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MCI defends government contracts

The official in charge of US government contracts for WorldCom defended the company's ethics and service record yesterday, and said the carrier, which is rebranding itself as MCI, has not received any special consideration in winning government bids for voice and data services.

"I don't see in that [federal bidding] process, as rigorous as it is, how MCI could be shown any favouritism," said Jerry Edgerton, senior vice president of MCI government markets. "We've won this stuff fair and square."

MCI is operating under Chapter 11 bankruptcy protection after admitting to improper accounting that exceeded $9bn. The company expects to emerge from bankruptcy this autumn.

Senator Susan Collins, chairman of the Senate Governmental Affairs Committee, has launched an investigation into federal government dealings with MCI, including bid awards to WorldCom by the US General Services Administration (GSA).

The GSA released documents to the committee yesterday, saying it continued to do business with WorldCom - even after disclosures of the massive accounting problems - because WorldCom was dealing with the fraud and had provided reliable network service and quick repairs.

Edgerton suggested that recent criticism of MCI was coming from activist groups that might be backed by MCI's competitors, including those who have lost bids to the government that MCI has won. "We come out of this bankruptcy in a very competitive environment," he said. "We will be very successful."

Despite hundreds of millions of dollars in contract wins in recent years, revenue from the government division accounts for only 5% to 7% of total MCI revenue a year, Edgerton said.

MCI, along with Sprint, were each guaranteed $750m from federal agencies for voice and data network services, including wireless and web hosting, in the Federal Technology Services (FTS) 2001 contract, according to GSA records.

The ceiling for the multi-year FTS 2001 contract is $11.5bn for both carriers, and both are in the fifth year of a possible eight-year contract. The contract had an original term of four years, with an option to be extended four more years in one-year increments. MCI had already received $835m in January, according to a GSA spokeswoman.

In May, MCI won a seven-year contract for high-speed data communications from the National Oceanic and Atmospheric Administration worth up to $11m, as well as a $20m contract from the Department of Defense to provide a mobile  phone system in Baghdad, for US personnel there.

"We are an important provider to the government," he said. "The government has realised millions and millions of dollars in savings" through MCI.

Matt Hamblen writes for Computerworld


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