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AT&T, Verizon, Qwest Pull in Fed Money

AT&T, Verizon and Qwest today won a piece of the government's largest-ever telecommunications contract, leaving long-time federal supplier Sprint in the cold. The deal for the three telecoms is potentially worth $48 billion over 10 years.

The deal comes against the backdrop of the CTIA Wireless show in Orlando, Fla., where scores of mobile phone operators, networking providers gathered to push their tech onto the industry.

The Networx Universal contract covers 135 federal agencies in 191 countries and aims to provide the government with a secure, worldwide IP and MPLS-based network running on IPv6.

By winning the rights to supply the contract, AT&T , Verizon and Qwest must now compete against each other for individual agency business.

Networx Universal is the first of two Networx contracts to be awarded by the GSA in its efforts to modernize the government's communications systems. The second contract, Networx Enterprise, has fewer mandatory requirements and is intended to allow additional companies to participate in the program. The GSA expects to award the second contract later this spring.

Sprint issued a statement saying it is "disappointed" that it was left off the blockbuster contract after an 18-year relationship with the federal government. "The Sprint team spent significant time and energy on the program and has made large investments to meet the diverse requirements of the agencies," the statement said.

Sprint also said it was "confident" the company would win a portion of the Networx Enterprise contract.

"This effort represents a new era for the General Services Administration (GSA)," Jim Williams, the GSA's Federal Acquisition Service Commissioner, said in a statement. "The advanced technologies and services defined in the Networx program will serve as a platform to transform the government's telecommunications infrastructure to a more seamless and secure environment.

The GSA said the technologically ambitious Networx program should meet the federal government's full range of worldwide telecommunications and networking requirements during the next decade. Its application-oriented architecture will support the federal communications infrastructure underlying key government operations.

"Networx gives agencies a tremendous range of telecommunications solutions and services that are available at a low cost and will address everything from ensuring continuity of operations to securing data from cyber attacks," Dan Herring, AT&T's senior vice president for government solutions, said in a statement.

Susan Zeleniak, vice president for Verizon Federal, said the "GSA has been forward-thinking on the Networx contracts and is offering federal agencies end-to-end solutions that require a service provider with experience at delivering complex services."

Qwest Chairman and CEO Richard C. Notebaert called the Networx contract a "big win" for his company, noting Qwest "already is offering to its business customers many of the advanced features that are required in Networx."

In addition to Networx, Qwest won a contract in November worth up to $10 million from the Defense Information Agency to provide bandwidth transmission services connecting military installations. Last month, Qwest announced it would be the sole provider of telecom services to federal agencies in nine Western states. The contract is worth at least $10 million.

"Although Qwest is already a leading supplier to the U.S. government, this award enables us to grow our federal business," Diana Gowen, senior vice president and general manager of Qwest government services, said in a statement.