Davis eyes Networx changes

While the Federal Technology Service's sweeping Networx contract vehicle is taking shape, Rep. Tom Davis (R-Va.) wants officials to revisit some of its provisions.

Davis, who is chairman of the House Government Reform Committee, singled out the telecommunications contract's proposed minimum revenue guarantees as a concern. He also wants to make sure that agency officials use Networx.

He made his remarks this morning at an event hosted by Federal Sources and ICG Government.

Officials at FTS, a division of the General Services Administration, had proposed that companies that earn a place on the Networx Universal contract, which will provide widespread network and communications services, should split a minimum revenue of $525 million. They also proposed that companies on the smaller Networx Enterprise vehicle should split at least $25 million.

The amounts are a far cry from the $750 million each that MCI and Sprint have been guaranteed on FTS 2001, which Networx will succeed in 2006. Davis said agency officials should consider whether the Networx minimums are sufficient to entice companies to bid on the contract.

"That's something we certainly have concerns about," added John Brosnan, senior procurement counsel for the Government Accountability Office, who is working with the committee. "That is probably the issue that has been mentioned the most since the issuance of the draft" request for proposal, which officials released in November.

The challenge for agency officials is to balance risk, said John Johnson, FTS assistant commissioner for service development and delivery. If officials commit to large guarantees and then prices fall or agencies buy services through other vehicles, taxpayers may have to make up the difference.

Davis wants to solve that problem, too. He proposed that agencies should be all but required to use Networx for procurements. If an agency wanted to use another contract vehicle, officials would need approval from the Interagency Management Council.

"Congress never envisioned or endorsed a technology procurement free-for-all, but that's precisely what we have," he said. If agencies don't use governmentwide vehicles such as Networx, the contracts lose the buying volume that can lead to lower prices, he said.

Johnson said FTS officials expect agency officials to use Networx because of the quality and range of services it will provide.

FTS officials plan to release the final RFPs for Networx April 1, 2005, and to award the contracts a year later.


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