Networx transition woes: Dual contracts or dueling contracts?

EDITOR'S NOTE: This is part two of a three-part series that explores the transition from FTS 2001 to Networx.

Agencies wanted the FTS2001 replacement contract to play dual roles, and that’s just what the General Services Administration gave them with Networx Universal and Enterprise contracts. But agencies may be getting more — and less — than they bargained for, Networx vendors say.

In theory, Networx Universal provides straightforward telecommunications services, while Networx Enterprise offered managed services, IP-centric services and other options to help agencies revamp their networks, not just transition their old FTS2001 service.

Instead, the two contracts increasingly more closely resemble each other. Today, the only real difference between the Enterprise “innovation contract” and Universal is that Enterprise allows for fewer wire centers and less robust feature sets, said Diana Gowen, senior vice president and general manager of Qwest Government Services. Universal carriers could duplicate on Enterprise everything they were making available on Universal, “which frankly is what Qwest, AT&T and Verizon did,” she said.

“GSA provided the contract vehicles; it’s up to the agencies to decide how to use them,” said Ed Morché, general manager and senior vice president of Level 3 Communications Inc.

Some experts say GSA could administratively direct an agency to consider all network awardees, regardless of whether they are Universal or Enterprise. As it stands, agency procurement officials must document the basis for their procurement decisions. “What we would like the agency to add to that procurement file is why, if they go with Universal, they didn’t choose Enterprise,” Morché said.

The acquisition process is complex, he said, and agencies are “going to need help from vendors to get through this process.” Working through Enterprise gives them access to the engineering staff and resources of five companies rather than Universal’s three.

With so little difference in the offerings of the two contracts, fiduciary prudence alone is enough reason for agencies to make Enterprise their default Networx contract, he said. “The whole reason we don’t do sole-source pricing on the agency side is to allow competition, because competition will drive pricing down,” Morché said. “If you believe that, and I think we all do, then you should believe that five vendors vying for business should drive pricing down and become more competitive than just three, [as on Universal].”

Karl Krumbholz, GSA deputy assistant commissioner for network services, refuses to be drawn into that discussion.

“I can’t comment on the extent to which all of the carriers would respond to any given statement of work nor what the result of that might be,” he said. That would depend on what agencies are seeking, what carriers are offering and which contract the service is on, he said. “It could be you’d get the same three vendors that are on Universal because the others don’t provide the service.”

Questions of one or two contracts and whether any particular company is capable of handling a particular task are beside the point, Krumbholz said, a faint note of exasperation slipping into his voice.

“The way the acquisition is done in government is you write requirements, and you allow all companies to compete and offer their best solution,” he said. “The government evaluates those proposals and chooses those it believes provide the best value. Once that decision is made, it’s done. And the next opportunity will come in the next acquisition. In the case of Networx Universal and Networx Enterprise, the opportunity to get a contract has passed.

“There’s no provision to change the rules in midstream,” he said. “There’s a lot of talk about the fact that that’s regrettable — specifically from those that did not win a contract, but all of the telecom vendors had the opportunity upfront to win a contract on Universal.”

During the Networx planning stage, Gowen supported a single Networx contract. But, she said, “the contract gurus at GSA said they just could not do that. That was a well-known fact when we were all competing — if you wanted to play in the Universal space, you needed to compete on that contract and win. We went into this eyes wide open; if we were not a competitor and a winner on Universal, we would probably be left with crumbs. That’s why we went full court press to make sure that we were competitive.”