AAFES phone service contract goes to MCI WorldCom.FTS

The Army and Air Force Exchange Service has awarded a 10-year, $1.5 billion
communications contract to MCI WorldCom Inc. to supply pay phones, residential and phone
center service, Internet access and calling cards at Army and Air Force installations
around the world.

MCI WorldCom beat out incumbent AT&T Corp., Qwest Communications International Inc.
of Denver and Sprint Corp. The contract award came less than a month after MCI WorldCom
won a portion of the General Services Administration’s FTS 2001 procurement, which
former incumbent AT&T also lost.

“Quite simply, MCI WorldCom offered AAFES more than the other bidders did,”
said Michelle Priester, AAFES’ chief contractor for telecommunications.

Figuring in the bid were guaranteed annual dividends and high percentages of the
contractor’s revenue going back to military installations for morale, welfare and
recreation activities.

MCI WorldCom will roll its existing AAFES prepaid calling card services into the
contract, which also includes standard calling cards.

The contract, which opens March 2 and has seven base years and three one-year options,
is AAFES’ largest telecommunications deal.

Under separate contracts, Sprint provides local and long-distance telephone service to
35,000 Army and Air Force personnel in barracks as well as voice and data communications
to AAFES’ catalog operations. AT&T provides Internet access to bases in Japan and

AAFES dates back to 1895 as a retail supplier to Army, and later Air Force,
active-duty, reserve and National Guard personnel and retirees and their families. It
operates catalog centers as well as post exchanges on military bases.

The most noticeable part of the contract transition will be the change-out of more than
16,500 pay phones at military sites around the world.

About the Author

William Jackson is a Maryland-based freelance writer.


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