GSA extends WorldCom work

WorldCom Inc. dodged disbarment and landed an extension of the FTS2001 long-distance contract, its biggest federal business.

The General Services Administration extended the contract two days after its suspension found that the Ashburn, Va., company had satisfied GSA's concerns about accounting controls and ethics. Those problems arose during 2002.

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 a GSA investigation of its fitness and ability to perform.

When the suspension was lifted earlier this month, WorldCom 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. WorldCom 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 the state of Oklahoma.

GSA determined 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 for long-distance services. WorldCom won one of two four-year FTS2001 contracts in January 1999. Sprint Corp. got the other contract in December 1998. The contracts include four one-year options. Sprint also has had its contract extended.

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

-- From staff reports