AT&T, Verizon, Qwest win major telecom contract

WASHINGTON (CNN) -- The General Services Administration announced Thursday the award of the largest government telecommunications contract ever - a maximum of $48 billion over 10 years - to Verizon, AT&T and Qwest.

Under the GSA umbrella, the Networx program will work with the three companies to fulfill the networking and telecommunications needs of all federal government agencies, including wireless, satellite and Internet services.

"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," GSA's Federal Acquisition Service Commissioner Jim Williams said in a written statement.

The contract is valued at a minimum of $20 billion over 10 years, with a spending cap of $48 billion.

Under the terms of the contracts, Verizon (Charts), AT&T (Charts) and Qwest (Charts) will compete with each other for telecommunications and networking services task orders for the federal government.

With Thursday's announcement, other companies, such as Sprint-Nextel (Charts), are now excluded from doing business with the government under the Networx program.

Verizon, the first of the three companies awarded the contract, described the contract in a written statement as being "designed to enable the government to choose among a comprehensive range of integrated telecommunications and network services, ranging from converged voice, video and data services over a single network to a variety of next-generation offerings, including advanced IP services, managed services and advanced security services."

"AT&T will be a partner to all agencies that want to transition today, or when they're ready, to the converged IP world of the future, by helping them enhance their network infrastructure through Networx," AT&T said in a written statement.

Prior to the announcement, Qwest already provided telecommunications services to more than 50 federal government agencies, including the Department of Energy, Department of Defense, Department of Justice and the Department of Treasury.

The GSA contract, is "also good for government customers because including Qwest in Networx provides federal agencies with more choices, which will enable creative solutions and excellent price performance for the U.S. government and the taxpayers," Qwest said in a statement.

The GSA manages $500 billion of the government's assets, or one-fourth of the government's total procurement monies, which includes 170,000 vehicles and 8,300 government owned and leased buildings.

-- By CNN's Katy Byron in New York

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