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Reuters
U.S. extends telecommunications contract with MCI
Friday January 9, 7:20 pm ET


WASHINGTON, Jan 9 (Reuters) - MCI (Other OTC:WCOEQ.PK - News) will provide another year of telecommunications services to several federal agencies under a contract worth hundreds of millions of dollars to the bankrupt company, the U.S. government said on Friday.
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The government said it has extended the contract days after a suspension was lifted that barred the No. 2 U.S. long-distance telephone and data company from receiving federal contracts.

MCI, whose legal name is still WorldCom Inc., will provide telecommunications services to government agencies including the U.S. Departments of Defense, Commerce, Transportation and Health and Human Services.

It continued providing those services even after the emergence of an accounting scandal, the proportions of which have now reached about $11 billion. MCI earned $396.5 million from the contract during the last fiscal year.

Ashburn, Virginia-based MCI's "performance exceeded that required of it under the terms" of the contract, said the U.S. General Services Administration, which handles government procurement. "The company's pricing remained very attractive when compared with other similarly situated vendors."

MCI filed for bankruptcy protection in 2002 and hopes to emerge soon.

The GSA suspended the company in July from receiving new contracts and extensions while it reviewed whether a longer suspension was needed because MCI's lapses in ethics and internal controls.

On Wednesday, the procurement agency lifted the ban but only after MCI agreed to several conditions for monitoring its business ethics and internal controls over the next three years.

The company won the lucrative four-year contract in 1999 and the GSA extended the contract once before for a year.