Telecommunications: GSA Needs to Share and Prioritize Lessons Learned to Avoid Future Transition Delays
Published: 2013-12-05T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: GSA is responsible for ensuring that federal agencies have access to the telecommunications services and solutions needed to meet their mission requirements. As agencies' telecommunications needs have evolved, so too have GSA's contracts to help support them. Its latest contracts, signed in 2007 and collectively called Networx, provide transport; Internet protocol; wireless; and management and application services, among others. In fiscal year 2012, agencies spent over $1.4 billion on Networx services. However, the transition from the previous telecommunications contracts, known as FTS2001, has not been easy, taking almost 3 years longer than planned.
GAO's objectives were to determine (1) what factors contributed to the delay in transitioning services to Networx and the consequences due to the delay, and (2) to what extent GSA is documenting and applying lessons learned as it prepares for the next telecommunications contract transition. GAO examined lessons learned activities and supporting documents, cost and missed savings estimates, performed case studies at two agencies with large delays, and interviewed agency and service provider officials.
section_title: What GAO Found
paragraphs: Complex acquisition processes and weaknesses in project planning contributed to the delays experienced on the Networx transition, resulting in cost increases and missed savings. In particular, the complexity of the acquisition process was related to duplicative contract vehicles, the large number of service options, and changes related to the process for ensuring fair competition among service providers, among others. These issues were reported by the General Services Administration (GSA) to have been compounded by a decline in contracting and technical expertise within the agencies. GAO has identified skills gaps in the federal workforce as a government-wide high-risk area and highlighted the need for agencies to work with the Office of Personnel Management (OPM) to close them. Weaknesses in agencies' project planning also contributed to the delays. For example, agencies tended to transition easier items first, to demonstrate progress, before they transitioned items that needed a long lead time such as data networks and international services. As a result of the delays, GSA's estimated cost to complete the transition increased by $66.4 million, 44 percent over the baseline estimate. In addition to the extra transition costs, agencies may have paid more for similar services by staying on the FTS2001 contracts longer than planned. Specifically, in April 2010, GSA estimated that agencies could have saved 28.4 percent of their spending on FTS2001 by using Networx contracts instead. Based on this rate of savings, GAO estimates that agencies could have saved about $329 million if they had transitioned to Networx on time.
The extent to which GSA is documenting and applying lessons learned in preparation for the next telecommunications transition varies. GSA has fully or partially satisfied five of six key practices necessary for a robust lessons learned process. To its credit, GSA has collected, analyzed, and validated lessons learned from the Networx transition. However, it has not fully shared these lessons with its customer agencies or prioritized them to ensure that resources are applied to areas with the greatest return on investment. GSA plans to finalize its next telecommunications acquisition strategy in December 2013 and begin the next transition when it awards new contracts in February 2017. Fully addressing key lessons learned practices should help GSA and agencies better plan for and execute the next telecommunications transition.
section_title: What GAO Recommends
paragraphs: GAO recommends that, in preparing for the next transition, GSA, in coordination with OPM, examine potential government-wide expertise shortfalls, and that it provide agencies guidance on project planning and fully archive, share, and prioritize lessons learned. GSA and OPM agreed with GAO's recommendations.

section_title: Letter
paragraphs: The General Services Administration (GSA) is responsible for ensuring  that federal agencies have access to the telecommunications services  and solutions that they need to meet their mission requirements. As  agencies’ telecommunications needs have evolved, so too have GSA’s  contracts to help support their needs. Currently, contracts established in  2007 and collectively known as Networx provide voice and data  communications transport services, Internet protocol services, wireless  and satellite services, information security, and management and  application services. GSA reports that in fiscal year 2012, agencies spent  over $1.4 billion on Networx services. However, this evolution has not  been easy. The latest transition, from the previous telecommunications  contracts known as FTS2001 to Networx, took almost 3 years longer than  planned.
At your request, we conducted a study of the Networx program. Our  specific objectives were to determine (1) what factors contributed to the  delay in transitioning services to Networx and the consequences the  federal government experienced as a result of the delayed transition, and  (2) to what extent GSA is documenting and applying lessons learned as it  prepares for the next telecommunications contract transition.
