The U.S. General Services Administration will award the first portion of Networx, the largest government telecommunications contract ever awarded, by the end of March, affecting businesses across the metro region.
The total estimated value of Networx’s two phases is at least $20 billion and as much as $68 billion over 10 years. The second phase, Networx Enterprise, focusing on emerging technologies, will come in May.
Networx is a vehicle through which government agencies can purchase telecom equipment upgrades.
Two local companies, Reston-based Sprint Nextel and Vienna-based AT&T Government Solutions, seek the contract, as do Verizon Business and Quest Communications.
GSA will chose at least two prime vendors, and possibly all four teams.
Quest may have the most to gain from the contract because it does not have a strong footing in the government sector, FedSources Senior Vice President Ray Bjorklund said. A loss would hurt Sprint and Verizon, who have GSA contracts already, the most since GSA is a major revenue driver, Bjorklund said.
“If they were to lose, it probably would be a jolt to them, but not an instantaneous one; it probably would happen over the course of nine months to a year,” Bjorklund said.
Sprint and Verizon’s GSA contracts now provide around $300 million in annual revenue, analyst David Barden of Bank of America Equity Research estimated in a note to investors. Sprint Nextel could rebound from a loss, said Tony D’Agata, vice president of Sprint’s federal government business, though its Wireline Solutions business would be hit hardest. Area subcontractors are also competing. AT&T’s team includes Chantilly-based GTSI and Fairfax-based SRA International; Quest is partnered with McLean companies BearingPoint and SAIC International; Sprint Nextel has Germantown’s Hughes Network Systems and Bethesda contractor Lockheed Martin; G2 Satellite Solutions of D.C. is on Verizon’s team. The Networx contract will affect scores of small and disadvantaged businesses; each prime contractor has at least 30 on its team.
Herndon-based Tech 2000 is partnered with AT&T. A win could bring in at least $14 million in revenue for the 14-person company, which does Web-based training and reports $3 million in revenue annually, CEO George Churchill said Monday.
Sprint Nextel will rely on small businesses to fill specialized niches, though a win may not mean major contracts for all, D’Agata said.
