Sun Microsystems, Inc. cancelled one of its largest IT contracts with the federal government by eliminating its Multiple Award Schedule (MAS) with the U.S. General Services Administration (GSA), effective October 12th. 

Sun has been caught up in a pricing dispute with the GSA over the MAS provisions and reportedly told the U.S. government that it was in the government’s best interests to cancel the MAS.  Sun indicated it will continue to do business with the GSA, but without the MAS provisions.

The Inspector General had been investigating Sun’s product pricing policies and claimed that Sun failed to provide the same discount pricing to the GSA that was being offered to Sun’s commercial customers. Sun countered that the GSA was already receiving very aggressive discounts for the purchases that it had made.

The audit claimed that Sun had overcharged the federal government $25 million dating back to 1997, which prompted a huge dispute over the federal agency’s right to an in-depth audit into Sun’s private business data.

As part of the audit Sun released more than 25,000 pages of documents to the Inspector General.  On Friday last week, Sun decided to pull its GSA MAS contract, which may have an impact on other companies who do business with the General Services Administration. Sun has indicated that it will continue to act as a vendor for the GSA through its other existing contracts.

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