To identify causes for the delay, we assessed key documentation,  including transition project plans, management reports, and lessons  learned results from GSA and two case study agencies, the Social  Security Administration (SSA) and the U.S. Army Corps of Engineers. We  selected the case study agencies based on the extent of their delays in  transitioning and their spending on telecommunications. To determine the  consequences of the delay, we compared GSA’s latest transition cost  estimates with its 2004 cost estimate, and assessed its April 2010  analysis of the federal government’s potential savings resulting from  transitioning from FTS2001 to Networx. To assess the reliability of the  cost data, we tested them to identify obvious problems with completeness  and accuracy, and interviewed knowledgeable agency officials about the  systems and processes in place to collect and verify the data. On the  basis of these steps, we determined these data to be sufficiently reliable  for the purposes of our report. To assess the extent to which GSA is  identifying and applying lessons learned, we compared GSA’s lessons  learned process and supporting documentation with leading practices.  We also interviewed GSA, SSA, U.S. Army Corps of Engineers, and  Office of Management and Budget (OMB) officials, and representatives  from all of the FTS2001 and Networx contractors.
We conducted this performance audit from December 2012 to December  2013, in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives. More details about the  scope and methodology can be found in appendix I.
subsections: section_title: Background
paragraphs: GSA is responsible for ensuring that federal agencies have access to the  telecommunications services and solutions that they need to meet  mission requirements. The organization responsible for carrying out these  duties is the Integrated Technology Services Office within GSA’s Federal  Acquisition Service. Within the Integrated Technology Services Office, the  Office of Network Services Programs develops and manages programs  for federal civilian and military agencies that are intended to deliver cost-  effective administrative and technical support for telecommunications and  network services. To provide cost savings to agencies, GSA aggregates  requirements and develops government-wide contracts.
subsections: section_title: Networx Provides Contract Vehicles for Agencies to Acquire Telecommunications Services
paragraphs: Networx is the latest in a series of programs GSA has offered to agencies  to provide telecommunications services. It is the successor to the  FTS2001 program, which began in the late 1990s. FTS2001 was  composed of two large contracts, one awarded to Sprint in December  1998 and one awarded to MCI in January 1999. The program also  included contracts that had been awarded to local telecommunications  contractors for selected metropolitan areas. GSA allowed the local  telecommunications contractors to also offer long distance services on  the FTS2001 contracts. These contracts were termed “crossover  contracts,” and were with AT&T and Qwest, among others.
In 2003, GSA, in conjunction with a group of senior federal information  technology officials known as the Interagency Management Council,  developed a successor program—Networx—to replace the FTS2001  contracts. Networx was to provide agencies with traditional and emerging  services to meet current and future requirements.
GSA identified several goals for the program, including several that were  specific to the transition from FTS2001 to Networx. The goals for the  transition included minimizing service impact, transitioning telecommunications services before the FTS2001  contracts expired, expediting the availability of new services, and minimizing transition expenses.
GSA’s, the Interagency Management Council’s, and other key  participants’ roles and responsibilities in carrying out the transition from  FTS2001 to Networx are described in table 1.
In 2007, GSA made multiple awards of task- and delivery-order contractsto five vendors under this program as vehicles for agencies to procure  telecommunications services. These contract vehicles are known as  Networx Universal and Networx Enterprise. Networx Universal contracts  were awarded to AT&T, Verizon Business Services, and CenturyLink in  March 2007. In May 2007, Networx Enterprise contracts were awarded to  these three vendors as well as to Level 3 Communications and Sprint  Nextel Corporation.contracts.
section_title: Complex Acquisition Process and Weaknesses in Project Planning Contributed to Networx Transition Delays, Resulting in Increased Costs and Missed Savings
paragraphs: Several factors contributed to delays in transitioning from FTS2001 to  Networx. In particular, the complex Networx acquisition process  compounded by a reported lack of telecommunications and contracting  expertise within the agencies contributed to delays. Weaknesses in  project management also contributed to the delays. As a result of the  delays, GSA experienced increased costs, and agencies missed savings.
subsections: section_title: Complex Acquisition Process Compounded by Limited Agency Expertise
paragraphs: The complexity of the acquisition process was related to duplicative and  overlapping contract vehicles, the large number of potential service  options for a given requirement, and challenges related to implementing  the fair opportunity process, among others. The complexity was  compounded by limited contract and technical expertise at some  agencies.
