Telecommunications: GSA Has Made Progress Planning for a New	 
Governmentwide Program, But Critical Issues Remain (03-MAR-05,	 
GAO-05-361T).							 
                                                                 
In October 2003, the General Services Administration (GSA) issued
a request for information describing its plans for a new	 
governmentwide telecommunications program known as Networx, which
is to replace expiring contracts. The program consists of two	 
simultaneous acquisitions: Networx Universal, which is to provide
a full range of national and international network services	 
across the United States, and Networx Enterprise, which is to	 
provide agencies with mainly Internet-based services with less	 
extensive geographic coverage In September 2004, GAO testified on
GSA's actions to address challenges related to this program and  
made recommendations intended to improve transition planning,	 
performance measures, and billing procedures. GSA subsequently	 
issued a draft request for proposals (RFP) in October 2004. In	 
response, the telecommunications industry and federal agencies	 
provided more than 2,500 comments, covering technical issues such
as the inclusion of certain standards and more general topics,	 
such as the level of small business set-asides. GAO was requested
to provide a progress report on GSA's planning for this program. 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-361T					        
    ACCNO:   A18637						        
  TITLE:     Telecommunications: GSA Has Made Progress Planning for a 
New Governmentwide Program, But Critical Issues Remain		 
     DATE:   03/03/2005 
  SUBJECT:   Contract administration				 
	     Contract terms					 
	     Evaluation criteria				 
	     Federal procurement				 
	     Internet						 
	     Performance measures				 
	     Productivity in government 			 
	     Program management 				 
	     Solicitations					 
	     Standards and standardization			 
	     Telecommunication industry 			 
	     Program goals or objectives			 
	     FTS Networx					 

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GAO-05-361T

United States Government Accountability Office

GAO Testimony

Before the Committee on Government Reform, House of Representatives

For Release on Delivery

Expected at 10 a.m. EST TELECOMMUNICATIONS

March 3, 2005

 GSA Has Made Progress Planning for a New Governmentwide Program, But Critical
                                 Issues Remain

Statement of Linda D. Koontz, Director Information Management Issues

GAO-05-361T

[IMG]

March 3, 2005

TELECOMMUNICATIONS

GSA Has Made Progress Planning for a New Governmentwide Program, But Critical
Issues Remain

What GAO Found

Since GAO's testimony in September, GSA has made progress in addressing
the program's challenges and our recommendations. GSA has articulated a
strategy for addressing billing concerns and has plans to complete
transition planning and guidance for agencies on the identification of
service inventories by February 2006. It has also drafted performance
measures for each of its program goals.

Critically important to the short-term progress of the Networx program are
three issues that could, if unresolved, affect the ultimate success of the
program:

o  	Contract scope. In commenting on the draft RFP, vendors indicated
concerns about the potential size of the acquisitions as proposed by GSA.
Subsequently, GSA doubled the minimum amounts to be bought under the
Enterprise acquisition and is reexamining certain aspects of the
acquisitions' requirements to ensure that they are all necessary.

o  	Evaluation criteria. GSA has yet to identify the evaluation criteria
and share this information with prospective offerors.

o  	Traffic volumes. GSA has not yet determined the traffic volumes
required by agencies at specific locations. Agency officials estimate that
this information on the government's needs may not be ready until mid to
late May 2005, after the final RFP is scheduled to be released.

These uncertainties represent risks to potential offerors which may, in
turn, affect the quality of their proposals particularly their ability to
offer the best prices to the government. In addition, delays in
establishing evaluation criteria and traffic volumes could affect GSA's
ability to award the contract by April 2006 as planned.

                 United States Government Accountability Office

I am pleased to participate in the Committee's hearing on the General
Services Administration's (GSA) next generation, governmentwide
telecommunications acquisition program, which is known as Networx. As you
know, GSA's planning for this program is taking place within an
environment of tremendous change in the telecommunications industry, in
underlying services and technology, and potentially in the regulatory
environment. In this context, the Networx initiative can be viewed as a
significant opportunity for federal agencies-GSA's customers-to acquire
and apply innovative telecommunications services to improve their
operations.

