WorldCom Wins $360M Government Contract
JACKSON, Miss. (AP) _ WorldCom Inc. has won its third government contract since early November, a sign that the telecommunications company is convincing government agencies that its massive bankruptcy has not hindered its ability to provide large-scale services.
The latest contract, announced Thursday, is a 10-year agreement for WorldCom to provide as much as $360 million in data and Internet services to the U.S. Department of State.
WorldCom has been one of the largest federal contractors _ its federal contracts brought in $1.7 billion _ 8 percent of its revenue last year.
But since news of its accounting fraud, now estimated at more than $9 billion, began surfacing last spring, WorldCom’s government contract work came under attack by rivals and special interest groups.
In addition, the General Services Administration began examining WorldCom’s performance under its telecommunications contract that gives it the right to bid to provide services such as long-distance and Web hosting to government agencies.
Thursday’s contract announcement ``reflects a shift in perception on the part of WorldCom’s customers, and could open to door to reestablish WorldCom as a significant player in the government arena,″ said Warren, president of Susss Consulting Inc. of Jenkintown, Pa., which specializes in market research and consulting in the federal marketplace.
WorldCom filed the largest-ever U.S. bankruptcy in July and still faces massive fines for its accounting fraud.
WorldCom spokeswoman Natasha Haubold called the new contract ``a vote of confidence.″
``It’s another example that WorldCom is continuing to get new business and win new contracts,″ she said.
Nine labor and advocacy groups, including the Communications Workers of America, have lobbied the General Services Administration to suspend WorldCom from bidding on government contracts. WorldCom blamed the protest on the Baby Bells and their operating companies.
The GSA hasn’t taken its eye off WorldCom. ``We continue to monitor WorldCom’s performance,″ GSA spokeswoman Mary Alice Johnson said.
In July, WorldCom lost out to a group that includes Qwest Communications a $3.5 billion contract with the Federal Aviation Administration to upgrade the country’s air traffic control communication system. WorldCom had been the incumbent contractor.
But since early November, WorldCom has won two other government contracts.
One contract allows it to provide phone services to Veterans Affairs medical centers and outpatient clinics for five years. WorldCom has declined to disclose the value of the contrtact.
It also won a one-year renewal of a GSA contract that allows WorldCom and Sprint Communications Corp. to compete to provide telephone, Internet and other services to federal agencies. WorldCom took in $331 million in revenue last year under that contract.