Telecom companies protest DREN'again

Just when the Defense Information Systems Agency thought it was safe to start work on the Defense Research Engineering Network, the accounting woes of WorldCom Inc., which won the DREN contract in April, threaten to halt the project.

Two telecommunications companies have lodged protests asking the General Accounting Office to stop the Defense Department from proceeding with the $450 million deal for WorldCom to build the high-speed research network.

Sprint Corp. filed a protest on July 3, and Global Crossing Ltd. of Bermuda followed suit July 5, each citing the accounting scandal swirling around WorldCom.

DISA is reviewing the protests and will report its findings next month, spokeswoman Betsy Flood Said.

Many protests

'It's fueled by what's going on in the market,' said Dan Gordon, associate general counsel for GAO. 'The protests allege the award to WorldCom was void, improper'because of the accounting fraud.'

DISA picked WorldCom to build the network after several previous protests of earlier awards. That announcement prompted another round of protests from losing bidders Sprint, Global Crossing and AT&T Corp. Qwest Communications International Inc. did not.

AT&T and Sprint withdrew their protests in May. In June, GAO threw out Global Crossing's protest, finding the company to be a 'nonresponsible' contender because of its own financial problems. But when news surfaced last month that WorldCom officials had not accounted for almost $4 billion in expenses, it opened the floodgates for a second round of protests.

Global Crossing originally won the DREN contract but lost it last summer following a round of protests. During the subsequent competition, DISA said WorldCom offered the best value to the government.

Kirstin Orban, a spokeswoman from Global Crossing, said her company's financial picture looks much brighter these days. Orban said the company decided to protest for reconsideration after hearing about WorldCom.

'Having completed most of our restructuring activities, we are well on our way to completing a successful reorganization,' Global Crossing said in a release. 'At the same time, we have met all of our financial targets, continued to serve approximately 85,000 customers, and even improved network performance.'

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