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Message: Holocom deal

Holocom deal

posted on Apr 21, 2007 07:13AM

Another reason the Holocom deal mayend up being be good for us:

http://biz.yahoo.com/ap/070314/telec...

This is the largest telecommunications contract ever awarded by the government. A large part of it will be secured networks

AP
Government Telecom Award Expected Soon
Wednesday March 14, 3:31 pm ET
By Dibya Sarkar, AP BUSINESS WRITER

General Services Administration Expected to Award Multi-Billion-Dollar Telecom Contract

WASHINGTON (AP) -- The federal government will soon award its largest telecommunications contract ever, a deal worth up to $48 billion for at least two of the bidders: Qwest Communications, Sprint Nextel, AT&T and Verizon.

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The 10-year General Services Administration contract, which covers voice, video and data services and technologies for at least six federal agencies, is expected to be awarded sometime in March, according to the agency.

"It's the granddaddy, make or break," said Verizon vice president Susan Zeleniak.

No fewer than two winners will be chosen, but it's possible that all four companies could get the contract.

Winning the contract doesn't mean the companies share the multibillion-dollar prize. The winners will split $525 million, and then must compete for business from individual agencies.

Experts said they expect federal agencies to collectively spend at least $20 billion over the life of the contract, which is capped at $48 billion. To put that into perspective, the combined revenues of Sprint and Verizon in 2006 were roughly $129 billion, or almost triple what the GSA contract could potentially be worth over a decade.

"To the winners, it's a guaranteed pool of business for a decade even though there will be competition," technology consultant Warren Suss said. "On the other hand, the companies that don't get a ticket to play are going to be closed out of a large portion of the federal marketplace."

Ray Bjorklund, an analyst at market research firm Federal Sources Inc., said the GSA's incumbent telecom providers -- Sprint Nextel and Verizon -- have a natural advantage over their rivals, but believed that all four companies are qualified to do the work.

A victory would give any of the four bidders -- and particularly Qwest, the smallest among them -- an important springboard for gaining additional work, technology consultant Warren Suss said.

"They'll be able to turn to corporate customers and corporate prospects," Suss explained, "and let them know that, 'The largest, most important federal agencies trust us with their network traffic. You can trust us too.'"

For the losers of the Networx Universal contract, there is a consolation prize on the table.

GSA is planning in May to award a second telecommunications contract called Networx Enterprise -- worth up to $20 billion -- that contains fewer mandatory requirements and services in select areas across the nation.

The agency's hope was that smaller companies would compete in the contract. However, the same four companies -- plus Level 3 Communications -- are vying for this second pot of money.

The four bidders on the government's primary telecommunications contract -- Qwest Communications International Inc., Sprint Nextel Corp., AT&T Inc. and Verizon Communications Inc. -- would not say how much they spent in preparing their proposals. Experts estimated that each bidder spent millions of dollars on the competition.

The contract requires the winning companies to maintain the agencies' current telecom needs, while also offering advanced technologies, such as Internet-based phone service, wireless communications, data storage and network security.

The two prior 10-year government-wide telecom contracts had two main providers. The first included Sprint and AT&T. The second had Sprint and the now defunct MCI Worldcom, since acquired by Verizon.

To meet the new contract requirements, the telecom giants have teamed with defense contractors and others.

The Qwest-led team includes Bearingpoint Inc., SAIC Inc., Accenture Ltd., Hughes Communications Inc. and others.

The AT&T-led team includes Northrop Grumman Corp., Electronic Data Systems Corp., SRA International, Global Crossing Ltd. and others.

Verizon's team includes Hewlett-Packard Co., Level 3, General Dynamics Corp., Computer Sciences Corp. and others.

Sprint Nextel's team includes Lockheed Martin Corp. and Hughes.

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