GAO Backs WorldCom in Defense Bid Dispute

TELECOM

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WorldCom Inc. scored a victory when the General Accounting Office rejected rivals’ protests of its selection to receive a $450-million Defense Department contract.

Rival telecommunications firms Sprint Corp. and Global Crossing Ltd. challenged the contract award because WorldCom admitted this summer that it improperly accounted for almost $7.7 billion, raising questions about its credibility.

The General Accounting Office, the congressional agency that rules on such protests, said it had qualms about intervening because the project was well underway, and the Defense Department “has authority to address the alleged impropriety” if it so chooses.

In other developments, Procter & Gamble Co., Sun Microsystems Inc., DaimlerChrysler Corp. and 14 other Fortune 500 companies asked a federal bankruptcy judge to give them a formal role in WorldCom’s Chapter 11 reorganization.