GAO: Legacy Telecom Delays Trigger 206% Price Hikes for DoD and Federal Agencies

The financial fallout heavily impacts defense and security leaders. The Department of Defense saw its monthly Networx legacy billing surge by 210 percent, jumping from $4.84 million in February 2025 to over $15.01 million in March 2025. The Department of Homeland Security experienced a similar 188 percent increase, rising from $5.86 million to $16.85 million. Combined across the six evaluated departments—which also include Commerce, Interior, Agriculture, and Transportation—monthly legacy contract spend spiked from $13.38 million to nearly $40.93 million as vendors capitalized on extended service terms and phased-out telecommunications technologies.

Transition efforts lagged more than three years behind GSA's revised September 2022 deadline. Agencies cited 21 contributing factors, led by EIS vendor performance shortfalls, legacy architecture complexities, and pandemic-driven supply chain and staffing bottlenecks. Critically, risk mitigation was fragmented. Selected agencies mitigated risks for only half of their cited delay factors, while GSA lacks central visibility into whether service disconnections caused actual mission disruptions. GSA remains unaware of specific outage events because it is not systematically notified when legacy lines are severed before replacement services become operational.

For defense acquisition officials and program managers, the GAO report underscores urgent risks surrounding IT infrastructure transitions and vendor pricing leverage. As GSA begins planning the follow-on vehicle to EIS, legacy network modernization must be paired with rigorous, real-time risk monitoring. Uncoordinated cutovers not only drain operation and maintenance budgets through penalty pricing, but also jeopardize operational continuity across mission-critical command, control, and intelligence communications networks. (Source: GAO Reports)