Some Hill E-Mail Systems Set for Big Price Hike

Posted December 19, 2007 at 6:33pm

Some Members will be paying thousands more dollars annually to sort and manage their e-mail after House officials approved — with little or no negotiations — a price hike for several companies that provide such services.

The increase could be as much as $8,000 a year in some offices, according to staffers with knowledge of their office’s e-mail systems. That would make a noticeable dent in their offices’ limited annual budget, known as the Members’ Representational Allowances.

But there’s also not much they can do. Switching companies is difficult and time consuming, and with 313 million e-mails arriving at both the House and Senate in 2006, for example, an e-mail management program is a must.

Most simply go to the vendors that already have been pre-approved by the Chief Administrative Officer and the House Administration Committee.

The CAO and committee have certain requirements for security, ease of use and capability. But they don’t negotiate prices. Instead, the vendor sets the price that Member offices have to pay. There are no negotiations and no special deals for individual offices, House Administration spokesman Kyle Anderson said.

“Vendors submitted pricing that they believed would cover their cost,” Anderson wrote in an e-mail, adding that the committee does advise the vendors what they think the market rate should be. But, says Anderson of the vendors: “The final choice is theirs.”

For more than 75 percent of House offices, the e-mail program, or Correspondence Management System, comes from Lockheed Martin.

The company offers two programs — Internet Quorum and Capitol Letters — that store, organize and help manage the thousands of e-mails and letters that come into each office every month. But Lockheed is shutting down Capitol Letters by the end of 2009 and is in the process of convincing offices to make the switch to IQ. That program is the most expensive offered in the House, with a monthly charge of at least $2,100 without maintenance, according to a Lockheed pricing chart obtained by Roll Call. Neither Lockheed nor the House Administration Committee would comment on the prices.

This lack of competition can mean lost innovation, said Rob Pierson, the online communications director for Rep. Mike Honda (D-Calif.) and president of the House Systems Administrators Association.

It’s nice to have an approval process, especially for offices with no time to research companies, he said. But staffers also need to band together to ensure that the technology keeps up with their needs. HSAA and other House groups already have met to discuss ways to centralize technology resources and explore other e-mail management options.

“Congressman Honda believes the innovative spirit of Silicon Valley needs to come to the House in the form of increased competition between vendors and lower barriers to entry for new [CMS] packages,” he said. “The CMS packages need to keep up with the pace of innovation in the advocacy world.”

The problem, say House techies, is that there only are so many companies that have developed software to the House’s specification.

Four companies are “approved” by the House Administration Committee for use in Member offices: Lockheed Martin, InterAmerica, Monarch and Centurum. Others are in the pipeline to be approved, a process that Anderson said takes a minimum of three months.

“This is a way we guarantee and we make sure every Member is getting a uniform level of service — the same product line, the same response time — and is treated equally no matter what his or her constituency or politics,” Sterling Spriggs, the technology director on the House Administration Committee, said.

But Rep. Debbie Wasserman Schultz (D-Fla.), for one, has decided to go off the beaten path.

After deciding that InterAmerica’s system didn’t match the office’s needs and unwilling to pay Lockheed Martin’s high prices, her office has decided to go with an unapproved company called Government Response. The company has been waiting for approval for two years, owner Gene Gentile said.

“When shopping for a new mail vendor, we decided to go with Government Response because we found that both of the two main companies failed to meet all of our needs and we were particularly concerned about the large price increases for 2008,” Jonathan Beeton, the spokesman for Wasserman Schultz, wrote in an e-mail. “It appears that decreased competition has resulted in fewer choices for Member offices while at the same time creating higher costs.”

Only a handful of offices choose to hire an unapproved vendor, Anderson said. The committee “strongly encourages” that offices use only approved vendors, he said, because they have been screened for security and other necessities.

However, using an unapproved vendor means the office can negotiate prices and outline their own specifications rather than being limited to the restrictions of the House contract.

And some have lost a bit of faith in the approval process. Earlier this fall, officials initially approved a contract with Lockheed that only offered offices a package for both CMS and maintenance, which made prices jump up by as much as $1,000 each month. But after offices complained, Brady renegotiated the contract, allowing offices to hire one company for their e-mail management and another for server and computer maintenance. Prices, however, still increased.

The price hike was necessary to keep up with cost-of-living increases, Lockheed spokesman Joe Wagovich said.

“Each Member has an option to choose from about four different plans so the Member can choose a plan that has no increase or a modest increase,” he said.

Wagovich, however, declined to list the prices or the increases, citing a confidentiality agreement with the House. Anderson also declined to outline the prices, saying the information was private because it was a direct communication with the Member offices.

Lockheed officials have also argued that the increase was necessary after 10 years of keeping prices almost steady. In an e-mail to staffers, Lockheed House program manager Andrew Kaplan wrote that prices for IQ only increased by 3 percent in both 2005 and 2006, while Capitol Letters has increased less than 1 percent since it was introduced.