Networx delays breed fears
- By Roseanne Gerin
- Feb 09, 2006
The General Services Administration's decision to delay the Networx contract until 2007 has made a tough competition that much tougher.
The delay is raising fears among the four competitors that they will lose momentum, employees will suffer burnout, and rapidly changing technology will cause major revisions to already submitted proposals.
A lot is at stake with Networx, as GSA wants all federal agencies to use the contract for most of their communications needs. Chasing the $20 billion contract are teams led by AT&T Corp., MCI Inc., Qwest Communications International Inc. and Sprint Nextel Corp.
GSA delayed Networx because of the large volume of industry responses, the complexity of the procurement and the need for further government and industry discussions.
There are two parts to Networx: Universal will cover global telecommunications needs, and Enterprise will be used for specialized telecom services.
Bids for Universal were submitted Oct. 5; bids for Enterprise were due Oct. 24. In January, GSA pushed the award dates from July 2006 to March 2007 for Universal, and from September 2006 to May 2007 for Enterprise.Scary slowdown
GSA also has extended the FTS2001 contract, which Networx will replace. Sprint had its contract extended until Dec. 17, 2008, and MCI's contract will last until Jan. 10, 2009. The extensions carry options for three six-month periods. The added time allows for a transition to Networx.
Qwest's chief concern is the possibility of losing momentum, said David Peed, vice president of government sales and business development for the Denver company. Peed and executives from other bidders spoke in January at an event by TelecomHUB Inc., a Washington area networking organization.
"We really have to get the support of the whole corporation behind us to bid Networx," Peed said. "It's going to take all we can do to hold the company together to keep doing the constructive things we need to do."
Because the Qwest government services division is a wholly owned subsidiary, it does its own pricing and contract operations, which gives it some freedom from headquarters, Peed said. "That helps to keep us very agile," he said.
As part of its Networx strategy, Qwest last May hired telecom veteran Diana Gowen to lead its team. As senior vice president and general manager of government services, she recruited BearingPoint Inc., BellSouth Corp. and Science Applications International Corp. to pursue both Universal and Enterprise awards.
Qwest also tried but failed to bulk up its telecom presence. The smallest of the Baby Bells suffered a blow in 2005 when it lost its battle for MCI. Verizon Communications Inc. bought the Ashburn, Va., long-distance company for $8.5 billion.
Qwest's other competitors also have grown, with Sprint merging with Nextel Communications Inc., and AT&T's acquisition by SBC Communications Inc.
While chasing Networx, Sprint has assigned about 100 employees to work on the procurement. With the award delayed for a year, the company risks employee burnout, said Raymond Baxter, director of business development for Sprint's public sector unit.
"We need to bring them back because they have day jobs, and [Networx] is their night job, so to speak," he said.
Sprint has teamed with Lockheed Martin Corp. to bid on both the Universal and Enterprise parts of Networx.LURKing in the lull
Both Baxter and Mary Freeman, director of business development for Verizon's federal unit, said addressing technology creep would be another challenge in the lull before Networx awards are issued.
"What we see in the procurement that was thought of four years ago is not the technology that is available today," Baxter said. For example, the concept of data and voice convergence was well known four years ago, but wireless and wired mobility convergence is not included in most telecom and IT procurements, he said.
When agencies ask GSA to add to Networx technologies that were not included in the original procurement, bidders will have to find money in their budgets to substantially rewrite proposals, Freeman said.
Another of Freeman's concerns is whether the Office of Management and Budget will come through with the money for large communications contracts such as Networx. Verizon is bidding only for the less lucrative Enterprise portion.
Verizon's subsidiary, MCI, however, has put together a team that includes Anteon International Corp., Computer Sciences Corp., Comtech Telecommunications Corp., G2 Satellite Solutions, Hewlett-Packard Co., Protus IP Solutions Inc., Proxim Wireless Corp., TeleTech Government Solutions LLC, WilTel Communications Group Inc. and Verizon Wireless Inc.
Both MCI and AT&T are bidding on Universal and Enterprise awards. AT&T's team has Cingular Wireless LLC, EDS Corp., Global Crossing Ltd., GTSI Corp., Northrop Grumman Corp.'s IT Sector, SRA International Inc. and other small and midsize companies.
The delay of Networx has not dampened enthusiasm for the contract ? the dollars are too big. Sprint, for example, has more than $1.1 billion in annual government revenue, Baxter said, and GSA wants Networx to carry the bulk of government telecom spending.
Networx is "an important program, and we need to maintain diligence and work with the agencies" to make sure that their near-term and long-term goals will be met, Baxter said.
Staff Writer Roseanne Gerin can be reached at email@example.com.