WorldCom gets new heat from Hill, GSA

The referral of a negative report by the General Services Administration's inspector general earlier this month has initiated suspension proceedings against troubled telecom company WorldCom Inc.

Besides the GSA review of WorldCom's fitness as a government contractor, the Senate Governmental Affairs Committee has asked five other agencies for information about federal WorldCom contracts.

WorldCom has filed a reorganization plan to emerge from bankruptcy. The company sought Chapter 11 protection in the wake of revelations about accounting problems that resulted in billions of dollars in earnings restatements and the loss of billions of dollars more in shareholder value.

While in bankruptcy the company has continued to provide service under major government contracts and has been awarded several more contracts.

A number of organizations have called for a prohibition on the company doing government business.

Sen. Susan Collins (R-Maine), chairwoman of the Senate Governmental Affairs Committee, asked GSA earlier this year to look into WorldCom's financial and ethical dealings with the government. That report was critical of the company and was referred to GSA's Office of Acquisition Policy for review by the agency suspension and debarment official.

That review is ongoing and there is no timetable for its completion, a GSA spokesman said.

Meanwhile, Collins' committee has asked for information on WorldCom contracts awarded or extended in the last year by the Postal Service and the departments of Commerce, Defense, State and Veterans Affairs.

"I'm reserving judgment on the ultimate question of WorldCom's suitability as a federal contractor, and my investigation will continue," Collins said in a statement.