have that military communications understanding and how to deal with the bureaucratic side of the house," said Smith. One reason AT&T hooked up with Boeing is the contractor's know-how with the government, AT&T readily admits. "They have critical experience in government proposal work, government contract work, and project management," said Louis Golm, vice president for AT&T's federal systems division. Once built, the network will benefit government workers by stretching the limits of technology to offer services simultaneously over the same communications channel, said Jerome Lucas, president of TeleStrategies, a McLean consulting firm. That requires the standardization of the telecommunications network into a new incarnation known as integrated services digital network (ISDN), he said. "We are looking at the integration of voice and data for services you could not create otherwise," he said. "With ISDN, you will be able to see on a screen who is calling you ahead of time. If it is a customer calling you, you can have all the information on that customer appear on the screen at the same time," he said. The winning bidder gets to play with 21st century technology along with an instant customer base of 1.3 million that is expandable to other large corporate customers, analysts say. That's good news for US Sprint, for example, which just spent several billion dollars expanding its network with fiber optic cables. The fiber optic cables are very efficient thin glass strands that transmit voice and data signals using light pulses. "If you are putting together a system for 1.3 million users who are you clients, your customers, then there is nothing that says you can't learn from those lessons and turn around and sell to other users," said Mike Hashemi, president, of Telesynetics, a consulting firm that GSA used for part of its effort. Defense companies Martin Marietta and Boeing view teaming on the telecommunications contract as an excellent way to diversify. "The Boeing Co. is emphasizing this business right now as part of its long-term strategy," said James Smith, director of new business development for Boeing Computer Services. "We are leveraging technical strengths into a whole new area." The division is seeking to gross $1 billion in revenue by 1990 and is “on a profitable path," he said. Defense contractors that build aircraft, spacecraft or missiles, for example, have developed high-speed data processing and software capabilities in-house that they can market to other users, analysts say. Boeing is creating a private communications network for the National Aeronautics and Space Administration, while Martin Marietta has served as principal contractor for the Federal Aviation Administration's 10-year program to upgrade the nation's air traffic control system. Electronic Data Systems, the builder of a private network for parent General Motors Corp., is not a defense contractor, but is the biggest systems integrator in the United States-one of the few that is profitable, analysts say. So far, most efforts to provide commercial communications and information processing have been "consummate failures," analyst David J. Smith said. "This foray by all these information processing guys has not worked," Smith said. "The bottom line is the defense industry doesn't know how to do that yet." Enter US Sprint, MCI and AT&T to work on the ultimate telecommunications network. "EDS saw a network supplier in Sprint that could provide extensive fiber optic capacity. along with the . . . private network service offering that is being requested," said Tracey Gray, vice president for the federal systems division at US Sprint. EDS has capitalized on the know-how of Sprint before. When it encountered problems on the construction of the voice part of the GM network, US Sprint solved it for them, one analyst said. Analysts say that whoever wins the contract will have entre to about $15 billion worth of upgrading of government communications systems in the coming decade. AT&T, for one, plans to capitalize on Boeing's expertise in marketing to the government, said AT&T's Golm. "We have asked them to share with us in the marketing role because clearly they have customers and relationships within the federal government," he said. The award will also open doors into the complex world of corporate communications networking and prove whether the incumbent, AT&T, can retain its virtual monopoly in providing telephone networking services to large businesses. If an AT&T competitor wins, woe to AT&T. "It will give them the credibility they don't have with large corporate users," said Fritz Ringling, an analyst at the Gartner Group. "It's more than revenues, its pres tige and capabilities. If the government feels confident enough, AT&T competitors will use this as an affidavit to penetrate other camps." Right now, private network services to large business customers will bring AT&T about $5 billion in 1986 revenue, half of which go to local telephone companies for connections, out of a total of $34.4 billion in 1986 revenue, said Ringling. The segment is one of AT&T's fastest growing. "I think it is very important that AT&T win this," said AT&T's Golm. "Clearly, if it didn't, it would cause large customers concern, and they would want to have to understand how that was true." The General Services Administration, the federal services procurer that has fueled intense competition between these companies, got the idea to replace the network back in 1981. AT&T withdrew a lucrative service offering at that time and the government's phone