MCI Communications Corp. yesterday was awarded a $10.9 million contract to perform communications services for the federal government, a pact that company officials called the largest telephone contract ever awarded to a competitor of the Bell System.
MCI Chairman William McGowan said the contract indicates that at least part of the federal government "is interested in saving money. Now all we need is for the Defense Department to realize that they could aid the reliability and survivability of their network," he said.
McGowan was referring to the military's claims that splitting up American Telephone & Telegraph Co. would jeopardize the nation's defense communications capabilities. MCI management for many years has advocated breaking up AT&T, the dominant company in the long-distance business.
Announcement of the one-year contract for 2,000 circuits with the General Services Administration for its Federal Telecommunication System (FTS) network came simultaneously with MCI's annual stockholders meeting, also held yesterday.
For the fiscal year, the company reported sales of $234.2 million, a 62 percent increase over the previous year, with profits rising 58 percent to $21.1 million.
MCI President Orville Wright said MCI gained 240,000 new customers last year, bringing their total customer base to 280,000. About 200,000 of the customers are residential, with the remaining 80,000 business customers.
During the stockholders meeting, McGowan announced that as of Aug. 1, MCI's more than 20,000 credit card customers will be able to use their card billing service to call anywhere in the 48 contiguous states. Calls to cities not yet served by MCI will be routed over AT&T's network but billed through MCI.
In addition, the company's stockholders passed several MCI charter amendments designed to prevent takeover bids by other companies. Any takeover of MCI would have to be approved by the holders of 80 percent of the company's stock under the amendments.
The amendments, according to MCI's proxy statement, are "designed to promote the stability of the company's business and to discourage any attempted takeover of the company" unless MCI's board agrees the takeover is in the interests of the company and its stockholders.In response to a stockholder's question, however, McGown said the company had not been engaged in any merger talks recently.