The government is losing $18 million every month because agencies have not yet switched their telecommunications services to the General Services Administration's Networx contract.

Approximately 96 percent of the $1.1 billion in government telecommunications spending remains on the legacy FTS2001 telecom contract, which expires in June 2011, said Karl Krumbholz, GSA's director of Network Services Programs. Krumbholz spoke Wednesday at an Association for Federal Information and Resource Management roundtable

Of the 383 agencies that must choose a vendor under the contract, only 48 percent have done so, Krumbholz said. He would not disclose which agencies have not selected a Networx carrier, but claimed most of the agencies were smaller agencies and Indian tribes.

Still, with only 20 months left until the FTS contract expires — and more than 3.4 million of the government's 5 million circuits to transition to Networx — if agencies don't move quickly, they run the risk of having no provider to continue their voice and data networks, Krumbholz said following the roundtable.

"Everybody has to have a contract in order to order network services, so if there is no contract, there is no ability to order the services," Krumbholz told Federal Times. "Our goal is to get it done, so that problem doesn't occur."

Krumbholz was scheduled to make a presentation to the Chief Information Officers Council on Wednesday to show CIOs why Networx transition should be a top priority. By engaging senior agency officials and letting them know of the lost savings and potential for lost service, Krumbholz said he was "optimistic" no agency would miss the 2011 deadline.

Already, GSA has moved back deadlines for agencies to switch to the new contract and obtain transition cost reimbursements from GSA. Under the old deadlines, to obtain reimbursements, orders for like-for-like services were supposed to be placed by January and orders for new services were supposed to be placed by April . Both dates have been pushed back until Aug. 31, the latest possible date when vendors say they can complete the transition of services before June 2011, Krumbholz said.

The transition has been delayed because agencies have run into "extenuating circumstances" such as the increasing complexity of network services offerings and turnover among transition staff, said Sanjeev Bhagowalia, the Interior Department CIO. He is also co-chairman of the Interagency Management Council, which serves as a bridge between the agencies and GSA on Networx transition issues.

Also contributing to the delay, companies can now protest task orders on multiple-award contracts, including the two contracts that make up the Networx program. That threat has slowed agencies down because "some people in government are risk averse at times and [they] have to go through more checks and balances in the process," Bhagowalia explained.

Agencies also are delayed because they don't have complete inventories of their infrastructure that would be affected in the Networx transition. So they cannot yet issue requests for proposals to vendors, said Michael Ponti, director of strategic resources and planning for the Office of the Assistant Secretary of Defense for Network and Information Integration.

Given the size of the Defense Department, "one of the biggest challenges for us over the last couple of years is to try to get our arms around the entire inventory of things we're dealing with that are transitioning over from FTS2001 to Networx," Ponti said. "You really need to know what you have out there in your baseline in order to transition."

To spur agencies along, the Interagency Management Council and GSA have established measures to show agencies how they stack up to one another on a monthly basis, Bhagowalia said. "When these dashboards go up, [senior] people pay attention," he said. With more senior-level attention, Bhagowalia said he anticipates there will be more action, especially in austere budget times when every penny counts and $18 million is going to waste each month Networx transition is delayed. He declined, however, to outline the dashboard measures before they were approved by the CIO Council.