April 1, 2008 in Business

IBM banned from federal contracts

Associated Press The Spokesman-Review
 

WASHINGTON – 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.

The company also has been temporarily banned from receiving 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-mail. Under a reciprocal agreement among federal agencies, when one issues a ban, others follow it.

EPA said it will not comment further on the matter.

IBM said the U.S. Attorney’s Office for the Eastern District of Virginia served the grand jury subpoenas, but it did not say when.

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

IBM spokesman Fred McNeese said the company is still 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 on Friday, but “prior to that (we had) no indication there was a dispute between the IBM and EPA. We’ve spent most of the day trying to determine what’s going on,” McNeese added.


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