Looking to enter IAS service domain in partnership
with local ISP
Commonalties of Experience
• Experienced a great deal of difficulty establishing relationships with SI Prime Contractors, in each case it
took more than two years to consolidate relationship, even with 8(a) certification
• Sales growth has been limited due to not being on the GSA schedule
• SBA has been less than helpful
• Primes have been actively disinterested and frequently dismissive of alliances
• Both firms expect more outsourcing of intranet and internet services, but see this activity taking place very
slowly and cautiously
Indus Corporation Khera Communications

45. Confidential GTE
45
Agency Presence of Selected IT Solutions Providers (1)
VENDOR
CONTRACT
NUMBER
PRODUCT or SERVICE AGENCY
AT&T DAAB0797CD604
Prof. SVCS / Engineering Technical
Services
Army, Dept of The
AT&T DACW179C0046
Telephone and-or Communications SER
Radiotelephone Communications
US Army Corps of
Engineers - Civil Pro
AT&T DFTA0190D00009
ADP Central Processing Unit-Digital, Electronic
Computers
United States Coast
Guard
AT&T DTFA0193D00054
Other Professional SVCS
Engineering Services
Federal Aviation
Administration
AT&T DTFA0496C20015
Telephone and-or Communications Services,
Telephone Communication, EXC. Radio
Federal Aviation
Administration
AT&T DTFA0694C30019
Other Professional SVCS
Measuring & Controlling Devices, NE
Federal Aviation
Administration
AT&T F0560392C0002
Other ADP &Telecommunications SVCS
Telephone Communications, EXC. Radio
Air Force, Department of
The (headquarters)
AT&T F1963088D0005
Maint-Rep of ADP Eq & Supplies
Computer
Air Force, Department of
The (headquarters)
AT&T F1963088D0005
Maint-Rep of ADP EQ & Supplies
Computer Repair & Maintenance
Air Force, Department of
The (headquarters)
AT&T M6700496C0007
ADP SVCS – Telecomm & RES
Computer Repair
Navy, Department of
The
AT&T N0060094D0344
ADP SVCS/Telcomm & Transmission
Communication Services, NEC
State, Department of
AT&T N00600D0344
SDP SVCS/Telecomm Transmission
Communication Services, NEC
State, Dept. of
AT&T TIR910057
Other ADP & Telecomm SVCS
Telephone and Telegraph Apparatus
Internal Revenue
Service
BELL
ATLANTIC
143495C30244
Transmission
Communication Services, NEC
Geological Survey
BELL
ATLANTIC
6009308084
ADP SVCS / Telcomm & Transmission
Communication Services, NEC
Social Security
Administration

46. Confidential GTE
46
Agency Presence of Selected IT Solutions Providers (2)
VENDOR
CONTRACT
NUMBER
PRODUCT or SERVICE AGENCY
BELL
ATLANTIC
DAAB0792CC109
Other ADP & Telecommunications SVCS
Electronic Computers
Army, Dept. The (Exc.
Corps Of Engineers)
BELL ATLANTIC GS00K95HS0534
Telephone & Telegraph EQ
Telephone Communications, EXC. Radio
Small Business
Administration
BELL ATLANTIC GS35F3030D
ADP Support EQ
Electronic Computers
Office of FTS2000
BELL ATLANTIC N0014095DJ021
ADP Facility Management
Computer Repair & Maintenance
Navy, Department Of The
BELL ATLANTIC N0014096C1026
Other ADP & Telecomm. SVCS
Communication Services, NEC
Navy, Department Of The
BELL ATLANTIC N0039197MMD21
ADP Facility Management
Computer Repair & Maintenance
Navy, Department Of The
BELL ATLANTIC NRC2895206
Other ADP & Telecomm. SVCS
Business Services, NEC
Nuclear Regulatory
Commission
BELL ATLANTIC W91331
Other ADP & Telco SVCS
Communication Services, NEC
National Aeronautics &
Space Administration
IBM 53315750009
Other ADP & Talc SVCS
Computer Repair & Maintenance
Farmers Home
Administration
IBM 6009520396
Other ADP & Telecomm SVCS
Computer Repair & Maintenance
Social Security
Administration
IBM 94BYC103245000
ADP Software
Computer Peripheral Equipment., NEC
Tennessee Valley Authority
UUNET 43YABC740149
COMM Security EQ & COMPS
Communication Services, NEC
Bureau Of The Census
UUNET DABT2396P3239
Prof. SVCS / Communication Services
Computer Related Services, NEC
Army, Dept. The (Exc.
Corps of Engineers)
WORLDCOM 43ABNW700050
Telephone and-or Communications Services
Radiotelephone Communications
National Oceanic And
Atmospheric Administration

47. Confidential GTE
47
• Very strong Y2K focus
• Limited PKI infrastructure
Profile: Department of the Treasury
Total Employees: 148 K
FY1999 IT Budget: $2.0 B
FY1999 Internet Budget:
% Empl with E-Mail: 80 % +
% Empl with Int Access 80 % +
• Using the Internet to improve
customer contact
• Creating virtual government -
ubiquitous access to the
government for taxpayers
• Investment Review Boards evaluate ROI for Internet initiatives
• Running PKI pilots
• Intranet used largely for informational purposes (e.g.,
transborder shipment info, maps, bonds, etc.) by a full range of
bureaus within the department
• IRS is the Internet leadership agency
• Some electronic commerce (selling special edition mint sets on
the web)
Agency Vision
Incumbent ISP(s)Current Situation
Buying Plans
Buying Vehicles
Key Individuals • TRW advising Treasury
• TRW RFQ went out two weeks ago allowing
them to take moves, adds, and changes for
WANs and backbones and put it on a sub-
contractor
Obstacles to Deployment
Treasury Telecom Services (TSC) managed by TRW
NTIS supports IRS in peak periods
• Large procurement
• GSA and GWACs - use available buying vehicles
• Pilots
• Shift to performance-based measurements
• Jim Flizik, CIO
• Candace Hardesty, Dir of Liason and Business Service
• Steve Holden, IRS
• Cosgrove, IRS Outsourcing Status
• Actively outsourcing
• TRW, NTIS, etc.
• Use existing buying vehicles (e.g., GWACs and GSA)
Suggestions to ISPs

