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AMS FOUNDER IN LINE FOR TOP IRS POST


Charles Rossotti, Chairman of AMS

Charles Rossotti will be nominated as commissioner of the Internal Revenue Service in the coming weeks, according to government officials who said extensive background material on Rossotti has been submitted for review. Rossotti is chairman and a founder of American Management Systems Inc., Fairfax, Va.

As the IRS has had extensive problems modernizing its tax processing systems, President Clinton apparently wants Rossotti for his management and technical systems integration skills.

POSTAL SERVICE WINS AMEX CONTRACT

The U.S. Postal Service's recent win of an American Express contract is setting off another round of protests over the government competing with private contractors. The Postal Service reportedly plans to pursue more bill-processing contracts similar to the one it just snagged with American Express. Postal Service officials could not be reached for comment.

Meanwhile, work on the controversial Federal Aviation Administration Integrated Computing Environment-Mainframe and Networking, or ICE-MAN, contract is back on track after an FAA and Office of Management and Budget review of the FAA's decision to award the contract to the U.S. Department of Agriculture. Agriculture beat Computer Sciences Corp., El Segundo, Calif., and the Defense Information Systems Agency to win the $250 million contract. The Information Technology Association of America complained in a letter to FAA that the award could have a "chilling effect" on the federal marketplace. Competition between the government and commercial firms is inherently unfair to the private sector, ITAA President Harris Miller said in the letter to acting FAA Administrator Barry Valentine.

NEW FUND KEYED TO WOMEN-OWNED BUSINESSES

A new $5 million venture capital fund finished its first closing of $2.3 million earlier this month. The Women's Growth Capital Fund, the first of its kind in the mid-Atlantic region, was formed by Patty Abramson, president of Abramson Communications and former chief executive of Hager, Sharp and Abramson; Robert Stein, a lawyer, private investor and former chief of staff at the Commerce Department from 1993 to 1995; and Wendee Kanarek, formerly of Manufacturers Hanover Trust Co. and Shearson American Express. Thirty people - 70 percent of whom are women - have made an initial investment of between $50,000 and $200,000 each.

Besides the obvious point of making money, the fund's goals include providing capital to women-owned businesses that might otherwise not get the money and creating a new network for women business owners. "Historically, women-owned companies have been below the radar screens of venture capital funds," said Abramson, who is managing director of the fund.

Investments will range between $100,000 and $500,000, with average investments expected to be $400,000. The fund directors expect to close on the rest of the $5 million by the end of July, making it the largest fund of its kind in the country.

AGENCY FINDS $2.5 BILLION IN SPREADSHEET

Someone goofed, and $2.5 billion disappeared from the government's 7(a) Guaranteed Loan Program.

But the mistake was discovered in early June by the General Accounting Office, immediately allowing the Small Business Administration to guarantee an additional $2.5 billion worth of commercial loans to small businesses during 1997.

The error was made on a simple spreadsheet program when an employee of the SBA or the Office of Management and Budget typed in "2.54 percent" instead of "1.93 percent." That meant the SBA had to buy $2.54 of default insurance for every $100 dollars in commercial loans that it backed, instead of $1.93 worth of insurance.

Once the GAO discovered the error, the SBA could guarantee $10.3 billion in loans during 1997, instead of the previously estimated $7.8 billion. "There was some disruption to the lending program ... [but] discovery of the mistake did relieve the problem," said SBA spokesman Mike Stamler.

LOCAL BUYING RAMPAGE

Excel Communications Inc. in Dallas, a wholesaler of long distance service, has announced plans to acquire Telco Communications Group in Chantilly, Va., for $1.2 billion. The deal will create a communications company with 6.3 million customers, a 100,000-mile fiber optic network and revenues of about $2 billion.

Also, Washington-based Torso Inc. will merge with Wayfarer Communications in Mountain View, Calif. The dollar amount of the deal was not disclosed by company executives. Torso, which was formed in October 1996, developed a product that allows business managers to analyze, identify and deliver changes to specific internal and external World Wide Web sites to targeted desktops.

Joining them was Intermedia Communications in Tampa, Fla., which announced plans to acquire Digex Inc. of Beltsville, Md., for $150 million. (See story on page 50)

GOOD GOES TO PRIVATE SECTOR

Mary Good, who resigned earlier this month as undersecretary for technology at the U.S. Department of Commerce, was elected June 5 to the board of directors of Biogen Inc., a biopharmaceutical company in Cambridge, Mass. Good served as undersecretary, a Clinton administration presidential appointment, from 1993 to 1996.

IS AOL DUMPING ITS BIZ-TO-BIZ PLAN?

The Dulles, Va.-based online services company's one-year-old Enterprise unit has quietly been restructured and folded under AOL's company product marketing umbrella.

Mark Walsh, who started the unit last summer, said he will stay with AOL; his title will change from senior vice president for Enterprise to senior vice president for Enterprise Ventures. "We're moving into the brand."

While AOL is known mostly for its consumer market, Enterprise has gone after business customers, offering online services such as World Wide Web page hosting and development, intranets and voice over the Internet.

AOL spokeswoman Wendy Goldberg said the Enterprise division is being restructured to improve its communications with the rest of the company, but analysts who follow AOL saw it as a sign that the business-to-business side of the company is not thriving.

"If it was flourishing, they would maintain its independence and increase the size," said Ulric Weil, senior technology analyst with Friedman, Billings, Ramsey & Co., Arlington, Va.

CONTRACT SIGN-UP SHEET

By the end of the summer, small contractors will be able to quickly sign onto a new federal list that registers them for a gamut of upcoming contracts and support programs. This Pro-Net list, found at http://www.sba.gov, was created by the Small Business Administration and the University of New Hampshire. The program was announced June 2 by Vice President Al Gore, and the initial pilot list already includes profiles of 6,500 small businesses, including all SBA 8(a) firms.

Each profile includes a summary of the participating firm's products and services, its history, its business references, and other data of interest to potential contracting entities. Profiles can be searched by Standard Industrial Classification codes, state, congressional district, key words, quality certifications, business type, ownership, race and gender, electronic data interchange capability, and security clearance.

IRIDIUM RAISES IPO BAR

Iridium World Communications Ltd., based in Washington, has decided to offer 2 million more shares of common stock in its initial public offering. The developer of a global satellite telephone network was originally offering 10 million shares of common stock in its filing on March 18. As of June 9, the company, with lead underwriter Merrill Lynch, will offer 12 million shares, valued at $20 a share. The change will allow the company to raise $240 million.

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