April 5, 2008 in Business

IBM regains eligibility for federal contracts

From Wire Reports The Spokesman-Review
 

The government has lifted a week-old ban that prevented IBM from getting new federal contracts in an exchange for an agreement from the company to drop its protest of an $84 million Environmental Protection Agency contract it lost last year.

The ban stemmed from an alleged ethical violation in connection with IBM’s protest of the EPA contract. Under a reciprocal agreement among federal agencies, when one issues a ban, the others follow it.

International Business Machines Corp. said it is continuing to cooperate with the EPA and the U.S. Attorney’s Office for the Eastern District of Virginia, which served grand jury subpoenas seeking documents and testimony relating to the contract.

The two sides on Thursday signed an agreement in which IBM agreed to withdraw its protest from the Government Accountability Office and drop any interest in competing for the contract. The company will also refund the EPA any attorneys fees and costs the agency paid to IBM in regard to the filing of the protest.

Several IBM employees allegedly obtained protected information from an EPA employee, “which IBM officials knew was improperly acquired, and used the information during its negotiations to improve its chance of winning a contract,” according to the agreement. Such an act violated federal procedures.

• A person familiar with Microsoft‘s bid for Yahoo said Friday the software company is evaluating its offer in light of the economic climate and the Internet pioneer’s deteriorating business.

The person, who asked not to be named because he was not authorized to speak publicly, said Yahoo Inc.’s share of the search market and overall condition have deteriorated since Microsoft announced its bid Feb. 1.

At the time, Microsoft offered $44.6 billion, or 62 percent above Yahoo’s market value. The deal is currently valued at about $41 billion, based on Friday’s closing share prices.

Yahoo’s board formally rejected Microsoft Corp.’s bid, saying it undervalues the company. The Silicon Valley company has since explored alliances with Google Inc., News Corp.’s MySpace.com and Time Warner Inc.’s AOL, but no alternative to Microsoft’s offer has surfaced.

Yahoo and Microsoft both lost less than 1 percent of their share of U.S. Web searches in February, the most recent month for which data are available, according to the research group comScore. During that month, Yahoo grabbed 21.6 percent of searches, more than Microsoft’s 9.6 percent. Google Inc.’s share rose less than 1 point to 59.2 percent.

WellPoint‘s former chief financial officer, David Colby, left in disgrace, but he didn’t leave empty-handed: His cash, options and retirement plans totaled $118.2 million, according to a federal regulatory filing Friday.

The company even paid him $116,692 for his unused vacation.

Colby, 54, resigned abruptly in May and has since been plagued by lawsuits tied to a string of romantic entanglements with women across the country.


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