Networx fee to remain unchanged

The General Services Administration is not, at least for now, lowering its agency management fee for the Networx telecommunication contracts, said Karl Krumbholz, GSA's Networx program manager.

“Our strategy is to keep the fee at 7 percent, exactly where it is, until transition is over,” Krumbholz said. Some media reports earlier this week had said GSA planned to halve the fee.

GSA will evaluate its fee structure only after agencies have finished switching their telecom services from the expiring FTS 2001 vehicle onto the new Networx contracts, he added.

“The fee has to cover the expenses associated with managing the program,” he said.

Last year, the agency began discussing the possibility of sliding-scale administration fees based customers’ use of GSA's infrastructure to support Networx operations.


GSA took that action after giving the Treasury Department a steep discount in January 2007 as an incentive to drop its own telecom procurement in favor of buying through GSA. The idea for the discount originated outside GSA’s regular Networx team, agency officials confirmed at the time.

Concerning whether a sliding-scale fee is still on the table, Krumbholz said the agency will study the overhead associated with agencies that directly handle their telecom bills.

Agencies have 26 more months until their FTS 2001 contracts expire. However, to qualify for money held by GSA  that would cover agencies’ one-time transition fees associated and the cost of running parallel networks for as long as 30 days, agencies must select a vendor by the end of this fiscal year.

Agencies that decide to chose vendors through a statement of work or objectives must submit those documents to GSA for review. GSA generally requires 69 days for a review, Krumbholz said. Based on that timeline, making a contract award by September 30 requires handing in paperwork to GSA by June 23, Krumbholz said.

“There’s really no way to make this any more straightforward: Get it in as soon as possible,” he said.

About the Author

David Perera is a special contributor to Defense Systems.

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