GSA extends WorldCom telecom contract

The General Services Administration on Friday exercised the second one-year option for WorldCom Inc. in the FTS2001 telecommunications contract.

The action came just two days after the agency's suspension and debarment officer took the financially troubled company off of a blacklist that prevented it from competing for new government business.

Suspension officer Joseph A. Neurauter on Jan. 7 found that WorldCom had satisfied GSA concerns about accounting controls and business ethics that arose from a 2002 accounting scandal that eventually led to the company's bankruptcy.

GSA determined on Jan. 9 that WorldCom's "performance exceeded that required of it," under the FTS2001 contract and that its prices "remained very attractive when compared with other similarly situated vendors."

FTS2001 is a governmentwide telecommunications program that awarded one of two primary four-year contracts to WorldCom in January 1999. Sprint Corp. received the other contract in December 1998. The contracts contain four one-year options. GSA exercised the first WorldCom option in January 2003. The current option ran through Jan. 10.

WorldCom's FTS2001 customers include the Social Security Administration and Nuclear Regulatory Commission, as well as the departments of Defense, Interior, Commerce, Health and Human Services, and Transportation, including the Federal Aviation Administration.

Following the exposure of accounting irregularities that masked massive losses and the company's subsequent bankruptcy, WorldCom was barred in July 2003 from competing for new government business pending an investigation of its fitness and ability to perform. When the suspension was lifted last week, the company agreed to three years of GSA oversight of its ethics and business practices.

The U.S. Bankruptcy Court approved WorldCom's reorganization plan in October, and the company expects to emerge from bankruptcy early this year. The company has settled civil actions brought by the Securities and Exchange Commission, but remains the subject of investigations by GSA, the Federal Communications Commission, Justice Department and state of Oklahoma.

William Jackson writes for Government Computer News magazine.