Scaling the mountain

Telecom officials analyze massive Networx RFPs to seize opportunities

At General Services Administration headquarters, the officials who wrote the thousands of pages that make up the requests for proposals for the two Networx contracts are not ready to relax and celebrate the end of a difficult task. Like Sisyphus in Greek mythology, they pushed the boulder up one mountain, only to have to immediately start again. Now, they are preparing to evaluate expected proposals.

Officials at companies preparing to bid on the contract are not resting either. Since the documents were released earlier this month, company officials have been analyzing the requirements, conditions and specifications. Most vendors are uneasy with some aspects of the solicitations, but say they can work with what GSA's Federal Technology Service has created.

Not everyone agrees, however. FTS officials reduced the number of billing elements that vendors must track and lessened the demands for operational support system verification necessary for making the transition to Networx from the current FTS 2001 contract. But the cost of complying with the final solicitation's requirements is still too high for some small firms, said Diana Gowen, president of Broadwing Communications' government services division.

The solicitations favor companies that already have contracts through FTS programs and thus have already made some of the infrastructure investments, keeping Broadwing out of the hunt, she said.

"Most of the incumbents have already done a lot of the things that are required," she said. "Of course, there are new ones and things they need to do, but it is not as monumental as for a new entrant into the space."

Gowen said she is not sure that many newcomers will compete. Networx Enterprise, the smaller of the two contracts, is intended to draw smaller and newer companies that can't offer the broad swath of national services required of bidders on the larger Networx Universal.

"The intention for Enterprise was to get some of the smaller companies involved, and I'm not sure you'll see many there," she said. Broadwing will not bid as a prime contractor, she said. Instead, Gowen is talking to other firms about coming in as a subcontractor.

"Broadwing is a small company, and even a couple of million dollars' investment is a big deal when you're not going to see any revenue for two or three years," she said.

Emphasis on pricing

The final solicitations also reveal for the first time the selection criteria that the agency will use to evaluate proposals. That information is contained in the standard "Section M," which was missing from draft RFPs that FTS officials released in 2004.

Warren Suss, president of Suss Consulting, said the selection criteria emphasize price, which is not surprising. Vendors who have been waiting to see the criteria can now begin their proposals.

Focusing on cost is what the government does, said James Payne, senior vice president of Qwest Communications International's government services division. "They're very clear about the emphasis on pricing," he said. "We can work with this as it's stated."

Verizon officials plan to bid only on Enterprise, said James Glowacki, vice president for business development at Verizon Federal. He said the company was satisfied with the final documents.

"They made a lot of changes and either corrected things, eliminated things or modified them," he said. "We're estimating that about 50 percent of our concerns were either addressed satisfactorily or at least part of it was taken into consideration."

Companies such as Verizon can't pin all their hopes on Networx, however, Glowacki said, because agencies will not be required to use the contracts. Companies should also try for other contracts when opportunities arise, he said.

"You don't want to pigeonhole yourself into one vehicle," he said. "You want to be on several vehicles as they present themselves. The interesting thing with Networx is it seems that government and Congress are pushing for Networx to be the focal point."

Crossing over

John Johnson, assistant commissioner of service development and delivery at FTS, said officials created a method through which Enterprise contractors could essentially become Universal contractors as their capabilities grow. Some potential Enterprise bidders raised that concern during the development process.

The contract allows Enterprise providers to add additional services to their offerings, but they must wait 24 months after the initial contract award. That is to encourage competition, Johnson said, by slowing the speed at which companies can race ahead of competitors in capabilities.

If an Enterprise contractor can eventually offer the same services across the same geographic area that Universal calls for, the contractor will have crossed over. The company then could compete with Universal contractors, although it would still officially be an Enterprise contract holder.

It is the same as the crossover provision in FTS 2001 that allows holders of Metropolitan Area Acquisition contracts, which provide local telecommunications services in some cities, to expand services and compete with Sprint and MCI, the FTS 2001 contractors, Johnson said.

Not quite commercial

AT&T officials are pleased with the RFPs, said Robert Collet, vice president of engineering and chief technology officer at AT&T Government Solutions.

"There's also a strong emphasis on convergence, and by retaining the scope of the procurement as it was in the draft, it allows us as a contractor to pull together all the network and IT components to provide a converged service," he said. "It gives us all the tools to do the job right."

Collet said he was pleased that FTS officials reduced the number of billing elements, the structure of service-level agreements and other requirements where government standards demand more of the contractor than commercial contracts would. However, he still has reservations.

For example, contractors would be penalized for missing goals on billing accuracy and timeliness, which could make them reluctant to introduce new products until they ensure they can properly handle billing for them.

Another troubling provision, Collet said, is that agency officials can enter into leases for certain expensive service-enabling devices, then cancel them without warning. "There's no remedy to recover your costs," he said. "There could be an issue in how contractors provide equipment."

Despite such reservations, he said that AT&T will bid on both Networx contracts.

A spectrum

Networx is likely to become one of several ways that agency officials procure network services, Suss said. That would fit with what he perceives as GSA's desire to provide options without sacrificing interoperability.

The result will be a strong, standards-based set of solutions, he said. "Ultimately, the way the government's going to succeed with interoperability among agencies is with standards-based solutions, with federated solutions," Suss said. "I don't think there's a single magic solution."

FTS reduces Networx billing elements

Telecom company representatives have struggled over the course of the Networx solicitations' development to persuade General Services Administration officials to reduce the number of billing elements. Officials at GSA's Federal Technology Service responded and reduced the number from the more than 500 that were originally under consideration to about 120 in the final requests for proposals.

But what are "billing elements" and why are they an issue?

Billing elements are pieces of information that telecom companies measure, report and base billing on.

They include basic parameters such as the name of the service — for example, long-distance voice — the duration of a call or a hierarchy code that lets agency managers correctly bill individual divisions for their share of the costs.

About 100 of Networx's billing elements are ones that telecom companies already have to track for their commercial customers, said John Johnson (right), assistant commissioner of service development and delivery at FTS. Company officials have resisted FTS efforts to add government-specific requirements, because the companies would have to expand their billing systems to accommodate the additional elements.

A similar tension has dogged FTS officials' efforts to require companies to submit reports verifying that they have the operational support system capabilities to carry out the demands of the contracts. Johnson said the agency had reduced the numbers of such reports as well, but it can't risk awarding contracts to companies that can't handle the work.

That concern stems from the transition from FTS 2000 to FTS 2001. Some of the service providers involved were unable to conduct their billing properly, causing problems that took time to iron out, Johnson said.

"Some of these things are based on lessons learned," he said.

— Michael Hardy

Mandatory and optional

A sampling of services on the two Networx contracts:

  • Universal — Mandatory services include voice, voice over IP and secure managed e-mail. Optional services include Ethernet, unified messaging and paging.
  • Enterprise — Mandatory services include voice over IP, antivirus management and managed firewall services. Optional services include toll-free calling, videoconferencing, and dedicated or co-located hosting.

    Source: Networx requests for proposals

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