GSA, GovWorks ready to rumble

New contract program to take on telecommunications, Federal Technology Service

GovWorks primer

What: A franchise fund administered by the Interior Department's Minerals Management Service. It provides acquisition services to more than 400 managers in every federal agency.


When: Established in May 1996 by the Office of Management and Budget.

Size: About 30 full-time staff.

Present contracts: Administered $250 million in contracts during 2000.

Objective: By 2007 will administer $1 billion in contracts.

James Payne, senior vice president of Denver-based Qwest's government unit, says the company, which recently won approval to provide Web-hosting services under FTS2001, is planning to bid on GovWorks.

Later this month, the first salvo in a competition for government business will be fired, but it won't be contractors dueling for the latest federal opportunity. Instead, the General Services Administration will face off against GovWorks, the Interior Department's Minerals Management Service franchise fund.

GovWorks is a self-funded purchasing organization, established in 1996, that provides additional ways for federal agencies to make purchases through governmentwide acquisition contracts, or GWACs. But this new GovWorks project is different from other GWACs in that it's the first to tackle telecommunications services, an area dominated by GSA's Federal Technology Service contracts.

"We think there is an opportunity to change the way the government buys telecommunication services and equipment," David Sutfin, chief of procurement operations at the Minerals Management Service, told telecom company representatives at a Feb. 28 industry conference. "We think the current system is broken."

Problems with the GSA business model include its "high hidden fee structure," Sutfin said, promising that GovWorks' fees will be from 50 percent to 500 percent lower.

Another drawback is the complexity of its procurements, Sutfin said. For example, the request for proposal for GSA's Connections program is about six inches thick; by comparison, the GovWorks telecom RFP will be under a dozen pages, he said.

"I think the model we're looking to put in place is a commercial model, where the service providers can bring us the service level agreements that they typically bring to their commercial clients. ... If a vendor has a suite of services that they sell to the commercial marketplace, we would like them to bring it to us," Sutfin told Washington Technology. GovWorks' fee will be fixed going into any agreement and typically will average 3 percent, he said.

Sandra Bates, the FTS commissioner, declined to comment on the issue. Instead, GSA spokesman Bill Bearden provided a written response: "We feel confident that we are adding value at extremely competitive prices with the best industry partners. We will continue to maintain our customer focus so that we remain the provider of choice."

FTS offers long-distance services through its FTS2001 contract, held by Sprint Communications Corp. and WorldCom Inc. The agency provides local telecom through its collection of Metropolitan Area Acquisition contracts, held by numerous contractors in about 24 markets throughout the United States. The agency also is evaluating bids on its new Connections contract, an ambitious program to provide "last mile" products and services that make the connection from the desktop through building infrastructures to the carriers.

FTS' telecom contracts have faced intense scrutiny on Capitol Hill. Rep. Tom Davis, R-Va., chairman of the House Government subcommittee on technology and procurement policy, held hearings last year to review the MAA contracts and fees the GSA charges to administer them. Davis also pushed the GSA to move more quickly on its "crossover" plan, which allows MAA contractors to compete in additional MAA markets and for FTS2001 work.

Davis is pleased that GovWorks will provide additional competition for GSA, said his spokesman, David Marin.

"Clearly, GSA has not taken its management of the telecom programs seriously, or we would not continue to see the delays in transition in the MAA program [or] the confusion over crossover," Marin said. "Competition will give agencies additional choices, which should be a win for the overall program."

Telecom firms are generally supportive of the upcoming GovWorks RFP. Sprint and WorldCom both plan to submit bids, even though they already hold the FTS2001 contract.

"I think it's intriguing. I think it'll be another contract vehicle that agencies may want to use," said Mike Ligas, region vice president for business development with Sprint Government Systems. "It'll appeal to a particular set of customers, agencies that would like to do more of their own [systems work]."

Qwest Communications International Inc., which holds several MAA contracts and just recently was approved to provide some Web-hosting services under FTS2001, is also planning to bid on GovWorks.

"We are interested in any creative alternatives such as GovWorks to bring products and services to the market," said James Payne, senior vice president of Denver-based Qwest's government unit. "But it will be the customers that determine the vehicle."

AT&T Corp., which held much of the federal government's long-distance business before being shut out on FTS2001, now offers local services under several MAA contracts. It also expressed support for the GovWorks program.

"This procurement demonstrates the government's commitment to a responsive and effective acquisition system for its customers and we are enthusiastic about the opportunity to participate," said Eloisa Regalado, AT&T's civilian sales and business development vice president. "We see GovWorks as one more tool an agency can use when deciding how it will procure commercial telecommunications products and services."

Lisa Crawford, president of the Crawford Group, a Washington-based telecom consulting company, applauded GovWorks' attempt to compete with FTS.

"From a pricing [and] quality of service standpoint, there are wholesale improvements to be gained by adding a competitor into the mix," she said.

Some industry executives, however, expressed concerns about GovWorks' ability to deliver on its promises.

"It seems to put more of a burden on the agency to know what to buy," said one company official, speaking on background. "It potentially could challenge [agencies'] in-house staff, but their option then is to outsource those functions, which seems to be the value-add of FTS."

Staff Writer Patience Wait can be reached at pwait@postnewsweektech.com.

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