# Presentation: 703839

## FTS Networx Program 

**Karl Krumbholz**
**FTS Networx Program Manager**
**September 30, 2004**

## FTS Networx Program History

**Networx is the third in a series of major competitive full service telecommunications acquisition programs, that:**
**Leverage the volume of government requirements **
**Provide the lowest prices in the telecommunications marketplace**
**FTS 2001 provides eight-year pricing that has saved over $1.6 billion to date **
**Agencies today carry 3-5 times more traffic at 30% less cost on FTS2001 than at contract award**

## Network Services Growth vs. Economic Value

- Network Services *Growth vs. Economic Value*

**Price reduction**

**Volume Growth**
**(Data Services)**

**Price**
**Reduction**

**Volume**
**Growth**

**Notes:**
GSA continues to demonstrate value over decades:
This slide demonstrates that value:
Data volume has grown by 300%
Since 1999 price has declined by approx 15% per year
Cumulatively, price has declined by over 65%.  
Voice service prices have approached commodity level
In 1990, average switched voice price was 15¢/min, today it’s < 2¢, in 2006 it will be less than 1¢
Similarly, average cost per Mbps was $2,200, today is $500 

## Contract Dates

- Sprint

- MCI

- AT&T

- Verizon

- SBC

- Winstar/ID

- Qwest

- Networx

**12/07**

**01/08**

**05/08**

**01/09**

**03/09**

**11/10**

**05/11**

**05/17**

**01/04**

**01/06**

**01/08**

**01/10**

**01/12**

**01/14**

**01/16**

- With 1 year extensions

**05/06**

## FTS Acquisition Challenges 

**Develop a program that replaces current services and provides for growth of emerging services while,**
**Continuing to leverage volume and competition**
**Provide greater choice**
**Delivering superior customer services**

**Notes:**
     As I indicated, Program requirements are described in the IMC FTS Networx Program Goals which I will describe briefly:
Service continuity.  All services to all geographic locations that are currently offered on current FTS2001 and wireless contracts.  
Highly competitive prices.  Prices that are better than prices available elsewhere in the telecommunications marketplace.  
High quality service.  Include enforceable agreements that will ensure that high quality service is delivered throughout the term of the contracts.
Full service vendors.  Access to industry partners that provide a broad array of services and that can add follow-on services when and where requested. 
Alternative sources.  Access to and competition among a greater number of vendors that provide new enhanced services and emerging technologies to ensure best value alternatives throughout the life of the program.
Operations support.  Fully integrated ordering, billing and inventory management to improve management and control costs of agency telecommunications programs.  
Transition assistance and support.  Provisions that facilitate industry partner transition coordination and support 
Performance based contracts.  FTS Networx will provide performance based contracts with Service Level Agreements to the extent possible.

## FTS Networx Program DevelopmentAgency Coordination

**FTS Research **
**and Strategy**
**Development**

**Agency **
**Coordination**

- ***The IMC is a senior management group comprised of representatives from government agencies that provides customer oversight and guidance to FTS on the management of FTS programs   **

**FTS developed and obtained concurrence on the initial strategy with the Interagency Management Council (IMC) in the Spring of 2003**

**Notes:**
     Following this briefing, we will continue to make preparations to release two Draft RFPs on November 1, 2004.  The Drafts will be posted on the Networx Web site: at WWW.GSA.gov\networx following an announcement on FEDBIZOPPS.  The Networx Final RFPs will be released on April 1, 2005 and awards are scheduled to be made in April of 2006.  
     Following Awards, Agencies will make selections following the Fair Opportunity Process as defined in the FAR and will transition to the new contracts.

