When people hear about this huge government contract Qwest just won, they'll say, "This is what Joe Nacchio was talking about - he really must be not guilty."

Not so fast. Here are a few reasons why you shouldn't jump to the conclusion:

• The Networx contract was put out for bid in October 2003. That's more than two years after the events at issue in the Nacchio trial and nearly three years after Qwest issued its optimistic five-year projections.

• How do I know that? I pulled up an article from the Newsbytes News Network in October 2003 that discussed the government placing its "request for information" on the Web site FedBizOpps.gov. The Nacchio team and the prosecutors have spent countless hours in closed-door hearings talking about issues that require a national security clearance. The Networx contract was no secret.

• The GSA awarded the Networx contract Thursday, pretty much on schedule. The key issues in the trial are whether Nacchio knew in early 2001 whether Qwest would hit the targets it was promising for that year, particularly in the first two quarters. The Networx contract could have no impact on the five-year projections, much less the 2001 numbers.

• The announcement Thursday means Qwest, Verizon and AT&T are now eligible to bid on business, so they won't be booking revenue for months, if not years. It would have no impact on 2001 quarterly numbers.

It's not options backdating, but Qwest seems to have an issue with its 2001 stock awards.

Prosecutors introduced a memo written by David Weinstein, Nacchio's financial adviser, after a 2001 phone call with the Qwest CEO.

According to Weinstein, Qwest had given Nacchio an options grant earlier in the year when the stock traded at $39. But according to the Aug. 23, 2001, memo, Nacchio hadn't signed the options agreement because he had issue with it.

Weinstein wrote that Nacchio told him, "Qwest can reprice the options now and it need not be disclosed."

Defense attorney Herbert Stern addressed the issue in cross-examination, saying Nacchio was negotiating a new contract and didn't reach agreement until Oct. 24. "A new option agreement" was executed at the exercise price of $16.81.

Qwest's 2002 proxy, which contains disclosure for investors on the 2001 stock awards, does not clear up this issue.

What it does say is that Nacchio received 7.25 million options "effective" Oct. 24, 2001, at the exercise price of $16.81.

That was the fair market price of Qwest stock at the time - after the disclosures on all the one-time deals. That strike price is about $22 less. If he'd gotten the options at $39, they'd be about $160 million underwater by October. Instead, he got a fresh start.

According to the proxy, several other Qwest executives - President Afshin Mohebbi, General Counsel Drake Tempest, CFO Robin Szeliga and consumer head James Smith - got a total of 2.45 million options "effective" that Oct. 24 date.

(I'm using the word effective because that's the word Qwest used. I'm not saying Qwest said they "granted" the options on that date because that's not what the proxy says.)

Like most other companies, Qwest had typically given its options out in the first quarter, not the fourth.

Was the entire executive option grant held up by Nacchio's lengthy contract negotiations? That's innocuous, although the continually dropping stock price made it beneficial to wait as long as possible for the options.

Unfortunately, the language of Weinstein's memo suggests worse: Options were actually awarded, then scrapped and reissued at the lower price.

Comment on David Milstead's blog at RockyMountainNews.com.