Senators Highlight New Assessment on Government’s Transition to Major Telecommunications Contract Program

WASHINGTON – Today, Senate Homeland Security and Governmental Affairs Committee Chairman Tom Carper (D-Del.), Ranking Member Tom Coburn (R-Okla.), Senate Financial and Contracting Oversight Subcommittee Chairman Claire McCaskill (D-Mo.) and Senator Susan Collins (R-Maine) highlighted a  new Government Accountability Office (GAO) report that details some of the problems and lessons learned from the General Service Administration’s transition process for Networx telecommunications contracts for over 150 agencies from the legacy FTS2001 contracts. 

“The rocky transition to the Networx contracts was, unfortunately, a lesson in lost opportunities,” said Chairman Carper. “As this report shows, dozens of agencies missed out on hundreds of millions of dollars in savings under the new contracts, and instead accrued tens of millions in increased costs in contract management. Given that we are trying to do more with fewer resources in every part of the government, it is essential that programs like Networx reach their full potential and garner all possible savings. One of my core values is if it isn’t perfect, make it better, and I believe that the General Services Administration must look at these lessons learned and perfect its process so the transition to the next suite of telecommunications contracts does not veer off -course as the Networx transition did.”

“GSA’s failure to successfully transition its telecommunications services to Networx is the latest in a long line of contracting problems.  Too often we’ve seen poor planning, unnecessary duplication, and inadequate management at GSA,” Dr. Coburn said.  “Even worse, as the report shows, it cost taxpayers $329 million more than if GSA had adequately transitioned to Networx on schedule.  Such mismanagement and waste is simply unacceptable, especially at a time of increasing debts and limited resources.  GAO has made a number of recommendations to GSA, including that GSA establish better transition plans with detailed time frames to get this program back on track. GSA should implement these recommendations and take immediate steps to prevent future delays and wasteful and unnecessary spending. I look forward to working with the committee to conduct oversight of this, and other efforts by GSA to improve efficiency, and save taxpayer dollars.” 

The transition from FTS2001 to Networx took almost three years longer than planned, and GSA estimates that the delay increased the transition cost by over $66 million.   Further, GAO estimates that if the transition had occurred on time agencies could have saved over $328.7 million by moving to lower-cost services on the Networx contracts.  GAO found that the delays by agencies in transitioning to Networx were attributable to a number of factors, including weak project planning and a complex acquisition process characterized by duplicative contracts and a large number of service options.  Additionally, GSA reported that these issues were compounded by a decline in contracting and technical expertise in the agencies.

The General Services Administration (GSA) negotiated the Networx contracts in 2007 to provide a range of telecommunications services to federal agencies, including internet and wireless services.  These contracts will expire in 2017 and GSA is in the planning stage for the next generation of contracts to replace Networx, which will be known as NS2020.  However, GAO reports that there is a high risk that GSA will not meet its goal of awarding the next set of contracts in 2017, and that GSA expects to extend the Networx contracts for at least three years.