## IMC/FTS Networx Relationship

**FTS Commissioner****Sandra Bates**

**FTS Networx**
**Program Manager **
**Karl Krumbholz**

**AC For Service **
**Development and Delivery**
**John Johnson**

**Strategy **
**Working **
**Group**

**Transition **
**Working **
**Group**

**Operations**
**Planning **
**Working Group**

**Technical**
**Requirements **
**Working Group**

**Networx **
**Project Teams**

**Program Information**

**Program Direction**

**Technical**
**Requirements**

**Operations**
**Planning**

**Transition**

**Notes:**
     The FTS team and IMC representatives remain in lockstep on the Networx program.  In addition to close working relationships at the Commissioner and Assistant Commissioner level with Jan Lilja, the chairperson, and with the Interagency Management Council membership, the Networx team meets regularly with the membership of 4 IMC working Groups:  Strategy, Technical Requirements, Operations Planning and the Transition Working Group.  Though these groups, FTS customers have defined program requirements through the statement of program goals, validated the strategy, reviewed and approved technical specifications and performance based services, operational requirements, and have worked diligently, for more than a year in planning efforts that will prepare agencies for the transition from current FTS industry partners to the Networx awardees.  Clearly this strategy and the services to be competed have been fully vetted with agency representatives and will meet the mission requirements of all the agencies currently using FTS services. 

## FTS Networx ProgressGoals

**Notes:**
     Following this briefing, we will continue to make preparations to release two Draft RFPs on November 1, 2004.  The Drafts will be posted on the Networx Web site: at WWW.GSA.gov\networx following an announcement on FEDBIZOPPS.  The Networx Final RFPs will be released on April 1, 2005 and awards are scheduled to be made in April of 2006.  
     Following Awards, Agencies will make selections following the Fair Opportunity Process as defined in the FAR and will transition to the new contracts.

## FTS Networx ProgressInitial Strategy

**FTS Research **
**and Strategy**
**Development**

**Networx**
**Goals/Initial **
**Strategy**

**Agency **
**Coordination**

**Initial Networx Strategy**

**2 Acquisitions**
**Mandatory Full Service **
**Expanded Choice**
**9-Month delay between acquisition 1 and 2**
**Extensive Billing and Ordering data requirements**

**Notes:**
     Following this briefing, we will continue to make preparations to release two Draft RFPs on November 1, 2004.  The Drafts will be posted on the Networx Web site: at WWW.GSA.gov\networx following an announcement on FEDBIZOPPS.  The Networx Final RFPs will be released on April 1, 2005 and awards are scheduled to be made in April of 2006.  
     Following Awards, Agencies will make selections following the Fair Opportunity Process as defined in the FAR and will transition to the new contracts.

## FTS Networx ProgressIssued RFI

**FTS Research **
**and Strategy**
**Development**

**Initial Networx**
**Goals/Strategy**

**RFI**

**Agency **
**Coordination**

**Agency **
**Concurrence**

**FTS received extensive and valuable feedback from industry, Specifically on: **
**Entry criteria (ubiquity vs continuity)**
**Number and timing of acquisitions (One or two acquisitions)**
**Billing and Ordering**
**Use of Multiple Award Schedules**
**FTS conducted extensive research and analysis in addressing comments**
**Revised Strategy while adhering to Agency goals**

**Notes:**
     Following this briefing, we will continue to make preparations to release two Draft RFPs on November 1, 2004.  The Drafts will be posted on the Networx Web site: at WWW.GSA.gov\networx following an announcement on FEDBIZOPPS.  The Networx Final RFPs will be released on April 1, 2005 and awards are scheduled to be made in April of 2006.  
     Following Awards, Agencies will make selections following the Fair Opportunity Process as defined in the FAR and will transition to the new contracts.

## FTS Networx ProgressRevised Strategy

**FTS Research **
**and Strategy**
**Development**

**Initial Networx**
**Goals/Strategy**

**RFI**

**Revised**
**Networx **
**Strategy**

**Agency **
**Coordination**

**Stakeholder**
** ****Feedback – **
**Program **
**Revision**

**Agency **
**Concurrence**

**Two Simultaneous Acquisitions:**
**Networx Universal**
**Networx Enterprise**

**Notes:**
     Following this briefing, we will continue to make preparations to release two Draft RFPs on November 1, 2004.  The Drafts will be posted on the Networx Web site: at WWW.GSA.gov\networx following an announcement on FEDBIZOPPS.  The Networx Final RFPs will be released on April 1, 2005 and awards are scheduled to be made in April of 2006.  
     Following Awards, Agencies will make selections following the Fair Opportunity Process as defined in the FAR and will transition to the new contracts.

