Sprint Nextel Cleared To Bid On U.S. Networx Contracts

WASHINGTON (Dow Jones) -- Sprint Nextel Corp. didn't get shut out the second time around.

On Thursday, the Reston, Va.-based phone carrier was one of five companies selected to compete for up to $20 billion in federal contracts over the next 10 years. The other designated bidders were AT&T, Verizon Communications, Qwest Communications International and Level 3 Communications.

In a surprise to company executives and industry analysts, Sprint Nextel was denied the right to compete for business in the first portion of the two-part federal contract known as Networx Universal. The General Service Administration selected bidders for that contract in late March.

The Networx Universal contract could be worth up to $48 billion -- more than double the amount of the second contract called Networx Enterprise.

The two-part communications contract is the largest ever put out for bid by the U.S. government. Sprint Nextel and Verizon were the primary beneficiaries under a U.S. contract granted in 2001 that Networx will replace.

The first proceeds from the new contracts, however, might not be received for many months: The phone companies were not awarded actual bids, merely the right to compete for pieces of Networx expansion. Government agencies have to put out public bids first.

Winning bidders will provide voice, wireless, data and Internet services to federal agencies and upgrade the government's communications systems with Internet Protocol and other cutting-edge technologies.

In recent trading, Sprint Nextel's shares moved up about 0.5%. Shares of Qwest rose 1.2%, while blue chips AT&T and Verizon made slight gains and shares of Level 3 fell a few pennies.

(END) Dow Jones Newswires"

Posted to the site on 1st June 2007