GSA: Agencies that stay on FTS 2001 face increased fees

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Agencies that have asked for an extension to the deadline for transitioning onto the Networx telecom contract will face higher management fees from the General Services Administration so long as they stay on their existing FTS 2001 contracts, says Karl Krumbholz, GSA director of network services programs.

GSA has allowed agencies to postpone the deadline for submitting orders to Networx providers from August 31, 2010 to the same date a year later. In all, 42 government agencies that buy telecom services through GSA have successfully applied for the yearlong extension, including several large cabinet agencies such as the departments of Defense, Veterans Affairs, Justice and Homeland Security. Also included in that number is GSA itself.

However, agencies that chose to remain on FTS 2001 contracts--technically, the FTS 2001 Bridge Contract awarded when the original FTS 2001 telecom contracts expired in 2006 and 2007--will face an increase in fees, Krumbholz said in a statement provided to FierceGovernmentIT.

How large the fee increase will be is unknown, Krumbholz added, only stating that it will be based "on the additional cost of transition incurred over the longer than anticipated transition period."

As for what will happen when the FTS 2001 Bridge Contract itself expires in May and June of 2011, Krumbholz said GSA approved on Sept. 10 an extension vehicle, but refused to say what it is.

Industry sources say that GSA has talked about either awarding another clutch of sole source contracts to FTS 2001 providers, or allowing agencies to continue FTS 2001 services through a sole source Networx task order done without a Fair Opportunity competition. However, the task order would come with the caveat that agencies would still have to fully compete their telecom contracts through the Fair Opportunity process before the task order expires.

Industry sources have mixed reactions to that second proposal, some stating that the full competition between Networx providers envisioned under the Fair Opportunity process would be forgotten and the Fair Opportunity process would be circumvented through a fait accompli. Others say that a GSA offer of a sole source Networx task order could be used as a forcing mechanism to ensure that agencies wouldn't be able to extend their FTS 2001 contracts any further.

During internal government deliberations, providing new sole source contracts "was thought by some to be a signal that agencies would be free to relax their efforts to complete their transition and further unnecessarily prolong the transition," Krumbholz said. In any case, GSA estimates that approximately 90 percent of FTS 2001 services will be disconnected by May and June of 2011, Krumbholz said.

For more:
- read Karl Krumbholz's statement on Networx transition
- download a list of agencies with approved Networx transition dates
- read a July 15 letter from GSA Federal Acquisition Service Commissioner Steve Kempf notifying agencies of a deadline extension possibility (.pdf)

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