GSA to sell voice telecom services through IT schedule

The General Services Administration will begin offering voice telecommunications services on its popular schedules contracts, hopefully by the fall, agency officials confirmed. The addition is likely to be welcomed by many vendors and agencies, who've benefited from the schedules contracts over the years. But some feel it raises questions about overlaps with existing GSA telecom contracts.

GSA will add voice services to the widely used Schedule 70 contract for information technology, agency spokeswoman Mary Alice Johnson confirmed. That contract includes a broad range of IT products and service offered by many companies and lets agencies buy goods and services quickly. GSA officials would have to add the voice services through a formal modification process.

Historically, GSA has offered customers many telecom services through the schedules, but never voice service. The omission proved problematic for agencies using the schedules to assemble technology systems only to find that an all-important and simple voice telephone line was unavailable to them, said a GSA official, speaking on background.

A spokesman for House Government Reform Committee Chairman Tom Davis, R-Va., said that adding voice services "has always been something that [he] has discussed as a positive approach to the overall issue of telecom procurement. Allowing agencies the option of purchasing voice off the schedules will provide further competition to the benefit of the taxpayer," said the spokesman, Drew Crockett.

GSA already offers voice services though the FTS 2001 contract. But the agency is in the midst of replacing that contract with a new one known as Networx. GSA hopes to make a series of awards under the Networx umbrella next year.

The schedules modification would likely occur before then, however, raising the question of whether or not GSA is setting up redundant and competitive telecom contracts. Under Networx, agencies would have the option to buy telecom services piecemeal, from a menu of providers, just as they can using the schedules.

Adding voice services would create an alternative for agencies who don't want to procure telecom through Networx, which potentially could charge higher administrative fees. Those fees haven't been set yet, but the schedules' low usage fee makes them an attractive option, evidenced by the contracts' high sales volume. In fiscal 2004, agencies purchased more than $32 billion in goods and services through the program, more than half of which, nearly $17 billion, was through the technology schedule alone.

A telecom industry source, who asked not to be identified because of the sensitivities surrounding procurement issues, said GSA's move shows there may be some disagreement within the agency over how to provide services to the government. "It signals a disconnect internally," the source said, questioning the rationale of having multiple contracts for similar services.

Networx also will offer agencies the option of buying a full set of telecom services as a package. But the industry source questioned the logic underpinning the contract-- that by creating multiple ways to obtain services, the government will force the industry to compete aggressively and thereby lower prices.

"If these competitions produce lower prices and higher quality, that's good," the source said. "But you have to prove that's happening. What are GSA's costs to administer these contracts [such as Networx], and what are agencies' costs to use them instead of the schedule?"

The source noted that if agencies are faced with potentially higher administrative costs or other management burdens under Networx, they could walk away from the contracts and buy off the schedules. "The existence of the schedule in parallel may signal an easy option for the agencies and the vendor." Those vendors, the source added, could use existing schedules for administrative support to put together telecom packages for their agency customers, in essence providing the same management services that GSA wants to provide under Networx. It was unclear how a pending merger of two GSA divisions also might affect the agency's telecom contracts. Officials are now deciding how to merge the Federal Supply Service, which manages the schedules, and the Federal Technology Service, the unit that's overseeing Networx.