Global Crossing may lose $137 million contract

Aug. 17, 2001
Aug. 17, 2001--In July, Global Crossing Government Markets, a unit of Global Crossing Ltd., announced it was selected by the U.S. Department of Defense to provide advanced wide area network services. Now, the $137 million contract may have to be re-bid.

Edited by Mardi Balgochian Scalise, Lightwave Web Editor

Global Crossing (NYSE: GX), which provides telecommunications solutions over the world's first integrated global IP-based fiber optic network, issued the following statement from Chief Executive Officer Tom Casey:

"Although no official action has been taken by the U.S. Department of Defense (DoD), we have been notified that the contract awarded in July by the DoD to Global Crossing Government Markets to provide advanced wide area network services for the Defense Research and Engineering Network (DREN) may have to be re-bid to address procedural issues in the procurement process that were identified by the DoD after the contract was challenged by unsuccessful bidders. These procedural issues have nothing to do with Global Crossing's bid."

In July, Global Crossing Government Markets, a unit of Global Crossing Ltd. (NYSE: GX), announced it was selected by the U.S. Department of Defense (DoD) to provide advanced wide area network services for its Defense Research and Engineering Network (DREN). The contract has a three-year base with seven one-year options and is valued at $137 million with the potential to exceed $400 million over the contract life.

The DREN network is the Department of Defense's premiere long-haul communication service provider for the agency's High Performance Computing Modernization Program (HPCMP). Utilizing its high-speed Internet backbone -- the most advanced optical network -- Asia Global Crossing and Global Crossing will design, develop and manage a secure, virtual private network for DREN. Users of the Department of Defense network will be able to communicate and collaborate in real time throughout the United States, Puerto Rico, Guam and other U.S. territories.

Global Crossing planned to support the HPCMP by linking over 6,000 scientists and engineers at defense laboratories, test centers, universities and industry sites throughout the United States and beyond via a single, contiguous fiber-optic network. Connectivity in the Asia-Pacific region will be provided by Global Crossing's affiliate, Asia Global Crossing.

Asia Global Crossing and Global Crossing will provide advanced data networking services, including: Internet Protocol (IP) service, Asynchronous Transfer Mode (ATM) service, and wavelength services, including video, audio, imaging and digital data. DREN also connects DoD's high performance computing community to other governmental, research and academic networks.

In addition, Global Crossing will allow DREN users to fully exploit the emerging data transport benefits of multi-protocol label switching (MPLS). Global Crossing's worldwide deployment of MPLS technology across a single autonomous system gives DREN subscribers increased capabilities in reliable, secure, low-latency transport across user-identified virtual private networks.

"While Global Crossing is confident it will win any potential re-bid, the loss of this contract would not have a material effect on the company's financial results," said Casey.

About Global Crossing Government Markets:

Global Crossing Government Markets, based in Washington, D.C., provides government entities with global networking solutions over an optical network. Global Crossing Ltd. (NYSE: GX) provides telecommunications solutions over an integrated global IP-based network. For more information, visit or

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