GSA's Networx to open doors for smaller firms
- By Michael Hardy
- Sep 29, 2003
Networx, the contract that will replace FTS 2001, will make it easier for small and unknown companies to get the attention of agencies, according to the contract's architects.
The General Services Administration's Federal Technology Service is striving to incorporate improvements over existing contracts into Networx, FTS Commissioner Sandra Bates said. One strategy is dividing the vehicle into two acquisitions.
Networx Universal will cover national, well-established offerings, such as high-speed Internet services from well-known carriers. Networx Select, however, is for smaller, more localized services, possibly from smaller or newer companies.
"We anticipate that dividing the Networx program into two acquisitions will make it easier for new companies to do federal business," said John Johnson, FTS' assistant commissioner for service delivery and development.
"In particular, the Networx Select contracts will provide additional opportunities for telecommunications providers that offer services and solutions with less extensive geographic and service coverage than was required under FTS 2001," he said.
That has the potential to be very good news to companies such as Netarx Inc., a provider of IP networks that is based in Bingham Farms, Mich. The company, a partner of Cisco Systems Inc., has not been able to crack the government market despite several years of trying.
Federal procurement policies, especially where telecom and network- ing are concerned, make it easier for agencies to rely on carriers and companies they already know well than to take a chance on a newcomer, said Duane Tursi, chief executive officer of Netarx.
"It seems like the agencies are very much at the mercy of their single-source providers," Tursi said. "It seems to be a consistent theme."
Although such a stance is understandable, it has the unintended consequence of cutting agencies off from some newer technologies, Tursi said.
"They are unfortunately too bent on [worrying about] the price per call rather than empowering communications that are truly integrated," he said. "Where is the collaboration of information? Where is the collaboration of communications?"
It also encourages agencies to settle for what they know, he added. "When I talk to a lot of these government folks, they're not aware of the options that are out there."
The phenomenon is an unintended consequence of the FTS 2001 structure, which, like many open-ended contracts, encourages agencies to work with vendors that are on the vehicle rather than look for newer, less prominent players, said Frank Dzubeck, a telecom consultant and president of Communications Network Architects Inc. in Washington, D.C.
"It's not designed to prohibit a small company; it's intended just to expedite the process," he said. The exclusion just occurs.
"The government has always been a game of the 'ins' and the 'outs,' " said consultant Warren Suss, president of Suss Consulting Inc. in Jenkintown, Pa. "There have always been tremendous barriers to entry for new entrants, and the barriers to entry to smaller firms are even greater."
For innovative technologies, Suss said, the bar is even higher because the technologies are only beginning to be proven. "The big firms face the same challenges," he said. "There [have] been resistance and skepticism. For any new technologies, government is going to be cautious."
"It's very difficult for a small business," said Jim Ridgell, a vice president at E.F. Johnson Co., a maker of digital two-way radios. "The federal government is looking for larger companies to provide services so that they can rely on that larger company to do things and minimize their risk. The government, especially for larger projects, would not go to a smaller business."
Small companies that don't want to form partnerships with larger suppliers and integrators have an especially difficult course, Ridgell said. E.F. Johnson has won success primarily by being aggressive and understanding the federal market.
"The government is always looking for multiple sources," he said. "We were lucky enough to find out that the government is really adamant about getting multiple sources in [local-area network] mobile radio. Since we were one of the few small companies that could provide a second source, we took advantage of it."
E.F. Johnson has also won federal business through a partnership with General Dynamics Corp., he said.
Partners are almost mandatory for smaller firms, just to absorb the costs of going through the process, Dzubeck said.
There is another possibility, though — the one that E.F. Johnson found: Identify a service that no one else can provide.
If smaller firms complain about the easy access that comes to their larger competitors through the governmentwide contracts, "MCI had the same [complaint] on FTS 2000, [the predecessor to FTS 2001], because that was AT&T and Sprint," Dzubeck said. "MCI got $900 million worth of business by signing business that wasn't available through FTS 2000. You have to learn how to sell."
Readying for feds' new telecom era
Networx, a new telecommunications contract that the Federal Technology Service is working on, will:
* Replace both the FTS 2001 multiple-award contract for long-distance services and the Metropolitan Area Acquisition contracts for local and regional offerings.
* Be split into two sections, one for nationwide offerings and one for smaller, more localized ones.
* Incorporate advice from industry and agencies, along with lessons learned from earlier contract vehicles.
* Be awarded in 2005 so that agencies and vendors can move to it before FTS 2001 expires in 2006.