GSA Reports Agency Buying Trends through Networx

Published: June 25, 2014

Communications ServicesForecasts and SpendingGSA

In early June, the General Services Administration (GSA) reported on government telecommunications buying habits from the first half of fiscal 2014. Using data collected through their Networx program, GSA analysis found $332 million in agency savings amid increased acquisition.

GSA’s “big data” from Networx acquisition details stems from over 136 federal agencies buying through the program. These agencies purchased over $762 million in services through Networx during the first half of fiscal 2014. This amounts to a 12.8% year-over-year increase in purchases from FY 2013, and it means that agencies are spending more through the Networx contracts.

Several services have been purchased more during the first half of this year than last. These include Network-Based Internet Protocol Virtual Private Network Service, Managed Network Services, and call center services. GSA also observed an increase in storage services, such as Network Attached Storage and Storage Area Networks. Their analysis also noted a decrease in several services, particularly Frame Relay Service and Asynchronous Transfer Mode. Since GSA uses percentages to report its findings about changes from FY 2013 to FY 2014, it’s difficult to tell exactly how much growth (or contraction) was seen in the various services it highlights.

According to GSA, these trends are indicative of trends in the broader market. As an analyst covering communications and network services in the federal space, I couldn’t help but wonder how patterns through Networx weigh against other major vehicles like Transformation Twenty One Total Technology Program (T4) and Schedule 70. Leveraging the Federal Industry Analysis team’s market segmentation and reported IT obligations for FY 2013, the communications and network services (CNS) market saw over $2 billion in spending. Across the government, the top ten vehicles for CNS FY 2013 obligations are as follows:

  1. GSA Schedule 70
  2. Networx Enterprise
  3. Operations Maintenance and Defense of Army Communications (Southwest and Central Asia)
  4. Transformation Twenty One Total Technology Program (T4)
  5. Networx Universal
  6. DISN Satellite Transmission Services – Global
  7. Total Engineering and Integration Services (TEIS III)
  8. Department of Navy Wireless Services
  9. End-to-End Solutions for the Future Commercial SatCom Acquisition
  10. Information Technology Enterprise Solutions 2 Services (ITES 2S)

In total, these ten vehicles comprise 41.5% of reported spending for that fiscal year. Both Networx vehicles (Enterprise and Universal) fall in the top five contract vehicles. Combined, these two vehicles represent 11.9% of the spending in this segment of the IT market for FY 2013. While those contracts represent a growing portion of the CNS market, it still leaves room for wondering how trends through roughly 12% of the market align with the other 88%.