WorldCom wins defense contract from Global Crossing

The U.S. Department of Defense (DOD) awarded WorldCom a 10-year networking contract capped at US$450 million for defense research and engineering laboratories, the company announced Friday.

Global Crossing Holdings originally won the contract to build a secure telecommunication system for the Defense Information Systems Agency, but the agency canceled the contract in August and re-opened the bidding, according to WorldCom and the DOD.

Other carriers, including data and long distance carrier WorldCom, AT&T Corp. Qwest Communications International Inc. and Sprint Corp., challenged the award of the contract to Global Crossing, claiming Global Crossing couldn't meet the required technical specifications.

Global Crossing fell into bankruptcy in January amid allegations of improper accounting practices, and investors from two companies based in Asia -- Hutchison Whampoa Ltd. and Singapore Technologies Telemedia Pte. Ltd. -- rose to buy the carrier out. Global Crossing critics raised the added possibility of a security risk caused by foreign interests owning a vital defense contract as another reason it should be reassigned.

The defense contract has a minimum guarantee of $6 million, with $70 million of expected orders over the base three-year period of the deal, according to Natasha Haubold, a WorldCom spokeswoman. Clinton, Mississippi-based WorldCom will build a wide area network to connect research laboratories, and will help support the DOD initiative to modernize its high-performance computing.

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