INTERNET RFP RECOMMENDATIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP88-01418R000200120029-8
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 8
• Document Creation Date: December 22, 2016
• Document Release Date: June 28, 2011
• Sequence Number: 29
• Publication Date: April 19, 1985
• Content Type: MEMO

Approved For Release 2011/06/28: CIA-RDP88-01418R000200120029-8
19 April 1985
MEMORANDUM FOR: Source Selection Official
D/FBIS
FROM: Chairman, Source Selection Evaluation Board (SSEB)
SUBJECT: INTERNET RFP Recommendations
1. In accordance with the INTERNET Source Selection Plan, the SSEB
is forwarding its final recommendations on the subject RFP.
2. The formal evaluation process is now complete in that those
companies considered in the competitive range were called in for
discussions and given the opportunity to revise their proposals. These
revised proposals have been evaluated by the appropriate panels whose
final reports are attached. The Technical and Management Panel has
ranked COMSAT first and OTI second, scoring 46 and 33.3 points
respectively. The Cost Panel ranked COMSAT second but by only a point
differential of 1.15. Thus the overall ranking is COMSAT 94.85 and OTI
83.3 points.
3. Based on this evaluation the SSEB recommends that COMSAT be
selected the winner of the competitive procurement and the contracting
officer be directed to enter into final negotiations. A critical aspect
of these negotiations should be the points addressed in the attached memo.
Attachments:
Initial INTERNET Negotiations
Panel Review of OTI Revised Proposal
Revised Cost Proposal Evaluations
Distribution:
1 - Addressee w/att.
1 - CO/FRIS, w/att.
1 - RFP INTERNET File, w/att.
1 - Chrono
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19 April 1985
MIMRANDUM FOR: Source Selection Official
D/FBIS
FROM: Chairman, Source Selection Evaluation Board (SSEB)
SUBJECT: INTERNET RFP Recommendations
1. In accordance with the INTERNET Source Selection Plan, the SSEB
is forwarding its final recommendations on the subject RFP.
2. The formal evaluation process is now complete in that those
companies considered in the competitive range were called in for
discussions and given the opportunity to revise their proposals. These
revised proposals have been evaluated by the appropriate panels whose
final reports are attached. The Technical and Management Panel has
ranked COMSAT first and OTI second, scoring 46 and 33.3 points
respectively. The Cost Panel ranked COMSAT second but by only a point
differential of 1.15. Thus the overall ranking is COMSAT 94.85 and OTI
83.3 points.
3. Based on this evaluation the SSEB recommends that COMSAT be
selected the winner of the competitive procurement and the contracting
officer be directed to enter into final negotiations. A critical aspect
of these negotiations should be the points addressed ii the attached memo.
Attachments:
Initial INTERNET Negotiations
Panel Review of OTI Revised Proposal
Revised Cost Proposal Evaluations
/~U 10 . n
it tor, Foreign Broadcast Information Service
ou e Selection Official
S c
C Z3 1
Date
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:iNENIORANDUM FOR: Contracting Officer/FBIS
FROM: Chief, Engineering Division
SUBJECT: Initial INTERNET Negotiations
1. The INTERNET RFP has resulted in COMSAT being the apparent
winner on the basis of costs submitted during the revised proposal step.
There remains a number of points that must be addressed either before or
during actual negotiation of the contract. These are addressed below.
Maximum financial exposure until these issues are satisfactorily resolved
should not exceed $120K/YR (COMSAT's service charge).
2. Points that need to be built in to the contract are listed
below. If these cannot be satisfied then an automatic termination
clause, without penalty, should be invoked.
a. COMSAT will act as FBIS' agent with foreign administrations
in determining the precise conditions for the non-U.S. parts of the
lease. These specifics shall be reviewed in detail with FBIS prior
to presenting the reservation request to INTELSAT.
b. COMSAT will act as FBIS' agent in preparing, processing, and
presenting a customized lease request to INTELSAT, independent of
the lease currently bid.
c. COMSAT shall establish a position on whether they wish to
bid on the U.S. terminal. They shall provide written assurances, or
conditions should be incorporated in the contract, that they will
expeditiously ana effectively process the earth station application
whether they are selected as the installation contractor or not.
3. Negotiating points that have been identified are listea below:
a. How the monthly lease charges can be reduced. We note that
the monthly charge by INTELSAT is $90.5K. The additional cost is
carrier markup.
b. Based on conditions, if any, specified by the foreign
administrations, we need a mechanism for incorporating all markup
charges and then negotiating these as a single cost item.
c. There is a discrepancy between the first and third page of
COMSAT's revised proposal as to what the first month's reservation
fee actually is. This relates-in part to "a" above.
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t
SUBJECT: Initial INTERN,,,' Negotiations
4. COMSAT must be informed that a minimum condition of the lease as
far as FBIS is concerned is that we must have 24 hour a day availability
and operational control of the traffic flow. By traffic flow it is meant
message priority, within the network, in so far as the originating
station is concerned. Other conditions that may be specified by the
foreign administrations will be dealt with following their precise
definition. FBIS reserves the right to participate in these meetings
and/or negotiations with the foreign administrations since these may well
.influence overall program direction. See paragraph two above.
