GSA extends WorldCom contract but bars tainted former execs

GSA extends WorldCom contract but bars tainted former execs

The General Services Administration has exercised the first one-year option of troubled WorldCom Inc.'s FTS 2001 contract, but it has barred two former WorldCom officials accused of criminal wrongdoing from future federal business.

The option extends the long-distance telecom carrier's contract through Jan. 10, 2004, and comes during a campaign to bar the company from future government business. The Web-based campaign, started in May by former WorldCom employee Mitch Marcus, is drumming up public support for a federal ban for the company.

GSA found that the company's 'performance has been consistent with the terms of the contract even after the announcements early this year of WorldCom's financial difficulties and its Chapter 11 bankruptcy filing.'

Jerry Edgerton, senior vice president of WorldCom Government Markets, said the extension 'shows our customers that WorldCom's ability to provide services of the highest quality remains rock solid.'

Former WorldCom controller David F. Myers has pleaded guilty to federal charges of securities fraud, conspiracy and making false filings with the Securities and Exchange Commission. Former CFO Scott D. Sullivan has been indicted on seven counts of securities fraud, conspiracy and false filings. Both men have been added to the List of Parties Excluded from Federal Procurement and Non Procurement Programs.

The exclusion has little practical effect on WorldCom, as both men have already left the company's management.

WorldCom, along with Sprint Corp., is one of two major providers of long distance telecommunications service under the FTS 2001 contract. The company succeeded AT&T Corp., which held a similar position under the FTS 2000 contract, in January 1999. The contract has a base period of four years with four one-year options and guaranteed minimum revenue of $1.5 billion.

But the telecom company made history in July by becoming the largest company ever to file for bankruptcy protection. The company pledged to continue servicing its 75 FTS 2001 customers, including the Defense, Interior, Commerce, Health and Human Services and Transportation departments.

According to GSA figures, WorldCom did $426 million worth of business with the government in fiscal 2001.

About the Author

William Jackson is a Maryland-based freelance writer.


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