IBM Gets Red Light For Government Contracts

US-based conglomerate IBM has been reportedly suspended from striking new agreements with the United States federal government for an indefinite period of time. According to a post on the General Services Administration's website, the company is now blacklisted by the Environmental Protection Agency as of March 27th.

The company is now under the U.S. Environmental Protection Agency investigation as it is accused of possible violations of ethical bidding provisions on an EPA contract submitted by IBM two years ago. The $80 million bid made in March 2006 was alleged to modernize EPA's financial system.

According to an IBM spokesperson, the United States Attorney's Office for the Eastern District of Virginia had already sent subpoenas to the company and to a couple of its employees especially for documents related to the interactions between the EPA and IBM employees.

Fred McNeese, one of IBM's spokespersons, claimed that the company will fully cooperate with the US government during the investigation, although they did not agree upon the terms of its suspension. "We are going to cooperate with investigators but we are also going to take all appropriate actions to challenge the scope of this action," McNeese said.

According to the latest financial reports issued by the company, IBM usually receives about $1.43 billion in revenue per year from business with the federal government. Despite the temporary suspension, IBM may continue working on the already existing contracts with the government.

EPA Press Secretary Jonathan Shradar announced that the agency he represents had decided to suspend IBM from contracting new business opportunities with the federal government. However, he refused to give details until the investigation is concluded. "As the matter is currently pending before the suspending official, the agency will have no further comment at this time," said the EPA official during a statement.

If the ban regarding the US government contracts is not lifted, the company could eventually be forced to give up on big business worth billions of dollars in favor of IBM's biggest rivals such as CSC, EDS or Affiliated Computer Service.