May 31 (Bloomberg) -- AT&T Inc., Level 3 Communications Inc., Sprint Nextel Corp., Qwest Communications International Inc. and Verizon Communications Inc. won the right to bid on some orders in a $20 billion government program spanning 10 years.

The five companies can seek contracts from federal agencies under the second, smaller part of the so-called Networx acquisition program, the General Services Administration said today during a briefing in Washington.

The decision allows Sprint to continue its 18-year run as a provider of federal phone services after the GSA in March shut the company out of participation in the first part of program, called Networx Universal. The second portion, Networx Enterprise, doesn't require contractors to offer as many services.

``This is clearly welcome news for the five companies, particularly Sprint,'' Stifel Nicolaus & Co. analyst Blair Levin said today in a note to clients.

AT&T, Verizon and Qwest in March won the right to also bid on orders under the Networx Universal portion of the contract.

Shares of San Antonio-based AT&T rose 36 cents to $41.34 at 4:02 p.m. in New York Stock Exchange composite trading. New York- based Verizon fell 29 cents to $43.53, Denver-based Qwest added 2 cents to $10.29, and Broomfield, Colorado-based Level 3 lost 10 cents to $5.81. Shares of Reston, Virginia-based Sprint were unchanged at $22.85

Last Chance

Winning the right to bid for Enterprise orders was especially critical for Sprint, which gets several hundred million dollars each year for federal network services and has lost consumer customers in recent months. The company said in January it plans to cut 5,000 jobs this year, or 7.7 percent of its workforce, as sales trail analysts' estimates.

Sprint ``only has one card left to play, and this is it,'' said Warren Suss, president of Suss Consulting Inc., a Jenkintown, Pennsylvania-based research group that tracks government contracts. He spoke before the announcement.

Participation in the Enterprise program may boost Sprint's chances of retaining business from agencies it serves under an expiring contract that Networx will replace, Suss said.

Sprint ``bid aggressively and they addressed the government's needs thoroughly,'' said John Johnson, the GSA assistant commissioner overseeing the Networx program.

Improving Systems

The Networx program was designed to help as many as 135 government agencies upgrade to Internet-based systems, add more wireless networks and adopt newer equipment. Agencies also want to tighten network security and improve their ability to communicate with one another, particularly during emergencies.

While GSA expects Universal projects to account for most of that spending, officials said it is too early to give a breakdown of how much may be spent on Universal and how much may be spent on Enterprise.

Companies competing for Universal contracts must offer at least 36 communications and technology services to federal agencies housed in more than 24,000 buildings worldwide. Enterprise contractors are only required to offer nine services to about 300 government buildings located in the U.S.

Bidders for Enterprise orders can offer more than 40 additional services on a non-mandatory basis, and are allowed to offer all services to buildings outside the U.S.

Most U.S. agencies probably will opt to buy services through the Universal program, ``because it guarantees that they're going to be able to get any of this stuff for a long period of time,'' Suss said.

``My guess is that Sprint is going to have a hard time convincing agencies to go to the Enterprise vehicle,'' he said.

To contact the reporter on this story: Molly Peterson in Washington at mpeterson9@bloomberg.net

Last Updated: May 31, 2007 16:25 EDT