Carriers brace for federal buying spree

Carriers are preparing for a flood of buying activity under the federal government’s massive Networx telecommunications program in 2008.

Networx  is the largest telecommunications deal in the world. It will provide domestic and international voice, data, video and wireless services to 135 federal agencies for the next decade.

The U.S. General Services Administration awarded the 10-year, $20 billion Networx program in two parts earlier this year.

Related story: Carriers mobilize for $24B in military telecom contracts.

Networx Universal, a comprehensive program that covers everything from legacy frame-relay and ATM to cutting-edge VPNs and VoIP, was awarded to AT&T, Qwest Communications and Verizon Business last March.

Networx Enterprise, which offers emerging IP and wireless services, was awarded in May to AT&T, Level 3 Communications, Qwest, Sprint Nextel and Verizon Business.

"The benefit of Networx is that it provides virtually everything that someone would want from a telecom perspective, and now an agency can to go one place and get all those things," says Jeff Mohan, AT&T’s program director for Networx. "Security, hosting, long distance and toll-free -- all in one place."

The winning service providers started taking orders on Networx Universal this fall, and they are wrapping up acceptance testing and will be ready to take orders under Networx Enterprise in January.

"There will be a lot of [Networx] competitions happening in the first three to six months of next year," says Susan Zeleniak, vice president of Verizon Federal. "There could end up being a dozen statements of work issued early next year."

"Once we get through the continuing resolutions and other appropriations battles, the pace should pick up on Networx," says Ray Bjorklund, senior vice president of FedSources, a market research firm that tracks military telecom spending. "It’s been a slow start."

So far, only one federal agency -- the U.S. Department of the Treasury -- has placed a major order under Networx Universal. AT&T won that $1 billion award in September. The Treasury Network (TNet) will be a secure MPLS network spanning 1,000 locations and supporting more than 100,000 employees of the Treasury Department’s 12 bureaus, which include the U.S. Internal Revenue Service and the U.S. Mint.

Homeland Security getting ready

The U.S. Department of Homeland Security has issued an RFP under Networx Universal to build a single, unified network to replace the separate networks run by the various security agencies that were combined to form the DHS in 2003. The DHS OneNet contract is expected to be awarded during the first quarter of 2008. The DHS spends around $560 million per year on telecommunications services, Bjorklund says.

"The DHS award will be significant," says Don Herring, president of AT&T Government Solutions. "It will be big, it’s strategic for the agency, and it’s early in the process of Networx. . . . DHS needs collaboration, but it’s got to be in a secure environment."