Duplicative and overlapping contract vehicles. According to GSA’s  analysis, the establishment of two Networx contract vehicles—Universal  and Enterprise—created confusion with customer agencies and added  administrative cost for GSA. The two-contract-vehicle strategy was  intended to address Networx program goals to provide all services that  were available under FTS2001, as well as to provide access to a greater  number of competing vendors that would provide new, enhanced services  and emerging technologies. The Universal vehicle was intended to focus  on the first of these goals, while the Enterprise vehicle was to focus more  on the second. However, because of industry consolidation by the time  the contracts were awarded, the strategy was not as effective as had  been envisioned. Specifically, three of the five contractors awarded  Enterprise contracts were also awarded Universal contracts, and most  services are provided on both contracts. Having two vehicles essentially  doubled GSA’s management and support responsibilities, and significant  overlap existed with the two contracts. GSA agreed that the  Universal/Enterprise construct should not be repeated in the follow-on  NS2020 program.
Decoupled contract services. According to GSA and some service  providers, another key factor that contributed to delays was that agencies  could not purchase multiple services bundled into a single item on the  Networx contracts. Specifically, Networx contracts did not permit this type  of bundling, as the FTS2001 contracts had. Instead, the Networx  contracts offered services by detailed contract line items in order to allow  agencies to more accurately identify and maintain inventories of the  services they were purchasing. Agencies were expected to map their  existing FTS2001 services to the individual services on Networx, using a  tool called the Networx Unit Pricer. To facilitate this, agencies were  expected to use the Networx Unit Pricer to compare unit prices at the line- item level across the Networx Universal and Enterprise contractors and,  where available, the FTS2001 contracts. However, the growth in the  number of services offered (54 on Networx compared with 26 on  FTS2001) and the number of contract line items (about 5,100 in the  original contracts), including some that vary by location and bandwidth,  led to a number of different potential service options for any given  requirement.
To address this challenge, many agencies developed statements of work  to request proposals from the contractors instead of using the Networx  Unit Pricer. However, GSA had expected that the vast majority of orders  would be placed using the Networx Unit Pricer and would not require the  development of statements of work. Thus, this process added to GSA’s  planned workload, requiring GSA to review the statements of work to  determine if the requirements were within the scope of the Networx  contracts and assist in ordering them. If the requirements were not in the  scope of the contracts, additional time was required to modify the  contracts. (This extra work, for example, resulted in the number of  contract line items increasing from 5,100 to 13,400 as of June 2011.)
Challenges related to the fair opportunity process. Finally, according to  GSA, agencies experienced challenges in implementing the fair  opportunity process because of a lack of clear guidance on changes that  were made to the process after GSA awarded the contract vehicles. At  the time the Networx contracts were awarded, potential contractors could  protest (i.e., contest) the issuance of an order only when an order  increased the scope, period, or maximum value of the contract under  which the order was issued. However, soon after the Networx transition  was under way, changes were made to the procurement statutes that  resulted in agencies needing to take more measures than in the past.  Specifically, the statutes were modified to allow protests of the issuance  or proposed issuance of task or delivery orders above $10 million (not just  on the grounds that the order increases the scope, period or maximum  value of the contract under which it was issued). In addition, the new  statutes required additional measures in giving all contractors a fair  opportunity to be considered for orders over $5 million. In addition to  lacking clear guidance, according to GSA’s analysis, because agencies  previously relied on GSA to provide expertise on contract processes and  procedures, several agencies lacked expertise in the fair opportunity  process. To GSA’s credit, once aware of this issue, it responded by  providing guidance; however, according to GSA, its guidance was  sometimes inconsistent and created confusion. GSA officials agreed that  different organizations within GSA, such as acquisition support or the help  desk, provided oral guidance to customer agencies that was inconsistent.