48. Confidential GTE
48
• Significant business process re-engineering /
re-organizations underway
• In “infant” stage of Internet adoption
• Y2K focus
Profile: US Postal Service
Total Employees: 765K
FY1999 IT Budget: $1B+
FY1999 Internet Budget: $10M+
% Empl with E-Mail:
% Empl with Int Access:
• PostOffice Online - Geared towards small and home-
based businesses, will offer customers access to
postal products and services via the Internet
• Secure service for movement of messages and
money (Mail a check and feel comfortable that it will
get there.)
• Electronic commerce (e.g., secure money transfers
and selling postage) and Digital Certificates.
• USPS is also looking at their competitors for ideas
(e.g., UPS and FedEx).
• Today -Informational web pages, internal e-mail, and Internet / intranet usage account for the
bulk of current Internet applications. Now starting to explore and evaluate more sophisticated
applications (e.g., selling postage over the Internet, knowledge management solutions [based
on Lotus Domino], and extranets [pilots underway]).
• USPS faces strong competition from private sector vendors (e.g., UPS, FedEx, etc.) as well as
electronic communications (e.g., e-mail) - Threat: Very concerned about losing first class
postage and shipping revenue.
• Selling postage (information-based indicia [IBI]) over the Internet may be a huge business - In
1999, the USPS projects mail volume at 200 billion pieces.
• Strong interest in exploring Internet applications to stay ahead of strong competitors and
electronic communications.
Agency Vision
Incumbent ISP(s)Current Situation
Buying Plans
Buying Vehicles
Key Individuals
• Select vendors for Information-Based Indica (IBI) program
• Ramp up IBI / PostOffice Online
Obstacles to Deployment
• Use all buying vehicles
• Can buy through MCI’s $3B Managed Network Services contract -
MCI beat out CSC, TRW, and IBM
• Norm Lorentz, CIO
• Kathy Rogerson, Grp Mgr, New Business
• Marvin Benan, Manager, Telecommunications Services
• Roy Gordon, Program Manager, IBI
Outsourcing Status
• Expected to depend heavily on vendors for IBI program
• Public Internet site (hosted in CA) is likely to continue to
be hosted by USPS.
• Internet access and security demands are the greatest needs.
• Ready to talk with vendors now
• Looking to work with smaller partners (e.g., StampMaster).
Suggestions to ISPs
• MCI
• Not locked in sole relationship with MCI - Can use other service
providers

49. Confidential GTE
49
• Beholden to Government oversight and
guidance
• PKI infrastructure
• Lack of expertise within the agencies in
understanding the technology
• Integration with Legacy systems
• Y2K focus
Profile: Social Security Administration
Total Employees: 65,000
FY1999 IT Budget: $600M
FY1999 Internet Budget: $6M
% With E-Mail / Intranet: 90%
% With Web Access: 20%
• Electronic Transactions (earnings
history, online benefits)
• Complete online transactions (request
online, delivered online)
• Public Key Infrastructure (PKI) is the
gating item.
• Building integrated service delivery
channel slowly over 10 years
• Building apps online and developing
policies
• Today - Most SSA web services today are informational for the employer
community and the Regional Field Offices, no hosting, no VPN, no e-
Commerce. Internally they have an Intranet.
• Less than 1% of IT budget spent on Internet Services.
• Recently spent $1.2B to modernize computers and upgrade Token Ring
LANs to TCP/IP.
• The bulk of internet expenditures are for developing internet content
• (4) T-1s and a sprinkling of dialup accounts
Agency Vision
Incumbent ISP(s)Current Situation
Buying Plans
Buying Vehicles
Key Individuals • Upgrade to T-3
• Redundancy and Backup
• Just initiated a $400K study with Price Waterhouse
Coopers to help set direction
Obstacles to Deployment
AT&T Worldnet
• Use all vehicles used, the bulk of purchases are small.
• Use credit cards for <$2500.
• Work through FTS2000 contract but not obligated to
use if they can find a better deal.
• John Dyer, CIO
• John Sabo, Director Electronic Services (manages the web sites)
• Jeana Kotowski, Branch Chief of Systems Operations (buys ISP services)
Outsourcing Status
• Outsource ISP services, backup and recovery
• Hard to outsource legacy databases that takes
1000s of COBOL programers to maintain.
• Most likely to outsource generic services that
don’t take specialized inhouse expertise
• “ISPs are much too passive marketing to FedGov”
• Partner with Verisign to provide digital certificates that will help fed agencies to
ID individuals.
• Take a marketing approach to security
• Do not believe that Federal Agencies will want to outsource firewall services
unless they farm out hosting
Suggestions to ISPs

50. Confidential GTE
50
Profile: Department of Energy
Total Employees: 132K
FY1999 IT Budget: $1.5 B
FY1999 Internet Budget: $ Million
% Empl with E-Mail: 90 %+
% Empl with Int Access 75 %+
• Intranet linking field offices with headquarters
• Ensures uniform distribution of DOE knowledge base (e.g.,
industry analyses or statistical databases)
• Implementation began June 1997
• ATM backbone
• Electronic commerce pilot
• Three VANs being used today. (Not intensive usage.)
• Plan to consolidate on one of them in 1999
• Linked to Dept of Defense
Extranet
• Adoption of PKI Technology
• Testing secure e-mail now
• Testing secure access to key labs
like Lawrence Livermore
• EDS won 5-yr, $600M ID/IQ contract for telecom and
computing services in June 1997.
• Energy Resource Department (DOE) provides network
services (access, hosting, etc.) for other bureaus within
DOE. 4 T1s and and ATM backbone.
• Internet access
• Electronic commerce solution - Frustrated with
lack of GSA solution
• Individual DOE offices are “not required” to use
EDS telcom / IT services under the terms of the
award
Buying PlansKey Individuals
Agency Vision
Incumbent ISP(s)
Buying Vehicles
Obstacles
• Competitive Bids: CBD, FedSim, FedCAC
• Y2K and seat mgmt focus
• Security concerns
• Howard Lewis, Acting CIO
• Robert Wilson, Office of the CIO
• Richard Otis, Chief Engineer, Telecom
• Mike Raizen, Contracting Office, E-Commerce

