The General Services Administration is likely to miss the deadline to complete the transition to its new telecommunications contract, threatening to cost the government millions of dollars in missed savings, according to GSA officials and industry executives familiar with the contract.
Networx is the government's largest telecommunications program to date, a 10-year pact worth up to $68 billion. It offers more advanced telecom technology and services than its predecessor, the expiring FTS 2001 contract.
Agencies have delayed in moving from the FTS 2001 contract to Networx, making it unlikely that all agencies will have transitioned to the new contract by the summer 2010 deadline, according to GSA officials and industry executives familiar with the contract. Currently, only 23 percent of the services on FTS 2001 have been disconnected, and less than half the fair opportunity decisions have been made. Under the 1994 Federal Acquisition Streamlining Act, all multiple award contractors must receive a "fair opportunity" for consideration for each task or delivery order in excess of $2,500 issued under a contract. Agencies may not place orders on Networx until they have completed a fair-opportunity competition for the services.
At her confirmation hearing in June, Martha Johnson, President Obama's choice to lead GSA, told lawmakers she believed the transition to Networx was too slow and delays were costing taxpayers millions of dollars every month. Johnson is awaiting Senate confirmation.
The government currently is missing out on about $18 million a month in savings by not transitioning to Networx, Karl Krumbholz, director of network services programs at GSA's information technology service, told Nextgov on Friday.
He said bridge contracts in place with FTS 2001 vendors Sprint and MCI, issued to carry agencies until they move to new Networx contracts, will expire in May and June 2010. After that, agencies still using FTS 2001 will be guaranteed one year of continuity of service before their telecom services terminate, making June 2011 the hard deadline for when agencies must have completed the transition.
Krumbholz declined to estimate what percentage of agencies would have completed their transition by that date, but said he was optimistic that all agencies would meet the deadline complete the transition on time. "It's clear we need to make it, because if we have to put other contracts in place, that's an enormous amount of work for GSA," he said. "It takes resources and support away from the transition, and frankly the costs on the current contract are higher."
Warren Suss, president of Suss Consulting based in Jenkintown, Pa., said it was "highly likely" that some agencies will miss the deadline. If that occurs, GSA will likely be forced to create another bridge contract, which would require considerable time and expense, he said.
"It's one of those things where you can only extend a contract like that so many times," said Bob Woods, president of Topside Consulting Group based in Tyson's Corner, Va., and former commissioner of GSA's now-defunct Federal Technology Service. "Last time it took about three years to get the bulk of [the transition] across, but we're two and a half years into this thing. You can measure it several ways, by the number of agencies disconnected [from FTS 2001] or the number connected [to Networx], but any way you cut it, only 20 to 25 percent are transitioned. That's where they are."
Woods and Suss said it was unlikely the government would allow agencies that haven't completed their transition in time to lose their service. "They'll probably be forced into a sole-source bridge contract, which won't sit well with Congress and the oversight agencies," Woods said. "As the saying goes, poor planning on your part doesn't constitute an emergency on our part. The new administration does not want to see those sole-source contracts."
Many of the delays have occurred during the fair opportunity competitions, which have been more complex than GSA envisioned. GSA originally thought agencies would choose one carrier for all telecommunications services to make it easier to manage the program, according to Krumbholz. But, "We haven't seen that play out," he added.
Agencies have chosen to divide their services among the five Networx vendors, choosing multiple vendors for a variety of reasons, including differences in pricing and technical capabilities, Krumbholz said.
At GSA's annual Network Services Conference in Chicago next week, GSA plans to encourage agencies to make Networx a priority and make their fair opportunity decisions soon, he said.
GSA has offered technical assistance to agencies to encourage them to move more quickly to Networx, Krumbholz added. In response, agencies have come to GSA seeking help on tasks like preparing statements of work and identifying services that must be transitioned.
Woods said the technical help GSA offers agencies is crucial because cuts to the acquisition workforce and telecom budget have left agencies without the resources or expertise needed to complete the transition. "Most [chief information officers] are more IT and less telecom-oriented," he said. "There's a lack of resources, understanding and priority" to support the Networx transition.
Suss said the success of FTS 2001 and its predecessor FTS 2000 is what led agencies to make cuts to their telecommunications personnel because GSA and the telecommunications vendors were able to carry most of the load in those areas.
Krumbholz said the large number of ongoing initiatives such as IPv6 and cybersecurity have distracted agencies from transitioning to Networx. "If we're going to get the transition done, it has to be raised high enough that it becomes a priority for agencies to simply get it done," he said. The transition "takes a considerable amount of effort, so it will never get done unless it's a priority."
Suss said the Office of Management and Budget should provide agencies more resources to meet its mandates. "The problem here is that he same agencies that are working the transition are being loaded up with OMB mandated requirements without any additional funding," he said. "Another way to look at this is to get some recognition from OMB of the growing cost of OMB mandates and to get some support from OMB to set priorities. All of these have importance . . . but you can't just dump all these requirements on agencies without giving them some additional resources or basic prioritizing."
Krumbholz said some agencies, such as the Environmental Protection Agency, have made significant progress in transitioning to Networx and will likely meet the mandated deadline. But "everybody has to be done, not just most," he added.