The US government on Thursday awarded a telecommunications contract worth up to $20 billion over 10 years to five companies as it looks to upgrade its telecommunications services. Major telecommunications companies AT&T Inc., Verizon Communications Inc., Qwest Communications International Inc. and Sprint Nextel Corp. won the right to compete for a large federal-government telecommunications contract. Whereas a fifth firm, broadband fiber-network operator Level 3 Communications Inc., was also on the list for the contract, which covers part of an overhaul of the government’s telecommunications infrastructure. Sprint Nextel won approval to compete on the government contract two months after it was excluded from participating in a much larger telecommunications contract.
In March this year, Sprint, whose federal government contracts total about $1 billion annually, was shut out of the more significant part of the contract, known as Networx Universal, which is worth up to $48 billion and is the largest government. As a matter of fact, it was Sprint’s last prospect to keep the federal government as its customer and a piece of the Enterprise deal was critical. However, the Reston company is not guaranteed that business, particularly after defeated on the larger deal. Sprint has been providing telecommunications services to government agencies for the past 18 years. Involvement in the Enterprise program may enhance Sprint’s likelihood of retaining business from agencies it serves under an expiring contract that Networx will replace.
Moreover, the second contract was visibly less demanding than the first and required firms to show that they could provide nine mandatory services. The first contract required an ability to provide 36 mandatory services.
Speaking on the awarded contracts, the officials of General Services Administration said that they expected agencies to spend roughly $20 billion over the life of both contracts or less than a third of what is allowed. The GSA provides business services of all kinds for about 135 US government agencies and offices. The Networx program was designed to serve government agencies to upgrade to Internet-based systems, add wireless networks and adopt latest equipment. The government is also stressing to strengthen network security and improve their ability to communicate with one another, specifically during emergencies.
This is the second of two contracts that comprise the government’s Networx program, which is aimed to overhaul federal agencies’ telecommunication services. In late March, Qwest Communications International Inc., AT&T Inc. and Verizon Communications Inc. were held winners of the much larger Networx Universal contract, the government’s largest telecom contract ever awarded. For the inclusion of Sprint, analysts have argued that Sprint’s existing customers in the federal government may be willing to remain with the company to ensure transition from the previous government-wide telecom contract to Networx is smooth and easy.
