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Senators Want Answers on Networx

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By Gautham Nagesh December 10, 2009

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Whenever you've got what looks like a clear-cut case of government waste, some sort of manufactured political outrage inevitably follows. Taking up the mantle of the indignant taxpayer this week: Sens. Joe Lieberman, I-Conn., and Susan Collins, R-Maine, of the Senate Committee on Homeland Security and Governmental Affairs. The reason for their indignation? Millions in missed savings due to delays in the transition to the Networx telecom contract.

In case you haven't been following my coverage of the transition from FTS2001 to Networx, you should know that federal agencies are taking much longer to complete the transition than expected. The result: $18 million a month wasted and probably a lot more to come, since it's unlikely General Services Administration will complete the transition before the final FTS2001 bridge contracts expire in June 2011. That means GSA likely will have to come up with some sort of emergency contract to maintain service at a cost many times higher than the prices on Networx.

GSA has stepped up its efforts in recent months, but with agencies facing myriad new requirements, including increased Recovery Act reporting, the Networx transition has gotten lost amid the shuffle. Now the senators want to know why and what's going to be done going forward. From a letter sent yesterday to OMB chief performance officer Jeffrey Zients:

We understand GSA has taken a number of steps to assist the transition to Networx and is working to ensure agencies have adequate information on the steps needed to transition before the FTS2001 contracts expire. However, we also believe that strong leadership from the Office of Management and Budget would be useful in speeding the transition.

In addition to the cost-savings, we also believe that agencies should be using Networx to take advantage of newest technologies instead of solely using the same or similar services from their existing contracts. This is of particular concern given the security of federal networks and the opportunities to use new technologies to assist agencies in strengthening their cyber defenses.

We are interested in knowing the specific actions your office has taken and is taking to ensure that federal agency managers have prioritized this very important transition of telecommunication services. To that end, we would appreciate your responses to the following questions:

1. What actions has OMB taken to assist the transition to Networx?

2. Why have agencies delayed the transition from FTS200 I to Networx?

3. What remedial actions can agency managers take to ensure transition activities are taken before the current contracts expire?

We also request your office provide a briefing on Networx to this Committee no later than January 31, 2010.

Now that lawmakers are involved we can expect the amount of noise and pressure surrounding the transition to ratchet up significantly. While this will no doubt result in a lot of stress and appearances on the Hill for Karl Krumbholz and other members of the Networx team, it may also be the only way to get the attention and resources needed to complete a successful transition by June 2011. A fact that will no doubt be of little comfort to the folks at GSA who will likely be dealing with the increased scrutiny for the next 18 months.

Full letter is below:

The Honorable Jeffrey D. Zients

Deputy Director of Management and

Chief Performance Officer

Office of Management and Budget

7257'" Street, NW

Washington, D.C. 20503

Dear Deputy Director Zients:

The General Services Administration (GSA) telecommunications contracts provide basic telephone, network services, and information technology services to federal agencies. These contracts are very important for ensuring that agencies have the telecommunications abilities to perform their missions and efficiently manage taxpayer dollars. As you are aware, GSA's existing telecommunications program, known as FTS2001, is the successor to a line of programs that have provided telecommunications to the federal government. FTS2001 is scheduled to expire in June 2010.

In 2007, GSA awarded contracts for a successor program, known as Networx, and has been working with more than 135 agencies to assist the transition of 50 types of services and thousands of voice and data circuits. As potentially the largest telecommunications service s transition ever undertaken by the federal government, this transition has experienced its own challenges. In particular, as of November 2009, GSA reported that nearly 96 percent of the savings projected by this transition have not been realized, and agencies have been slow to take appropriate steps to ensure a smooth transition.

During the previous transition to FTS2001, delays were encountered that resulted in raised telecommunications costs and an estimated savings lost of $74 million. We are concerned that the slow transition to Networx is a repeat of the past. Specifically, every month that agencies delay transitioning to the new program, an estimated $18 million of savings are lost.

We understand GSA has taken a number of steps to assist the transition to Networx and is working to ensure agencies have adequate information on the steps needed to transition before the FTS2001 contracts expire. However, we also believe that strong leadership from the Office of Management and Budget would be useful in speeding the transition.

In addition to the cost-savings, we also believe that agencies should be using Networx to take advantage of newest technologies instead of solely using the same or similar services from their existing contracts. This is of particular concern given the security of federal networks and the opportunities to use new technologies to assist agencies in strengthening their cyber defenses.

We are interested in knowing the specific actions your office has taken and is taking to ensure that federal agency managers have prioritized this very important transition of telecommunication services. To that end, we would appreciate your responses to the following questions:

1. What action s has OMB taken to assist the transition to Networx?

2. Why have agencies delayed the transition from FTS200 I to Networx?

3. What remedial actions can agency managers take to ensure transition activities are taken before the current contracts expire?

We also request your office provide a briefing on Networx to this Committee no later than

January 31, 2010.

Thank you for your attention to this important matter and assistance in working with federal agencies during this transition to ensure the effective and efficient use of telecommunication services to perform their missions.

Sincerely,

Joseph I. Lieberman Susan Collins

Chairman Ranking Member

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