GSA grants dozens of agencies deadline exceptions for Networx

Faced with continued delays in moving to the government's massive new contract for telecommunications services, the General Services Administration has granted exceptions to more than 40 agencies that give them until next year to transition to the program.

Federal managers now have until Aug. 31, 2011, to transition to the multibillion-dollar Networx pact, which offers lower prices and more services than its predecessor, FTS 2001. The previous deadline was Aug. 31, a date GSA had extended from the original deadline of September 2008.

As part of the extension, GSA plans to increase the management fee for FTS 2001 by an undisclosed amount due to the additional cost of operating the contract for another year.

Agencies have been slow to transition to the new telecommunications services since GSA awarded Networx Universal contracts in March 2007 to AT&T Government Solutions, Verizon Business Services and Qwest Government Services. The awards were valued at about $48 billion. The Universal program requires the vendors to provide a full range of telecommunications services domestically and internationally at the lowest possible prices, similar to FTS 2001, but also expands offerings to include more advanced technologies and services such as IP telephony and managed e-authentication services.

GSA also awarded Networx Enterprise contracts, in which smaller companies must offer a minimum of nine IP-related services such as Voice over IP and network-based VPNs. The contracts are worth $20 billion over 10 years.

The agency had taken a hard line on not extending the deadline for Networx. In a May 2009 program update, GSA said, "plans suggest that the transition will not be complete until just before expiration of the bridge contracts' continuity of service period in May/June 2011."

In that update, GSA said to meet the schedule, it would not consider reimbursing agencies for their transition costs after April 1, and "agencies using the [continuity of service] period for transition will do so at their own expense."

But many agencies did not meet the deadline, with mangers and contractors saying Networx's complexity and overworked acquisition staffs slowed the transition. Because many agencies did not meet the April 1 cutoff, GSA extended the deadline to Aug. 31, Karl Krumbholz, director of the networks services program at GSA's Federal Acquisition Service, said in an e-mailed statement.

At a June meeting, some agencies said they might not or could not meet that deadline and a decision "was made not to move the deadline, but rather, for agencies to request an exception to the deadline," Krumhbolz said.

In July, Steven Kempf, commissioner of the Federal Acquisition Service at GSA, said in a letter, "While the government has disconnected 60 percent of FTS 2001 telecommunication services to date, many agencies still have much work to do."

In the letter, he noted agencies must submit their transition orders for Networx contract services by Aug. 31 and if they could not, they should request an exception. Agencies that could not meet the deadline would be required to propose a plan indicating when they would initiate and complete their transition.

If an agency submitted a request for an exception, GSA provided an application. By the Aug. 13 deadline, GSA received 47 requests for an exception, and approved 42. Of the 42, 17 applications for exceptions were for large unnamed agencies and 25 for small to very small agencies, according to Krumbholz.

"Some requested the exemption to mitigate risk and some clearly will need additional time," he said.

GSA expects 90 percent of the FTS 2001 services will be disconnected no later than June 2011, which is when the contract expires.

For extended contracts, GSA will negotiate with each FTS 2001 carrier, "and the prices on these contracts will be based on the results of that negotiation," he said. There has been concern that their rates and fees will be higher.

Krumbholz said GSA has been working for months on a plan for when the contracts expire, and "multiple options have been considered."

The Federal Acquisition Service has approved an approach to provide continuity of service, but declined to explain the approach "until senior stakeholders are fully briefly," including the Office of Management and Budget and Congress, he said.