MCI Banned From Bidding On Government Contracts

Spurred by a request by the Office of the Inspector General into Ashburn, Va.-based MCI's eligibility to compete for new government contracts, GSA officials said they determined that MCI/WorldCom "lacks the necessary internal controls and business ethics" to bid on new contracts.

The GSA has proposed debarment, which automatically suspends MCI's ability to bid on new federal contracts.

"It is important that all companies and individuals doing business with the federal government be ethical and responsible," said Stephen Perry, GSA Administrator, in a statement. "GSA has rigorously followed the Federal Acquisition Regulations and has acted to protect the interests of the government and taxpayers."

MCI can challenge the decision after a period of 30 days, according to the GSA. MCI has continued to win government contracts throughout its bankruptcy proceedings and counts the federal government as its largest customer.

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Verizon and other competitors have for some time been rallying the government to ban MCI from bidding on federal contracts.

The GSA decision follows new allegations against MCI that claim the carrier rerouted traffic through Canada to avoid high access charges. Competitors claim they, in turn, had to pay MCI's access charges when calls were terminated on their networks in the United States.