51. Confidential GTE
51
• Strong Y2K focus
• Heavy Congressional oversight of IT
budget / “wasteful” procurement
policies
• Business process re-engineering
required pre-deployment
Profile: Department of Agriculture
Total Employees: 102K
FY1999 IT Budget: $948M
FY1999 Internet Budget: $10-50M
% Empl with E-Mail: 75%+
% Empl with Int Access: 50%+
• Consolidate Internet access / services
for approx 29 USDA organizations
• Roll out video conferencing to every
desktop - key factor in lowering training
costs
• Expand EC efforts
• Internet access for all employees
• Today - Informational web pages, internal e-mail, and Internet / intranet usage
account for the bulk of current Internet applications. Limited extranet and
electronic commerce applications are taking root. Video conferencing /
training just getting underway
• Between 1-5% IT budget spent on Internet-related goods and services
• Major IT centers in Washington, DC; New Orleans, LA; Kansas City, KS; and
Ft Collins, CO
• Major connectivity consumer - the Kansas City Center alone has 30-40 T1s.
• The agency’s Washington, DC offices are linked with FDDI backbone.
Agency Vision
Incumbent ISP(s)Current Situation
Buying Plans
Buying Vehicles
Key Individuals • Consolidate multiple T1s to fractional T3s
• “Open Edition” - Migrating client-server apps to
mainframe and providing web access to the data on
the mainframes.
Obstacles to Deployment
• Use all buying vehicles
• In-person presentations appear key
• Partnering with IBM (major IT contracts) is an easy
way to sell - IBM had 49% of all FY1997 IT contracts
• Anne Thompson, CIO
• Bill Conway, (Manages security at Kansas City site)
• Mike Thomas, (Buys ISP services)
• Ron Anderson, Office of the CIO / NITC
Outsourcing Status
• Outsourcing is “unlikely” for most IT
requirements - “We’ve got the capability …
we’re a little under used right now.”
• Seat management is one of the few areas
where outsourcing is likely to prevail.
• “Contact Mike Thomas directly regarding access.”
• Partner with IBM
• “Come on down here and make your pitch”
• “Unlikely” that USDA / NITC will farm out hosting or integration
Suggestions to ISPs
• AT&T
• Currently work with multiple service providers and
plan to continue doing so to ensure reliability in the
event of service failure

52. Confidential GTE
52
Roadmap: Detailed Findings
Introduction
High Level Findings
Conclusions
Detailed FindingsDetailed Findings

53. Confidential GTE
53
Contract Vehicles used by the Competition
Contract Vehicles AT&T BTG CSC Epoch IBM MCI Sprint FDC
ACES-BPA
AFNET
C3TE&I
CCPL
CECOM-ACES
CINEMA
CIO-SP
D/SIDDOMS II
DEIS II
DoC /NOAA
DFISS
DIESCON II
DOJ/INS BPA
DoN-ES
DS/BMS
DSSMP
EPA
FAATSAT
FEDCAC VDC
FEDSIM MAC
FSS
FTS2000
GSA FTS TMS
GSA Schedule
GSA Seat Mgmt
GWAC
IC41
INFOSEC TSC

54. Confidential GTE
54
Contract Vehicles used by the Competition (continued)
Contract Vehicles AT&T BTG CSC Epoch IBM MCI Sprint FDC
ITOP
ITSS
Legislative Common
Services
LINCS
MAPP
MNS
MOBIS
NASA ODIN
NASA SEWP
NIH
NIH Electronic Store
NraD BPA
ODIN
PC2
PCTN
PM-PSE
SASS
SASS 2
SBPR
Seat Management
SETAC
State Dept S11
TDPI
TIPSS
US Postal Data
Services
vBNS

55. Confidential GTE
55
Cinema Pricing
CINEMA
(Commerce,
Internet, E-mail
Access)
• A Post-FTS2000 initiative designed to provide information services to federal
agencies with integrated federal telecommunication services.
• Authorized individuals may use federal government PO, funding document or
IMPAC Card.
• Contractor A POC: Deidre Wyborski, CINEMA Team Leader, BTG (Epoch
provides ISP services)
Phone: 888-883-2662 x.8489
• Contractor B POC: Dave Bolan, CINEMA Team Leader, Advantis (IBM Global
Network)
Phone: 800-588-5808
Internet Access
Includes both analog dial-up and dedicated connections to a national high speed
fault-tolerant DS-3 Internet backbone.
E-Mail--
x.400 & x.500
Directory
Services
• x.400 Message client services providing mail-management interfaces for the
creation, submission, receipt, manipulation and filing of simple test and multi-
part, multimedia messages.
• x.500 Directory client provides directory searching, browsing and online phone
book services.
EC/EDI
OMB-Circular A-130 Compliant electronic commerce and electronic data interchange
services over a value-added network (FACNET). Document types supported: 843
(RFQ), 850 (PO), 855 (PO Acknowledgement), 836 (Contract Award), 997
(Functional Acknowledgement) and 838 (Vendor Profile)
Cinema Pricing Overview

56. Confidential GTE
56
Competitive Pricing for BTG/Epoch, IBM, and MCI
BTG
(ISP services by EPOCH)
IBM Global Network
(formerly Advantis)Internet Access Service,
E-Mail and EC/EDI IAS
Setup
EM &
EC/EDI
Setup
IAS, EM &
EC/EDI
Monthly
IAS
Setup
EM &
EC/EDI
Setup
IAS, EM &
EC/EDI
Monthly
Analog Dial-up $0.00 $25.25 $21.21 $0.00 122.00 $18.86
ISDN BRI Dial-up $25.25 $25.25 $41.41 $505.00 $0.00 $85.58
Dedicated DS0 $433.13 $0.00 $363.00 $757.00 $0.00 $388.00
Fractional T1 (256K) $757.00 $0.00 $666.00 $757.00 $0.00 $712.00
Fractional T1 (512K) $757.00 $0.00 1,040.00 $757.00 $0.00 1,131.00
Fractional T1 (768K) $757.00 $0.00 1,570.00 $757.00 $0.00 1,707.00
T1 (1.544M) $757.00 $0.00 2,080.00 $757.00 $0.00 2,358.00
T3 (45M) $757.00 $0.00 41,410.00 $757.00 $0.00 42,243.00
*Included in all IAS: Netscape Communicator, PPP Dialer, Streamworks, View Director Pro2 and
SMTP Email, x.400/x.500 client licenses, EC/EDI VAN enablement
Cinema Pricing

