Managing Risk

The U.S. Postal Service has hired government contractor Lockheed Martin Corp. to deliver the next phase of a project to create an organizationwide network that ties together voice, data, video, and other services, saving the government money and providing high-speed data access to 15,000 field offices. The 18-year contract is valued at as much as $3 billion.

Moving from networking company MCI--which has provided the Postal Service with network services since 1997 and will continue its service through 2008--to Lockheed Martin will take the Postal Service at least two years, says Bob Otto, chief technology officer. The Postal Service spends as much as $200 million each year on a variety of telecommunications services, including data, LAN, voice, and wireless functions, and Otto says it can save 20% to 30% of those costs by using Lockheed Martin.

"MCI has done a really great job for us," Otto says. But the telecom market is going through changes, he adds. "With Lockheed, if they lose a partner, they have the expertise and bandwidth to replace that partner."