## Networx Strategy - Universal

**Designed to meet the needs of Agencies for Continuity and Full Service**
**Provides for all services to all locations currently served by FTS2001 – nationwide service and geographic continuity**
**Most services will be mandatory to bid**
**Length of contract: 4 years with 3, 2 year options**
**MRGs:  Small – relative to FTS2001**
**Small business strategy still being developed**
**Number of awards:  Multiple – The number of awards will depend on the quality of the offers received **

## Pricing - Networx Universal

**Must price Mandatory Services**
**Must offer Prices for 39 services**
**Must offer Serving Wire Center (SWC) access prices as required to meet continuity profile (serve approx 15,000 SDPs)**
**May provide building specific access prices if lower than SWC prices**
**Government will provide SDPs & SWCs in pricing model**
**Must price SWCs where service is offered commercially **
**May price non-mandatory services**

**Notes:**
For Universal, offerors must price the 39 mandatory services I covered in the technical section of this brief.  Offerors must also provide prices for the 5,385 serving wire centers which provide service to our population of over 15,000 government SDPs, mostly buildings.  Service providers may offer prices at the building sites if that access price is lower than the SWC.  Additionally, service providers, as in FTS2001, are required to provide access prices for SWCs where service is offered commercially.  Finally, providers may price any or all of the 10 optional services for Universal. 

## Universal Continuity

_***29,598 Domestic Wire Centers***_** required today to bid Ubiquity.**
**15,042 buildings served by **_***5,385  Domestic Wire Centers***_**. Reduces the wire center pricing requirement by over 70%**

**Notes:**
In Networx Universal, we’ve reduced the footprint a service provider must bid by over 70% when compared to the requirements of FTS2001.  For Universal,  the service provider must, at a minimum,  offer prices for the mandatory services and price the Serving Wire Centers depicted above. 

## Networx Strategy - Enterprise

**Awarded at the same time as Universal**
**Designed to meet the needs of Agencies for alternative sources**
**Some services will be mandatory to bid, most will not.  **
**Length of contract: 4 years with 3, 2 year options**
**MRGs:  Small – relative to Enterprise**
**Small business strategy still being developed**
**Number of awards:  Multiple – The number of awards will depend on the quality of the offers received**

## Pricing - Networx Enterprise

**Must offer 9 mandatory IP and Security services for availability at 297 Government locations**
**The 297 locations are actual government buildings presently with data service and T-3 or higher access**
**Must offer, at a minimum, SWC access prices for T-3 and lower speeds as specified in the bid model (the 297 locations)**
**Must price SWCs where service is offered commercially**
**May price non-mandatory services**
** ****- OR -**** **

**Notes:**
So, if you are a potential data provider on Enterprise, the above describes what you must offer prices on to bid Enterprise.  If you are a potential wireless service provider, we’ll discuss your pricing requirements in the next slide. 
We’ll take a moment to cover each of the bullets, because they provide the detail you need to understand for pricing Enterprise. 

Cover each bullet.......

## Pricing - Networx Enterprise

**Must offer Cellular/Personal Communications Services to following nationwide profile**
**Provide and price service in 100% of Metropolitan Statistical Areas and, at least, in 90% of Rural Statistical Areas **
**May offer prices for additional services**

**Notes:**
If you desire to offer wireless service, the above are the pricing requirements.  Brief each bullet. 

## Pricing - T-3 for Enterprise

**297 buildings are served by FTS2001 today with T3 or greater access **
**83% of the buildings are within 100 miles of a Top 50 city**

**Notes:**
The above profile is the nationwide profile we will use for pricing Enterprise.   These are the government locations served today by T-3 or higher access with data services.  We will require offerors to price, at a minimum, T-3 and lower speeds at these locations, and price the mandatory technical services discussed earlier. 

