who will win this $20 billion project?

The U.S. government will announce this month the carrier it has selected to supply voice, data, video and wireless services through 2017. The $20 billion project, called Networx, is split into two contracts: (1) Networx Universal includes VPN, VoIP, frame relay and ATM services, and (2) Networx Enterprise which will focus on emerging IP and wireless services. The US GSA (General Services Administration), which is the govt agency overseeing the project, will announce the winner of Networx Universal this month and the Enterprise component winner in May. Here are the bidders for Networx Universal (essentially, the telecom market...and it couldn't be any other way):

• AT&T, with Bechtel, Cingular Wireless, Electronic Data Systems, Global Crossing, GTSI, Northrop Grumman and SRA International.
• Qwest, with Akamai Technologies, Alcatel-Lucent, Bearing Point, Hawaiian Telecom Services, Science Applications International and Wire One Communications.
• Sprint Nextel, with Hughes Network Systems, Intercall and Lockheed Martin.
• Verizon Business, with Comtech Telecommunications, G2 Satellite Solutions, HP, Proxim Wireless Networks, WilTel Communications/Level 3 and Verizon Wireless.

Those same teams are bidding for the enterprise contract, but an additional team led by Level 3 is also bidding for it. For more on Networx, read this article from Wireless Week.

What's going to happen? Level 3 doing their own show for Networx Enterprise could make their team weaker for it. It is very likely that (1) and (2) will go two different teams. The execution risk of going with one combination alone is high, plus the added benefit is that if two teams are chosen, almost half the telecom industry will be working with each other on this project, allowing GSA a strong control on evolving telecom standards.

Who's likely to win Networx Universal? While all teams are technically covered, the AT&T team has EDS, which has speciality in doing such ultra long-term projects, with both good and bad results. And there is Northrop Grumman to counter Lockheed Martin. So this team looks most attractive. Time will tell.

But whichever companies win, they will have to help the various agencies make the transition from one provider to another, a process that was difficult when the government last bid its telecom work for FTS 2001. Such a transition will never be painless, and the extent of effort planned in this giant transition could make some proposals more expensive and pragmatic than others, but less attractive financially. We will see what the GSA decides for itself.