According to GSA’s analysis, a decline in telecommunications technical  and contracting expertise in the federal government contributed to some  agencies’ inability to efficiently identify and contract for Networx solutions  for their requirements. In particular, customer agencies requested GSA’s  assistance in developing a statement of work and conducting the fair  opportunity process. Moreover, according to the analysis, customer  agencies are concerned that the shortage of telecommunications  specialists will get worse because there are not enough to replace  experienced workers nearing retirement. Further, since February 2011,  we have identified gaps in the skills of the federal workforce as a high-risk  area that threatens the government’s ability to effectively address national  issues. We have noted that agencies should work with the Office of  Personnel Management, the central human resources agency for the  federal government, to pursue a strategic, government-wide approach to  addressing these critical skills gaps. GSA has yet to fully study this issue,  and agreed that understanding expertise shortfalls would be useful for  future transition planning purposes; however, it has not established a plan  to do so. As we previously reported, sound transition planning practices  include ensuring that personnel with the right skills are in place to support  the transition effort. These skills include contract expertise, legal  expertise, asset management, and program management. Identifying  current and projected shortfalls in critical telecommunication specialist  roles early in the process of planning the next transition could better  position GSA to assist customer agencies and help avoid future delays.
section_title: Customer Agencies’ Weak Project Planning and Execution Issues
paragraphs: Another key factor that contributed to delays was weak project planning.  According to sound transition practices, a transition such as the one from  FTS2001 to Networx should be approached as a critical project.  Accordingly, agencies should develop a project management plan as the  primary document that defines how the transition is to be executed and  controlled, as called for by leading project management practices. As  we previously reported, a transition project management plan should  include, among other things, a time line of all activities that need to be  completed, taking into account priorities relative to the agency’s mission- critical systems, contingency plans, and identified risks. Moreover,  transition plans should be updated on an ongoing basis to reflect the  current status of the project and allow for reporting progress.
However, neither of our case study agencies had a current transition  project management plan or an integrated transition time line. Although  the U.S. Army Corps of Engineers had established a project management  plan in February 2008, it had not established an integrated transition time  line, and had not updated the plan to reflect the current status and  endpoint of the project. Instead, it managed and tracked individual  transition projects separately. For example, it used a spreadsheet to track  the installation of Multiprotocol Label Switching circuits at 868 sites.  However, as of June 2012, according to a GSA report, only about 49  percent of the Corps’s transition had been completed. Using an integrated  transition time line and having an updated project management plan that  included plans for addressing the issues it experienced with its local  vendors might have helped the Corps identify and schedule sites that  needed a longer lead time to upgrade. According to Corps officials, the  transition was complete in March 2013.
In addition, SSA had prepared a transition project management plan by  June 2008, but it had not established an integrated transition time line,  nor had it updated its plan since then. SSA’s transition was divided into  five components, and agency officials reported that three of the  components were complete by March 2011, but that the two most  complex components were not complete as of September 2013. While  they had received contractor plans and schedules for the incomplete  components, they had not updated these plans into one integrated  transition project management plan. According to SSA officials, it was not  feasible to integrate the schedules because of their complexity and  scope. As of September 2013, SSA had yet to finish disconnecting its  FTS2001 services. It has established Networx sole-source task ordersto maintain the services until April 2014, while it completes its transition.
An exception to the fair opportunity process allows a task order to be issued on a sole- source basis in the interest of economy and efficiency if it is a logical follow-on to an order  already issued under the contract, provided that all awardees were given a fair opportunity  to be considered for the original order. percent of the value of the inventory. By planning to transition time- consuming services earlier in the project, agencies could have reduced or  avoided delays incurred.
In planning their next telecommunications transitions, agencies could  avoid delays by approaching the process as a critical project and  establishing transition plans that include detailed time lines that take into  account priorities relative to their mission-critical systems, contingency  plans, and identified risks and are updated to reflect the current status  and endpoint of the transition.
In addition to weaknesses in project planning, our case study agencies  described problems executing their transitions. U.S. Army Corps of  Engineers officials stated that the biggest factor contributing to their  delays was related to installing new services at field sites. Specifically,  they said that installation required additional work by the local  telecommunications vendors, but that the local vendors were not always  cooperative. According to the officials, the local vendors did not have an  incentive to make the upgrades, and would therefore refuse to install the  additional facilities or would quote excessive prices for the installation.