## Technical Structure

**Technical Requirements consist of:**** **
***20 Telecommunications Services***
**Solutions that provide end to end communication**
***14 Management and Applications Services***
**Provides management of network enterprise solutions, reduces operation costs**
***8 Security Services***
**Ensures specific security levels are met to prevent cyber attacks & unauthorized access**
***3 Special Services***
**Includes 2 Satellite (Networx Universal only, optional)**
***4 Wireless Services***
***4 Access Services (Enterprise only)***
**Enables agencies to connect to other transport networks**

**Notes:**
So, t the top level, the technical requirements for Networx are contained in 53 services derived from FTS2001 and mods, and from our market research and agency requirements.  20 provide end to end telecommunications solutions, 14 are management and applications services, and 8 are security oriented.  The rest are wireless and satellite, and access.  

## Universal Services
39 Services Mandatory
10 Services Non-Mandatory
Newly Emerging Services and Sunset Services

Enterprise Services
 9 Mandatory Services
Secure IP and Managed Network Service
42 Non-Mandatory Services

***39 Services Mandatory***
***10 Services Non-Mandatory***
**Newly Emerging Services and Sunset Services**
**Enterprise Services**
*** ******9 Mandatory Services***
**Secure IP and Managed Network Service**
***42 Non-Mandatory Services***

- Technical - Networx Universal and Enterprise Services

**Notes:**
At a top level,  for Universal,  service providers must offer 39 services.  Universal is designed to meet agency requirements for full service vendors.  10 services are not mandatory to bid.   We made these decisions based on your RFI feedback.....these services are largely newly emerging services not expected to be offered by many vendors or legacy services expected to phase out. 

On Enterprise, 9 service are mandatory...these services meet agency requirements for additional vendors with secure IP networks, who can also offer agencies flexible solutions using Managed Network Services. 

## Technical - Networx Universal Services

**Notes:**
Now, let’s get down to specifics........These are the 39 services which you must offer if you are to bid on Universal.......they are mandatory for Universal.  Most services are required to be offered on Universal. 

## Technical - Networx Universal Services

**Notes:**
The services in green are optional to bid on Universal....Again, we largely used your RFI feedback to determine those services which are either considered sunset and being phased out,  or too new to be offered by all of you.  Ethernet across the backbone, Dark Fiber, Unified Messaging, Collaboration Support are optional.  Internet Fascimile,  very important to some agencies, but not widely offered, is optional.  Note satellite services and land mobile radio will be optional to bid which is consistent with RFI feedback.  Finally, two wireless legacy services are optional. 

## Technical - Networx Enterprise Services

**Notes:**
Now, let’s leave Universal and discuss Enterprise.  There are two groups of mandatory service for Enterprise which conform with the entry criteria already discussed.  Now , let me make this point clear from the outset......we have two options on Enterprise........One set of requirements is for offering wireline service, and one for wireless service. 
I plan here to discuss what you must offer for  wireline.......I’ll discuss the wireless option when I get to pricing.
 There are 9 mandatory IP, management and application, and security services which must be bid.  For wireline,  you must be able to offer, at a minimum, Network based IP VPN, VOIP transport and IP.  This is our minimum requirement for the agencies and should encourage offerors that they can pursue services needed by agencies for this acquisition.  Additionally, you must offer Managed Network Service and Customer Specific Design Engineering, which are two services which allow providers to offer custom solutions. Finally, you must offer a minimum level of security.  This suite meets our minimum requirements and ensures that any Enterprise winner has an attractive offering for the agencies. For wireless, the only mandatory service which must be bid is Cellular/Personal Communications Service, which is the basic wireless service.  

This blend of service offerings provides value that our agencies seek......

