AT&T, Qwest and Verizon capture Networx Universal

Teams led by AT&T, Qwest Government Services and Verizon Business Services have captured Networx Universal, awarded by the General Services Administration. In a surprise, however, GSA rejected the proposal by Sprint-Nextel, the fourth bidder on the multi-billion dollar contract.

Networx Universal will take over for the expiring FTS 2001 contract as the primary contract vehicle for agencies to use in procuring telecommunications and network services. GSA plans to award Networx Enterprise, a companion vehicle offering a less extensive range of services, in May.

The agency expects the government to do about $20 billion in business through the two contracts in the next decade. However, the contract ceilings are set considerably higher ? $48.1 billion for Universal and $20.1 billion for Enterprise ? in case the estimate is too low.

John Johnson, assistant commissioner of integrated technology services at GSA, said the world has changed significantly since GSA awarded FTS 2001 to MCI and Sprint in the late 1990s.

"While FTS 2001 focused on pennies per minute [for long-distance calls], Networx will focus on securing vast amounts of information around the world," he said.

Johnson declined to comment on why Sprint did not get a spot on the contract, saying only that GSA decided the three winners could best meet the government's needs. He noted that use of Networx is not mandatory, so Sprint or any other company not on the contract can still compete for federal business.

"The fact that a company has the contract doesn't guarantee they will get the business," he said. "Agencies have to make a choice."

As a practical matter, however, the decision could be devastating for Sprint, said Warren Suss, president of Suss Consulting in Jenkintown, Pa.

"Sprint is going to be a marginal player," he said. "They're going to be able to play as a niche wireless provider, but it takes them out of the game" for most network procurements. "I just don't think we'll be seeing Sprint going after the big contracts anymore," he added.

Sprint's flagship federal customers, including the Department of Veterans Affairs and the Administrative Office of the U.S. Courts, could now slide to other providers, he said.

The news was surprisingly good for Qwest, however, Suss said. "On the Qwest side, we've got a scrappy player that had been somewhat marginalized, playing in a niche way in the intelligence community," he said. "All of a sudden they have put themselves into the game."

Sprint officials issued a statement saying they want GSA to explain why the company didn't get a place on Networx Universal. The company will decide whether to protest the award after learning the agency's reasoning, the company said. Sprint also hopes to get a place on Networx Enterprise, according to the statement.

"Sprint is disappointed not to receive a portion of the Networx Universal contract," company officials said in the statement. "Sprint has enjoyed an 18-year relationship with its government customers. The Sprint team spent significant time and energy on the program and has made large investments to meet the diverse requirements of the agencies."