We previously reviewed, at your request, GSA's initial planning efforts
for Networx and identified several challenges GSA faced in ensuring a
successful outcome for the program.1 In September 2004, we testified that
GSA had addressed the initial concerns about the timing and structure of
the Networx acquisition.2 While work was under way to address the
challenges related to the need for transition plans, an inventory of
current services, and effective measures of performance and billing
procedures, GSA had not yet completed its efforts. We made several
recommendations to GSA to assist it in addressing these challenges. In
November, you requested that we assess GSA's progress in addressing the
challenges that we previously identified, our recommendations, and other
outstanding issues. My testimony today presents our results to date on
these topics.

  Results in Brief

Since we testified in September 2004, GSA has continued to make progress
in addressing the program's challenges and our recommendations.

1GAO, Telecommunications: GSA Faces Challenges in Planning for New
Governmentwide Program, GAO-04-486T (Washington, D.C.: Feb. 26, 2004).

2GAO, Telecommunications: GSA Has Made Progress in Planning Governmentwide
Program But Challenges Remain, GAO-04-1085T (Washington, D.C.: Sep., 15,
2004).

0M	Transition planning. As we recommended, GSA developed a transition time
line. It has also recently awarded a contract for support in transition
planning and expects to develop procedures that apply the lessons learned
from previous transitions by February 2006.

0M	Inventories. GSA continues to work with agencies to develop accurate,
detailed inventories of current services to enable an effective
transition. It is also developing guidance for agencies on gathering this
information and plans to provide the agencies with further training on
inventory issues. The guidance is expected to be included in the
transition management plan scheduled for completion in February 2006.

0M	Billing issues. In response to our recommendation that GSA develop a
strategy for addressing billing issues, it has made plans to first,
attempt to resolve billing issues internally, and second, refer unresolved
issues to a working group of agency officials. It has also begun a
long-term effort to identify changes to its current billing process.

0M	Performance measurement. As we recommended, GSA has drafted an initial
set of performance measures intended to address the program's eight goals.
GSA is continuing to work on these measures and plans in order to begin
using them in 2006.

Critically important to the short term progress of the Networx program are
three issues regarding the requirements underlying the Networx
acquisitions. These issues could, if unresolved, affect the ultimate
success of the program:

0M	Contract scope. In commenting on the draft RFP, vendors indicated
concerns about the potential size of the acquisitions as proposed by GSA.
Subsequently, GSA doubled the minimum amounts to be bought under the
Enterprise acquisition and is reexamining certain aspects of the
acquisitions' requirements to ensure that they are all necessary.

0M	Evaluation criteria. GSA has yet to identify the evaluation criteria
and share this information with prospective offerors.

0M	Traffic volumes. GSA has not yet determined the traffic volumes
required by agencies at specific locations. GSA officials currently
estimate that this information will not be available until mid-to-late

May, even though the final request for proposals is scheduled for release
on April 1.

These uncertainties represent risks to potential offerors which may, in
turn, affect the quality of their proposals, particularly their ability to
offer the best prices to the government. In addition, delays in
establishing evaluation criteria and traffic volumes could affect GSA's
ability to award the contract by April 2006.

My remarks today are based on audit work conducted at GSA headquarters,
where we reviewed program planning documents, public presentations, and
comments on GSA's plans. We also interviewed program officials and
representatives of four vendors who provided comments to GSA and we
reviewed analyses conducted by GSA as well as our previous work on FTS2001
and related contracts. We conducted our work in Washington, D.C., and
Fairfax and Arlington, VA, between December 2004 and February 2005 in
accordance with generally accepted government auditing standards.

Background

GSA's Federal Technology Service (FTS) is responsible for ensuring that
federal agencies have access to the telecommunications services and
solutions needed to meet mission requirements. Currently, GSA uses a
series of contracts intended to meet agency needs for various
telecommunications services. Specifically, it awarded two large,
governmentwide contracts for long-distance services-one to Sprint in
December 1998 and one to MCI in January 1999-known together as FTS2001.
According to GSA, federal agencies spent approximately $614 million on
FTS2001 services during fiscal year 2003 and $780 million during fiscal
year 2004.

