Government Awards Five Telecommunications Companies $20 Billion Contract

Five companies -- AT&T Inc. (T), Level 3 Communications, Verizon Communications Inc. (VZ), Qwest Communications International Inc. (Q) and Sprint Nextel Corp. (S) -- on Thursday were awarded a federal telecommunications contract worth up to $20 billion over 10 years.

Getting on the so-called Networx Enterprise contract is the first step. The winners must now compete with each other to win business from agencies looking to improve their voice, data and other telecom services.

It's the second telecom contract awarded by the General Services Administration in about two months.

In late March, Qwest Communications International Inc., AT&T Inc. and Verizon Communications Inc. were winners of the much larger Networx Universal contract, the government's largest telecom contract ever awarded. That deal is potentially worth up to $48 billion over a decade.

Universal requires companies to not only maintain current agencies' needs, but also offer advanced services, such as Internet-based telephone service, network security and video and Web conferencing, domestically and internationally.

Enterprise has far fewer requirements than the much larger Universal contract and covers a smaller geographic area.