Carriers to feds: Show me the money on massive telecom deal

17.04.2009

GSA says Networx could still reach $20 billion in sales by 2017.

"We have every expectation that the contract will grow, and we don't feel that number is out of whack," Krumbholz says.GSA says the true measure of success for Networx is how much money it saves the federal government, not how much money is spent on it.

"Our definition of success is that the prices on Networx are 10% to 40% better, depending on the service and the contractor, than they were on FTS 2001," Krumbholz says. "The value of the contract is the continuous competition. We've seen constant normalizing of the prices on all of these statements of work."

GSA says studies have shown that FTS 2001 prices were 30% to 40% lower than commercial prices. They expect similar volume discounts from Networx.

"We have the pre-eminent carriers in the industry...[The Office of Management and Budget] did an analysis that confirmed our prices are better than agencies can find elsewhere. And we know that FTS 2001 is going to expire," Krumbholz says. "So it looks to me like there's no possibility except that Networx will ultimately be a rousing success."