More government eyes on Qwest

The federal government is reviewing the contract status of Qwest Communications International in light of the embattled telecom company's accounting problems.

The General Services Administration, the buying and procurement arm of the federal government, said in a statement that it was "conducting a review of all Qwest's government contracts and other related information for purposes of determining present responsibility."

In other words, the GSA is examining whether Qwest meets the ethical business standards necessary to work with the government.

Qwest was recently awarded a contract to supply network services for the Advanced Technology Demonstration Network, a Department of Defense research network. Qwest also has contracts with the Departments of Treasury, Commerce and Energy; and it supplies voice, data and infrastructure services to federal offices in various western states through a contract with the GSA.

Last month, Qwest fired CEO Joseph Nacchio amid an investigation of its accounting procedures by the Securities and Exchange Commission. Qwest on Thursday said it had been notified that the U.S. attorney's office in Denver had begun a criminal investigation of the company.

A Qwest representative said that the company is "presently a responsible government contractor" and that "we look forward to working with the GSA to demonstrate our present responsibility."

The GSA also recently confirmed it was conducting a similar review of WorldCom, which is struggling with its own accounting woes. If the GSA finds that a company is not a responsible contractor, that company could be barred from federal contracts.