House panel offers GSA advice on new governmentwide telecom deal

Senior officials from the General Services Administration testified before Congress Thursday about their plan for a telecommunications contract for the federal government. They received a series of suggestions from lawmakers and industry executives who want to see a competitive contract that doesn't limit agencies' access to new technologies on the market.

GSA administrator Stephen Perry told members of the House Government Reform Committee that he had tried to keep an "open dialogue" between his agency and telecom executives, who were invited in recent months to submit comments about GSA's proposed contract, known as Networx. The agency received more than 700 comments from almost 50 respondents, said Sandra Bates, the commissioner of GSA's Federal Technology Service. FTS manages Networx and the existing telecom contract, FTS 2001.

Eight telecom executives from some of the nation's biggest companies also testified before the committee. They and others have expressed numerous concerns about the structure of the contract, as well as the timetable for implementing it, Bates and Perry said.

Among their concerns is that Networx not be limited to a few players, but rather have enough flexibility to allow multiple companies to participate, the officials explained. Only two companies hold slots on the FTS 2001 contract.

Also, companies and lawmakers want assurances that agencies will be able to acquire telecom services, such as the ability to make traditional telephone calls over the Internet, as they come to market. The FTS 2001 contract has been modified 229 times to accommodate new products and services.

Some companies also have questioned FTS' plan to release Networx in two contract phases. The first, called Networx Universal, would require companies to serve all domestic and international customers with a broad range of services. The second, Networx Select, would offer specific services and would let a company sell them in specific geographic areas where it does business.

Some executives and lawmakers want FTS to compete contracts among different product categories, and possibly drop the requirement for ubiquitous service as called for under the Universal contract. Lawmakers wondered if that strategy also might encourage companies to compete more aggressively. For example, rather than have one nationwide contract for all services, the government could save more money by allowing specific companies, such as Internet service providers, to compete for work focused only on their areas of expertise.

Perry said the industry's level of interest in Networx was perhaps unprecedented in GSA's history. At stake is billions of dollars in annual business providing telephone, data and other network services to about half the agencies in the federal government.

But the final form Networx will take is far from certain. Bates said that officials hadn't even decided how many companies could win slots on the contract. "We've not even reached a point yet where we would put a limit," she said.

GSA will continue to "probe deeply" the industry's concerns and recommendations, Bates said, indicating that officials recognize the contract isn't likely to succeed unless potential bidders are satisfied.