Treasury to outsource network

Treasury Communications Enterprise RFP

Treasury Department officials issued a request for proposals for network services this week that could carry a $1.5 billion price tag but would let Treasury get out of the telecommunications business.

Treasury officials say they expect to save money by awarding what is known in the telecommunications industry as a managed services contract. The contract will offer advanced data, voice and video capabilities for a fixed monthly fee. Treasury will no longer own the network infrastructure assets on which it will depend.

The technical details of the Treasury proposal are confidential. Bidders must sign a nondisclosure agreement to protect information that Treasury officials say could compromise the security of operations in the department that is home to the Financial Crimes Enforcement Network, the Internal Revenue Service and the U.S. Mint.

Treasury is asking for a smorgasbord of managed services that at the upper end include 10 Gigabit Ethernet service with a 99.99 percent service guarantee, or less than 1 percent downtime in a year. Web site hosting, network management, help-desk support, virus protection, intrusion detection, encryption — the winning contractor will provide it all.

Treasury's telecommunications contract with Northrop Grumman Corp. expires in September 2005. That 10-year contract has provided Treasury with what is said to be the largest private secure civilian network in the United States. The network has 215 customized system interfaces and more than 4,200 circuits in about 1,000 locations in the United States, Europe, the Bahamas, Bermuda and Guam.

In the RFP, Treasury officials describe the state of networking in the department and what they hope it to be in the future. Moving from a secure network that supports Systems Network Architecture protocols from the 1980s to a system of network services based entirely on IP will be a challenge for the winning vendor, according to Treasury officials.

Department officials envision network services that offer secure remote access for employees who need to telecommute. The network services must be reliable enough to support the operations of Treasury and its bureaus during a national crisis that might bring down the public-switched telephone network.

The managed-IP network services will be used for many Treasury activities, such as bill paying, personnel transactions and sharing information with law enforcement and financial institutions. Treasury also plans to expand the range of transactions that it conducts online with citizens and businesses, including the filing of tax returns and bill payment with electronic invoices.

Treasury officials said they expect to use the managed services contract to acquire advanced network capabilities such as IP multicast, IPv6, IP telephony and optical wavelength service. Multicast is a way to broadcast video signals through networks using relatively low bandwidth.

Treasury will hold the managed-services contractor to service-level agreements requiring, for example, Internet access service with latency no greater than 150 milliseconds at least 98 percent of the time. The proposal states that the contractor must guarantee the default setting is to deny access to the public Internet for all firewall ports with inbound or outbound access.

Two Treasury offices will manage the contract: the IRS Office of Procurement and the Treasury Communications Enterprise Program Management Office.

The basic contract will last three years through Sept. 30, 2007. After that, the award may be extended year by year for up to seven years.

Dozens of companies have expressed interest in bidding on the contract, including high-profile optical cable companies such as Global Crossing Telecommunications Inc. and Level 3 Communications Inc.