S. Please review these points and determine whether these
discussions should take place prior to or in conjunction with formal
negotiations. In any event, we should resolve these points before
dismissing completely the OTI competing bid.
Harry R. Wood
Distribution:
1 - Addressee
1 - INTERNET File
Info copy sent to DO/FBIS
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8 April 1985
MEMORANDUM FOR THE RECORD
SUBJECT: Panel Review of OTI Revised Proposal
REFERENCE: 20 February 1985 - Report of Response to RFP-09-85
The revised proposal, addendum to Volume I Technical Proposal
20 March 1985 from OTI was reviewed by the Technical and Management
Evaluation Panel on 8 April 1985.
BACKGROUND
On 20 February 1985, COMSAT was selected by the Technical and
Management Evaluation Panel as the offeror with the highest technical and
management proposal score and it was recommended that COMSAT be awarded the
contract on the basis of their response. OTI was second and IRI ran a close
third. Five offerors responded to the RFP.
NEW DEVELOPMENTS
The Contracting Officer, Mr. James Grabulis, asked for clarification
of COMSAT and OTI on their original submissions since they were designated
within a cost competitive range. COMSAT did not revise their original
proposal, which was already rated high. OTI has effectively increased their
professional staff by the addition of Mr. Al McCormick who has served at
COMSAT World Systems and American Satellite Corporation. OTI has also
effected liaison with British Telecom, Mercury Communications, and the
Belgium, German and Swiss PTT's. OTI has downgraded the percentage of
foreign ownerships originally cited in the technical and management proposal
to 15%. OTI will have its first IBS ground terminal in Detroit in May 1985.
On 5 April, Mr. Grabulis invited OTI's president to give a presentation
on their business projection plan. Established during the question and
answer period was the status of OTI as follows:
a) OTI has no signed contracts at present
b) OTI will be contracting for its first IBS Ground Station
in Detroit.
RECOMMENDATION
The overall ratings have not changed since the 20 February 1985
evaluation by the Panel. The Panel continues to recommend COMSAT.
Arthur F. Boland
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9 April 1985
MEMORANDUM FOR: Chairman
Source Selection Evaluation Board
FROM Chairman
INTERNET Cost Evaluation Panel
SUBJECT: Revised Cost Proposal Evaluations
of the INTERNET RFP
In accordance with the criteria established in the RFP, amendment
number one and the Source Selection Plan, the Cost Evaluation panel
evaluated the revised proposals submitted by the offerors in the
competitive range: OTI and COMSAT.
COMSAT submitted a revised proposal totalling $13,913,350 (which
includes the British value added tax) for a seven year lease which is a
reduction of $1,322,650 below their originally submitted cost. On 4
April COMSAT sent the contracting officer a letter stating their
originally proposed costs are valid and that the resubmitted costs were
in error. Thus there is no change in COMSAT's price of $15,236,000.
OTI reduced their costs for a seven year lease by $256,000.00 for
total of $15,137,700. In evaluating the OTI proposal, their financial
condition became of concern. Based on this concern the contracting
officer requested (1) OTI present its business plan and (2) the auditor
is to review their financial condition and submit a audit report to the
undersigned by 12 April 1985. On 5 April OTI presented their business
plan. It was evident from the plan that OTI has developed a sound
business approach with considerable financial backing. Satellite
Transmission Systems, Inc. (STS) is for example building a site for OTI
as a operational base and will lease the facility back to OTI. STS is in
effect financing OTI and has sent a letter to the contracting officer
stating their support, commitment and confidence in OTI. MACOM,
apparently at OTIs request has also sent a letter stating their technical
support and assistance for this effort. Checking with OTI financial
institutions, it apparently has $847,721.92 in cash assets as of 8 April
1985. However, to date they have not been awarded a single contract.
OTI claims that they will eminently be awarded a major contract with
Electronic Data Systems Division of General Motors and possibility DEC.
Given the foregoing, there is still concern regarding OTI's financial
responsibility. That determination will be made upon completion of the
auditors evaluation.
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SUBJECT: Revised Cost Proposal Evaluations
of the INTERNET RFP
The following represents a cost comparison of the companies in the
competitive range between their initial and revised submissions:
INITIAL PROPOSAL REVISED
PROPOSAL
OFFEROR
($000) ($0
00)
COMSAT
$15,236.0 No
change
OTI
15,393.7 $15
,137.7
Jim Gra ulis
Chairman,
Cost Evaluation Panel
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 Approved For Release 2011/06/28: CIA-RDP88-01418R000200120029-8
SUBJECT: Revised Cost Proposal Evaluations
of the INTERNET RFP
DDS$T/FBIS/CO/JJGrabulis:swx2696(11 Apr 85)
Distribution:
Addressee
1 - Paul Thompson
1 - Bill Walls
1 - Charles Sklarewitz
1 - FBIS/CO Orono
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