Time is winding down for federal agencies to make their transition onto Networx, the General Services Administration's pair of telecom contracts.

Networx offers considerably more telecom services than FTS 2001, GSA's current telecom contract offering, and the GSA officials behind Networx openly expected agencies to use the new contract as an opportunity to converge voice, video and  data network services, and not simply duplicate their existing network architecture.

That opportunity appears mostly lost for now, as agencies scramble to write mostly like-for-like contracts in anticipation of the moment in June 2011 when FTS 2001 expires. FierceGovernmentIT recently caught up with Karl Krumbholz, GSA's director of network services programs. Krumbholz talked about Networx transition, the future of convergence and also about possible changes coming to federal acquisition of wireless telecom services.

FGIT: How would you characterize the state of Networx transition?

Krumbholz: Agencies are engaged, and they're doing everything they can to complete the transition by June 2011. I don't think that was always the case, but it's the case now. And, frankly, I'm not sure what anyone could do to get them more motivated.

FGIT: Will agencies that haven't made the switch in time have access to extension contracts?

Krumbholz: What we have in place now are sole source bridge contracts that were put in place when the FTS 2001 contracts expired. We're now in a continuity of service period, which means that we've exercised the ability to extend the current capability to provide services to the agencies through these contracts for an additional year, which was a provision in the contract. We're now in the process of developing request for proposals that will be additional sole source contracts that will assure us that we have contract vehicles in place, should we need them following the current bridge contract period.

While agencies have told us that they are going to do everything they can to meet the June 2011 deadline, and we're not aware specifically of any agency at this point that is not going to make it, our current projection of transition progress suggests to us that we may not quite make it. If we continue on the current track, we might be about 90 percent done by the end of next year. That's just based on extending our current progress. Since we are uncomfortable that maybe we won't make it, we don't want to be in a position where we don't have the contracts in place to keep the government in business.

FGIT: Why is it that so many major departments have yet to transition?

Fierce: At the top of the list are competing agency priorities. It's clear to us that if this had been the only thing that agencies had to do over the last few years, it would have been done by now. In the view of some--myself included--it did not necessarily get to the top of the priority list soon enough. But once there, it has moved along in a consistent manner.

FGIT: But why is that? Agencies knew they would have to transition.

Krumbholz: When you say "agencies," it suggests that an agency is a single entity. As you know, an agency is many entities. While the people we worked with on the Interagency Management Council, in my view, were always doing their very best to get this done, they were a single voice in a big organization. I'm not talking about every agency, I'm talking about the large agencies that constitute 95 percent of the services. Many of those folks worked at headquarters and were trying to get support for a transition that involved upward of a dozen subagencies, all of which are autonomously funded and managed by organizational structures that do not report to those individuals.

In addition, they must have contracting officers who are engaged, knowledgeable and focused. Somebody has to assign those resources to them to get the work done--all that coordination and focus needs to start at a relatively high level in order to get all those parts to come together.

Until there's enough focus by senior agency executives, or oversight organizations like OMB, perhaps Congress, it just doesn't seem that a requirement that simply maintains the status quo really seems to get the overall priority that it needs.

Also, transition is a very complex process. You must know your inventory--everything your agency has on the current contract--before you can make a fair opportunity decision and write orders. Everything must be coordinated within the agency. Until you get everyone to agree to move in the  same direction, all  the pieces don't tend to come together.

FGIT: Wasn't there an incentive to transition right when the Networx contracts were awarded in 2007, because agencies already had put together an inventory back in November 2006?

Krumbholz: From the last transition, we knew that one of the most important things that agencies would have to do is establish an inventory of their current services. We knew that, so we started working on it early within the transition working group. We highlighted it to the agencies, and we did our best to collect all the inventory information that was available--from GSA, from the carriers, from various databases that we could access.

We put that information all together, and we made it available to the agencies to compare with what they knew their inventories to be. In some cases, agencies used it exclusively, because they had nothing on their own. Other agencies had good inventories. We put together our transition baseline inventory that would be used to monitor the progress of the transition in moving services off of the hold contract. And, eventually, complete that transition.

FGIT: But having already once put together an inventory, it now appears that agencies have to do it again.

Krumbholz: Theoretically, if you have an inventory, then you have an inventory. And, any time it changes, you would update it, and you would keep it current.

FGIT: Have the agencies done that?

Krumbholz: No, nobody ever does that. And even if they try to do it, they don't do it very well.

