Networx: A revolution on hold

Agencies show little interest in transforming telecom operations.

The federal Railroad Retirement Board’s name suggests a bygone era. And indeed, it is a Great Depression creation and a New Deal legacy. When the RRB was born, there was no interstate highway system. Great spinning propellers pulled airplanes across the sky. The nation needed its rail system, so taking care of the industry and its workers became a federal responsibility. And today, the board still looks after U.S. railroad workers, administering their retirement and related benefits.There’s nothing bygone, though, about the Chicago-based agency’s plans for a new voice, data and video network. The board was one of the first agencies to place a task order with the General Services Administration’s Networx program, two sets of multiple-award contracts GSA awarded about a year ago to five network services providers. In the long run-up to the program’s start, GSA promised agencies that Networx would be an opportunity to transform their back offices. Agencies have little practical choice but to use Networx for their telecommunications needs — GSA has a virtual monopoly on federal telecom contracts, and its old contract vehicle, FTS 2001, is expiring.  Agencies must choose to move the services they have to the new contract — often called a like-for-like transition — or use the transition for a business process transformation by rethinking their network and telecom operations from the ground up. RRB decided to go for broke. It is using Networx to revamp its call center backbone. Soon, railroad workers will call a single toll-free number and be routed to the center with the shortest wait time. The board is also integrating its telephone-help-desk service with its toll-free number. Its network will support Multiprotocol Label Switching to manage network traffic. The agency is implementing voice over IP in each of its 53 field offices.  “We wanted that single underlying fabric to support all of those technologies,” said Roger Wiessner, a data network specialist at RRB. The agency gave Qwest a $3.5 million order in October to do it all. Site testing is now under way. “A couple months from now, we’ll go to full-blown implementation,” said Diana Gowen, who leads the Colorado-based company’s government services and sales division. Meanwhile, about a year after GSA awarded the two Networx vehicles — Universal for wide-ranging services and Enterprise for a narrower selection — RRB seems more an exception than a trailblazer. Industry analysts, telecom companies and federal officials say agency transition activities are more often an affirmation of the status quo than a transformation.For example, the Veterans Affairs Department, the largest civilian agency, wants to keep things as they are. “Our concern is continuity of service, No.1. And No. 2, no disruptions to business operations,” said David Cheplick, director of VA’s telecom operations management service. That’s not an unusual approach, said Stan Wood, retiring chairman of the Interagency Management Council’s transition working group and head of the Nuclear Regulatory Commission’s telecom team. “Most agencies, they’re probably going to go for like-for-like,” Wood said. Many will make some easy changes, such as replacing multiple, expensive T1 lines with a single, cheaper, higher bandwidth T3 connection — but that’s not really transformation, he said. It’s a far cry from the convergence of voice, data and video that the RRB is doing and that some people had hoped would become a common Networx transition story. There are several reasons why transformation projects are on hold, Networx participants say. Some agency executives are not confident they can handle a large-scale switch to VOIP. In March, the Customs and Border Protection agency, part of the Homeland Security Department, awarded AT&T a $20 million task order for traditional voice services in part because of that concern. “We’re not ready to do a full transformation switch at this point,” said Ken Ritchhart, CBP’s acting assistant information and technology commissioner. Many agencies don’t have the resources to handle a broad transformation, said a federal telecom consultant who asked to speak anonymously. Competing technology priorities, especially those with Office of Management and Budget-enforced deadlines, draw off staff energy, the consultant said. In addition, many agencies did a full upgrade in the late 1990s when they moved from FTS 2000 to FTS 2001. Although technology has advanced considerably since then, it might be too soon for many of them to consider doing it all again, the consultant said. Agencies wanting access to available transition dollars have a looming deadline. They must pick a Networx vendor by Sept. 30, when the fiscal year ends. The approach of the deadline will probably speed activity in the remaining months of what most people say has been a slow year. Activity has been steady — GSA has validated agencies’ existing inventories, and vendors have completed their operational support system and certification and accreditation testing. However, much of the effort poured into Networx so far has been behind the scenes, with only a few task orders issued.  The process of selecting a vendor — called fair opportunity — is a slow one. “It’s not, by design, a very rapid process,” said Jeff Mohan, AT&T’s Networx program director. Agencies can choose to detail their requirements in a statement of work or a statement of objectives. GSA must review all statements, which on average takes 69 days to complete, said Karl Krumbholz, director of GSA network services. Most statements contain errors, he said. After agencies correct their statements and resubmit them to GSA for another review, they can release the statements to vendors. All vendors then must have a chance to bid on the work.  In some cases, agencies can use a GSA electronic-pricing tool to make a final vendor selection, but that works only if everything agencies want to buy through Networx is explicitly listed on vendors’ contracts. That isn’t always the case because advancing technologies and product releases mean that agencies can easily request services that are in the scope of the contract but not specifically listed, Mohan said.  In many cases, the contracts might list products that have become obsolete and are no longer offered, he added.Agencies can use the pricing tool as part of their planning. But if they use it as the sole basis of a fair-opportunity decision, they must make the decision based strictly on price rather than best value, Wood said. Most agencies choose to use statements of work or objectives, and they often issue multiple statements. Krumbholz estimated large agencies each submit between two and four. They’re doing so because they don’t have to commit to a single Networx vehicle — Universal or Enterprise. They can mix and match service solicitations, as long as they are not the same service, by using both contracts. Some people think the fair-opportunity process is baffling and overly complicated. “I think the whole fair-opportunity process was one that was confusing and onerous,” said Tony D’Agata, who retired in March as Sprint’s head of government systems. D’Agata said it’s also unnecessary to have a GSA review of every agency statement. “GSA is struggling to demonstrate their value to the agencies. I think they’ve created this approa ch to help justify their service fees.” Some agencies wonder whether GSA has the manpower to review all their statements in a timely manner. That concern has come up in Interagency Management Council meetings, but GSA has assured agencies it has the resources at hand. Krumbholz disputes suggestions that GSA might be creating a bottleneck. A crisis will occur only if agencies create one by waiting until late summer and submitting their statements all at once, he said. “There’s really no way to make this any more straightforward,” Krumbholz said. “Get it in as soon as possible. That’s the answer, that’s the story. Anytime after June 23, we are concerned we might not have enough time.” Krumbholz expressed little patience with agencies that are not ready. “We’ve been talking about this for 21⁄2 years,” he said. “I said in February of 2007 that if you don’t have your fair-opportunity process and procedures in place now, and you don’t have the criteria, you are late. That was 14 months ago.”Although most agencies are not planning major transformations, experts see two trends developing. First, agencies are centralizing telecom operations. This has been going on for years, but Networx could be accelerating it. For example, DHS awarded Verizon a Networx Universal task order worth as much as $679 million to create a consolidated DHS IP wide-area network. The agency selected AT&T as a secondary provider, awarding it as much as $292 million on the same task.“Everybody will access the network through the same set of security requirements,” said Susan Zeleniak, vice president at Verizon Federal. The company will consolidate seven DHS WANs into one. Agencies also are increasingly relying on managed services to run their networks. Rather than buying equipment, they’re leasing it. Rather than directly managing networks, they’re choosing to hire companies to do it. Making managed services work requires a lot of talk between customer and provider, Zeleniak said. DHS, another example of this trend, will be able to peer into its network and receive a steady stream of status reports.However, managed services still present a risk, some analysts say. “You’re putting a lot of responsibility on your vendors,” said Jason Williamson, a principal at Booz Allen Hamilton. Its success requires a well-written solicitation that documents penalties for bad management.That adds another another time-consuming chore to the fair-opportunity process, but the cost of not taking the time is a risk of failure that leaves the agency with no recourse.  Krumbholz said it’s still too early to predict whether transformation will lose out to like-for-like transitions. “We haven’t seen enough statements of work to come back and make that assessment,” he said. Staying with the status quo is human nature, Gowen said. “It is much harder to transform than it is to just stay where you are.”But Gowen makes an argument for change. “If I were an agency telecom manager or chief information officer, and I had an opportunity to transform, and I had to change contracts anyway, [transformation is] what I would probably expect that I would do,” she said. “I am baffled that many of these telecom managers are not doing that.”  () .