bill jumped by about $100 million a year, said Bernard J. Bennington, GSA's deputy commissioner for telecommunications services. The old network, which allows only conversation and low-speed data functions, costs the government $505 million a year. The new network, to be fully operational by 1990, will cut costs by about $100 million a year, the GSA estimates. The drafting of specifications has taken months, two drafts of a request for proposal, and cost more than $4 million paid out to consulting firms, according to government officials. Though only one team wins, each will spend between $4 million and $25 million on the bidding process, experts estimate. "If you listen to the scuttlebutt and claims of these companies, each has a team in excess of 50 people working on this and they put these teams together at least six months ago," said Bennington. The managements of these company teams apparently feel the investment is worth the risk. "They said here's your opportunity of a lifetime," said Jerry Thames, vice president of communications for Martin Marietta. The loser still gets an enormous leg up in learning about the integration of huge and unwieldy communications networks, company officials say. "I think this is a [sign] of things to come in the telecommunications industry for the next 20 years," said Thames. "There is just too much technological competence and too many technology products that need to be integrated and brought together in a very complex world.' Mr. WHITE. That is correct. It indicates some of the complications, and it indicates the money that is involved. You will notice that the GSA expects their costs to reduce from $505 million a year to $400 million, a 20 percent savings, through appropriate networking. You will notice also the industry itself, which is fairly new since divestiture, is struggling with how it should operate. There are many unknowns even within the industry. And you see the telecommunications people combining with the defense people for these major contracts. We are involved in that whole operation on a smaller scale. So to have any preconceived notions would be inappropriate, Mr. Chairman. Mr. FAZIO. We certainly would be compatible with this network, wouldn't we? Mr. WHITE. Absolutely. FUTURE NETWORK POTENTIAL Mr. FAZIO. I am looking forward to the day I will get a clean line in my district office. Mr. WHITE. There are all sorts of possibilities, as you read in this article. You will be able to see on a screen who is calling you ahead of time. If a customer is calling you, you can have all the information on that customer appear on the screen at the same time. The same thing could be true, for example, of a constituent calling you. You could have information about that constituent. Mr. FAZIO. They won't be able to see us, will they? Mr. WHITE. We can arrange it either way, Mr. Chairman. But the point is there are all kinds of possibilities. We need to be flexi ble enough in our design to enable whatever possibilities that exist to be adopted if the Congress so chooses. So we are in a very complicated area that we intend to have a report on by August, Mr. Chairman. Mr. FAZIO. Are you working closely with the Senate Rules Committee and House Administration? Mr. WHITE. We are. The Senate Rules Committee and House Administration Committee are represented at our meetings. Mr. FAZIO. It has been almost a month since you had a meeting like you had on Friday? Mr. WHITE. Yes. As everyone was told that hiatus occurred because of the selection of a consultant and getting an agreement with the consultant, which we now have. We approached it just as we would architects or engineers under the Brooks bill. We viewed these people as professionals and while we made a selection of one, it became incumbent upon us to find a financial agreement which we were able to do. There again I am pleased to report that we are under the budget. TELECONFERENCE POTENTIAL Mr. LEWIS. Yesterday we talked a little bit about the telephone system and our wish lists in terms of advanced improvements in forms of communication, and I thought of you over the weekend for I visited a church in Los Angeles, a Greek Orthodox Church, St. Sophia's, a magnificent building. They are thinking of doing restorative work of the nature you brought to our attention. You once provided advice and counsel to the State Legislature in California as we went about restoring a building there. I couldn't help but think here is this church group going about the same thing in a little different way, but with absolutely identical kinds of needs. Wouldn't it be magnificent if by television, telephone, conference call some of your people could see what they are doing without having to travel out there? We were talking about GAO being able to communicate with their staff people without traveling. I hope we are going to push the edges of technology—— Mr. WHITE. Absolutely. We view this project as vital to the Congress of the United States, the heart of this representative Republic, the heart of the government. It ought to be at the cutting edge of all these technologies. Mr. LEWIS. I will be able to call my home here on the Hill? INTEGRATED NETWORK ACHIEVABLE Mr. FAZIO. Do you think with what you have learned so far, George, that the concept of an integrated plan for all these agencies is feasible? Mr. WHITE. I not only think it is possible, I think it is a tribute to the wisdom of this committee for having instituted it. I think it is not only possible, it is going to save a lot of money. Mr. FAZIO. Would you be prepared to