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IBM Barred from Doing Business with the US Government – Over a Contract It Didn’t Win

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IBM Barred from Doing Business with the US Government – Over a Contract It Didn’t Win

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Free Resource
Turns out IBM has been barred from doing business with the US government over what was a $84 million modernization contract from the Environment Protection Agency that it didn’t even win.

The CGI Group, the big Canadian integrator, or rather its US subsidiary CGI Federal did in February of last year, 11 months after the contract was put out for bid.

IBM protested and claims it won the protest, which stopped any work and put the contract in limbo waiting for the Government Accountability Office (GAO) to evaluate the protest.

However, according to CGI – which claims it had nothing to do with IBM’s current dilemma – IBM didn’t win the protest. If it had CGI’s contract would have been voided and it hasn’t been.

What happened, it says, was that the GAO punted a few issues back to the EPA, which then asked CGI and IBM for clarification and was considering the responses when, unbeknownst to IBM, the agency lowered the boom last Thursday.

Somewhere along the line – IBM won’t say where – heck it won’t talk officially about the contract at all – EPA people apparently gave IBM information that IBM allegedly used in violation of the Procurement Integrity provisions of the Office of Federal Procurement Policy Act.

The fact that the agency never intimated to IBM that there was a problem – sandbagging it according to what IBM says – and brought the US Attorney into it from the get-go could imply any number of dire things.

As of Tuesday IBM was still saying that it was trying to find out what happened – and this is after multiple meetings with the EPA and the US Attorney’s Office, which has served grand jury subpoenas on IBM and some of its employees looking for documents and testimony connected with whatever was whispered in IBM's ear.

Naturally IBM says that it “intends to take all appropriate actions to challenge the suspension and limit its scope.” It has 30 days to protest the scope of the temporary suspension.

It won’t say whether its lawyers will take 30 days to mount the protest. Time of course is of the essence. If the bar lasts long enough, IBM’s competitors could have a field day.

According to the rules, IBM can continue to work on existing contracts.

The fact that the EPA has barred IBM from seeking further contracts (and that includes contract modifications) applies as a blanket interdiction across the entire federal government. Apparently when one agency takes such a step they all follow in unison, but it is highly unusual that it apply to all sections of a company the size of IBM, and not just an allegedly naughty operating unit.

It puts IBM in the same class as Enron.


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