Davis urges more Networx changes

General Services Administration officials can expect continued pressure from Rep. Tom Davis (R-Va.), who says he wants more changes in the sweeping Networx telecommunications contract.

Davis, chairman of the House Government Reform Committee, has singled out the contract's proposed minimum revenue guarantees as his major concern. He also is worried that if use of the contract is voluntary, some agency officials will bypass it in favor of other contract vehicles or their own competitions.

Officials at GSA's Federal Technology Service have proposed that companies earning a place on the larger Networx Universal contract would split a minimum revenue of $525 million. The Universal contract is for large-scale network and communications services. Companies on the smaller Networx Enterprise vehicle would split $25 million.

MCI and Sprint were guaranteed $750 million each on FTS 2001, the contract that Networx will replace. Davis said agency officials should consider whether the Networx minimums are sufficient to entice companies to bid on the contract.

Bob Woods, president of Topside Consulting Group, echoed Davis' concern about the minimum guarantees. Woods, who was FTS' commissioner when officials developed the FTS 2001 contract, said the high minimum guarantees would inspire the contractors to perform, their best.

John Johnson, FTS' assistant commissioner for service development and delivery, defended the proposed Networx guarantees. If officials are committed to guarantees and prices fall or agencies buy services elsewhere, taxpayers may have to make up the difference, he said.

Woods said the best approach may be to make the contract almost mandatory, as Davis has proposed. In most cases, agency officials were required to use FTS 2000, the first major telecom contract, he said. But in developing FTS 2001, Woods and FTS officials dropped that provision.

"The reason I didn't want mandatory use is that I wanted to send a signal in GSA that we had to compete for our business," Woods said. "Now, the prices have gotten so low, I think you could return to a benevolent dictatorship."