estimate what that might be? Is it in the realm of what GAO projects? Mr. WHITE. Percentagewise, it is in that realm. They are talking about a lot more dollars to begin with. Percentagewise absolutely; it will not only save money, but increase functionality, using that word again, so you can pick and choose the things that you want. Bear in mind, of course, that there is a tendency to think about television and telephones just as you are doing, and that is great, and that will improve dramatically, but the big savings will be cost; the transmission of data is, of course, increasing dramatically. Going from analog to digital transmission systems has made all the changes possible and that enables other possibilities to take place. I have attended some seminars and will attend others; as I said, I intend to remain personally involved in this not only because I feel that it is an obligation, but because it is of intense interest to me. NEED FOR AGENCY INVOLVEMENT Mr. FAZIO. Let me just conclude by saying we have heard concerns expressed by some of the witnesses who come to see us from the Legislative Branch agencies who are nervous and concerned and would like to have more input, and want to see you be sensitive to the nuances of their own problems and plans. I urge that you give that the very highest priority and that you continue to discuss these issues with all the agencies involved and make sure they are letting you know when they have any problems or questions so you can deal with those without letting problems accumulate that perhaps you are not aware of. Mr. WHITE. We will take their temperature, Mr. Chairman. There are several ways of doing that, as you know. Mr. FAZIO. I will insert some questions to be answered for the record. [The questions and responses follow:] TELEPHONE SYSTEM Question. What will be the cost and duration of the contract you have signed? Response. The contract cost is $280,000. It is scheduled to be completed by October 1, 1987. Question. What is the schedule for completing the plan and presenting it to the committees? Response. Following review by appropriate staff, it will be forwarded to the Committee on House Administration and the Senate Committee on Rules and Administration in August or September of 1987. After those committees approve the report it will be transmitted to the House and Senate Committees on Appropriations. Question. How much is in this budget for the installation of the new telephone equipment in the House and Senate? Response. No funding is requested for the installation of telephone equipment, as that cost is the responsibility of the vendors who are supplying and installing new telephone service to the House and Senate, respectively. However, new budget authority in the amount of $1,000,000 is requested in the Capitol Buildings appropriation for such needs as may arise with respect to any new telecommunications system that may be adopted. In addition, restoration of funds reprogrammed for additional warehouse space and the telecommunications study, is requested in the amount of $500,000 in the Capitol Buildings appropriation and $895,000 which was reprogrammed for telecommunications renovations in the House Office Buildings is requested to be restored to the House Office Buildings appropriation. Question. What is the schedule for this work? As you see it, is everything that you are responsible for (construction of conduit pathways, etc.) on schedule for the target date installations of House and Senate switches and the new service? Response. All work is on schedule for the target dates on the House and Senate switches. Construction work in the House Office Buildings will be complete by March 31, 1987, and work in the Senate Office Buildings is virtually complete at this time. Question. Place a table in the record identifying the funds contained in the FY 1988 budget, the activities involved, and the time schedule. Response. The information follows: SUMMARY OF TELECOMMUNICATIONS FUNDING AND ACTIVITY STATUS-JANUARY 15, 1987 Activity To provide $50,000 for the rental of additional For modification to the basement and ground floor Schedule Currently occupying 48.205 Sq. Ft. (12/31/86) Contract with Network Strategies, Inc. being finalized. Architect of the Capitol construction work to be Architect of the Capitol work 95% complete, only Fiscal Year 1988 request for telecommunications for Fiscal year 1988 request. Note Restoration of funds have been requested in fiscal year 1988 for the first three items EAST PLAZA SECURITY STATUS Funding $100,000 400,000 895.000 219,000 1,000,000 Mr. FAZIO. We had better discuss the East Plaza. Are you making any requests for activities on the East Plaza in this budget? And I am concerned about the issues of security, too. I would like to talk about these items. Mr. WHITE. We are not making any requests in this budget for the East Plaza. We have, as you know, $725,000 that was budgeted. It appears at this point we will be able to complete the work for that even though there have been some changes, some of which have modified the costs, but we think, on balance, we will be able to finish for that amount of money. SECURITY FENCE Mr. FAZIO. Briefly update the committee about your plans, your accomplishments, expenditures and what you anticipate before you finish? People ask me, for example, where is the fence we heard about? These are issues that remain hanging fire, and I would like your report. Mr. WHITE. Let me try to clarify, Mr. Chairman, the difference between the perimeter fence, which was an issue raised as part of |