GSA awards three companies Networx telecom contracts

The General Services Administration on Thursday announced the next generation of government telecommunications providers, with the awards of Networx Universal contracts to AT&T Government Solutions, Verizon Business Services and Qwest Government Services.

"Award of the Networx Universal contracts is a historic moment at GSA, and reflects our goal of providing transformational products and services to our federal customers at the best prices available in the marketplace," said GSA Administrator Lurita Doan. "I look forward to working with our new industry partners to provide the best possible service and value to our customer agencies and the American taxpayer."

Networx Universal will provide voice, IP, wireless, satellite and IP-centric services to 135 federal agencies at locations spanning 191 countries, and is expected to transform the current federal telecommunications system.

Sprint, which currently supplies about 30 percent of all government telecommunications services, was shut out of the new contract. The company's federal branch serves the Defense, Homeland Security, Transportation, Veterans Affairs and Interior departments, and the Federal Reserve and the Federal Deposit Insurance Corp.

A Sprint spokeswoman said the company was disappointed not to receive a portion of Networx Universal, and will request a debriefing from GSA next week. A decision on whether to file a bid protest will be made after that meeting, she said.

"Sprint has enjoyed an 18-year relationship with its government customers," the spokeswoman added. "Federal agencies have come to rely heavily upon our high-performing network, our strong portfolio of converged IP solutions and mobile enablement."

Asked why Sprint was not given a Networx contract, John Johnson, GSA assistant commissioner for integrated technology services, said the agency set out its goals and objectives upfront. "We defined what we hoped to achieve in the Networx program and we believe the three awardees best meet our needs," Johnson said.

Warren Suss, president of Suss Consulting Inc. in Jenkintown, Pa., said the exclusion was "a devastating blow to Sprint," which had built its company around the federal business.

"The fact that they did not make the cut means they will primarily serve as a niche player in the federal space and the commercial space as well," Suss said. "They are not in the game now for broad-based network services."

GSA's inclusion of the Denver-based Qwest was an impressive victory for the company and will require Verizon and AT&T to "be continually sharpening their pencils and watching their backs," Suss said.

Networx is the largest federal telecommunications acquisition, and is the third in a series of programs GSA developed in partnership with other federal agencies. The entire Networx program, which also will include the smaller Networx Enterprise contracts, to be awarded in May, is estimated to be worth $20 billion over 10 years. The overall ceiling for the contracts is $68.2 billion, with $48.1 billion of that for Universal and $20.1 billion for Enterprise.

"We are proud of the message this program conveys about GSA's ability to deliver large acquisitions on schedule," said Jim Williams, commissioner of GSA's Federal Acquisition Service. "The advanced technologies and services defined in the Networx program will serve as a platform to transform the government's telecommunications infrastructure to a more seamless and secure environment."

Networx Universal is intended to ensure continuity of telecommunications services currently provided on FTS2001 Bridge and FTS2001 Crossover contracts. The contractors will be required to provide 36 mandatory services and 12 optional services.

About 30 days after the issuance of a "notice to proceed" by the Networx Universal contracting officer, the winning contractors can begin the test verification process for operations support. This is expected to take about 60 days.

GSA will then certify and accredit the companies' systems. At the same time, agencies will be encouraged to begin the process of selecting the contractor or contractors that they believe will meet their needs.

The companies are expected to post pricing data for the first year of the contract on their Web sites soon, Johnson said.

Verizon, one of the two telecommunications companies initially awarded the FTS2001 contracts by the GSA in January 1999, provides some level of telecommunications services to nearly every federal agency. As agencies move to Networx, Verizon Business will continue to offer the telecommunications services it currently provides under the FTS2001 bridge contract, according to the company.

AT&T also provides telecommunications services to a variety of defense and civilian agencies under the FTS2001 crossover contract, including the Defense, Homeland Security, Justice and Veterans Affairs departments, and the Internal Revenue Service and the U.S. Postal Service.

Fiscal 2006 Revenue from FTS2001 Bridge and Crossover Contracts

Contractor Revenue
(in millions)
Percentage of total revenue
Verizon Business $417.1 44.9
Sprint $324.7 35
AT&T $176.5 19
Qwest $10.3 1.1
Total $928.6

Source: General Services Administration

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