Similarly, SSA described problems related to Networx contractors’  performance in executing its contracts. SSA is working to resolve the  problems, and as previously mentioned, expects to complete its transition  by April 2014.
section_title: GSA Experienced Increased Costs, and Agencies Missed Savings
paragraphs: One result of the delayed transition to Networx was an increase in the  cost of making the transition. Specifically, GSA estimated that the  transition cost increased by $66.4 million, or 44 percent, over the $151.5  million planned in 2004. This included increases in the costs for  contractor support, as well as costs for GSA program management, which  were not included in the 2004 estimate. For example, GSA’s updated  2010 estimate showed an increase from $35 million to $87.3 million for  contractor support through fiscal year 2013 (a $52.3 million increase) due  to the slower-than-expected transition. In addition, in March 2013 GSA  estimated program management costs, such as GSA staff and support  systems, for the period from June 2010—when the transition had been  planned to end as of 2008—through March 2013, when the FTS2001  contracts expired. These additional costs were estimated at $18.1 million.  Table 4 shows the estimated change in transition costs.
In addition to the added transition costs incurred as a result of the delays,  agencies likely paid about $329 million more for similar services by  staying on the FTS2001 contracts longer. According to GSA’s most  recent analysis, in April 2010, the rate of savings agencies could achieve  through a move to Networx was 28.4 percent. Agencies spent about $1.2  billion on FTS2001 services between July 2010 and March 2013, the  period in which transition delays occurred. Applying GSA’s calculated  savings rate to the amount spent on FTS2001 services, we estimate that  agencies could have saved about $329 million.
section_title: GSA Documented Lessons Learned but Has Not Effectively Archived, Shared, and Applied Them
paragraphs: The use of lessons learned is a principal component of an organizational  culture committed to a continuous improvement, which serves to  communicate acquired knowledge more effectively and to ensure that  beneficial information is factored into planning, work processes, and  activities. Lessons learned provide a powerful method of sharing good  ideas for improving work processes, quality, and cost-effectiveness.
We have identified six key practices that can be used to identify and apply  lessons learned. They include (1) collecting information, (2) analyzing the  information collected to identify lessons that lead to recommendations, (3)  validating the accuracy and applicability of lessons to other projects, (4)  archiving the lessons, (5) sharing and disseminating lessons, and (6)  deciding to invest resources to apply lessons learned. Table 5 provides a  description of each of these lessons learned key practices.
GSA collected, analyzed, and validated lessons learned, and partially  archived and shared them. However, it has yet to prioritize and apply  lessons learned. Table 6 summarizes the extent to which GSA satisfied  the lessons learned key practices.
GSA collected information. GSA collected information during meetings  with agencies, vendors, and GSA employees from June 2009 until  November 2010. It also collected information through a study conducted  by Deloitte Consulting from March 2011 through September 2011. The  study included 92 interviews with 117 stakeholders, including GSA  personnel, customer agencies, vendors, and OMB officials. In addition,  Noblis, a contractor that provided GSA project management services,  provided GSA a lessons-learned report. The report was a critique of the  program, based on the contractor’s experiences supporting it.
GSA analyzed the information collected and identified lessons that led to  recommendations. The Deloitte study resulted in a July 2012 report that  identified 27 lessons learned and made 94 recommendations. The  lessons and associated recommendations were arranged by strategic  themes, such as acquisition efficiency, tailored customer service,  operational efficiency, customer partnership, and aggregated  requirements. According to the study, one of the lessons learned was that  agencies found it difficult to make fair opportunity decisions, a mandatory  component of which is price, using the Networx Unit Pricer tool. This  lesson learned resulted in recommendations that GSA should simplify  contract structure, pricing, and communication. In addition, the report  included a recommendation that GSA should consider making fair  opportunity decisions for some agencies as part of the original contract  award.
GSA validated the accuracy and applicability of lessons to other projects.  GSA validated the lessons learned at meetings held in 2012 between  GSA officials and government stakeholders. For example, in September  2012, GSA discussed the lessons learned with agency chief information  officers, who verified their accuracy and applicability. In addition, in  December 2012, GSA officials discussed lessons learned with the  NS2020 Interagency Advisory Panel. GSA officials also reported that they  conducted individual meetings and teleconferences about lessons  learned with agency executives from the Departments of Defense,  Homeland Security, and Justice.
