Delays in telecom switch costing government millions

Delays in the federal government's switch to a new telecommunications contract are costing taxpayers more than $20 million each month in missed savings, according to testimony.

At a House Oversight and Government Reform Committee hearing to discuss the government's delayed transition to the Networx telecommunications program, chairman Edolphus Towns (D-NY) chided the General Services Administration for not meeting their original summer 2010 deadline. "This is not a small matter. GSA reports that for every month the transition is delayed, the Government is losing approximately $22.4 million in unrealized savings," said Towns in his opening statement, adding that the unrealized savings could total between $300 and $500 million by next year. Networx is the government's largest telecommunications contract to date, a 10-year pact worth up to $68 billion. It offers more advanced telecom technologies and services than its predecessor, the expiring FTS 2001 contract. GSA reported that only 50 percent of services on FTS 2001 have been cut off, making it highly unlikely that all services will be transitioned before the contract expires in June 2011.