Networx score card

It's over ? theendless preparationsandenforced idleness,the anticipationandworry, the calm beforethe $68.2 billionstorm. Now comes apunishing two-yearrace to the 2010deadline for transitioningall governmentagencies from FTS2001 to Networx.The General ServicesAdministration can'tmandate that allagencies buy voice,IP, wireless, satellite,and other telecommunicationsand networkservices throughNetworx. But agencieswill be cruising theaisles of GSA'sNetworx warehousefor most of their telecomneeds for thenext 10 years.Actually, there aretwo virtual warehouses:the $48.1 billionUniversal with 37mandatory and 11optional services, andthe $20.1 billionEnterprise with newerand more specializedofferings, including 10mandatory and 42optional services.So far, agencies have made more than$1.3 billion in Networx awards. In September2007, the first of 33 task orders GSA says ithas processed went to AT&T Inc. for work atthe Treasury Department. Treasury hadawarded $270 million worth of work to AT&Tin 2006 under the Treasury CommunicationsEnterprise contract but withdrew the contractunder pressure from GSA.A few new awards have made headlines ?notably, the Homeland Security Department'saward last month of the $970 million OneNetprogram to Verizon Communications Inc. andAT&T. But there have been others: AT&T wona Universal order in May from theTransportation Department, and QwestCommunications International Inc. wonNetworx awards from the EnvironmentalProtection Agency and the Social SecurityAdministration.As the transition deadline approaches,more than 200 of the estimated 250 taskorders remain to be awarded."Since February, pretty much all of thevoice awards, except the recent DHS award,have been by former Sprint customers," saidDiana Gowen, senior vice president and generalmanager of Qwest Government Services."We're still seeing the wave building. Wehaven't gotten to the point where it's curlingand getting ready to crash down on us."GSA officials had expected to receive mostagency transition plans by March. But DavidBibb, GSA's acting administrator, said, "We'renot disappointed. It's a complicated contract."Deciding which services are needed is nosmall task, said Bill Gormley, president andchief executive officer of the WashingtonManagement Group. "From a priority standpoint,it's a huge commitment of resources."Staffing shortages and challenges presentedby the Office of Management and Budget'sTrusted Internet Connections and IPv6 initiativeshave further slowed agencies, saidWarren Suss, president of Suss Consulting Inc.GSA can help agencies clear those hurdles,said Karl Krumbholz, GSA's deputy assistantcommissioner for network services. It set asideabout $150 million to help agencies compareprices, identify inventory, plan transitions andtake advantage of modifications to the contractvehicle. For example, an agency mighthave added a new office in a location thatwasn't listed on the original Networx contractbut has been added by another agency, thusmaking it available to all agencies.And not every agency will need to createcomplex statements of work. The largest 21 agencies will make the greatest use of Universal,tailoring services to fit their missions, then submitstatements of work to GSA for review, Krumbholzsaid. Smaller agencies will likely buy packagedcontract offerings.But agencies should do it soon, said Gormley, aformer assistant commissioner at GSA's FederalSupply Service. "You can't jam the door thenexpect GSA to take care of all [the plans] at once."Each contract holder's approach is also differentand shaped by its current position, Suss said.Verizon, as a provider on FTS 2001 and boththe Universal and Enterprise components ofNetworx, "is in a good position," he said.Additionally, "it already has a very substantial revenuestream, while Qwest and AT&T are bothlooking to increase their federal revenue streamsthrough this new contract."Susan Zeleniak, group president of VerizonFederal, has the relaxed confidence of an experiencedfront-runner. Agencies decide what theyneed, and as with the recent DHS award, Verizoncreates a proposal that balances mission, serviceand price, she said."There's still plenty of time for agencies to makea graceful transition," she added.Jeff Mohan, AT&T's Networx program director,talks instead about his army of transition experts.The company has about 3,000 service employeesin the Washington area, and half of the 1,300 peopleat AT&T's operations center are in Vienna, Va.,in the government group. If necessary, he said, "Ican call an all-hands-on-deck exercise.""With such a large number of users [as agencieshave], something is going to go wrong," Mohansaid. "If anyone tells you life will be perfect and atransition this size will go off without a hitch, itjust means they've never done one.""We're no neophytes," Gowen said. "We know howto move the roadblocks and get the job done." Qwesthas already snatched Social Security's voice businessfrom Verizon, she added."But once that tsunami crashes and we have 20or 30 requests for proposals to respond to in 30days or so, it's going to be tough," she said. "That'sa heavy load for anyone, no matter how many people you've got on it."One significant difference in this transition,Zeleniak said, "is we're not seeing one mammothcontract for all services."However, Krumbholz said, that potential waswritten into Networx because "it was somethingwe knew agencies wanted."A single contract offers administrative simplicityand efficiency, and "Universal is the completeSears catalog of services," Suss said.Just don't say that to Level 3 CommunicationsInc. or Sprint Nextel Corp."Last week, we were talking with one of ourcustomers, and they still believed they had to goto Universal," said Karen King, Networx programdirector at Sprint. "The constant message points in the media and to some extent from GSAand Universal winners have been thatEnterprise, as the smaller contract, is limitedto niche services, and that's not the case."There are few services that agencies canget only through Universal, said Ed Morché,general manager of Level 3's federal marketsgroup.It's no surprise that Enterprise-only contractorswould extol the virtues of Enterpriseto clients, Gormley said. "But it's a good storyto tell," he added. "Agencies should be askingthemselves: 'Do I need Universal?' What youwant to do here is try not to buy futures. Nomatter how much depth a company mayhave, with the compressed period of timeleft, the sooner an agency makes a decision,the better."You'll get no argument from Networx vendors,who are eager to get past this stage ofwriting proposals, making bids and waitingwith bated breath."A sweet prize would be to pull off the[Internal Revenue Service] 800-numberbusiness," Gowen said. "But we'll see."