Related governmentwide telecommunications services are provided through
additional GSA contracts: the Federal Wireless Telecommunications Service
contract and the FTS Satellite Service contracts. The wireless contract
was awarded in 1996 to provide

wireless telecommunications products and services to all federal agencies,
authorized federal contractors, and other users such as agency-sponsored
laboratories. Satellite services are provided through a series of
contracts for a variety of commercial off-theshelf satellite
communications products and services, including mobile, fixed, and
broadcast services.

Figure 1: Time Periods for GSA's Current and Planned Telecommunications
Contracts

GSA has begun the process of replacing all of these expiring contracts
with a new set of contracts, collectively known as the Networx program. In
October 2003, GSA released a request for information (RFI) that describes
its initial strategy for Networx. In the request, GSA proposed two
indefinite delivery/indefinite quantity acquisitions-Networx Universal and
Networx Select. Awards under the Universal and Select acquisitions were to
be staggered, with the Select acquisition to be awarded 9 months after the
Universal acquisition. The Universal acquisition was expected to satisfy
the requirements for a full range of national and international network
services and, according to GSA, was intended to ensure the continuity of
services and prices found under expiring contracts that provide
broad-ranging services with global geographic coverage. By

contrast, GSA planned to award multiple contracts for a more
geographically limited set of services under the Select acquisition. The
services required under these contracts focus on Internet-based offerings
and related security and management services. This would provide agencies
with leading-edge services and solutions and less extensive geographic and
service requirements than Universal.

GSA has worked with representatives of federal agencies, the
telecommunications industry, and other interested parties to lay the
groundwork for the Networx program. Agencies work directly with GSA and
through the Interagency Management Council (IMC), a group of senior
federal information resource officials who advise GSA on issues related to
telecommunications contracts. GSA and the IMC have agreed on eight goals
for the Networx program that include an emphasis on ongoing support and
performance-based contracts. Table 1 lists each of the program's goals.

                         Table 1. Networx Program Goals

Goal Description

Service continuity	Contracts should include all services currently
available under FTS2001 to facilitate a smooth transition.

Competitive prices	Prices should be better than that available elsewhere
in the telecommunications marketplace.

High quality services	Contracts should ensure a high quality of service
throughout the life of the contracts by using enforceable agreements.

Full service vendors	Vendors should be capable of providing a broad array
of services and provide follow-on services to avoid duplication of
administrative and contracting costs.

Alternate sources	Agencies should be able to choose from a greater number
of competing vendors that provide new, enhanced services and emerging
technologies throughout the life of the contract.

Operations support 	GSA should provide fully integrated ordering, billing,
and inventory management.

Transition assistance and support 	Contracts should include provisions
that facilitate transition coordination and support.

                                Goal Description

Service continuity	Contracts should include all services currently
available under FTS2001 to facilitate a smooth transition.

Performance-based contracts	Contracts should be performance-based and
include service level agreements where possible.

Source: GSA.

In our September 2004 testimony, we reported that GSA had made progress in
planning the acquisition by responding to industry and agency concerns
over the nine-month lag between the release of the Networx acquisitions,
the geographic coverage requirements for the Universal acquisition, and
the number of billing elements that vendors were to provide. Specifically,
GSA decided to release the Universal and Enterprise (the current name for
the contract formerly called Select) acquisitions simultaneously. It also
reduced the geographic coverage requirements for the Universal acquisition
by 76 percent. In addition, through a collaborative effort with the IMC
and the Industry Advisory Council, GSA reduced the number of required
billing elements by 62 percent.

However, we also stated that additional efforts were necessary to fully
address the management challenges we identified. We recommended that GSA
finalize and implement processes for managing transition efforts, develop
measures to monitor program performance and a strategy for using them, and
develop and implement a strategy for resolving agency concerns about the
usability of billing data.

GSA released the draft requests for proposals (RFP) for Networx in October
2004, providing industry and agencies an additional opportunity to comment
on the structure and content of the Networx acquisition prior to the
release of the final RFPs. In response, the telecommunications industry
and federal agencies provided more than 2,500 comments, covering technical
issues such as the inclusion of certain standards and more general topics,
such as the level of small business set-asides.

The draft RFPs were described by GSA as nearly complete versions of the
final RFPs, which are scheduled to be released on April 1,

2005. According to program officials, GSA provided as much detail as
possible in the drafts because potential offerors will have only 3 months
to submit proposals once the final RFPs are released. After evaluating the
submitted proposals, GSA plans to award contracts under both acquisitions
in April 2006.

