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IBM banned from federal contract bidding


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Length of ban indefinite

The General Services Administration (GSA) has issued an order banning IBM from participating in future contracts with U.S. federal agencies. The GSA added IBM to its list of ‘excluded’ contractors and subcontractors on its Web site on March 27th based on direction from the U.S. Environmental Protection Agency.

Other federal agencies will also honor the EPA exclusion under GSA rules. IBM currently has prime federal contracts worth at least $1.3 billion, or about 1 percent of its 2007 revenue. IBM indicated that the U.S. Attorney’s Office had served it and certain of its employees with grand jury subpoenas requesting testimony and documents pertaining to interactions between IBM and certain EPA employees. 

Fred McNeese, a spokesman for IBM, said, "…it's our understanding that the basic issue is whether certain information concerning a contract should have been provided to certain IBM employees by an EPA employee." A person familiar with the matter said concerns had been raised within the EPA as to how IBM had received sensitive information pertaining to its bid on an EPA contract to help the EPA modernize some of its computer systems. The bid was said to be valued at $88 million.

Stan Soloway, the head of the Professional Services Council, a trade group representing IBM and other government contractors, issued a statement that the suspension by the EPA had been imposed upon IBM without advising IBM of any problem and without allowing IBM to respond. IBM spokesman, Fred McNeese, said he had no immediate comment on the matter.

Last modified on 02 April 2008
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