Senators concerned over savings lost due to Networx delays

Federal agencies' slow transition to the massive Networx telecommunications contract is costing $18 million per month in lost savings and is a major cause for concern, according to a Senate committee.

In a March 24 letter, Senate Homeland Security and Governmental Affairs Committee Chairman Joseph Lieberman, I-Conn., and ranking member Susan Collins, R-Maine, told several agencies the delay was reminiscent of the transition to Networx predecessor FTS2001, which cost $74 million in lost savings. Agencies aren't taking appropriate actions to move to the new contract, the senators wrote. FTS2001 expires in spring 2011.

Ray Bjorklund, senior vice president and chief knowledge officer for FedSources Inc., a market research firm in McLean, Va., said transition planning hasn't been smooth due in part to the telecommunications industry's difficulty with accommodating new technologies and the many steps required to inventory, purchase and implement new infrastructure and processes.

"That's the essence of what the problem still is -- it takes a while to do these things," he said.

The General Services Administration, responsible for awarding the contract and working with agencies to make the transition, has taken steps to speed the process, the letter said. The committee also has worked with the Office of Management and Budget to identify challenges.

"While GSA was aware of the concern expressed by government leaders, and this committee in particular, regarding the progress of the Networx transition, we were completely unaware of the decision by [the committee] to send letters to agencies regarding their transition progress," said Karl Krumbholz, director of the Networx services program at GSA's Federal Acquisition Service.

Krumbholz said GSA closely tracks agencies' transition progress and offers assistance as necessary. Agencies also can check their status in the GSA Transition Baseline Inventory database, which is updated weekly, he added.

"The successful transition to the Networx system is essential to providing updated, continuous services and efficiently managing taxpayers' dollars," said Jean Weinberg, deputy press secretary for OMB. "A number of factors have contributed to the federal agencies' delay in their transition to the Networx system; however, OMB is working with GSA and the federal agencies to escalate these efforts to achieve better results in a more timely manner."

The letter requested that agencies submit by April 9 their transition plans and a description of existing challenges. According to Senate staffers, the committee will wait for those responses to move forward. In spite of GSA's efforts to hasten the transition to Networx, the committee still is concerned that agencies might not meet the deadline unless they start investing considerable energy and resources, staffers said.

The committee issued letters to the Agriculture, Commerce, Defense, Health and Human Services, Homeland Security, Justice, and Labor departments. None was able to comment on the committee's concerns on Tuesday afternoon.