Neal Fox | IT and telecom: Converging opportunities

IT Contracting'commentary

The long-awaited marketplace convergence of IT and telecom technologies, symbolized by the advent of IP-based telecom, arrived with more of whimper than a big bang. This should be good news to the government, which is short on funds, since a major benefit of this convergence is greater efficiency and cost reductions. But has government procurement of these technologies kept pace?

Not so far, at least; but there are glimmers of hope.

The disruptive nature of IP technology has fundamentally changed both IT and telecom, tying them together as intertwined technologies. Sure, you can find all that legacy telecom out there that will be around for years. But data and voice can now travel the same IP-based highways regardless of whether the call those transmissions IT or telecom. The real point here is that convergence is upon us, and that is good news.

Government contracting for these technologies, however, is stuck in the old contracting molds, generally trying to buy IT and telecom separately. So what's a government CIO to do?

Many government agencies still separate their IT and telecom organizations, which is at the heart of the problem. This creates the inevitable 'us vs. them' approach, resulting in failure to coordinate requirements and the subsequent missed opportunities that wastes scarce resources.

How many times have the IT guys put together requirements that ignore the impact on telecom, and vice versa? The result is wasted resources, conflicting requirements, and non-interoperable systems. In this age of convergence, continuation of old habits could have a compounding effect. And I don't mean on the positive side.

Empires are not built in a day, nor do they dissolve easily. But the first item on the agenda is to break down the organizational barriers so the efficiencies of convergence can be realized inside the government. Often, these empires exist on separated funding. Eliminate the separate funding, and the various parts of the organization will be forced to come together to figure out how to integrate the requirements.

The failure to adapt to convergence is especially true in the contracting offices of federal agencies, which have perpetuated the myth that IT and telecom can still be purchased as separate technologies. One of the first things the contracting officer asks when the CIO presents either IT or telecom requirements is 'what is the NAICS code?' You see, the Small Business Administration (SBA) has separated businesses into not-so-neat categories, such as pest control, security guard services, IT, and telecom. Bingo. IT and telecom are very different SBA NAICS codes. Without going into all the reasons why this is the way it is, it is a fact of life.

Meanwhile, this often drives the government to continue to buy IT and telecom separately, because the small business size standard for IT is $23M in annual revenue, but the size standard for telecom is 1500 or fewer employees. Odd as it may seem, this has a big impact on how the government buys IT and telecom, and contributes to driving them into separate buckets to be procured separately. The SBA will eventually need to deal with this problem, but in the meantime, it is a problem that agency CIOs must contend with.

When presented with a set of requirements, government contracting officers tend to procure products and services the same way they have done in the past. This contracting equivalent of legal precedence is generally safe, because if there was no adverse reaction to a previous procurement, then using the same process again and again becomes the standard. Many times this is a result of auditors and IGs driving procurement officials into risk-averse procedures. But that does not necessarily mean the process is efficient. Given the advent of convergence, contracting officers will need to be pushed by the CIOs to change their procurement practices to align with the changes in the technology landscape.

Then there are the government wide IT and telecom contracts, which have not adequately dealt with the issue of convergence. But the recently awarded GSA Alliant contract has one major telecom-would-be-IT company, which is a start. And although the new Networx government wide contract from GSA did not truly embrace convergence, it is still a good strategic sourcing program for IP-based telecom. Using Networx will help agency contracting officers avoid some of the pitfalls of agency unique contracts, including the issues described above.

All in all, convergence of IT and telecom is good for government. It creates efficiencies that can save resources, both personnel and money. But it will fall to agency CIOs to push their contracting shops into the new reality of convergence if these efficiencies are to be realized.

About the Author

Neil Fox is the former assistant commissioner for commercial acquisition at GSA's Federal Supply Service, and is now principal at Neal Fox Consulting.


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