GSA partially archived lessons. Specifically, GSA established a Networx  transition lessons-learned database, which according to the Federal  Acquisition Service Acting Commissioner’s May 2010 statement before  the House Committee on Oversight and Government Reform, was  intended to be used to collect lessons learned from the transition and  efficiently analyze and easily report them. The database includes fields  for title, functional category, identification number, description, submission  date, and recommendation. As of May 2013, it included 38 records, 5 of  which have associated recommendations. However, the database has not  been updated since November 2010 and does not include any of the  information from GSA’s July 2012 lessons-learned report. For example,  the database was not updated with information about the need for  network services expertise that was described in the July 2012 lessons-  learned report. GSA officials explained that they had not considered it  practical to update the database with the detail that is in the report.  Nonetheless, GSA could populate its database with enough information  about each of the lessons learned to allow those responsible for planning  and implementing the next telecommunications transition to search the  database and access key information about the lessons. Moreover,  updating the database on an ongoing basis would help ensure that the  process is not cumbersome and new information is readily available to  stakeholders when the next telecommunications transition begins.
GSA partially shared and disseminated lessons learned. GSA shared  briefings of lessons learned with agencies and OMB. However, its July  2012 lessons-learned report is designated “for official use only,” and GSA  has not made the information in it readily available to agencies and other  transition stakeholders. According to GSA officials, the report is  designated this way because the agency does not want attribution of the  interview responses discussed in the report to be disclosed. Further,  access to the report is controlled by the NS2020 program manager. GSA  officials reported that they intend to only share the lessons learned with  program managers and contracting officers who will be developing the  acquisition plans for the next telecommunications acquisition. While we  agree that it is important to respect the potentially sensitive result of  disclosing attribution, such information would not need to be disclosed in  the lessons-learned database.
By making information on lessons learned readily available to  stakeholders through a database that is updated on an ongoing basis,  GSA would enhance the efforts of those responsible for the next transition  and their ability to avoid the recurrence of past mistakes.
GSA has yet to prioritize and apply its lessons learned. It has not  established a process for determining the most important issues to which  to apply limited resources. Specifically, neither its lessons-learned  management plan nor its lessons-learned process analysis discusses  how the agency has prioritized or plans to prioritize lessons learned by  importance in order to determine which lessons it will invest limited  resources in addressing. Also, while the draft NS2020 strategic plan  stated that it incorporated 63 of 94 recommendations, it does not describe  how it was determined which ones to incorporate. GSA officials stated  that they plan to incorporate the remaining recommendations in other  NS2020 strategic planning documentation and have already begun  investing resources to apply lessons learned. For example, GSA is  investigating improvements in the Networx contract modification life-cycle  process and improving Office of Network Services Programs support  systems. However, GSA officials agreed that they did not have a plan for  prioritizing its lessons learned. Moreover, GSA has yet to fully apply  lessons learned to its next transition because it is still in the process of  developing its next transition strategy. GSA plans to finalize the NS2020  strategic plan by the end of 2013 and then develop its acquisition plans.  According to its lessons-learned management plan, each program  manager responsible for an acquisition plan is to check to ensure that the  lessons captured in the July 2012 report have been applied. Until it  determines which lessons learned are the most important and the order in  which to apply them, GSA lacks assurance that it is using its limited  resources to address the lessons that would provide the most benefit for  the cost.
section_title: Conclusions
paragraphs: Given that the federal government invests at least $1.4 billion in  telecommunications services annually, GSA has an important role to play  in assisting agencies in acquiring these services in an efficient and cost- effective manner. However, the complexity of the process for transitioning  to Networx, which was compounded by a decline in telecommunications  expertise at the agencies as well as weaknesses in project planning,  contributed to delays in agencies’ transition to Networx. This in turn  resulted in increased transition costs, missed savings, and delays in  implementing new technologies. To its credit, GSA has studied the  Networx transition and documented lessons learned. In light of the  complexity of telecommunications services and the transition process,  studying potential government-wide shortfalls in telecommunications  expertise and providing agencies with additional guidance on transition  project planning could help ensure that the next telecommunications  transition proceeds more smoothly. In addition, it is important for GSA to  effectively apply lessons learned from Networx to future transitions. In  particular, ensuring that the agency’s lessons-learned database is fully  populated and that these lessons are prioritized and applied to future  transitions will assist GSA and agencies in planning and executing the  next telecommunications transition.