Enterprise is oriented towards those service providers who can’t meet the tougher requirements on Universal but can still offer solutions sought by and of best value to our agency clients.  Note, there are 11 mandatory services which must be offered and priced to meet the minimum IP requirements for Enterprise and our agencies.  These are services which will provide secure IP solutions. 
Additionally, under Enterprise, since this procurement is planned to replace Federal Wireless,  we have
Additionally, if you are planning to bid wireless services

## Technical - Networx Enterprise Services

**Notes:**
All other services will be optional to bid on Enterprise.  

This construct ensures that offerors provide immediate value to our customers, while,  providing additional flexibility for service providers to package their best approach for offering services to the government.  It is an approach for our services to be packaged to meet a mimimum level of agency requirements that ensures all offerors will provide desired value, while allowing providers to offer what they do best. 

## Technical – Performance Based Specification (Example – Voice Services)

**Functional Definition.**
**Standards.**
**Connectivity.**
**Technical Capabilities.**
**Voice Services Features.**
**Voice Services Interfaces.**
**Voice Services Performance Metrics.**

**Notes:**
Each service on Networx will be specified using a performance based specification.  This spec will describe the service functionally, bound the service by describing standards and interfaces to comply with, distinguish between the technical capabilities which are standard to the service and priced as part of the basic service, and features which must be offered but are separately priced and procured only if needed by our agency clients.  Finally, metrics are provided which detail the performance thresholds for delivering the service.  Again, we are moving towards a technology independent network that is performance based. I’ll now illustrate how this works with an example, for voice services.  

## Ordering

**All Agencies will order directly from the selected vendor**
**Designated Agency Representative (DAR) places order**
**Vendor selection will be made in accordance with FAR Fair Opportunity process **
**Industry Partner provides acknowledgements for order acceptance and completion**
**Industry Partner provides for status updates and inquiries from ordering Agency**
**SLA for provisioning interval**

**Notes:**
Under Networx, Agencies will order services using procedures similar to FTS2001.  Each Agency will designate an ordering representative, who the Industry Partners will train on their respective ordering systems.  During the provisioning process, the Industry Partners will be required to acknowledge order receipt and acceptance as well as completion and have a process or mechanism for providing order status.
We expect the RFP will define a service level agreement for the provisioning interval.

## Billing

**Consistent with process under current contracts**
**Centralized**
**Direct**
**Disputes:  Intervals will be defined for Industry Partner’s response to and reconciliation of reported errors**
**Verification:  SLA will be defined for billing accuracy compared to orders completed as well as to billing records**

**Notes:**
Billing on the Networx contract will be done the same as it is under the current contracts.  Agencies can declare either direct billing or FTS-centralized billing.  
Furthermore, we expect to have SLAs attached to the billing process for disputes and accuracy.
Following my presentation, James Clatterbuck, the Chief of our Billing Branch, will discuss the detailed elements required for billing.

## Network Management

**24x7 surveillance and repair**
**Notification of outages to GSA and affected Agencies**
**Quality of service managed through reports **
**Notifications of scheduled and emergency changes**
**Monthly reports of performance against SLAs**
**Disaster Recovery and NS/EP**
**24x7 customer support for reporting and status on service problems, complaints, or inquiries**

**Notes:**
The Networx providers must provide for 24x7 monitoring and repair of services delivered.  
We will specify procedures for notifying appropriate govt agencies when an outage does occur, and we’ll use the vendors’ monthly reports of network failures and impairments to oversee fault management.
Providers will give advanced notice to GSA and the affected Agencies for any schedule maintenance or changes as well as for emergency changes.
We will monitor adherence to service SLAs, defined in the technical section of the contract, as well as MOPS and any other performance requirements, through monthly reports from the Industry Partners and through our own records of performance.
Disaster recovery requires maintaining a state of readiness to respond to emergency situations that affect network services delivered to the Government.  It includes identifying a NS/EP liaison to the PMO for coordinating and prioritizing restoral efforts, notification of disaster and updates to the GSA PMO, a plan for responding and restoring service, and ensuring failover of network management capabilities.
Finally, Industry Partners must provide a method for 24x7 reporting of problems, complaints, or inquiries and updates to those reports.
I will now briefly describe our strategy for transition.

