Verizon nabs Postal Service Networx contract

Deal worth $16.4 million is another sign business is picking up on huge telecom agreement

Verizon Business announced today that the U.S. Postal Service awarded a multimillion-dollar contract for voice and network services off the government's large telecommunications contract, a sign that business on the Networx program is heating up.

USPS used the Networx Universal program to award a $16.4 million, 10-year contract to Verizon Business for long-distance and calling card services as well as an upgraded Internet protocol network. Verizon provided the agency with telecommunications services under FTS2001, the governmentwide telecommunications contract that preceded Networx.

"Whether employees are processing the mail or picking up the phone, Verizon Business is looking forward to building on that relationship in the decade ahead," said Susan Zeleniak, group president for Verizon Federal.

Networx Universal is part of the $68.2 billion Networx program, the government's largest-ever telecommunications contract. Networx Universal, with a ceiling of $48.1 billion, and Networx Enterprise, with a $20.1 billion ceiling, span 10 years and replaced. Last March the General Services Administration awarded Universal to AT&T, Verizon and Qwest Communications; Enterprise includes those three vendors plus Sprint and Level 3 Communications.

Agencies had been reluctant to buy new telecommunications services off Networx, but business on the contracts began to pick up this spring. Agencies have until Sept. 30 to submit their statements of work to GSA to receive compensation for all nonrecurring transition costs incurred from the switch to Networx. Zeleniak said Verizon was waiting to hear the news of awards on 40 bids that GSA was reviewing, including the Labor, Interior, and Housing and Urban Development departments. "We are anticipating a rush this summer," she said.

The Homeland Security Department awarded Verizon in May a $678 million contract to provide it with telecommunications services.

Zeleniak said that while business on Networx was picking up, the services agencies were buying were the same as those provided in the old FTS2001 contract -- voice and data services rather than newer offerings such as security and mobile communications services. She said agencies were likely to award contracts for services they used first and then later consider the new options.