GSA Is Addressing Networx Management Challenges

Since we testified in September 2004, GSA has continued to make progress
in addressing the program's management challenges and our recommendations
on transition planning, inventory development, billing procedures, and
performance measures.

GSA Continues to Plan for Contract Transition

As we testified previously, adequate transition planning is one of the
challenges that GSA must address to effectively complete the move to
Networx. Further, experience demonstrates the need for comprehensive
transition planning and an effective transition strategy. For example, the
current FTS2001 contracts got off to a rocky start when efforts to
transition services to the new contracts took more than 24 months,
hindering timely achievement of program goals. Subsequently, a subgroup of
the IMC-the Transition Working Group-identified past transition issues and
documented 22 lessons learned, including that the magnitude of the effort
was not fully appreciated. The working group recommended that the findings
of the lessons learned effort be used as input to the Networx program
management strategy and specifications. In testimony before you in
September 2004, we recommended that GSA develop a transition time line and
use the lessons learned to develop procedures to prevent the reoccurrence
of transition difficulties.

In response, GSA has taken steps to begin preparing for the transition to
the planned Networx contracts. For example, GSA has developed a document
that defines the transition cost elements and identifies how those
elements will be allocated to the GSA Networx program and its customer
agencies and has also developed an

outline of a transition management plan. Also, in response to our
recommendation regarding a transition time line, GSA developed a
high-level transition time line that depicts 28 tasks, beginning with the
development of the document that defines transition cost elements and ends
with the disconnection of services under the FTS2001 contract (transition
end). These tasks span the time from July 2004 through January 2008. GSA
estimates that the transition from the FTS2001 contracts to Networx should
require at least 18 months.

Additional steps are in progress. For example, GSA has begun work on the
outline of a transition management plan, which is intended to be used as a
guide by GSA, customer agencies, the Transition Working Group, and the
contract awardees to facilitate a smooth transition. The outline
identifies planning steps that agencies should undertake and lists the
lessons learned from past transitions. GSA has also recently awarded a
contract for transition planning assistance. This contractor is to assist
in finalizing the transition management plan, including developing
procedures to address lessons learned as we recommended. The plan is
scheduled to be finalized in February 2006. If completed as planned, this
should position GSA to effectively implement the planned transition.

Collection of Inventory Information is Ongoing

When we last testified on this program, we noted the importance of GSA and
its customer agencies having a clear understanding of agency service
requirements in order to make properly informed acquisition planning
decisions. This clear understanding comes, at least in part, from having
an accurate baseline inventory of existing services and assets. More
specifically, an inventory allows planners to make informed judgments
based on an accurate analysis of current requirements and capabilities,
emerging needs that must be considered, and the current cost of services.
In addition, the FTS2001 transition lessons learned document identified
the lack of a good starting inventory as the cause of problems in a number
of areas and a contributing factor to the slow start on the FTS2001
transition.

GSA is addressing the need for inventory information in several ways. It
first developed an inventory of the services currently used by its
customers by reviewing the existing contracts, modifications to them, and
billing information. Then, GSA used the inventory information from these
sources in acquisition planning, for example, to justify GSA's decision on
which services to include in the proposed Networx contracts and which to
make mandatory.

In addition, GSA recently asked agencies to provide and verify detailed
inventory information that includes the geographic locations of those
services that are used and how much they are used. In January, GSA
released a preliminary list that identified the geographic locations of
required services.

GSA will need to continue to work with its customer agencies to gather the
even more detailed information that will be needed to conduct an effective
transition, including the specific location of equipment within a room,
provisions for accessing the equipment, and contact information for
personnel authorized to access the space. According to the Networx program
manager, GSA expects agencies to use site plans developed by the incumbent
vendors to assist in developing this information. In addition, GSA is
developing guidance for the agencies on gathering this information and
plans to provide further training to the agencies on inventory issues.
This guidance, according to GSA, will be included in the transition
management plan scheduled for completion in February 2006.

