The $20 billion Networx deal announced today by the General Services Administration was great news for AT&T, Verizon and Qwest Communications, but it also may be good news for enterprise customers as it is likely to speed deployment of some new technologies, especially IP Version 6.

The bad news of the day was delivered to Sprint Nextel, which had participated in the two previous GSA contracts, but was cut out of this one.

The 10-year Networx Universal contract covers telecom services, including voice, IP, wireless, satellite and IP-centric services to 135 federal agencies across 191 countries. The contract is intended to transform the current federal telecommunications network to an IP-MPLS operation based on IP V.6 and is expected to include other technological innovations. The complete Networx deal, to include the Networx Enterprise segment to be announced in May, has an estimated value of $20 billion. The May award is a smaller piece, intended to involve cutting-edge technology and specific network sites, with awards also available for small to mid-sized businesses.

By focusing on next-generation technologies, the Networx deal will enable Qwest to bring new services to its business customers more quickly, said
Tom Richards, executive vice president of Qwest Business Markets Group.

“This is so synergistic with the climate that we saw in the commercial market space that it enables us to expeditiously bring to market a lot of new services and capabilities that will benefit our business customers,” he said.

Because the GSA contract specified IPV6, it will specifically boost that technology, said Don Herring, senior vice president, AT&T Government Solutions.

“In the cast of IP V6, I think the federal government is pushing the mandate through OMB [Office of Management and Budget],” he said. “IPV6 has been slow to take off in general so this will hopefully accelerate IPV6 in the commercial world.”

AT&T, Qwest and Verizon must now compete for the business of individual agencies on an agency by agency basis.

“I tell people this is like a hunting license,” Richards said. “When you sell to the federal government, you have to have a contract vehicle – this gives the three of us the vehicle we can use to go in and compete for services.”

“This is just the first step – now the real work begins,” Herring agreed.

Qwest is already a major supplier to the federal government, although it has not been part of any previous GSA contracts. “This was all upside for us,” Richards said. “This is a continuation of the positive trend and the number of milestones we have seen in Qwest’s performance, and it’s a significant opportunity for us to expand our federal government business.”

AT&T was part of the first GSA contract but not the second, and is looking forward to a chance to leverage its newly combined resources, including Cingular Wireless, Herring said.

“I think just the fact we do have it under one umbrella helps – convergence is upon them now,” he said. “Some agencies are at one level, in terms of convergence, and some at another. Being under one umbrella contractually and strategically puts us in a good position. What we will do is ask them what problem they are trying to solve and then we’ll back that up with applied technologies.”

In particular, AT&T believes its business continuity and disaster recovery services will have broad appeal, he added.

The GSA goal in all of this was to transform a network but also keep down costs.

“Award of the Networx Universal contracts is an historic moment at GSA, and reflects our goal of providing transformational products and services to our federal customers at the best prices available in the marketplace," said GSA Administrator Lurita Doan, in a prepared statement. “I look forward to working with our new industry partners to provide the best possible service and value to our customer agencies and the American taxpayer.”

Networx is the third and largest in a series of government telecom procurements, following FTS2001. The awards represent a defeat for Sprint Nextel, which was part of the two previous GSA contracts. This is the first time the GSA has chosen three primary providers, who now will compete for government agency business.

"We are proud of the message this program conveys about GSA's ability to deliver large acquisitions on schedule," said GSA's Federal Acquisition Service Commissioner Jim Williams. "This effort represents a new era for GSA. The advanced technologies and services defined in the Networx program will serve as a platform to transform the government's telecommunications infrastructure to a more seamless and secure environment. I am extremely proud to be associated with the Integrated Technology Service Networx Team."