section_title: Recommendations for Executive Action
paragraphs: To improve planning and execution of the next telecommunications  transition, we recommend that the Administrator of General Services take  the following actions:  in coordination with the Office of Personnel Management, examine  potential government-wide telecommunications expertise shortfalls  and use the study to shape the NS2020 strategic approach, and ensure that project planning guidance to agencies on the future  transition calls for establishing transition plans with detailed time lines  that take into account priorities relative to agencies’ mission-critical  systems, contingency plans, and identified risks, and are updated to  reflect the current status and endpoint of the transition.
In addition, we recommend the Administrator take the following three  actions related to GSA’s lessons-learned process: populate and maintain on an ongoing basis the agency’s transition  lessons-learned database with the lessons GSA has identified and  make it available for user searches by those involved in developing  the next transition strategy; prioritize the lessons, taking into particular consideration the factors  we reported as contributing to delays, and determine the resources  needed to apply them; and ensure that the lessons are applied, based on priority and available  resources, to the next transition strategy.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of our report to GSA, the Office of Personnel  Management, SSA, the Department of Defense, and OMB.
In written comments, GSA stated that it agrees with our findings and  recommendations and will take appropriate action. The letter is  reproduced in appendix II.
A Senior Analyst from the Office of Personnel Management’s office of  Internal Oversight and Compliance responded via e-mail that the agency  concurred with the recommendation and is prepared to support GSA in its  efforts to examine the potential telecommunications expertise shortfalls  discussed in the report.
In written comments, SSA stated that it did not agree that our statement  that agencies tended to transition easier items first to demonstrate  progress before they transitioned items that needed a long lead time  applied to SSA. Specifically, the agency stated that it did not delay the  transition of more complex requirements to demonstrate progress on  simpler requirements and that it had begun its overall transition activities  concurrently. We do not dispute this statement regarding SSA. Instead,  our concern was with the agency’s lack of an integrated transition time  line. Our point about transitioning easier items before more complex ones  applied across the government but not necessarily to each individual  agency. SSA’s letter is reproduced in appendix III.
An official from the DOD Inspector General’s Office of Communications  and Congressional Liaison responded via e-mail that department had no  comments on our draft report. In addition, a Paralegal Specialist from  OMB’s General Counsel Office responded via e-mail that the agency had  no comments at this time on our draft report.
As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time we will send copies to other interested  congressional committees; the Administrator of General Services; the  Secretaries of the Department of Defense and the Army; the  Administrator of the Social Security Administration, and the Directors of  the Office of Management and Budget and the Office of Personnel  Management. In addition, the report will be available at no charge on the  GAO website at http://www.gao.gov.
If you or your staff members have any questions about this report, please  contact me at (202) 512-4456 or chac@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made contributions to this  report are listed in appendix II.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: Our objectives were to determine (1) what factors contributed to the delay  in transitioning services to Networx and the consequences the federal  government experienced as a result of the delayed transition, and (2) to  what extent the General Services Administration (GSA) is documenting  and applying lessons learned as it prepares for the next  telecommunications contract transition.
To identify factors contributing to transition delays, we analyzed key GSA  Networx programmatic documentation, including various management  briefings and reports, transition plans and status reviews, and program  risk logs. We also assessed GSA’s lessons-learned documentation,  including Deloitte Consulting’s September 2011 Lessons Learned Report,  and GSA’s July 2012 Network Services Programs Lessons Learned  Report and September 2012 Networx Lessons Learned Report, which  were based on Deloitte’s study. Deloitte Consulting analyzed stakeholder  feedback on the Networx transition, and GSA incorporated the results of  the study into its reports. In addition, we analyzed relevant statutes, the  Federal Acquisition Regulation, and GSA guidance about the fair  opportunity process to understand its impact on the transition.