57. Confidential GTE
57
Cinema Pricing - Internet Access Only
BTG
(ISP services by EPOCH)
IBM Global Network
(formerly Advantis)
Internet Access Service
(IAS)*
Setup Monthly Setup Monthly
Analog Dial-up $0.00 $14.14 $0.00 $14.09
ISDN BRI Dial-up $25.25 $41.41 $505.00 $80.80
Dedicated DS0 $433.13 $363.00 $757.00 $363.00
Fractional T1 (256K) $757.00 $666.00 $757.00 $666.00
Fractional T1 (512K) $757.00 $1,040.00 $757.00 $1,040.00
Fractional T1 (768K) $757.00 $1,570.00 $757.00 $1,570.00
T1 (1.544M) $757.00 $2,080.00 $757.00 $2,080.00
T3 (45M) $757.00 $41,410.00 $757.00 $41,410.00
*Included in all IAS: Netscape Communicator, PPP Dialer, Streamworks, View Director Pro2 and
SMTP Email
Cinema Pricing

58. Confidential GTE
58
BTG
(ISP services by EPOCH)
IBM Global Network
(formerly Advantis)Internet Access Service
(IAS) and E-Mail* IAS
Setup
EM
Setup
IAS & EM
Monthly
IAS
Setup
EM
Setup
IAS & EM
Monthly
Analog Dial-up $0.00 $25.25 $21.21 $0.00 122.00 $18.86
ISDN BRI Dial-up $25.25 $25.25 $41.41 $505.00 $0.00 $85.58
Dedicated DS0 $433.13 $0.00 $363.00 $757.00 $0.00 $388.00
Fractional T1 (256K) $757.00 $0.00 $666.00 $757.00 $0.00 $712.00
Fractional T1 (512K) $757.00 $0.00 1,040.00 $757.00 $0.00 1,131.00
Fractional T1 (768K) $757.00 $0.00 1,570.00 $757.00 $0.00 1,707.00
T1 (1.544M) $757.00 $0.00 2,080.00 $757.00 $0.00 2,358.00
T3 (45M) $757.00 $0.00 41,410.00 $757.00 $0.00 42,243.00
*Included in all IAS: Netscape Communicator, PPP Dialer, Streamworks, View Director Pro2 and
SMTP Email, x.400/x.500 client licenses
Cinema Pricing - Internet Access with E-mail
Cinema Pricing

59. Confidential GTE
59
Internet Security Opportunity - Critical Infrastructure Protection
• The Critical Infrastructure Assurance Office (CIAO) has designated 14 agencies that must turn
in by November 18 a plan to protect critical infrastructures
• Primary agencies are: State, Treasury, Defense, CIA, Commerce, HHS, Transportation,
Energy, Veterans Affairs, EPA, Justice, FBI, NSA, and Federal Emergency Management
Agency
• Secondary agencies (e.g., Agriculture and Education) are required to turn in their protection
plans by February 1, 1999
• FedGov agencies are slated to work closely with the private sector in the development and
implementation of these plans.
• To help agencies find tools to protect services, GSA has partnered with Booz-Allen, offering
infrastructure protection planning services under the $620M Telecom Support Contract 2
(TSC2)
Presidential Decision Directive 63 (May 1998) requires FedGov agencies to inventory
computer systems and physical assets and develop a plan to protect from
“cyberattacks” those systems deemed as critical to the agencies’ operations.

60. Confidential GTE
60
WITS 2001 Overview - “Son of FTS2000”
Washington Interagency Telecommunications System 2001
• The Washington Interagency Telecommunications System 2001 (WITS2001) procurement is intended to provide telecommunications
services to all Federal agencies and other authorized users in the Washington, D.C. area. This procurement vehicle will offer a wide range of
services, from analog and digital switched voice services to advanced data services.
• The Government intends to use fully its investment in WITS network assets over the life of the contract while increasing its use of contractor-
provided services. The WITS contract is a hybrid contract covering service & operations, administration and maintenance requirements.
Additionally, Internet Access Services (IAS) has been included as a requirement.
Status of RFP: 1Q FY99 (January 20, 1999) CLOSE
Award Date: 2Q FY99
WITS2001 Services
• Circuit switched voice: Analog, ISDN
• Dedicated Transmission: DS1, DS3, OC-3, OC-3c, OC-n
• Switched data services: Frame Relay, ATM, PRI, BRI, SONET, SMDS, virtual local network
• Internet access service: ISDN, T1, T3, OC-1, web hosting
• Video teleconferencing service: multipoint, continous presence
WITS2001 Contract Responsibilities
Contractor Government
• Maintenance-switching & transmission facilities
• Local loop, local transport transmission provisioning
• Network management
• Provisioning of customer premises equipment
• Provisioning of switch hardware & software generics
• Ordering & billing
• Trouble reporting
• Marketing
• Contract administration & management
• Infrastructure investment
• Asset management
• Service delivery to customers/agencies
• Network planning & engineering analysis
• Marketing