A lot of things happen and it's just hard to keep track of all the stuff that is just constantly changing. I wouldn't say you couldn't do it--it's not impossible--but it's very complex, and very difficult. It requires a knowledge of what is ordered, and what is executed in accordance with the order, it requires essentially a closed loop process where every order is recorded and when the order is fulfilled, the fulfillment is compared to the order, it's verified, and the new services either replaces something that's been disconnected or it adds to the inventory, or subtracts from.

Consider that there are thousands and thousands, maybe even tens or hundreds of thousands--depending on the size of the agency--of services that are constantly in flux, and they're in flux every day. It's a very complex process.

FGIT: Why didn't agencies take advantage of an up-to-date inventory they had to have a few years ago and do the transition then, rather than putting it off and having to go through again the inventory process?

Krumbholz: Well, the question of "why didn't the agencies" is a difficult one for me to answer. For all of the good  reasons for why the agencies should have done something--we've got better prices on the new contract, we have continuing competition that keeps driving the prices down--I can only say that every agency has its own reasons and perhaps its own story about why they did or did not move quickly, or as quickly as they should have.

To try to generalize is difficult, and it's hard to answer the question "why didn't they." The overarching answer is, "It's a matter of priority." They simply were doing other things.

Some said, "Oh, you gave them too much time. If you had given them just 30 months instead of 42, then they would have gotten it done in 30 instead of 42." That could be a valid point. The other point, perhaps, is just that there's a big amount of inertia, you have to get these agencies moving, and it takes a while to do that.

FGIT: At what point, wasn't GSA only going to cover agency transition costs only if they chose a Networx vendor by September 2008 (.pdf)?

Krumbholz: The transition working group, which was established as far back as 2003, was concerned that some agencies wouldn't move quickly enough, and thought that it would be useful to establish deadlines for completing fair opportunity and writing orders. They themselves said this would be a good idea, to put these milestones in place to encourage agencies to move forward. That is what that was about.

The paradox that we had, to some extent, was that if an agency didn't make the transition, and they therefore didn't qualify for the funds, then they wouldn't get the money, so then they would go even slower because then they wouldn't have the funds that they needed for non-recurring costs associated with the transition.

Another reason we had this fund was to try to level the playing field so there wouldn't be more costs associated with a new carrier than there would be with an incumbent. In the end, the milestones that we established weren't as effective in moving the transition forward as we thought they would be.   

And, what makes a difference to agencies in a big project like this is transparency, visibility and a high level of oversight. That's what makes it work--that's why it's working now. We have that now. It took us a while to get it.

FGIT: So was the deadline for completing the transition in order to get transition funding removed?

Krumbholz: We still have the deadline of August 31 to complete all orders. That deadline is still in place.

FGIT: If agencies don't complete their fair opportunity, then after August --

Krumbholz: Actually, it's more challenging than that. They have to write their orders.

FGIT: If they don't write an order before that deadline, they won't get access to the transition funds?

Krumbholz: That is the way it is articulated in the taxonomy document.

FGIT: The deadline was lifted once before, and you're making preparations for sole source bridge contracts, so is there a reason why agencies should particularly believe that the deadline is serious this time?

Krumbholz: I would say that the forcing function for agencies is transparency, visibility, senior management accountability and if OMB says you need to have it done by August 31, GSA says you have to have it done by August 31, and agencies are told that if they don't, then their failure to comply will results in their not being funded, or they're clearly not moving at the pace that they've been told to move at, I think that those are all significant drivers.

FGIT: Is this deadline more believable than the first one was?

Krumbholz: I would only ask an individual agency if they believe it or not. And, if they don't believe it, does that change their actions? If they don't believe it, then what? Are they not going to transition? Are they going to say "I'm not going to do my orders?" My initial statement is that they are highly motivated, the high level of visibility is there, the CIO Council visibility is there, OMB visibility is there, some have received letters from Congress.

Everybody has gotten the message. In my view, they're moving as fast as they can. And no greater incentives are needed. They're doing it, they're moving.

FGIT: Because so many agencies put it off until now, do they have an opportunity to transform their networks?

Krumbholz: In some cases, agencies are transforming their network, and in some cases that would be a reason why it's taking them so long.

If you say "Why does it take so long?" well, they're doing this very involved transformation activity, in some cases. Not all, but in some.

