Revenue timetable updated
- By Greg Langlois
- Jul 09, 2001
FTS 2001 contract holders WorldCom Inc. and Sprint should meet their minimum revenue guarantees of $750 million each in fiscal 2003 and 2004, respectively, according to a July 2 letter from Linda Koontz, General Accounting Office director of information management issues.
That estimate is based on FTS 2001 revenue accumulated through April and assumes no significant changes in demand for services. In April, GAO officials had projected WorldCom and Sprint would meet those guarantees in fiscal 2005 and 2006.
The new estimate is similar to a recent General Services Administration analysis, wrote Koontz in a letter to Rep. Tom Davis (R-Va.). Davis has said that delays in transitioning to FTS 2001 have hampered the two vendors' ability to reach their revenue guarantees. But Qwest Communications International Inc. and AT&T officials have complained that the high guarantees will limit and delay FTS 2001 competition.
Koontz wrote that GSA will not wait until the revenue guarantees are completely met before opening FTS 2001 to competition. Instead, agency officials will make that decision when they can safely estimate that the revenue guarantees would be met at some point during the eight-year life of the contract.