Wait Nervously On $20 Billion Contract
By Kim Hart, Staff Writer
Wednesday, March 14, 2007
Over the past 3 1/2 years, AT&T has spent several million
dollars putting together two 5,000-page proposals detailing how
it can upgrade phone lines, wireless networks and fire walls for
the federal government. At one point, about 100 people toiled
through the night in a Northern Virginia basement to put the
final touches on a bid that would guarantee the company's
survival in federal market for the next decade.
Executives from AT&T and other companies are anxiously awaiting
the General Services Administration's announcement of the
largest telecommunications contract ever awarded. The winner of
the biggest and most lucrative piece of the project, known as
Networx Universal, could be named as early as this week.
In total, Networx is estimated to be worth $20 billion, though
over time it could grow to $68 billion -- a sum that has
inspired much nail-biting among the companies vying for a piece
of it. In addition to AT&T, other main bidders -- including
and Sprint Nextel -- have assembled teams of companies to help
them secure the 10-year deal. Their proposals involve about 120
potential subcontractors, some of whom have relocated their
headquarters to the Washington area, beefed up their workforces
or built state-of-the-art facilities locally in anticipation of
a boost in business.
The contract is part of one of the most sweeping revamps of the
federal government's technology infrastructure in two decades.
The overhaul will touch nearly everything federal employees rely
on, from BlackBerrys used by FBI agents to databases used by
"Previous contracts focused on straight telecommunications --
phone lines, data lines. But Networx is putting together the
next generation of high-end technology that the government will
use for years," said Alan Chvotkin, senior vice president of the
Professional Services Council, a government contracting trade
organization. "Every large telecom company is counting on this."
Awarding pieces of the Networx deal will be a multi-step
process. The GSA will chose at least two prime contractors, who
will then be eligible to bid on individual agency projects.
Dozens of smaller companies also stand to benefit from
The federal agencies involved will not be obligated to use the
Networx vendors for all of their telecom upgrades.
At Verizon, more than 1,000 people worked to prepare the final
bids, which required 10,000 pages to print. In September, the
company opened a 30,000-square-foot facility in Ashburn for
monitoring government networks and computers that "was built in
particular to meet Networx requirements," said Susan Zeleniak,
vice president of Verizon's federal division.
The size of the Networx project has produced a ripple effect
among some smaller companies, which have come to the Washington
area hoping to market themselves as subcontractors.
a telecom company outside Chicago, opened an office in Ashburn
in January and hired more staff -- putting the office at 120
employees -- to target the contract. Although it is not paired
with one of the four prime bidders, the firm will try to supply
other telecom companies as the government's technology
requirements evolve over the next few years, said Joe Shilgalis,
vice president for government systems.
"Having a stronger focus around the Beltway will give us more
opportunities to reach agreements with those prime contractors,"
Executives at Hughes Network Systems, a Germantown satellite
company, are "sitting on pins and needles waiting for the phone
to ring," said Tony Bardo, assistant vice president for
government services. The company, which is bidding with several
other prime contract bidders, is already planning on a "festive
atmosphere -- maybe even a party or two" when the GSA releases
The last major telecom contract, FTS 2001, went to two
companies, Sprint and MCI, in 1999.
This is Qwest's first time bidding as a prime vendor for a major
government contract. Several hundred employees have had to skip
vacations and pull all-nighters over the past three years to put
together their proposal, said Diana Gowen, head of Qwest's
federal services division.
"We're optimistic that we put our best foot forward," she said.
"But we're not planning any parties."
Staff writer Charles Babington contributed to this report.