Davis voices concerns over Networx minimum revenue guarantees

Rep. Tom Davis (R- Va.) yesterday offered two suggestions for garnering greater participation from industry and government agencies in the Federal Supply Service's Networx telecommunications program.

Davis, chairman of the House Government Reform Committee, said the General Services Administration should set the minimum revenue guarantees for Networx at a level high enough to encourage a broad range of contractors.

Davis also said GSA should report to Congress any agency requests for telecommunication services outside of Networx, which is slated for award in April 2006.

The Networx contract, which is potentially worth $20 billion over 10 years, is divided into Universal and Enterprise. FTS officials have proposed a minimum revenue guarantee of $525 million to be shared among companies that win a place on the Universal contract and $25 million for companies on the Enterprise contract.

This is considerably less than the $750 million guaranteed to each company, MCI Inc. and Sprint Corp., on the FTS2001 contract, which Networx will replace.

The proposed minimum revenue guarantees are "something we have concerns about, particularly as it relates to the Enterprise" contract, said John Brosnan, a Government Accountability Office official assigned to work on Davis' committee. "That is probably the issue that's been brought to our attention the most since the draft RFPs were released."

Using Networx will be not only a cost-savings measure, but also "an enterprise vs. stovepipe issue for government," said Davis, whose 11th congressional district in Virginia encompasses much of the state's high-tech community. Since being named chairman of the Government Reform Committee in January 2003, Davis has been a staunch advocate of improving interagency communication and lowering costs by eliminating stovepipe structures that hamstring government technology.

Davis' committee will be "key in exercising oversight of Networx," Brosnan said.

He added that the committee would continue holding hearings on Networx. Both industry and government officials involved in Networx have testified about the procurement in previous hearings before Davis' committee. Davis will finalize his technology management agenda within the next few weeks, Brosnan said.

Speaking at a conference on Networx co-produced by FSI and ICG Government, Davis offered six main points supporting GSA and the governmentwide telecommunications program:

?GSA is best suited to manage the government's communications environment.
?Networx must encourage the broadest possible participation by industry.
?Minimum revenue guarantees must be set at a level that encourages a broad range of participants.
?GSA must adjust its regulations downward.
?Networx should stand as a model contract vehicle.
?GSA should report to Congress any agency requests for services outside of Networx.

Davis said he would include the points as part of his technology management agenda for the next Congress. He also said he expected to move many more technology issues from subcommittee to full committee, although he did not elaborate.

The 10-year Networx program will replace the expiring FTS2001 contract and its corresponding crossover and federal wireless contracts. GSA issued draft requests for proposal in early November. Comments from industry are due by Dec. 22, and final RFPs will be released in April.