IBM banned from U.S. contracts

From the Associated Press

IBM Corp. and certain employees received subpoenas from a federal grand jury seeking testimony and documents relating to a contract it sought with the Environmental Protection Agency, the company said Monday.

IBM also has been temporarily banned from receiving future contracts with all federal agencies.

The suspension went into effect Thursday “while the agency reviews concerns raised about potential activities involving an EPA procurement,” the agency said Monday in an e-mailed statement.

Under a reciprocal agreement among federal agencies, when one issues a ban, the others follow it.


The EPA said it wouldn’t comment further on the matter.

IBM said the U.S. attorney’s office for the Eastern District of Virginia served the subpoenas, but it did not say when.

The Armonk, N.Y.-based company has prime federal contracts worth at least $1.3 billion, or about 1% of its 2007 revenue, which largely will not be affected by the suspension, an analyst said.

IBM spokesman Fred McNeese said the company was talking with the EPA about the alleged violation and would not describe the contract that IBM was bidding on that led to the suspension.


The company learned about the ban Friday, but “prior to that [we had] no indication there was a dispute between IBM and the EPA. We’ve spent most of the day trying to determine what’s going on,” McNeese added.

IBM said it had 30 days to contest the scope of the suspension, which can continue for up to one year pending the completion of the investigation.