To help address the first objective, we also selected two agencies—the  U.S. Army Corps of Engineers and the Social Security Administration  (SSA) —for case study review, based on the extent of delay in  transitioning and the amount spent on telecommunications. Specifically,  as of November 2012, these two agencies had the most FTS2001  services remaining to be disconnected. The Army Corps of Engineers had  about 16 percent of its services remaining and SSA had about 9 percent  of its services remaining. In addition, according to GSA documentation, in  fiscal year 2011, SSA had the third-highest spending (behind the  Departments of Defense and Homeland Security) on FTS2001 and  Networx, which was about $121 million, while the Corps spent about $15  million (the 12th-highest spending). Although the results from these two  agencies may not be generalized to all agencies, they provide examples  of the factors contributing to the delay in transitioning and the  consequences thereof.
We relied on our past work on the FTS2000-to-FTS2001 transition and  FTS2001-to-Networx transition, as well as on project planning and  management, to identify transition project best practices.SSA’s and U.S. Army Corps of Engineers’ transition plans with key best  practices. We also assessed their project status and risk reports, and  analyzed SSA’s contractor performance reports for one of its transition  component projects.
To identify consequences occurring as a result of the delays, we  determined the extent to which GSA incurred additional costs and the  extent to which agencies missed savings. Specifically, we compared  GSA’s latest transition cost estimates with its 2004 cost estimate. We also  assessed GSA’s April 2010 analysis of the federal government’s potential  savings resulting from transitioning from FTS2001 to Networx. (Figure 4  illustrates GSA’s analysis.) Specifically, GSA calculated that agencies  could save 28.4 percent of the cost of FTS2001 services by moving those  services to Networx. For example, using this savings rate, it determined  that in January 2010, agencies could have saved $22.4 million that  month. To assess the reasonableness of GSA’s savings rate calculation,  we conducted a detailed walkthrough of the formula, analysis, and  supporting documentation with GSA Networx Program officials. From this  exercise, we determined GSA’s estimated savings rate to be sufficiently  reliable for the purpose of this audit.
To calculate savings agencies may have missed by remaining on  FTS2001 after the transition was to be complete (i.e., as of July 2010), we  applied the 28.4 percent savings rate to total agency spending on  FTS2001 services between July 2010 and March 2013, as reported by  GSA.
To assess the reliability of the cost data, we tested the data to identify  obvious problems with completeness or accuracy and interviewed GSA  Networx Services Program officials about the data, the automated  systems used to collect them, and processes in place to verify them. For  the purposes of our report, we determined that the cost data were  sufficiently reliable. We did not test the adequacy of GSA’s cost  accounting systems. Our evaluation of these cost data was based on  what we were told by GSA and the information the agency could provide.
We also reviewed government-wide plans that involved the use of  Networx to determine the extent to which delays contributed to non- financial consequences. Specifically, we assessed documentation on the  Office of Management and Budget’s (OMB) plans for implementing the  Trusted Internet Connection relative to the progress of the Networx  transition.
To determine the extent to which GSA is documenting and applying  lessons learned, we compared GSA’s lessons learned process with key  activities we previously identified as best practices. These key practices  are discussed in a September 2012 GAO report, Federal Real Property  Security: Interagency Security Committee Should Implement a Lessons  Learned Process, and in the U.S. Army’s Lessons Learned Center’s  Establishing a Lessons Learned Program: Observations, Insights, and  Lessons. We compared GSA’s lessons-learned documentation, including  its lessons-learned reports, lessons-learned management plan, lessons- learned database, and lessons-learned process analysis with these key  practices. Based on our analysis, we assessed whether GSA satisfied,  partially satisfied, or had not satisfied the key practices. “Satisfied” means  GSA provided complete evidence that satisfied the entire criteria.  “Partially satisfied” means GSA provided evidence that satisfied a portion  of the criteria. “Not satisfied” means GSA provided no evidence that  satisfies any of the criteria.
For both objectives, we met with GSA, OMB, SSA, and U.S. Army Corps  of Engineers officials, and representatives from all of the FTS2001 and  Networx contractors, including Sprint, Verizon, AT&T, CenturyLink, and  Level 3 Communications.
We conducted this performance audit from December 2012 to December  2013, in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
section_title: Appendix II: Comments from the General Services Administration
section_title: Appendix III: Comments from the Social Security Administration
section_title: Appendix IV: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Eric Winter (Assistant Director),  Melina Asencio, Virginia Chanley, Cheryl Dottermusch, Franklin Jackson,  Lee McCracken, Jena Sinkfield, and Jack Wang made key contributions  to this report.