EPA Suspends Big Blue From Bidding on Federal Contracts
SAN FRANCISCO - Big Blue and a federal agency confirmed late Monday that the tech company has been suspended from bidding on all federal contracts pending an investigation by the Justice Department.
The
U.S. Environmental Protection Agency
temporarily suspended
International Business Machines
(IBM) - Get Report
from working for all federal agencies while it "reviews concerns raised about potential activities involving an EPA procurement," the agency said in a statement.
"We understand the basic issue with the EPA ... is whether certain information concerning a contract should have been provided to IBM employees by an EPA employee" for a bid submitted in March 2006, IBM spokesperson Fred McNeese said.
The U.S. Attorney's Office for the Eastern District of Virginia served IBM and certain IBM employees with grand jury subpoenas in its investigation of the procurement process, McNeese said.
In 2007, 1% of IBM's revenue, came from "transaction-type" contracts with the federal government, McNeese said.
Since IBM had $98.8 billion in revenue in 2007, the company had about $988 million in federal contracts.
Accordingly, IBM shares were down 1%, or $1.14, to $114 in after-hours trading.
IBM learned of the suspension on Friday, McNeese said. The suspension does not affect the company's annuity businesses, contracts that are already under way, or long-term consulting contracts in place at the beginning of 2007. McNeese said he did not know of any prior suspensions of the company by the federal government.
IBM said in a statement that it intends to challenge the suspension and its scope, which it must do within 30 days. It said the initial period of the suspension can last up to one year pending the completion of the investigation.








