Carriers to feds: Fix current telecom deal before starting follow-on
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Carriers aren't excited about the General Services Administration's plans for a follow-on contract to Networx -- tentatively dubbed Network Services 2020 -- because they want to see the U.S. government's procurement arm take steps to make the current contract more profitable for them.
"Hearing you mention NS2020 makes me want to put a gun to my head," joked one telecom executive when asked about the U.S. government's next umbrella contract for telecom services that would run from 2017-2027.
BACKGROUND: 'World's largest' telecom deal turns out to be a dud
NS2020 would provide telecommunications and infrastructure IT offerings. GSA has vowed that the contract will be comprehensive and easy to use, while providing significant cost savings to agency customers.
On Sept. 27, GSA held an NS2020 Roundtable for agency CIOs and their staff to present lessons learned from Networx as well as to gather input on emerging IT and telecommunications needs. GSA plans to release its NS2020 Strategy within the next 12 months. It's not clear yet whether NS2020 will be an omnibus contract like Networx or a portfolio of contracts aimed at particular services.
"I have heard rumblings that GSA is starting to talk about a follow-on program to Networx. People are scratching their heads because they haven't gotten this one right yet," says Ray Bjorklund, vice president and chief knowledge officer with Deltek, a Herndon, Va., consultancy.
Some Networx vendors question whether it makes sense for the U.S. government to award 10-year contracts given the rapid pace of change in network services.
"Nobody on the commercial side would execute a 10-year ... contract because you would be precluding yourself from competition, you'd be precluding yourself from greater cost reductions," says Edward Morche, senior vice president, general manager of the government markets group at Level 3 Communications. "On the commercial side, you want all the innovative ideas, and on the government side we actively discourage them. ... There are hundreds of other providers for wireline and wireless services who don't seek to be on these GSA contracts because there are too many barriers to entry."
Other carriers favor an approach that is closer to the GSA Schedule, which offers long-term government contracts where companies can provide their entire product line, plus the use of task-order contracts for telecom services.
"Commodities ought to be on the schedule, and solutions should be bought using things on the schedule but in a contract that is task order-oriented," says Diana Gowen, senior vice president and general manager of CenturyLink.
Among the issues that carriers want fixed for the Networx follow-on contract are:
-- A shorter transition time, with GSA more involved to help agencies switch contracts.
-- A streamlined process for agencies to choose a carrier from the contract. The so-called "Fair Opportunity" process in Networx required agencies to spend too much time running their own procurements after GSA had already vetted the Networx carriers.
-- Use of the same back-office systems as Networx.
"There was a very large infrastructure investment on the part of the vendors for the back-office capabilities GSA wanted on Networx," says Susan Zeleniak, senior vice president of Verizon Public Sector. "GSA can't do that again. ... If they make the back-office requirements dramatically different in the future, at that point it doesn't make any sense for the vendors."
Bob Woods, a former commissioner of GSA's Federal Telecommunications Service who runs Topside Consulting in Vienna, Va., suggests that GSA make more radical changes in the way it buys telecom services in the future.
For the Networx follow-on, GSA should "provide something that is secure and state-of-the-art ... a trusted service," Woods says. "They should rename Networx as Infrastructure Services and combine it with cloud. They should sell it on a per-drink basis on a transaction price basis. It will take a hellaciously complicated billing system to do it right."
"I would agree that the procurement model probably needs to be changed,'' Deltek's Bjorklund says. "These major programs take so long to develop, and by the time you award them you're already playing catch-up on the technology side. Maybe it should be more commoditized and more easily purchased through a schedule or open market. But having these very, very large contract vehicles take an enormous amount of time to award and manage."
Read more about data center in Network World's Data Center section.