61. Confidential GTE
61
WITS2001 - Internet Components
Annual Prices ofInternet Access Services (IAS) by CLIN
(dollars)
CLIN Description
Year 1 Year 2 Year 3 Year 4 Option Year 1 Option Year 2 Option Year 3 Option Year 4 TOTAL
Totals by Year - - - - - - - - -
IAS-00-0001 X.400 E-mail Gateway Service - - - - - - - - -
IAS-00-0002 X.500 Directory Service - - - - - - - - -
IAS-00-0003 Electronic Mail Service - - - - - - - - -
IAS-00-0004 Server Co-Location - - - - - - - - -
IAS-00-0005 Firewall Security Service - - - - - - - - -
IAS-00-0006 Border Gateway Routing Protocol - - - - - - - - -
IAS-00-0007 Domain Name Registration - - - - - - - - -
IAS-00-0008 Domain Name Hosting - - - - - - - - -
IAS-00-0009 NNTP News Feed - - - - - - - - -
IAS-00-0010 Proxy Services - - - - - - - - -
IAS-00-0011 Network Management System - - - - - - - - -
IAS-00-0101 Web Hosting - - - - - - - - -
IAS-00-0102 Web Authoring - - - - - - - - -
IAS-00-0103 Periodic Reports - - - - - - - - -
IAS-01-0001 56/64 kb/s - - - - - - - - -
IAS-01-0002 128 kb/s - - - - - - - - -
IAS-01-0003 256 kb/s - - - - - - - - -
IAS-01-0004 512 kb/s - - - - - - - - -
IAS-01-0005 768 kb/s - - - - - - - - -
IAS-01-0006 1.536 Mb/s - - - - - - - - -
IAS-01-0007 4 Mb/s - - - - - - - - -
IAS-01-0008 10 Mb/s - - - - - - - - -
IAS-01-0009 16 Mb/s - - - - - - - - -
IAS-01-0010 34 Mb/s - - - - - - - - -
IAS-01-0011 100 Mb/s - - - - - - - - -
IAS-01-0012 155 Mb/s - - - - - - - - -

62. Confidential GTE
62
FTS 2000 Cost Comparisons
Cost Comparison for Commercial & FTS200 Services
Commercial and FTS2000 FY 1997 and FY 1998 Prices
($/Month in thousands)
Item Commercial FTS2000 FY97 FTS2000 FY98
Service (Units) $/Unit $/Month $/Unit $/Month $/Unit $/Month
SVS (Minutes) 0.0512 23,379.8 0.0529 24,170.5 0.0505 23,050.1
SDS (Minutes) 0.1990 683.7 0.1986 682.2 0.1900 652.8
DTS (Circuits) 15,298.2 10,142.3 8,651.7
4.8A 1,190 778.2 523 342.0 494 323.4
9.6A 721 3,252.0 423 1,908.3 401 1,807.7
9.6D 684 1,184.0 475 821.3 447 772.5
56D 1,322 4,804.8 573 2,082.2 476 1,728.7
T1 2,735 4,625.0 2,536 4,271.8 2,083 3,522.3
T45 38,485 654.2 42,158 716.7 29,244 497.1
PSS (Ksegs) 0.765 2,860.5 0.356 1,330.4 0.345 1,290.5
Total $42,222.2 $36,325.4 $33,645.1
• Comparison between commerical prices in effect June 1997 and FTS2000 FY97 prices.
• Aggregate monthly total commerical price is $42.2 Million, compared to $36.3 Million for
FTS2000.
• The FTS200 FY97 aggregate total is $5.9 Million per month or 14% cheaper
than the lowest priced equivalent commercial offering.
• FTS2000 prices are lower for all services & circuit speeds, with the expection of SVS and
DTS.
Source: GAO

63. Confidential GTE
63
Commercial & FTS2000 Discount Comparison
Commercial and FTS2000 Price Comparison by Service for Fiscal Year 1997 (FY97)
($/Month in thousands)
Item Commercial
FTS2000 FY9
FTS2000 Compared to
Commercial
Service (Units) $/Unit $/Month $/Unit $/Month $/Month Discount
SVS (Minutes) 0.0512 23,379.8 0.0529 24,170.5 790.7 3.4%
SDS (Minutes) 0.1990 683.7 0.1986 682.2 -1.5 -0.2%
DTS (Circuits) 15,298.2 10,142.3 -5,155.9 -33.7%
4.8A 1,190 778.2 523 342.0 -436.2 -56.1%
9.6A 721 3,252.0 423 1,908.3 -1,343.7 -41.3%
9.6D 684 1,184.0 475 821.3 -362.7 -30.6%
56D 1,322 4,804.8 573 2,082.2 -2,722.6 -56.7%
T1 2,735 4,625.0 2,536 4,271.8 -353.2 -7.6%
T45 38,485 654.2 42,158 716.7 62.5 9.6%
PSS (Ksegs) 0.765 2,860.5 0.356 1,330.4 -1,530.1 -53.5%
Total $42,222.2 $36,325.4 -$5,896.8 -14.0%
Demand Set Assumptions: SVS (191K minutes); SDS (3.1M minutes), PSS
(3.2Mksegs), DTS (12k circuits).

64. Confidential GTE
64
FY97 and FY98 FTS2000 Price Comparison By Service
FTS2000 FY 1997 and FY 1998 Price Comparison by Service
($/Month in thousands)
Item FTS2000 FY97 FTS2000 FY98
FY98 Compared
to FY97
Service (Units) $/Unit $/Month $/Unit $/Month $/Month % FY97
SVS (Minutes) 0.0529 24,170.5 0.0505 23,050.1 -1,120.4 -4.6%
SDS (Minutes) 0.1986 682.2 0.1900 652.8 -29.4 -4.3%
DTS (Circuits) 10,142.3 8,651.7 -1,490.6 -14.7%
4.8A 523 342.0 494 323.4 -18.6 -5.4%
9.6A 423 1,908.3 401 1,807.7 -100.6 -5.3%
9.6D 475 821.3 447 772.5 -48.8 -5.9%
56D 573 2,082.2 476 1,728.7 -353.5 -17.0%
T1 2,536 4,271.8 2,083 3,522.3 -749.5 -17.5%
T45 42,158 716.7 29,244 497.1 -219.6 -30.6%
PSS (Ksegs) 0.356 1,330.4 0.345 1,290.5 -39.9 -3.0%
Total $36,325.4 $33,645.1 -$2,680.3 -7.4%

65. Confidential GTE
65
Descriptions of FTS2000 Services
DEFINITION OF FTS2000 SERVICES
Service Description
Switched Voice Service (SVS)
An FTS2000 service which has the capability of transmitting voice or
modulated data.
Switched Data Service (SDS)
An FTS2000 service which has the capability of transmitting data at rates of
56 kilobits per second using conditioned access lines.
Dedicated Transmission
Service (DTS)
An FTS2000 service for which the private line transmission of voice or data
on a dedicated circuit between two end locations is continuously available
and for which pricing is not sensitive to the number of minutes or calls.
Packet Switched Service
(PSS)
An FTS2000 service in which messages are broken down into smaller units
called packets, which are then individually addressed and routed through
the network.
Compressed Video
Transmission Service (CVTS)
An FTS2000 terrestrial based video service that uses digital codecs to
transmit near full motion color video over FTS2000 facilities.

