GSA looks at Qwest's fitness

GSA looks at Qwest's fitness

The General Services Administration is reviewing the financial and technical capabilities of Qwest Communications International Inc. of Denver for future government telecommunications contracts in the wake of civil and criminal investigations of the carrier.

Qwest holds four of GSA's Metropolitan Area Acquisition local-service contracts in Albuquerque, N.M.; Boise, Idaho; Minneapolis; and Seattle. It also has a national Web services contract.

GSA general counsel Ray McKenna today announced the action, two days after Qwest said it is the subject of a criminal investigation by the U.S. Attorney's office in Denver. 'GSA is conducting a review of all Qwest government contracts and other related information for purposes of determining present responsibility,' McKenna's statement said.

All government contractors must be determined to be responsible, a finding that covers financial soundness as well as technical ability to carry out the contract terms. The Qwest review does not mean that existing contracts would be cancelled.

Qwest was the first GSA contractor to cross over from the MAA program to the FTS 2001 long-haul program. Its Boise MAA contract was modified in April to let it offer Web hosting services under FTS 2001.

Qwest also has been under investigation by the Securities and Exchange Commission. Chief executive officer Joseph Nacchio resigned in June, the stock has gone into free fall and bond ratings have been reduced to junk status.

GSA earlier announced it was conducting a similar fitness review of WorldCom Inc., one of two FTS 2001 contractors. That review followed WorldCom's announcement it had misstated earnings for 2001 and early 2002 by $3.8 billion and was fighting to avoid bankruptcy. WorldCom has said it is committed to continue serving its government customers.

About the Author

William Jackson is a Maryland-based freelance writer.

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