GSA moves to debar WorldCom

The General Services Administration has slapped WorldCom Inc. with a suspension and a proposed debarment, which effectively stops the company from winning new government contracts.

WorldCom, which operates under the brand name MCI, has 30 days to respond to GSA's action.

The Ashburn, Va.-based telecommunications giant has been under attack from rivals such as Verizon Inc. and AT&T Corp., which have claimed that the company improperly routed calls to avoid access charges and that because of WorldCom's bankruptcy and accounting scandal, the company should not be allowed to win government contracts.

While still in bankruptcy and under investigation by the Securities and Exchange Commission, WorldCom has won several federal contracts, including the Defense Research and Engineering Network, a $450 million contract to provide long-haul communication service for more than 5,000 users of the Defense Department's high-performance computing network.

WorldCom's federal business has remained strong during its troubles, helping the company attain the No. 8 spot on Washington Technology's Top 100 ranking for 2003. GSA spokeswoman Mary Alice Johnson said the contractor is doing an estimated $700 million to $1 billion in federal business for fiscal 2003.

GSA also has suspended four more former WorldCom executives of the troubled FTS 2001 contractor.

That means the six now-suspended former employees cannot participate in government bidding if they join new companies, Johnson said. They are: MCI chief financial officer Scott Sullivan, controller David Myers, chief executive officer Bernard Ebbers, general accounting director Buford Yates, management reporting director Betty Vinson and legal accounting director Troy Normand.

"They are disqualified from doing any business with the government," Johnson said.

In response to GSA's action yesterday, WorldCom said it accepted the proposed debarment and will implement new internal controls and strengthen its Ethics Office.

GSA's decision will not affect WorldCom's ability to serve current customers, the company said.

WorldCom is expected to emerge from bankruptcy in October.

About the Author

Nick Wakeman is the editor-in-chief of Washington Technology. Follow him on Twitter: @nick_wakeman.

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