Bids in for Biggest Federal Telecom Deal

By Arshad Mohammed and Roseanne Gerin
Monday, October 10, 2005

The federal government has diplomats in Paris, soldiers in Iraq and Afghanistan, rangers roaming national parks and engineers toiling at NASA mission control.

They need up-to-date telephones. They need Internet access. They need wireless service. They need satellite coverage that patches far-flung embassy missions into Foggy Bottom.

The cost will be an estimated $20 billion over the next decade, a figure that has drawn the country's leading telephone, defense and technology companies into a fierce competition for the General Services Administration's largest-ever telecommunications contract.

When the agency decides the winners of its "Networx" contract in coming months, it won't make or break any of the scores of companies involved -- a list that includes many of the most prominent Washington area firms. But any company excluded from the work will spend a decade on the outside of a project designed to provide the federal bureaucracy with its next-generation suite of communications technology.

"Anybody who wants to be in the federal telecom integration market has got to be on the Networx deal," said Diana L. Gowen, who heads Qwest Communications International Inc.'s federal government services business.

After years of preparation and millions of dollars in investment, teams led by AT&T Corp., MCI Inc., Qwest and Sprint Nextel Corp. last week submitted bids on the largest, and most lucrative, part of the contract, called Networx Universal.

A more tailored piece of the project, called Networx Enterprise, is designed to allow smaller companies to compete for part of the work. Bids for that are due Oct. 24.

Each contract could produce multiple winners, who would then be qualified to compete with each other for specific tasks and projects.

Networx Universal is stunning in its breadth.

Telecom Spending: Spending has risen steadily during the life of the FTS 2001 telecommunications contract, which Networx will replace.
Bidders must be able to serve more than 15,000 locations in the United States and overseas. The work will include some noncombat communications for the military and U.S. missions in roughly 190 countries. The 1,000-page request for proposals goes well beyond the traditional realm of voice, video and data transmission. It includes requirements for communications over fixed and mobile satellite dishes, Web videoconferencing, and cell phone and wireless Internet services. It would prepare the government for a world in which voice, video and data are increasingly sent over the Internet instead of phone lines.

Ultimately, it may mean providing a federal worker sitting at a desk with an Internet phone, videoconferencing, e-mail and data, all flowing over a single communications pipeline.

Reflecting the complexity of the services, each bidder has lined up partners, including companies with experience weaving disparate systems into a seamless whole. The partnerships demonstrate the reach of the project.

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