WASHINGTON-The inspector general of the General Services Administration is investigating WorldCom Inc.’s contracts with the federal government and may issue recommendations soon on whether the Bush administration should continue to do business with the embattled long-distance company, according to a congressional source late today.
The GSA inspector general was not immediately available for comment. It is not public knowledge that the GSA inspector general was investigating WorldCom’s business relationship with the U.S. government.
Senate Governmental Affairs Committee Chairman Susan Collins (R-Maine) said she is dissatisfied with GSA Administrator Stephen Perry’s answers to questions she posed in a May 16 letter on WorldCom’s qualifications to bid on government contracts.
“Based upon .regulations and available information, GSA has not determined that MCI WorldCom should be suspended or debarred,” stated GSA general counsel Raymond McKenna in a May 30 memo to Perry, which was supplied to Collins.
WorldCom, which recently snagged an Iraq mobile-phone contract valued at $34 million from the Pentagon, has admitted to fraudulently overstating revenue by at least $9 billion. Last month, WorldCom, now marketed as MCI, agreed to pay a $500 million fine levied by the Securities and Exchange Commission.
“The GSA appears to have focused on WorldCom’s capacity to perform the contract without consideration of the company’s business ethics and integrity, both of which are integral in determining whether a company is a ‘responsible’ government contractor,” said Collins.
Collins said the committee would continue to examine GSA’s activities regarding WorldCom.
House and Senate bills would require the Bush administration to justify non-competitive contracts awarded for Iraq reconstruction. The MCI contract to equip officials in Baghdad with L.M. Ericsson mobile phones is not believed to have been put out for bid.
