Price Competition Heats Up With Enterprise Awards

Sources say that the General Services Administration's Networx Enterprise contract that it awarded today has lower prices than the bigger Networx Universal contract.

GSA awarded five telecom companies a Networx Enterprise contract: AT&T Corp, Level 3 Communications, MCI Communications Services, Qwest Government Services and Sprint Solutions. Many of the same telecom services on Universal can be had on Enterprise -- but at lower prices. That's good news for Sprint Solutions, which lost out on a Universal contract when GSA awarded that contract in March. Sprint was one of two vendors on GSA's FTS2001 telecom contract, the precursor to Networx and which is now expired, so winning the Enterprise contract was a must win for the federal telecom provider.

In a document titled "Networx Enterprise Program Frequently Asked Questions," GSA explains the difference between Universal and Enterprise this way:

The services provided by both sets of contracts are similar. However, most services on the Universal contracts (36 of 48) are mandatory to offer, while only nine services on the Enterprise contracts are mandatory to offer. Hence the Universal awardees offer between 39 and 47 services, while the Enterprise awardees offer between 23 and 41 services.

Enterprise vendors will provide a core set of services, including "IP services, security services, and management services. Among the optional services offered by one or more of the Networx Enterprise contractors are voice, private line, wireless, and optical connectivity services, as well as additional security services and IP-centric applications services such as conferencing, call center, hosting, content management, and teleworking," according to a document GSA provided vendors.

GSA was attempting, with its two-contract strategy, to generate as much competition among telecom providers to drive prices down. "It looks like they accomplished that," one source said.