Smaller telecoms push for changes to Networx

Multiple telecommunications firms have asked the General Services Administration to alter the way it structures a new, $10 billion governmentwide contract for telecommunications and networking products and services.

At a hearing before the House Government Reform Committee Thursday, some telecommunications executives said they could compete for Networx without any changes, but others said it would be extremely difficult to do so. Networx is the follow-on contract to FTS 2001.

Some executives asked that GSA conduct its two-phase acquisition concurrently. The agency had proposed to make awards on the first phase nine months before awards on the second phase. Other executives asked that GSA abandon the two-phase strategy and instead conduct one competition.

Sandra Bates, commissioner of GSA's Federal Technology Service, said GSA officials are committed to improving the acquisition strategy, and are studying ways to make it better.

The first phase of the Networx competition, Universal, favors large telecommunications firms that have infrastructure nationwide, executives said. The Universal phase requires ubiquitous service ? all services under Networx must be offered at all locations where agency employees work.

The second phase, Select, favors smaller telecommunications companies and systems integrators, executives said. It allows contractors to offer a lesser number of services and to offer those services in limited geographical areas.

If the Universal and Select awards are not made at the same time, Select vendors will be at a competitive disadvantage, said David Page, vice president of federal government sales for BellSouth Corp.

"Under this [current] scenario, the Networx Universal awardees will have established themselves as vendors of choice for almost a year prior to the Networx Select awardees being able to begin," Page told the committee.

Quinten Johnson, regional vice president of SBC Communications Inc., said GSA should abandon the two-phase strategy entirely.

If vendors must subcontract to other companies in order to provide all services everywhere, they will incur higher administrative costs, which will be passed on to the government customer, Johnson said. Allowing contractors who can offer some services to compete with contractors who can offer all services will allow more companies to compete and result in lower prices to the government, he said.

Officials of AT&T Corp., WorldCom Inc. (which is changing its name to MCI), SBC Communications and Sprint Corp. said they could compete for Networx without changes to the planned acquisition strategy. Some executives said it would be necessary to partner with other companies to meet the ubiquity requirement.

Officials of Level 3 Communications LLC, Winstar Government Solutions LLC, BellSouth Corp. and Verizon Federal Inc. said they anticipate difficulty competing for Networx if changes are not made to the acquisition strategy.

If ubiquity "means service everywhere, that would be quite a challenge, because our infrastructure is concentrated in major metropolitan areas," said Jerry Hogge, senior vice president of Winstar Government Solutions.

Officials of BellSouth and Verizon Federal said they could only meet the requirements of the Universal phase by relying on multiple subcontractors.

"We would have to go through multiple layers of subcontractors to achieve ubiquity. That's why we feel we need the merging of Universal and Select," Page said.

Networx contractors will offer some or all of these services: circuit switched network services; frame and cell switched network services; Internet services; dedicated network services; combined network services; virtual private network services; conferencing services; managed networking services; security services; applications and business operations solutions; remote and mobile user services; access services; wireless services; and satellite services.

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