Qwest and Level 3 Communications are among five companies selected Thursday to bid on a federal telecommunications contract worth up to $20 billion over 10 years.
The other selectees for the so-called Networx Enterprise contract are AT&T, Verizon Communications and Sprint Nextel.
Denver-based Qwest, AT&T and Verizon were also selected in March to bid on a larger Networx contract called Universal, worth up to $48 billion over 10 years.
The Networx program aims to upgrade video, phone, wireless, data and other communications systems for as many as 135 government agencies, including the U.S. Treasury and Health and Human Services.
Winners of Universal are guaranteed at least $525 million in work. Enterprise winners will receive at least $50 million.
The companies were selected by the General Services Administration, which solicited information for Networx from the industry in 2003.
Companies competing for Universal are required to offer more telecommunications services and must be able to reach more building locations, nationally and internationally.
Enterprise is intended to provide specialized services. It doesn’t require companies to reach international building locations.
The Enterprise selection gives Qwest “a safety net in case an agency decides not to use Universal, they’ll be able to compete on Enterprise,” said Warren Suss, a Jenkintown, Pa.-based consultant to companies seeking federal contracts.
Federal agencies won’t be allowed to receive bids on both contracts simultaneously. The agencies will have to choose which direction to pursue – to upgrade an entire system or a portion.
The Enterprise selection, in addition to the earlier Universal selection “now enables us … to meet whatever the unique needs of the federal government agency might be,” said Tom Richards, executive vice president of business markets group for Qwest.
The company has started marketing products under Universal to some agencies and expects to receive orders by the fourth quarter. Richards said Qwest will likely start incrementally adding workers.
The Enterprise selection will provide a boost for Broomfield-based Level 3, the smallest of the competitors, Suss said.
“This gives them a shot at the big time,” Suss said. “But they’re still up against a pretty fierce competitive field of well-established players.”
Level 3, which operates a global fiber-optic communications network, is also a member of Verizon’s Universal team.
Level 3 “can help enable a swift and seamless transition to the next generation of telecommunications services,” said Jerry Hogge, senior vice president of the company’s federal government group, in a statement.
The company currently provides services for about 35 government agencies.
Suss said it’s conceivable that just one or two companies will receive the bulk of the Networx contracts. Most government agencies haven’t decided which contract vehicle they’ll use, Suss said, though many are looking to upgrade their entire communications systems.
“Most agencies will be turning to the Universal contract vehicle,” Suss said. “And then once they get their core networks in place, they’re likely to (use) Enterprise to fill in with specialized wireless services or specialized data services.”
Staff writer Andy Vuong can be reached at 303-954-1209 or avuong@denverpost.com.