66. Confidential GTE
66
FTS Acquisition Projects Pending
Acquisition RFP Release RFP Close
Projected
Award
Technical and Management Support
(TMS)
01Nov96 24Jan1997 4
th
Qtr FY1997
Wire and Cable (WAC) Services 11Apr1997 21Jul1997 1
st
Qtr FY1998
FTS2001 02May1997
Projected
2
nd
Qtr FY1998
Summer 1998
Metropolitan Area Acquisitions (MAAs)
Qualifications
26Nov1997
(RQS
+
Release)
Aug1998
(Initial Qualification)
New York 26Feb1998 06Aug1998 1
st
Qtr FY1999
Chicago 24Apr1998 24Jul1998 1
st
Qtr FY1999
San Francisco 24Apr1998 31Jul1998 1
st
Qtr FY1999
WITS2001
Projected
2
nd
Qtr FY1998
Projected
2
nd
Qtr FY1998
4
th
Qtr FY1998
Federal Relay Service (FRS)
Projected
2
nd
Qtr FY1998
Projected
3
rd
Qtr FY1998
3
rd
Qtr FY1998

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FTS Acquisitions Recently Completed (one)
Acquisition Award Date Contractor For Information...
BDM International, Inc.
www.bdm.com/bdm/tms
888-TMS1-BDM
Boeing Information Services, Inc. www.tmsteam.com
888-294-4TMS
Booz-Allen & Hamilton www.bah.com/tms/index.html
703-902-5353
DynCorp Information & Engineering
Technology
www.dyncorp.com/tms
888-4DYNTMS
Science Applications International
Corporation (SAIC)
css.saic.com/tms
703-824-5955
12Oct1997
Unisys Corporation www.federal.unisys.com/contract/tms
703-556-5562
SETA
www.seta.com
703-821-5685
24Dec1997
Sherikon Inc.
www.sherikon.com/tms/
888-TMS-8300
Technical and nagement
Support (TMS)
www.fts.gsa.gov/html/tms.html
703-904-2832 (GSA)
AT&T www.att.com/gov/id3/
800-253-3846
International Direct Distance
Dialing (ID
3
)
01Jul1997
www.fts.gsa.gov/html/id3.html
703-904-2927 (GSA)

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FTS Acquisitions Recently Completed (two)
Acquisition Award Date Contractor For Information...
Advantis www.ibm.net/cinema.html
800-588-5808
BTG www5.btg.com/cinema
888-883-2662
CINEMA (electronic Commerce,
INternet and E-Mail Access)
09Apr1997
703-904-2838 (GSA)
GTE www.fedwire.com
888-FED-WIREFederal Wireless
Telecommunications Services
06Nov96
703-904-2888 (GSA)
Technical Services Contract II 06Sep96 Booz-Allen & Hamilton 800-458-4TSC

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General Implications of Changes in Federal Procurement Policies
• Managing Change and Transition is Key to Success in Federal
Procurements
• Timeliness and speed of delivery of service or product is more important
than "fairness" or "competition" requirements
• One-Stop-Shop arrangements desired by Agencies, making long-term
partnerships and alliances necessary and desirable, especially with 8(a)s
• GSA Schedule is Table Stakes because Past Performance is paramount!!
• Contracting Officers have more individual discretion: fewer protests have
been lodged
• Modular Contracting is new Paradigm: Incremental acquisition and
development
• New Metrics: Results-Oriented vs. Process-Oriented
Assisting Agencies Manage Change is an Ideal Means of Garnering Goodwill and Mindshare

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Industry-specific Implications of Changes in Federal Procurement Policies
• Accelerated Response Times: shorter sales cycle, increased sales
velocity
• Increased Customer Service through Employee Churn Mitigation:
improved compensation plans
• Increased Internal corporate coordination of customer-facing activities
• Increased Planning of Uncertainty: Personnel and Pricing
• Increased Marketing, Sales and Bidding & Proposal Budget Allocations
• Increased Market Research and Customer Education
Partnering with Federal Agencies to take advantage of IT Revolution is the Key to
Making Agency Friends & Influencing Federal Decision-makers

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Roadmap: Conclusions
Introduction
High Level Findings
ConclusionsConclusions
Detailed Findings

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Conclusions & Recommendations
•Enter this market aggressively and swiftly - If GTE wants to be
there in the future, it must be there now since past performance is key.
•GTE must choose to position itself as an ISP, SI, or Prime -
Positioning will be vehicle dependent.
•Quickly put up GSA schedule and sell hard against it
•Educate agencies about what to buy and how to buy - Agencies
don’t all understand what is possible.
•Participation in Pilots is a relatively easy and low risk way to establish
past performance.
•NTIS can be a channel for Internet solutions - This DC-based part of
the Dept of Commerce operates on a “fee-for-service” basis and serves
as an incubator for some FedGov agencies
•Buying vehicles don’t sell themselves and must be marketed
•Hidden opportunity - replacing private networks with VPN

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Appendix
• Public Key Infrastructure Pilot Projects
• Paper-Based Procurement Process
• Internet / Credit Card-Based Procurement Process
• Internet / Intranet-Based Procurement Process
• WITS 2001 Network - Supplement
• WITS 2001 Government-Owned Infrastructure
• A Guide to Federal Procurement Vehicles
• Federal Procurement Expenditures for FY97
• ADP Services and Equipment for the Dept. of Defense 1997
• ADP Services and Equipment Expenditures for Civilian Agencies for 1997
• Input Market Size Numbers
Table of Contents