Agencies have until the end of the fiscal year to complete the fair-opportunity process through which they choose a Networx provider. That could mean:

Writing a statement of work or objectives, subject to General Services Administration approval, and soliciting bids.

Or, if specified services are available through vendors’ contracts, using a GSA electronic pricing tool.

— Michael Hardy

Networx timeline

The whens, whats and whos of the government’s new network services contract program.

May 2005: The General Services Administration, following months of public debate and turmoil with potential vendors, releases the final Networx requests for proposals.

August 2005: After receiving more than 1,000 questions about the details of the RFPs, GSA twice extends the deadline for bids, prompting concerns that the agency might not be able to meet its goal of awarding the contracts by April 2006. The concerns would prove to be justified.

April 2006: GSA does not award the contracts as planned.
March 2007: GSA awards Networx Universal, the more expansive of the two Networx contracts, to AT&T, Qwest Communications International and Verizon. Sprint, an incumbent on the FTS 2001 program, is left out.

May 2007: GSA awards Networx Enterprise to the three Universal vendors plus Sprint and Level 3. With vendor choices established, agencies begin their transition work in earnest.

June 2007: The Homeland Security Department becomes the first agency to place an order under Networx.

Is Networx off track?

Fair but slow

Revolution not in the offing

Perera dave@dperera.comis a freelance writer