MCI will provide overseas service for U.S. agencies Company gains long-sought toehold

February 28, 1992|By New York Times News Service

WASHINGTON -- MCI Communication Corp. won a contract yesterday to provide international long-distance telephone services to federal agencies, giving the company the toehold it had long sought in the government market.

MCI officials said the five-year contract probably would generate $50 million to $75 million in sales annually.

Government agencies still would be allowed to buy international long-distance service from other carriers, but the contract gives MCI a big advantage because an agency would be able to buy service from the company without having to go through the complex process of seeking and obtaining a new round of competitive bids.

Competitors for the contract included US Sprint, in conjunction with Sonicraft of Chicago, and AT&T.

The contract was handed out by the Defense Department's Commercial Communications Office, which buys communications services for other federal agencies, as well as for the Pentagon. The biggest users of international long-distance service are the armed forces, the State Department, the Energy Department and the intelligence agencies.

American Telephone & Telegraph Co. supplies most of the international long-distance service to these agencies.

The contract may also signal a growing interest by federal agencies in changing the much bigger contract under which most agencies must buy all domestic telephone service from AT&T or US Sprint.

That contract has been estimated to be worth as much as $25 billion, but it has been plagued by feuding between AT&T and Sprint, disagreement about contract terms and considerable frustration by federal agencies that want greater freedom in buying telephone services.

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