Sandia, Verizon agree on a strategic relationship

Sandia National Laboratories has drawn up a nonbinding agreement with Verizon Federal Network Systems to develop additional telecommunications capabilities within the facility, part of the Energy Department.

Representatives from Sandia and Verizon signed a memorandum of understanding (MOU) that they characterized as a partnership. The lab has signed similar memos with seven other strategic partners, but Verizon is the largest.

Gary Romero, Sandia’s team leader for strategic sourcing, said the memo goes beyond the five-year, $50 million contract that Sandia awarded Verizon in 2003. Under that contract, the company manages the lab’s communications infrastructure and provides voice, video and data services, and equipment.

"Verizon does a whole lot more than just what’s simply stipulated in the contract,” Romero said. “What we’re doing with the MOU is to recognize that this relationship goes beyond just what’s in the contract.”

Romero said the benefit to Sandia is to develop a closer relationship with companies it considers strategic assets for the lab. The memo does not provide additional funds for Verizon, but it does spell out that the company is subject to quarterly performance reviews, annual technology reviews and reviews of new opportunities.

“Across the entire world, people are moving the central parts of the Internet out to the edges, and every day people are doing new things with telecommunications, voice, data and video,” said Douglas Gilbert, director of Energy operations at Verizon Federal Network Systems.

“It’s very difficult to write a contract that will last a period of 10 years that is still more or less relevant or germane at the end of it,” he added. The memo creates a partnership to help the lab meet its needs as it grows, he said.

Last year, Sandia launched the formal strategic relationship program to strengthen the lab’s competitive advantage and establish closer ties to its major suppliers. The program establishes three designations: transactional, key and strategic.

Sandia has thousands of transactional relationships, but only seven key designations and eight strategic relationships, including Verizon, Romero said. The companies designed as strategic go through a rigorous vetting process.

Verizon is the largest company within Sandia to get the top strategic designation, Romero said. The other seven are small businesses. No other labs have such a program, he added.

"This is all new," Gilbert said. "It’s really forging a whole new concept."

Sandia, which has more than 8,300 employees, manages more than 6,000 suppliers.