- By Thomas R. Temin
- Jul 18, 2002
Thomas R. Temin
Like many citizens, I was both fascinated and repelled by the spectacle of the WorldCom Inc. executives hiding behind the Fifth Amendment rather than answering admittedly hostile congressional questions. They appeared to embody contradictory emotions'arrogance and humiliation, nonchalance and fear, earnestness and deception.
What should the government do when several of its telecommunications vendors are mired in financial scandal? It can terminate a contract at any time for convenience, but in practice terminations are rare and happen only for nonperformance or malfeasance. Similarly, the government may blackball a contractor for non-contract-related activities, but this doesn't happen often.
Yet agencies share with their commercial counterparts real concerns over WorldCom's ability to keep going. So far, there's no evidence the company hasn't performed in its day-to-day operations. A bankruptcy filing wouldn't necessarily shutter operations and, at press time, the company was negotiating for billions in secured loans to avoid a Chapter 11 filing.
WorldCom has major FTS 2001, Navy-Marine Corps Intranet and Federal Aviation Administration contracts. Plus, it was recently awarded the Defense Research Engineering Network contract, freshly under protest by Sprint Corp. and, of all companies, the original DREN winner but also financially troubled Global Crossing Ltd. Talk about chutzpah.
Love it or hate it, WorldCom's fortunes matter to the government because of the mission-critical operations that rely on its infrastructure and services. I urge caution in moving to switch vendors or to disqualify WorldCom from future bids. Agencies contemplating such actions should know they would nudge the company closer to bankruptcy.
The current parade of notorious chief executive officers and their handmaidens in finance and investment can certainly spark a desire for revenge. But leave judgment and damnation to the courts.
Agencies holding contracts with the WorldComs of the world should concentrate on performance but keep a careful eye on the background situation.