Second Chance

Scandal-plagued telecommunications company WorldCom, currently doing business under its old name, MCI, may find itself back in the good graces of the government, now that a key contract is coming up for renewal.

MCI currently holds a place on FTS 2001, the government's biggest contract for long-distance phone service, which is managed by the General Services Administration. By Jan. 10, GSA must decide whether to renew the contract for one year or to terminate MCI.

But that's not the only decision GSA has to make, and it's certainly not the most politically difficult.

The agency also has proposed debarring MCI as a contractor in light of its business and ethical failings. Debarment would prohibit MCI from competing for any government work and from winning contract renewals.

Now the clock is ticking. If GSA lifts the proposed debarment, not only could MCI get the long distance contract renewed, but the company would be allowed back into the government market entirely. GSA has come under pressure from consumer groups who say any company with a history of abuses such as MCI shouldn't be winning government contracts, particularly when they add up to hundreds of millions of dollars annually, as they have in MCI's case.

Federal agencies have been instructed to limit contracts with companies that have been proposed for debarment. GSA has considered that step with other telecom firms, including Sprint and Qwest Communications.

Mary Alice Johnson, a GSA spokeswoman, said that the agency would make a decision on debarment before midnight Jan. 10, when action must be taken on FTS 2001. The agency sent a letter to MCI government markets chief Jerry Edgerton in November saying that the agency would renew the contract should MCI's "responsibility status improve."

In the meantime, MCI is keeping mum. A company spokeswoman referred all queries to GSA.

Communication Breakdown The Defense Department's system for buying use of commercial communications satellites-which have become an indispensable part of the U.S. military machine-is flawed, mismanaged and could ultimately be costing the Pentagon millions of dollars, according to a new General Accounting Office report.

With the emergence of new battlefield technologies, particularly unmanned aerial drones and communications devices that let soldiers stay in verbal and video contact with commanders, the military's consumption of satellite bandwidth has skyrocketed. Defense officials estimate that the military used 10 times the bandwidth in the recent Iraq war than it did during the Gulf War in the early 1990s.

But the process for procuring all that satellite capacity is too costly, and it needs to change, according to the report (GAO-04-206). Not only does the Pentagon not know how much money it is spending, in most cases purchases are taking nearly three months to complete, GAO auditors found.

According to industry estimates, the military spends between $300 million and $500 million annually for satellite bandwidth. The Defense Department, however, doesn't have a precise figure because the procurement outfit doing most of its buying is "hampered by oversight and management weaknesses," the GAO found.

The Defense Information Systems Agency (DISA) collects orders for bandwidth from the military services and then farms them out to industry. The process itself is apparently fair, and has helped the military get reliable service. But requirements for DISA to report its purchases haven't been enforced, GAO found, and as a result, no one really knows how much the military is spending.

In addition, orders take, on average, about 79 days to complete, despite the fact that DISA tells its customers that the normal turnaround time is less than 50 days. DISA's military customers told GAO that they have to spend additional time making sure their bandwidth orders meet detailed technical requirements, often requiring DISA employees to spend "substantial amounts of time educating" customers on how to submit a request.

In some cases, the customers have made an end run around the procurement shop, buying bandwidth on their own. The Navy told the auditors that by cutting DISA out of one order, the service managed to save almost $5 million over five years.

GAO's findings came as no surprise to the satellite owners and operators. Many of those companies have been lobbying the Pentagon to buy bandwidth in longer-term contracts, rather than purchasing it on the so-called "spot market" on an ad hoc basis, where it's more expensive.

Now those companies have some official data to back up their claims. David Helfgott, president and chief executive of Americom Government Services, called GAO's "a much-needed roadmap for reform." Americom manages a fleet of nearly four dozen satellites, and is one of a growing number of companies that have targeted the military market as the biggest growth sector in the commercial satellite industry.

The GAO auditors recommended that the Pentagon's chief information officer, John Stenbit, develop a strategic plan to correct DISA's weaknesses. He has done so, and a review is ongoing. However, DISA officials declined to discuss it.

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