AT&T, Qwest, Verizon win U.S. govt telecom contract

By Rachelle Younglai

WASHINGTON (Reuters) - The U.S. General Services Administration cast Sprint Nextel Corp. (S.N: Quote, Profile, Research, Stock Buzz) aside and picked AT&T Inc. (T.N: Quote, Profile, Research, Stock Buzz), Qwest Communications International Inc. (Q.N: Quote, Profile, Research, Stock Buzz) and Verizon Communications (VZ.N: Quote, Profile, Research, Stock Buzz) on Thursday for the largest-ever federal telecommunications contract.

Government agencies are expected to spend at least $20 billion on the contract over 10 years, the GSA estimates -- a move that will overhaul the government's telecommunications services.

Under terms of the GSA contract, called Networx Universal, agency spending could be increased to as much as $48 billion.

The announcement comes after weeks of anticipation and years of preparation. The four companies have spent millions of dollars preparing bids and called on thousands of their employees to develop proposals and hammer out the details.

The failure to include Sprint is seen as a huge upset as it has provided telecommunication services to U.S. government agencies for 18 years.

"Sprint is disappointed not to receive a portion of the Networx Universal contract," it said in a statement. "The Sprint team spent significant time and energy on the program and has made large investments to meet the diverse requirements of the agencies."

The company said it will request a meeting with GSA next week and will decide whether to "protest or not" after that.

JOCKEYING FOR CONTRACTS MOVES TO SECOND STAGE