FGIT: When Networx was awarded, there seemed to be a large expectation that agencies would start running voice, video and data over a single connection, and they would rationalize their connections, and so on. Is that happening?

Krumbholz: Just from observation, it really hasn't happened as much as we anticipated. There's only a couple of cases where they're even, at this point, working in that direction. There appears to be a number of reasons. Some of them have to do with security, some organization issues, some cost--all of these things are factors.

We still believe that convergence is inevitable, and it's just a matter of the time horizon of when it all happens.

FGIT: If you had to give a realistic estimate about when everything over IP will come into being?

Krumbholz: We've always called that "convergence"--but that's fine. I think it is occurring, it has occurred, and will continue to occur. Not every element of the government will be fully converged. If you went out to some rural location, you might find one of those phones where you have to crank and hold the receiver.

I don't know when it's going to be done. Most of it's going to be done within the next 5 to 10 years, I guess. I'm not really a futurist, I'm probably not the best one to ask that question. I can only tell you from our observation that it's happened slower than we thought.

It's a matter of security, or organizational control. In other words, who's in charge of voice, who's in charge of data, are they the same person, does the data person necessarily want to mess up their network with voice. There's capacity issues, is there enough capacity on the network. Is the network an old frame or ATM network and not yet an IP network? Should they move first to IP and then converge it? Is there an expense associated with putting that new network in place, and they don't have the funds? All these things.

FGIT: What's the potential for Networx to support cloud computing?

Krumbholz: Networx has a great amount of potential to support cloud computing. All of the carriers have cloud computing offerings, and it's actually a great platform, because of the security associated with Networx.

The only thing that has kept it, I would say, from occurring is the need for an agency to establish cloud computing as a requirement, and writing a statement of work, since it's not priced on the contract. You would have to write a statement of work and say ‘Here's what I want," and have it competed on the contract.

Since cloud computing is something that has not necessarily been driven by a requirement of agencies, but evolved from the top--to the extent that an agency has said "I want it!" it's there. They can get it. If they knew exactly what their requirements are, they could write a statement of work and they could buy it from our major carriers. There are other places to get it, of course, but they could get it in a private cloud --which is what in many cases agencies would find most desirable, at least at this point--on the Networx contract.

FGIT: Changing topics, GSA has been putting together a long-term strategy for wireless acquisition. Are there any update?

Krumbholz: Wireless is principally provided to agencies through the GSA schedule. Also on Networx. We used to have a wireless contract, but that's since expired. Most of that service moved over to the schedules.

The issue with the schedule is that on the schedule you buy the device form your local Verizon or AT&T or Sprint office or store--it's pretty much do it yourself on the schedule.

What we've learned from some research we've had access to is that wireless contracts are put together at the local level. There are thousands of contracts in existence for wireless services, and as a result, the government doesn't get a particularly good deal on wireless service. There's been an acknowledgment that management of the wireless services, the prices, can be better accomplished if the government--like we do on Networx--could put our volume together. We might be able to leverage industry to get much better prices, and better service offerings.

That requires agencies to get together and, in a common way, define their requirements and we would then compete them.

FGIT: Hasn't GSA been working on a strategy to do that?

Krumbholz: GSA is prepared to do that. The federal strategic sourcing initiative has a wireless management contract in place called TEMS [Telecommunications Expense Management Services].

We've been approached to put a follow-on to TEMS in place. We have briefed the CIO Council on exactly what I just said--that if we're going to go out with another contract, then agencies all have to decide to get together, define their requirements and then agree to use the contract. That's really the only way we can leverage industry. For industry to give us a good deal, they're going to have to be guaranteed--or at least have a good expectation of--a certain amount of work so that they can use that amount of work to determine how they can make  business case out of giving the government a good deal.

If we can't bring enough volume, then we'll continue to pay the same onesies, twosies prices that we're paying now. That's an initiative underway. It's not yet been fully developed.

FGIT: Have agencies gotten to the point where they are putting together requirements?

Krumbholz: No. But, we have established a requirements working group, or at least identified members of requirements working group, and we anticipate that group will start working on developing those requirements. Agencies, in some cases, are looking at how they can acquire wireless on their own. I can't speak to any of those programs, but I've heard of them. We are actually anticipating more guidance to come out of OMB of where this strategic sourcing initiative might lead us.

Unless we get some strong support from OMB and the CIO Council and a unified approach to the marketplace, I don't think it's going to be possible to meet all of our objectives.

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