The strategy under development for the Network Services 2020 telecommunications contract is focused on expanding the number of vendors offering services.
During the creation of the current contract, called Networx, the General Services Administration inadvertently limited competition to five large carriers.
But officials say this is one of several ways GSA is listening, learning and improving the suite of contracts under NS2020.
“Open up this deal,” said Fred Haines GSA’s program manager for NS2020 Enterprise Infrastructure Solutions (EIS) acquisition. “What I don’t want to happen is what happened under Networx back in the day. What should be the minimum requirement, geographic, to provide a compliant proposal? We based ours on: It’s global, figured we will tier it and those larger corporations like the Networx providers who may or not make a decision not to lose the business they have would bid that capability so it would be the continental United States and outside the continental United States. But what about the national-based carriers? So, we came up with a concept of core-based statistical areas — metropolitan areas — we did extensive analysis on that, and we came up with looking at our market analysis, who we think may be willing to play this time. It’s a double- digit number. What should that minimum geographic requirement be?”
Industry members tried to answer that question as part of their responses to the request for information for EIS. Answers were due Thursday afternoon.
$7 billion to $8 billion telecom market
As of now, GSA plans on breaking down the U.S. into three regions — northeast, central and western — and if a carrier only provides services out west, but not in the east, they can bid just in that geographic region.
Haines, who along with Kevin Gallo, GSA’s NS2020 program manager, spoke Thursday at the Independent Telecommunications Pioneer Association (ITPA) in Arlington, Virginia, said no matter what GSA eventually settles upon, it will be all about getting more players to bid on the solicitation. GSA estimates the addressable market in government around telecommunications is between $7 billion and $8 billion. He said the end goal is to make sure the winners under the two other regional contracts can provide quality service to the government wherever they bid.
Competition is one of several approaches GSA is considering that builds off of the lessons learned and mistakes under Networx. Agencies took about 33 months more than expected and the government ended up spending almost $400 million more than it should have for telecommunications services because of these delays, according to the Government Accountability Office.
GSA is not following the “one-big contract” model as it did under Networx. Instead, it’s going with a series of contracts, all providing an assortment of services.
EIS is the major acquisition, however. Under EIS, vendors would provide traditional voice/video/data and data-center services, plus emerging services that are delivered as managed services or under a self-service delivery model.
Gallo said GSA recognizes the telecommunications market has changed over the last decade, which was the last time the agency planned a large scale acquisition.
“If you look at the way the government is procuring services, it is — and has been for a while now and is increasingly more and more procurements now — at the enterprise level. So we are also organizing to be able to provide services and be able to respond to the changes in the marketplace,” he said. “Systems and modernization of our systems, ordering, billing, inventory and expense management, is another major initiative going on. And hand-in-hand with the systems, is common and, to a large extent, automated processes common systems there.”
Beyond EIS, Gallo said GSA will both take advantage of existing contracts such as Schedule 70 or the recent satellite-communications contract, and award new contracts, such as for emerging technologies, when necessary.
GSA also is aware of the transition struggles both agencies and vendors had under Networx.
Reducing the number of line items
Haines said one way GSA will try to help simplify transition is by reducing the number of contract line-item numbers (CLINs) under the contract. He said there are more than 18,000 line items under Networx, and GSA hopes to reduce that greatly, maybe even down to around 3,000.
“The term of art our contracts and legal people like are unpriced CLINs, or under Networx, agency-unique CLINs. That will live at the task order level,” Haines said. “Networx today, what would happen, is agencies would go out for their fair opportunity decision, come back, make a decision, turn around and wait anywhere from 60 to 90 to 120 days to have additional items that were not on the master contract modified to be put on the contract so they could begin the transition process and implemented. We aren’t going to do that. Those CLINs that are agency unique that aren’t already sitting on the contract, pre-negotiated, will live at the task order level only.”
Haines said NS2020 will take a page from the Alliant governmentwide acquisition contract and let contracting officers have procurement authority to determine whether the agency-unique CLINs are fair and reasonable.
“It allows a lot more empowerment of the agency customers as well as empowerment from you, our vendor community, to propose a solution that doesn’t require every single time a contract modification on the master contract,” he said.
The contract modification issue was a big one for agencies and contractors, adding complexity and time to every statement of work or fair opportunity competition.
Industry optimistic, so far
Several representatives from large carriers, consultants and other interested parties at the event Thursday responded positively to GSA’s strategy.
Tony Bardo, assistant vice president for government solutions at Hughes Network Systems, said the company decided not to bid on Networx last time around for several reasons, but GSA’s approach so far has the company thinking differently.
“The environment they are creating is one for increased competition versus the sort of almost oligopoly they’ve had over the years so they are certainly open to companies with a broader set of solutions and capabilities,” he said. “So that’s really encouraging. We are encouraged by the adherence to the schedule. In other words, they are really trying to do something by 2017 and have an overlap, which is a smart strategy, because we know how long transition can take. It gives agencies room to breathe. It gives agencies ready to move on to the next contract sooner or later. We find that very encouraging and an example of how GSA has been thinking about this.”
Bardo said there are still concerns around NS2020, including how GSA will simplify the requirements for vendor back-office infrastructure functions such as billing or order taking.
Bardo said non-typical voice or data carriers are looking at NS2020 more closely because GSA isn’t requiring that vendors offer everything under the contract and lets them focus on their strengths.
GSA has an aggressive schedule over the next year to get NS2020 moving, starting with a draft RFP this November and a final RFP next May. Haines said GSA expects to award the EIS and corresponding regional contracts on a staggered basis between late 2015 to early 2017.
Industry sources said there also may be a second RFI coming from GSA later this year depending on what the responses say during this initial set of questions.
Haines said two other lessons learned from Networx will come into play around the schedule for NS2020 EIS.
“One way or another, we are going to have a 15-year deal,” he said. “Here’s what’s going to happen: It’s either going to be a 10-year ordering period and a 15-year performance period. I’ve requested a 15-year period of performance … I didn’t talk about technology refreshment, clearly there’s going to be technology refreshment clauses in there. There is a question about on-ramps. We haven’t figured out how to do on-ramps per se under a FAR Part 15 deal. It’s really easy to do under schedules, we just award another schedule contract. We are struggling with that. Pricing, we are coming up with some different thoughts on how we might maintain pricing because who can give me firm fixed prices for 15 years? How many companies are still going to be potentially not be merged with each other in 15 years? We don’t know.”
Haines said GSA also is planning for about a three-year transition to go from Networx to EIS under NS2020. That will give agencies plenty of time to decide what and how they will buy the new services and to run competitions.