GSA Has Developed a Strategy to Address Billing Issues

Clear, accurate, and complete billing records are an important internal
control: they record the detail of each telecommunications transaction for
later verification and management oversight. However, bills and billing
systems have been a problem in the current generation of FTS programs and
continue to be a concern for their proposed replacement. Agencies have
commented that, in the past, billing information they received hampered
their efforts to reconcile invoices, resulting in hundreds of thousands of
dollars of additional costs. In testimony before you in September 2004, we
recommended that GSA develop and implement a strategy for addressing the
billing data issues raised by its customer agencies.

Under FTS2001, GSA resolved agency billing problems by establishing a
Billing Issues Team that was responsible for tracking issues through to
resolution. GSA stated that, for example, due to the efforts of this team,
it has already altered the way it processes the vendor-provided billing
data so that it now aligns with agency needs.

In response to our recommendation, GSA officials identified several
methods for addressing possible billing data issues, including

0M	service level agreements that hold the contractors accountable for the
accuracy of the billing data they provide and

0M	a requirement that contractors assign a unique identifier to each
transaction, which agencies believe will improve both billing and
inventory management.

Further, according to GSA officials, it will first attempt to address
internally any future billing issues raised by customer agencies after
contract award. Any unresolved issues will be raised to the IMC for
additional action.

GSA has also initiated a long-term strategy to address the billing process
as a whole. In January 2005, GSA issued a RFI that asked vendors to
identify potential alternatives to the way it currently consolidates
carrier billing data and provides the data to agencies. GSA is considering
several billing options, including the option of contracting out bill
consolidation and the potential costs and benefits of those options. The
study is a part of a larger GSA effort to define the requirements of FTS's
future operating environment.

GSA Has Developed Draft Performance Measures

Our research into recommended program and project measurement practices
highlights the importance of establishing clear measures of success to aid
acquisition decision making as well as to provide the foundation for
program management. Such measures define what must be done for a project
to be acceptable to the stakeholders and users affected by it; these
measures enable measurement of progress and effectiveness in meeting
objectives. In our testimony before you in September 2004, we recommended
that

GSA finalize its efforts to identify measures to evaluate progress toward
program goals and develop a strategy for using those measures for ongoing
program management.

In response, GSA provided the first draft of a Networx strategic business
plan that lists performance measures for the eight program goals
previously discussed. (These preliminary measures are listed in table 2.)

         Table 2. GSA's Initial Draft Performance Measures for Networx

Strategic goal Performance goal Performance measure

Service continuity: contracts should include all 98% of agency transition
orders Number of modifications compared services currently available under
FTS2001 to filled without the need for to services transitioned facilitate
a smooth transition contract modification

Competitive prices: prices should be better than Average prices attained
on Quarterly price comparison of those available elsewhere in the Networx
are at least 25% less commercial and Networx for like telecommunications
marketplace than comparable, negotiated services

                               commercial prices

High quality service: contracts should ensure a high quality of service
throughout the life of the contracts using enforceable agreements

95% of all service metrics met on an annual basis

Contractor performance per annual service level agreement report

Full service vendors: vendors should be capable Awardees deliver 98% of Services
                          delivered by transition end

of providing a broad array of services and provide follow-on services to
avoid duplication of administrative and contracting costs.

services ordered under Universal

Alternative services: agencies should be able to choose from a greater
number of competing vendors that provide new, enhanced services and
emerging technologies.

Awardees can provide 98% of mandatory services offered under Enterprise

  Transition end Transition support: contracts should include 98% of services
                                  transitioned

Quarterly audit of services that do not have disconnects completed before
contract expiration date provisions that facilitate transition
coordination and support

within planned transition period

Performance-based contracts: contracts should 95% of contracted services
Audit of contracts at contract award
be performance based and include service level have metrics
agreements where possible

Strategic goal Performance goal Performance measure

Operations support: GSA should provide fully Ordering: 90% of orders
Ordering: monthly service level integrated ordering, billing, and
inventory provisioned within standard agreement compliance report. Data
management intervals in contract or by firm elements added annually
through

order commitment in project contract modification
plans. No more than 5% annual
growth in ordering data
elements.

