Networx guarantees set

The primary contractors who end up with a piece of the Networx Universal telecommunications contract in 2006 will split a minimum of $525 million in revenue, officials said today.

Officials at the General Services Administration's Federal Technology Service announced the minimum revenue guarantee at a public meeting hosted by the American Council for Technology/Industry Advisory Council.

The contractors on Networx Enterprise, a smaller-scale contract for more limited offerings, will share a minimum of $25 million.

The numbers are practically pocket change when compared to the FTS 2001 contract, which Networx will replace. Sprint and MCI, the two prime contractors that were first awarded spots on FTS 2001, were guaranteed $750 million each on that vehicle. But FTS officials have said all along that Networx would have much smaller guarantees.

Some industry officials wondered if the Networx guarantees would attract many competitors. Not only are the numbers small, but the actual amount that goes to a contractor depends on how many vendors are sharing the pie, said Mitchell Singer, a contract manager at Analex Corp.

"You're talking about a lot of investment" for a company to comply with government standards and compete, he said. "The question is, is there enough opportunity to compete and get work that it will compensate?"

The company provides security services and would take part in Networx as a partner to larger firms, he said.

FTS officials said Networx will have a maximum value of $20 billion.

Although FTS officials are still talking to companies and actively soliciting comments on the draft requests for proposals (RFP) that were issued last month, the time has passed to expect significant changes in strategy, said Karl Krumbholz, FTS' deputy assistant commissioner for service development.

"I wouldn't call it a rough draft," he said, describing the current draft of the Networx RFP. "It's a smooth draft and contains most of what you will see in the final RFP."

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