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Public Key Infrastructure Pilot Projects (one)
Federal Agency Projects Using Public Key Technology
Department of Agriculture/Food and Consumer Services Electronic Benefits Transfer
In an initiative to employ security technologies in the Electronic Benefit Transfer (EBT), the United States Department of Agriculture’s Food and Consumer
Services (FCS) is piloting a security demonstration system. After a successful demonstration, FCS has made provisions to pilot the demonstrated
technologies in a live EBT environment. This will be accomplished by selecting states in which the security technology will be integrated into operational
EBT systems.
Department of Agriculture/National Finance Center Trusted Certification Authority at the National Finance Center
This project focuses on the requirements and functions necessary to allow the National Finance Center (NFC) to support digital signature requirements
from client agencies and to have the NFC’s CA participate in interoperability testing with NIST as a trusted CA site using COTS software. Selected
application documents, that are electronically submitted and require an original signature, are transmitted to NFC with an attached digital signature. The
digital signature is stored with pertinent document information prior to application processing. Along with this initial pilot, NFC is establishing IPSec
Encryption with VPN technology using certificates with various applications at NFC. NFC has begun interoperability testing with NIST.
Department of Commerce/National Institute of Standards and Technology Purchase Order Request System
The Information Technology Laboratory at the NIST has been focusing on the design, implementation and use of advanced systems for cryptographic
based computer security and office automation systems. The Purchase Order Request System combines both technologies into a system which will
provide NIST with basic infrastructure components necessary for migration into a paperless process. The approving authority reviews the request, verifies
the user's signature and, if in agreement with the request, signs it and sends the electronic form to the administrative officer for processing. The system
has been developed in a modular fashion so that both the digital signature module and the certificate management module can be used to support other
applications using digital signature technology.
Department of Commerce/National Institute of Standards and Technology Root Certification Authority Reference
Implementation
The purpose of this project is to develop an initial implementation of a top level or root CA for the PKI and to conduct experiments with Federal agencies
who are actively engaged in the development and use of digital signature technology. The CA will issue certificates to various pilot CA applications now
being developed by Federal agencies. This test will foster a flexible hierarchy, which could support agency-level digital signature based applications.

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Public Key Infrastructure Pilot Projects (two)
Department of Commerce/National Technical Information Service Secure Web and Certification
The NTIS FedWorld Secure Web and CA Project has prototyped trusted-agent services that support digital signature, encryption of files and messaging,
and authorized emergency access to encrypted information through key recovery management. NTIS currently provides the security infrastructure
supporting the DOT Electronic Grants System and the NIH Electronic Grants Pilot, both detailed below, and is actively exploring partnerships with other
agencies that need digital signature and encryption capabilities incorporated into current or planned web-based applications.
Department of Commerce/Patent and Trademark Office International Patent Document Exchange Project
The USPTO International Patent Document Exchange Project will demonstrate the exchange of patent documents in secure electronic form between the
Trilateral Offices (USPTO, European Patent Office, and Japanese Patent Office) and the International Bureau of the World Intellectual Property Office
(WIPO) to reduce processing costs and the burden on applicants. The pilot implements encrypted e-mail with a key recovery capability.
Department of Commerce/Patent and Trademark OfficeElectronic Patent Application Filing System (EPAFS)
Recent developments in the areas of high-grade encryption and DS technology coupled with emerging vendor products and software components offer
promising solutions to many of the problems associated with moving to an electronic patent filing and processing environment. For example, encryption key
recovery interchange standards and software modules will now support and enhance the recovery capabilities of archival data and other information assets.
General business practices will be enhanced with this new key recovery capability.
Department of Defense/Defense Information Systems Agency Defense Travel Management System
To support digital signature, the Department of Defense (DOD) Public Key Infrastructure will provide the means for DTS users to acquire moderate
assurance digital signature certificates and provide access to those certificates.
Department of Defense/Defense Logistics Agency/AQAC Standard Procurement System
The Standard Procurement System (SPS) will provide a single DOD procurement system with electronic commerce capability. The SPS will process only
sensitive but unclassified (SBU) information, financial data, trade secrets, technical methods, and other proprietary information as well as source selection
data. The business goals of the SPS include meeting procurement functional requirements, accepting and outputting standard DOD data elements, and
reducing operating expenses of the DOD procurement infrastructure.

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Public Key Infrastructure Pilot Projects (three)
Department of Defense/National Security Agency Multi-Level Information Systems Security Initiative
The Multi-level Information Systems Security Initiative (MISSI) is a network of security initiatives employing a framework for the development and evolution
of network system security solutions. These solutions draw on interoperable, complementary COTS and government-sponsored security products and
standards to provide flexible, modular security for networked information systems across the DII and the National Information Infrastructure (NII). The
underlying Network Security Framework, developed in partnership with customers and technology suppliers, addresses security services. Each of the
framework solutions, which provide these services, includes requirements for a supporting network security infrastructure. Within the Network Security
Framework, NSA is analyzing the commercial PKI products and services to determine requisite characteristics and the state of the commercial technology
in order to make recommendations regarding the use of these industry offerings. To support near-term DOD customers and gain technology expertise, the
PKI functions have been implemented through a government-sponsored CA Workstation (CAW) that manages keys, privileges, and certificates. The
current operational MISSI CAW hierarchy focuses on supporting FORTEZZA Crypto Cards. In the near term, the Defense Information Systems Agency
(DISA) and NSA as part of MISSI are utilizing the CAW and FORTEZZA Crypto cards to field a high assurance PKI for the Defense Messaging System
(DMS) for organizational messaging traffic. A long-term goal of MISSI is to support customer PKI needs, through a combination of (1) acting as an
unbiased authority validating the security goodness of the commercial PKI products/services, and (2) driving the development of robust PKI solutions by
specifying requirements and transferring technology expertise to industry.
Department of Energy Electronic Research Administration Demonstration
This project will test emerging security technologies for EDI that are based on the Internet standards for secure e-mail. Six Federal agencies and eight
academic research organizations currently involved in Electronic Research Administration (ERA) will participate in this project. This project will test the
interoperability of multiple vendors' products across an open systems environment. The initial implementation will focus on processing encrypted electronic
grant applications and providing key recovery services.
Department of Energy/Lawrence Livermore National Laboratory Badges and Security Clearances
This project uses the PKI digital signature capability to sign and route, via E-mail, an electronic form used to request changes in clearance/badge status.
The form originates in the Lawrence Livermore National Laboratory’s (LLNL’s) Human Resources Department and is routed to the Security Department.
Human Resources signs and Security verifies the form.
Department of Energy/Lawrence Livermore National Laboratory Public Key Infrastructure
In order to utilize the network, LLNL’s infrastructure must provide strong authentication, non-repudiation, message integrity, and privacy for the information
being exchanged. LLNL will exercise the key recovery capabilities of a commercial software product to ascertain its ability to meet requirements.