Billing: 90% of monthly billed revenue is without error. No more than 5%
annual growth in data elements for billing Billing: monthly service level
agreement compliance report. Data elements added annually through contract
Inventory: inventory audits produce at least 95% match with agency
inventories Inventory: annual audits of FTS inventory with service order
completion notices, billing data, and downloads from industry partners,
then comparison with agency inventories

Source: GSA.

GSA is continuing to work on these measures. For example, the draft
measures for the operations support goal-which calls for GSA to establish
integrated ordering, billing, and inventory management-address the
individual functions without addressing the overall management of the
services or their integration. GSA officials are aware of the need to
refine the measures and are working to determine how to address
integrating ordering, billing, and inventory. They stated, however, that
this is a longer-term effort and will not be resolved by contract award.
GSA does not yet have an expected completion date for the measures but
plans to begin using them in 2006.

  Critical Issues Regarding Requirements Have Not Yet Been

Addressed Critically important to the short-term progress of the Networx
program are three issues that could, if unresolved, affect the ultimate
success of the program. These issues involve setting the scope of the
contacts, establishing the criteria against which proposals will be
evaluated, and determining the traffic volumes required by agencies at
specific locations.

GSA Has Not Released Information on the Estimated Scope of Networx that
Potential Offerors Need to Estimate Business Risks

Federal acquisition regulations require indefinite-quantity contracts such
as Networx to estimate the minimum and maximum levels of goods or services
that will be purchased by the government. The minimum must be more than a
nominal quantity, but it should not exceed the amount that the government
is fairly certain to order.3 In addition, reasonable minimum quantities
provide potential competitors with an understanding of what will be
required of them and allow them to compete on a reasonable basis.4

GSA has not yet estimated contract maximums; it proposed minimums in the
form of minimum revenue guarantees (MRG) for each contract, subsequent to
the release of the draft RFP. GSA proposed a minimum for the Universal
acquisition of $525 million for all awardees over the life of the
acquisition and a minimum of $25 million for all awardees for the life of
the Enterprise acquisition. According to the Networx program manager,
these figures were derived by taking 75 percent of the estimated total
revenue (less fees, taxes, and surcharges) expected under the two
acquisitions in their first year. The total was then allocated between the
two acquisitions based on estimates of the relative level of business
during that first year. He added that GSA was purposefully conservative in
defining the minimums for several reasons:

0M	it experienced program delays when it did not fulfill the MRGs as fast
as originally estimated on the FTS 2001 contract,

0M	it was unsure how much agencies will use the Enterprise contracts and
did not want to risk being unable to recover the MRGs within the 4-year
base period of the contract, and

0M	vendors are aware of the overall level of revenue generated by FTS2001
which should provide them with an indication of the scope of the new
acquisitions, regardless of the size of any MRGs.

3 FAR 16.504, 48 C.F.R. 16.504
4 B-244710, Nov. 13, 1991; and B-291185, Nov. 8, 2002.

In commenting on the draft RFP, vendors expressed concerns about the
potential size of the acquisitions as proposed by GSA. In addition to
noting the absence of maximum amounts, vendors commented on:

0M	uncertainty over how business will be allocated between the two
acquisitions and the number of awards to be made under each;

0M the time period during which the MRGs will be paid; and

0M	the relatively small size of the Enterprise MRG compared to the costs
of developing proposals and fulfilling the administrative requirements of
the contracts. (Administrative requirements in the RFP call for the
contractors to provide, for example, training, management reporting, and
systems to perform billing, ordering, and other functions.)

These vendors commented that, because of such uncertainties, they have
difficulty estimating the revenue potentially available to them. This,
according to their comments, may cause difficulties in developing viable
business cases to support proposals, particularly on the Enterprise
acquisition. Vendors also raised the possibility that their proposed
prices for the Enterprise acquisition would need to be raised to account
for the risk of not recovering initial costs.

Subsequently, GSA took several actions. Specifically, it recently raised
the MRG for Enterprise to $50 million. In addition, according to GSA
officials, GSA is also reexamining the acquisitions' requirements to
ensure that they are all necessary. Finally, the program manager indicated
that maximum amounts would be included in the final RFP.

Establishing the required maximums should help offerors determine the
potential size of the contracts; however, until GSA fully resolves the
issues surrounding the Enterprise MRGs and administrative requirements,
uncertainty about contract requirements could result in proposals that
limit the government's ability to leverage its buying power and obtain
necessary services at favorable prices.