## Agency Selection Process

**To get business, offerors must win a Networx Contract and an agency task order**
**Agency will evaluate awardees on each acquisition**
**Universal Only (Full Service)**
**Enterprise Only (Reduced set of Services)**
**Universal and Enterprise separately (Two Competitions)**
**Agencies conduct fair opportunity to choose follow-on provider(s) of Networx services**
**Current services may be transitioned to either contract and to one or more vendor**
**Universal was created specifically for Agencies who want full service from a “one stop Provider”**

## FTS Networx Progress

**FTS Research **
**and Strategy**
**Development**

**Initial Networx**
**Goals/Strategy**

**RFI**

**Revised**
**Networx **
**Strategy**

**Transition**
**Complete**

**Draft RFP**
**1 Nov 04**

**FTS Networx**
**Awards**
**1 Apr 06**

**Agency Vendor**
**Selected**

**Issue**
**RFP**
**1 Apr 05**

**Proposals**
**Received**

**Agency **
**Coordination**

**Industry **
**Response**

**Stakeholder**
** ****Feedback – **
**Program **
**Revision**

**Evaluations and**
**Negotiations**

**Agency **
**Concurrence**

**Complete**
**Draft RFP**

**Stakeholder**
** ****Feedback**

**Agency Fair**
**Consideration**

**Transition**

**Today**

**Notes:**
     Following this briefing, we will continue to make preparations to release two Draft RFPs on November 1, 2004.  The Drafts will be posted on the Networx Web site: at WWW.GSA.gov\networx following an announcement on FEDBIZOPPS.  The Networx Final RFPs will be released on April 1, 2005 and awards are scheduled to be made in April of 2006.  
     Following Awards, Agencies will make selections following the Fair Opportunity Process as defined in the FAR and will transition to the new contracts.

## Transition Challenges

**Agency contractor selection**
**Fair opportunity process**
**Tools and contract data**
**Identification of resources**
**Contactor support**
**Initiation charges and implementation costs**
**Infrastructure upgrades**
**Advance planning**
**Notify people who will be affected**
**Provide information and training**
**Validate Inventories**
**Scheduling and upgrades**
**Real-time management, validation and follow-up**
**Order placement**
**Reporting**

## FTS Networx Summary

**FTS Networx continues to meet Agency Goals**
**Two Simultaneous Acquisitions; Universal and Enterprise**
**Ubiquity now continuity**
**Switched Voice now voice service**
**Includes new IP service and security offerings**
**Billing requirements refined**
**Performance based**
**Multiple Awards**
**Comprehensive program designed to provide Agencies the best value and most advanced telecommunications services available**

**Notes:**
In summary, we have a performance based specification that includes services which ensure operational continuity for service provided today, and provides the new services needed as we grow into the Secure Next Generation Networks envisioned for the future.  You now understand what services are mandatory and non mandatory for each Networx acquisition, and you should be aware of the unique government requirements for Section 508 compliance and NS/EP.
You should also now have a basic understanding of the price structure you’ll see in the draft RFP and what the pricing requirements are for Universal and Enterprise.  Finally, the Government will provide you with the specific CLINS, pricing tables, and pricing models needed to ensure a common understanding of the specific pricing requirements for the RFP. 

We are well underway to finish our work and complete the draft RFP by December.  We look forward to your comments and feedback. 

## For Additional Information

**FTS Networx Program **
**Karl Krumbholz                                Fred Schobert**
_**[Karl.Krumbholz@gsa.gov](mailto:Karl.Krumbholz@gsa.gov)**_**               **_**[Frederick.Schobert@gsa.gov](mailto:Frederick.Schobert@gsa.gov)**_
**703 306-6601                                     703 306-6632                                     **
**FTS Networx Website:**
**www.gsa.gov/networx**
**Briefings**
**Questions and Answers**