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Public Key Infrastructure Pilot Projects (four)
Department of the Treasury Secure Electronic Messaging System
The US Department of Treasury’s Office of Telecommunication Management (OTM) has implemented a pilot project aimed at exploring the use of PKI
tools to facilitate the flow of procurement information. In the case of this pilot, OTM has instituted a system that enables Treasury employees to interact
securely with key employees of a Treasury contractor over the Internet. Encryption, digital signatures, and key recovery functionality are being used to
secure all transactions.
Department of the Treasury/US Customs Service North American Trade Automation Project
To meet these requirements, the NAFTA partners have implemented a prototype electronic commerce initiative that is intended to demonstrate how the
NAFTA customs and trade processes could function in a cost effective, secure manner. Designated as the North American Trade Automation Prototype
(NATAP), the initiative includes live operations at US, Mexican, and Canadian frontiers. Through NATAP, government and commercial organizations
have the opportunity to exercise a business-driven application of electronic commerce over the Internet and to validate the use of standardized
international trade data elements. Further, since the application has been implemented using the Internet, it has been designed with a high level of
security features to ensure confidentiality and authenticity of business sensitive information contained in routine customs declarations, while preserving
the availability of that information through key recovery.
Department of Transportation/Federal Railroad Administration US Electronic Grants
Led by the US Department of Transportation, thirteen federal agencies (Departments of Education, Energy, Interior, Labor, Environmental Protection
Agency, General Services Administration, Office of Naval Research, Small Business Administration, Federal Railroad Administration, Federal Transit
Administration, Federal Aviation Administration, Federal Highway Administration, and US Coast Guard) have joined together to develop a comprehensive
‘Electronic Grants System’ (EGS). This system will streamline the federal grant process, improve efficiency and cut costs for grant customers and federal
agencies. EGS uses Java and Information Broker technologies to enable any grant customer to electronically exchange grant data with any federal
agency, or multiple agencies, using a single WWW user interface. These technologies also provide a truly interactive user interface by transmitting grant
data to and from federal databases in near real-time. In addition, the EGS facilitates government-wide information sharing by maintaining a standard data
structure based on existing EDI transaction sets. An EGS ‘proof of concept’ module was developed with funding from the National Performance Review
and its Government Information Technology Services (GITS) Board Innovation Fund. After extensive agency and customer testing, the pilot has
demonstrated the effectiveness of the system concept. With funding from the GITS Board's Key Recovery Demonstration Project, secure features
including digital signatures, encryption and key recovery, have been added to the EGS pilot. This secure pilot is currently being tested with state
government and university partners.

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Public Key Infrastructure Pilot Projects (five)
Federal Bureau of Investigation (FBI) Internet Communications Security
This project is to develop a method for the Computer Investigations and Infrastructure Threat Assessment Center (CITAC) to communicate with representatives
of private industry, the academic community, and other law enforcement agencies in a secure manner, while at the same time supporting key recovery. The pilot
will test secure E-mail over the Internet and will involve security services such as digital signature, encryption, and CA.
Federal Bureau of Investigation Secure E-mail
This project focuses on a small number of E-mail users to demonstrate the use of encryption for confidentiality and the feasibility of providing key recovery for
the e-mail messages.
Federal Networking Council/National Science Foundation Collaborations in Internet Security
This project is aimed at promoting multi-agency collaborations in the security arena. Eight agencies are participating directly (i.e., DOE, DOD/Army Research
Lab (ARL), Advanced Research Projects Agency (ARPA), National Institutes of Health (NIH), National Communications System (NCS), NIST, National Science
Foundation (NSF), and National Aeronautics and Space Administration (NASA)). Other Federal entities will be engaged indirectly through the Federal
Networking Council (FNC) outreach efforts. Participation in this pilot effort will be open to the academic and private sectors (both software and hardware
vendors), including members of various communities such as the Internet Society (ISOC), the Internet Engineering Task Force (IETF), and the Federal
Networking Council Advisory Committee (FNCAC). The governing principles behind the Security Testbeds include employment of an open process (with the
activities and results open to participation and comment by both public and private sector participants); a focus on multi-vendor technologies; an emphasis on
testing and experimentally deploying security technologies emerging from research and private sectors as well as security technologies currently in use in the
commercial environment; and an underlying objective to ensure interoperability among the broad Internet community (i.e., Federal, private, and academic). This
effort will also include development of a laboratory accreditation program for testing and certifying Internet security software and systems. This process will be
modeled on NIST's National Voluntary Laboratory Accreditation Program, which tests and accredits systems and products for Federal and private sector users.
General Services Administration Paperless Federal Transactions for the Public
By developing partnerships with industry and concentrating on COTS products, a proof-of-concept pilot was designed and implemented using public key
technology to enable digital signature and encryption. Six agencies agreed to participate and develop applications for use with the Paperless pilot. Each was
provided a web server, server software, client software, and hardware tokens containing their key pairs. Potential offerors were then issued hardware tokens
containing digital signature key pairs which were used to sign their electronic submissions.