GSA Has Not Finalized its Evaluation Criteria for Networx Proposals

Federal acquisition regulations require that, when an agency plans to base
award decisions on factors other than price, it must describe in its
solicitation:

0M	all evaluation factors and significant subfactors that will affect
contract award and their relative importance and

0M	whether all evaluation factors other than cost or price, when combined,
are significantly more important than, approximately equal to, or
significantly less important than cost or price.5

The draft Networx RFP released by GSA did not include information on the
evaluation criteria GSA planned to use. According to the Networx program
manager, GSA thought it would be premature to release the evaluation
criteria at that time, given its state of development. He added that GSA
plans to identify the necessary evaluation criteria in time to include
them in the final RFP.

In commenting on the draft RFP, vendors asked that GSA should make the
evaluation criteria available to them in draft form. For example, one
vendor commented that the evaluation criteria and other instructions to
offerors drive the strategy and framework for technical and business
offers. The earlier the service provider community receives such
information, the more time can be spent on refining offers and arriving at
the solution set that provides the best value to the government.

While GSA's approach will fulfill FAR requirements, it is inconsistent
with the broader strategy for Networx, which has featured several
opportunities for interested parties to review different aspects of the
program and comment on them; public forums, the October 2003 RFI, and the
October 2004 draft RFP. Because the selection criteria will receive
limited outside input and vendors have only a 3-month time period to
prepare proposals, GSA risks delaying contract awards should any
unanticipated concerns

5 FAR 15.101-1, 48 C.F.R. 15.101-1 Page 15 GAO-05-361T

arise that require it to revise the criteria. In addition, continued
uncertainty about the criteria could affect the quality of the proposals
received in response to the Networx RFPs.

Information on Traffic Volumes May Be Delayed

As previously indicated, an accurate inventory of current services is
critical to defining the government's requirements for Networx. The
inventory should identify the level of services needed at each location
(traffic volumes) to allow offerors to assess the government's
requirements and submit a proposal that accurately reflects those
requirements. Further, information on the level of service needed at each
location is necessary for GSA to ensure achievement of the goal of service
continuity, which requires all services currently available under FTS2001
be included in the Networx acquisition.

GSA has yet to finalize its assessment of the volume of traffic that will
be necessary at each location. In January, GSA released a preliminary list
of the locations to which offerors must provide services under the
Universal acquisition to ensure continuity of existing services. GSA
provided the list to allow potential offerors to begin assessing how they
can meet the government's needs. However, according to the Networx program
manager, the additional analysis needed to finalize traffic volumes has
not been completed due to delays in developing an underlying software
system. He estimated that the traffic volumes would not be available until
mid-to-late May.

Since this information is critical to developing proposals, delays in
providing this information to potential offerors further diminishes the
time frames they have to respond to the RFP and may ultimately affect the
quality of their proposals. Further, if GSA decides to provide offerors
with additional time to prepare and submit proposals, it could ultimately
delay GSA's ability to award contracts by April 2006.

In summary, since our testimony in September, GSA has made progress in
addressing the management issues we previously identified, as well as our
previous recommendations. However, several critical issues present
significant short-term hurdles to GSA's timely achievement of the
program's goals. GSA has not yet fully resolved issues concerning the
MRGs, including determining the validity of administrative requirements.
In addition, less than one month before the scheduled release of the final
RFP, GSA has yet to finalize its assessment of traffic volumes and to
share evaluation criteria with potential offerors. Resolving these issues
will be a significant challenge for GSA considering the tight schedule it
has outlined. However, if these issues are not resolved promptly, GSA
risks limiting its ability to deliver improved services to its customer
agencies at favorable prices.

Mr. Chairman, this concludes my statement. I would be pleased to answer
any questions from you or other members of the Committee.

  Contacts and Acknowledgements

Should you have any questions about this testimony, please contact me by
e-mail at [email protected] or James Sweetman at [email protected]. We can
also be reached at (202) 512-6240 and (202) 512-3347, respectively. Other
major contributors to this testimony were Jamey Collins, Nancy Glover, and
Nicholas Marinos.

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