Operating right in the heart of Washington, D.C., Edward Morche, Senior Vice President and General Manager, Federal Markets, Level 3 Communications (Nasdaq: LVLT) believes what sets the carrier apart from the pack in the government communications space is that it's not an "off the shelf" player.
"What differentiates Level 3 from the other providers is that we don't focus just on selling what's on the shelf," Morche said. "We sit down with a customer and try to figure out what problem they are trying to solve and lay out a solution with them, which is really how we work in the commercial world, and how we want to work with agencies."
It always works better when a customer brings you in as a consultant and say here's my problem that I am trying to solve for."
Such a scenario took place when Level 3 won a task order for data center connectivity for the U.S. Coast Guard's (USCG) business under GSA's Washington Interagency Telecommunications (WITS-3) contract. In the USCG's case, Level 3 had to build out fiber to connect a number of its key data centers that weren't directly connected to its fiber network.
While Level 3 is very fiber rich, it did not happen to have fiber near the Coast Guard building that needed access so it basically built out a conduit to serve that location, it built out fiber to it instead versus renting facilities from another local carrier like Verizon.
"What we will do is, which I think is unique in the industry, is we'll spend the capital, we'll go do the construction ourselves, we'll put the conduit in the ground and pull the fiber whereas other providers will just look at what they have in the inventory and purchase or lease from one someone else," Morche said. "Our preference is, if it makes sense, we'll go dig up the rocks for miles and bring something on net because then we can control it and provide the service levels a customer demands."
Under Morche's watch, Level 3 Federal Markets has won a seat at two contract holders of GSA's WITS-3 contract (the other contract holder being Verizon) and Networx Enterprise.
On Networx Enterprise, Level 3 recently won task orders with the Social Security Administration (SSA), while under WITS-3 it has won contract awards with not only the Coast Guard, but also the Department of State.
While Level 3 won a seat on the Networx Enterprise table, Morche admits there have been challenges in convincing agencies to transition to Networx Enterprise.
As a Networx Enterprise contract holder, Level 3, like other fellow holder Sprint has advocated for simplicity in the Networx award process and the similarities between Networx Universal and the savings that can also be incurred by transitioned to Networx Enterprise. Given that agencies are a year and a half behind in the Networx transition, it costs taxpayers $24 million a month by not getting off the old FTS-2001 contract, but Morche thinks further savings can be incurred with Networx Enterprise.
While all of the comments on the Networx transition "are all totally accurate what's missing is there's a $24 million a month of lost savings by not transitioning away from FTS 2001 to Networx Universal," Morche said. "The other carriers who are on both contracts tend to be towards Universal, but what was in our testimony in a recent House Oversight hearing is that there's an additional incremental billion dollars of lifetime savings over the 10 year period by using Enterprise and not using Universal in addition to that $24 million lost by not transitioning."
Regardless of the challenges, Morche's dedication to go outside the shelf will continue to pay off as more agencies transition off the existing WITS-2001 and FTS-2001 contracts this year and next.