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IBM Barred from Seeking More Business with the US Government for the Foreseeable Future

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IBM Barred from Seeking More Business with the US Government for the Foreseeable Future

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IBM had a lousy weekend.

See, last Friday – out of the blue according to its account – it found out that the Environmental Protection Agency had temporarily barred it from seeking any further business with the US government because of some alleged ethical hanky-panky connected with a reported $80 million contract that the EPA award the company in March of 2006.

IBM disclosed the highly unusual and potential devastating news after the market closed on Monday. It could take the government a year to investigate and cost IBM over a billion dollars in new business – and that’s only money, not reputation.

Not only that but the US Attorney’s Office for the Eastern District of Virginia has issued IBM and certain of its employees with grand jury subpoenas demanding documents and testimony “regarding interactions between employees of the EPA and certain IBM employees,” IBM said in a press release.

Apparently those EPA people gave IBM the keys to winning that 2006 EPA contract and IBM used the information 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 – could imply any number of dire things. IBM says it spent Friday trying to find out from the EPA and the US Attorney what’s going on.

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.

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

The fact that the EPA has barred IBM from seeking further contracts with it applies as a blanket interdiction across the entire federal government. When one agency takes such a step they all follow in unison.

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