Treasury first to jump to Networx

After three years of controversy, the agency begins its network modernization project

4 steps to transition

Other agencies may not be as prepared as the Treasury Department to make the transition to a modern network, said Karl Krumbholz, director of Network Services Programs at the General Services Administration. Some agencies could find the transition challenging because they must:

  • Validate their inventory of services to be transitioned.
  • Describe their requirements clearly and in a way that Networx awardees have a fair opportunity to compete for their services.
  • Write and submit orders for services.
  • Prioritize orders to avoid creating bottlenecks in the process for awardees who must fulfill the orders.

— Mary Mosquera

The Treasury Department was ready three years ago to begin modernizing its voice and data networks. But then it fought a losing battle with the Bush administration and Congress.

Treasury had wanted to award its own telecommunications modernization contract, but it finally agreed to use the General Services Administration’s governmentwide Networx contract. Last month, Treasury awarded a contract to AT&T just as it had three years ago, but this time under GSA’s Networx Universal contract.

“Treasury is the first agency to have completed a fair opportunity decision under either Networx Universal or Enterprise contract, and we expect [it] will be the first agency to begin ordering service,” said Karl Krumbholz, director of the GSA’s Network Services Programs.

In other Networx activity, the Railroad Retirement Board awarded a contract to Qwest, worth $1.4 million in the first year. Seven other agencies are in various stages of preparing to use Networx, Krumbholz said, although he declined to name them. The Homeland Security Department said it is reviewing proposals from Networx

Agency officials say they are ready to enter a new telecom era. “Treasury can now begin its transition to a completely performance-based, managed services arrangement,” said Michael Duffy, Treasury’s chief information officer. Treasury will specify service-level agreements based on 12 major performance metrics. AT&T will design, implement and operate the network to meet or exceed those service levels, Duffy said.

Treasury’s next milestone will be a transition plan to move all Treasury sites from the current Treasury Communications System to TNet. Treasury teams are working with AT&T to ensure a smooth transition, Duffy said.

AT&T also said it has started to work closely with Treasury to meet the TNet deployment schedule.

Before GSA awarded Networx, Treasury had issued an enterprise network services request for proposals, but it was opposed by the Office of Management and Budget, GSA and lawmakers. At that time, GSA was developing Networx, and it planned to use agencies’ combined market power to drive down prices.

That strategy apparently is starting to yield results. Treasury’s 10-year contract with AT&T is worth $270 million. Three years ago, Treasury had estimated that it would pay $1 billion to award its own networks modernization contract.

“We got a top-quality technical solution at prices that exceeded our expectations,” Duffy said during the award announcement Sept. 24.
As the first Networx user, Treasury will get a lot of attention, said Warren Suss, president of Suss Consulting. Treasury must make the transition from a contract it has with Northrop Grumman. The agency extended the company’s contract until GSA awarded Networx.

For most agencies, making the transition from the previous governmentwide FTS 2001 vehicle to Networx will be the most challenging phase, Suss said. Industry capacity might be a factor in the transition phase, he added. “We’re dealing with an industry that is running much leaner than when FTS 2001 was awarded. It has gone through consolidations and layoffs, and the ramp-up for transition is significant.”

Other industry experts agreed that the telecom landscape has changed. In the three years since Treasury tried to begin its network modernization project, many evolutionary changes have occurred, said Frank Dzubeck, chief executive officer of Communication Networks Architects. “It’s not that people don’t know that this has occurred. It’s just that management has to take it into consideration. Management time now is going to be spent adjusting to the changes that have occurred.”

About the Author

Mary Mosquera is a reporter for Federal Computer Week.


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