	Background

GSA is responsible for ensuring that federal agencies have access to the  telecommunications services and solutions that they need to meet  mission requirements. Networx Provides Contract Vehicles for Agencies to Acquire Telecommunications Services

Networx is the latest in a series of programs GSA has offered to agencies  to provide telecommunications services. These contracts were termed “crossover  contracts,” and were with AT&T and Qwest, among others. Complex Acquisition Process and Weaknesses in Project Planning Contributed to Networx Transition Delays, Resulting in Increased Costs and Missed Savings

Several factors contributed to delays in transitioning from FTS2001 to  Networx. Weaknesses in  project management also contributed to the delays. Complex Acquisition Process Compounded by Limited Agency Expertise

The complexity of the acquisition process was related to duplicative and  overlapping contract vehicles, the large number of potential service  options for a given requirement, and challenges related to implementing  the fair opportunity process, among others. Specifically, GSA estimated that the  transition cost increased by $66.4 million, or 44 percent, over the $151.5  million planned in 2004. In addition to the added transition costs incurred as a result of the delays,  agencies likely paid about $329 million more for similar services by  staying on the FTS2001 contracts longer. Applying GSA’s calculated  savings rate to the amount spent on FTS2001 services, we estimate that  agencies could have saved about $329 million. GSA collected, analyzed, and validated lessons learned, and partially  archived and shared them. However, it has yet to prioritize and apply  lessons learned. However, the complexity of the process for transitioning  to Networx, which was compounded by a decline in telecommunications  expertise at the agencies as well as weaknesses in project planning,  contributed to delays in agencies’ transition to Networx. To its credit, GSA has studied the  Networx transition and documented lessons learned. Recommendations for Executive Action

To improve planning and execution of the next telecommunications  transition, we recommend that the Administrator of General Services take  the following actions:  in coordination with the Office of Personnel Management, examine  potential government-wide telecommunications expertise shortfalls  and use the study to shape the NS2020 strategic approach, and ensure that project planning guidance to agencies on the future  transition calls for establishing transition plans with detailed time lines  that take into account priorities relative to agencies’ mission-critical  systems, contingency plans, and identified risks, and are updated to  reflect the current status and endpoint of the transition. In addition, we recommend the Administrator take the following three  actions related to GSA’s lessons-learned process: populate and maintain on an ongoing basis the agency’s transition  lessons-learned database with the lessons GSA has identified and  make it available for user searches by those involved in developing  the next transition strategy; prioritize the lessons, taking into particular consideration the factors  we reported as contributing to delays, and determine the resources  needed to apply them; and ensure that the lessons are applied, based on priority and available  resources, to the next transition strategy. In written comments, SSA stated that it did not agree that our statement  that agencies tended to transition easier items first to demonstrate  progress before they transitioned items that needed a long lead time  applied to SSA. Appendix I: Objectives, Scope, and Methodology

Our objectives were to determine (1) what factors contributed to the delay  in transitioning services to Networx and the consequences the federal  government experienced as a result of the delayed transition, and (2) to  what extent the General Services Administration (GSA) is documenting  and applying lessons learned as it prepares for the next  telecommunications contract transition. For example, using this savings rate, it determined  that in January 2010, agencies could have saved $22.4 million that  month. To determine the extent to which GSA is documenting and applying  lessons learned, we compared GSA’s lessons learned process with key  activities we previously identified as best practices.
Why GAO Did This Study

GSA is responsible for ensuring that federal agencies have access to the telecommunications services and solutions needed to meet their mission requirements. As agencies' telecommunications needs have evolved, so too have GSA's contracts to help support them. Its latest contracts, signed in 2007 and collectively called Networx, provide transport; Internet protocol; wireless; and management and application services, among others. In fiscal year 2012, agencies spent over $1.4 billion on Networx services. However, the transition from the previous telecommunications contracts, known as FTS2001, has not been easy, taking almost 3 years longer than planned.
GAO's objectives were to determine (1) what factors contributed to the delay in transitioning services to Networx and the consequences due to the delay, and (2) to what extent GSA is documenting and applying lessons learned as it prepares for the next telecommunications contract transition. GAO examined lessons learned activities and supporting documents, cost and missed savings estimates, performed case studies at two agencies with large delays, and interviewed agency and service provider officials.

What GAO Found

Complex acquisition processes and weaknesses in project planning contributed to the delays experienced on the Networx transition, resulting in cost increases and missed savings. In particular, the complexity of the acquisition process was related to duplicative contract vehicles, the large number of service options, and changes related to the process for ensuring fair competition among service providers, among others. These issues were reported by the General Services Administration (GSA) to have been compounded by a decline in contracting and technical expertise within the agencies. GAO has identified skills gaps in the federal workforce as a government-wide high-risk area and highlighted the need for agencies to work with the Office of Personnel Management (OPM) to close them. Weaknesses in agencies' project planning also contributed to the delays. For example, agencies tended to transition easier items first, to demonstrate progress, before they transitioned items that needed a long lead time such as data networks and international services. As a result of the delays, GSA's estimated cost to complete the transition increased by $66.4 million, 44 percent over the baseline estimate. In addition to the extra transition costs, agencies may have paid more for similar services by staying on the FTS2001 contracts longer than planned. Specifically, in April 2010, GSA estimated that agencies could have saved 28.4 percent of their spending on FTS2001 by using Networx contracts instead. Based on this rate of savings, GAO estimates that agencies could have saved about $329 million if they had transitioned to Networx on time.
The extent to which GSA is documenting and applying lessons learned in preparation for the next telecommunications transition varies. GSA has fully or partially satisfied five of six key practices necessary for a robust lessons learned process. To its credit, GSA has collected, analyzed, and validated lessons learned from the Networx transition. However, it has not fully shared these lessons with its customer agencies or prioritized them to ensure that resources are applied to areas with the greatest return on investment. GSA plans to finalize its next telecommunications acquisition strategy in December 2013 and begin the next transition when it awards new contracts in February 2017. Fully addressing key lessons learned practices should help GSA and agencies better plan for and execute the next telecommunications transition.

What GAO Recommends

GAO recommends that, in preparing for the next transition, GSA, in coordination with OPM, examine potential government-wide expertise shortfalls, and that it provide agencies guidance on project planning and fully archive, share, and prioritize lessons learned. GSA and OPM agreed with GAO's recommendations.