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MCI Faces Fed Work Bar.

MCI received another setback yesterday when the US government's General Services Administration proposed the bankrupt operator be barred from seeking further government work.

The decision to seek a debarment automatically triggers the suspension of MCI from seeking new government contracts. MCI's existing contracts, worth around $1bn a year, are unaffected.

Yesterday's decision by the GSA comes just days after it emerged that US authorities are investigating MCI over an alleged scheme to avoid access charges by rerouting calls. AT&T has lodged an objection to MCI's Chapter 11 reorganization plan, accusing the company of rerouting calls so that AT&T was forced to pickup the access charges.

In a statement yesterday, the General Services Administration said that in June its Office of the Inspector General had begun considering whether MCI met the standard of being "presently responsible" and therefore eligible to compete for government contracts.

The agency's suspension and debarment official has now decided that MCI "lacks the necessary internal controls and business ethics" to compete for government business. This has resulted in the proposed debarment of MCI from government work, and the immediate suspension of its eligibility to compete for new government contracts.

MCI has 30 days in which to appeal and convince the agency that it should not be debarred, before a final decision on the debarment is made.

A spokeswoman for Ashburn, Virginia-based MCI yesterday said that the company had already been putting the required controls in place, and would be working "very closely" with the GSA to put its case.

She added that government agencies can continue to do business with the company, "if there is a compelling reason".

None of WorldCom's existing government contracts were up for renewal "in the immediate future," she said.

This week's events come just over a year after MCI, then known as WorldCom Inc, collapsed into Chapter 11, after disclosing a series of massive accounting irregularities. The latest setbacks come just as the company's hoped it would be tying up the loose ends on its reorganization plan in preparation for reemerging from Chapter 11 later this year.
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Publication:Computergram International
Geographic Code:1USA
Date:Aug 1, 2003
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