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IBM barred from new federal business

01 апреля 2008

IBM has been barred from taking on any new federal government business in the US following allegations of misconduct over a contract it had been pursuing with the Environmental Protection Agency.

News of the highly unusual ban came as a shock to IBM executives last Friday after they first learned of it indirectly.

They were forced to go to a website managed by the US General Services Administration to confirm its existence.

The computer group and an unnamed number of its employees were also issued with grand jury subpoenas later the same day seeking information about the alleged case.

IBM said the ban and the criminal investigation sprang from the conduct of a competitive bid for EPA work that had been in progress for two years, and that the official inquiries had focused on “interactions between employees of the EPA and certain IBM employees”.

It added that the investigation concerned some suspected breaches of provisions of the Office of Federal Procurement Policy Act, which are designed to ensure a level playing field for all bidders seeking to do business with the federal government.

Although the immediate financial impact on IBM is likely to be limited, the case could do more severe long-term damage to the company’s relations with one of its most important customers, depending on the severity of the accusations and whether wrongdoing is proven.

IBM said that only about 1 per cent of its revenue last year came from what it termed “transactional” business with the federal government, as opposed to ongoing business under long-term consulting and other contracts that have been signed in the past, which largely remain unaffected. However, the company is also barred from bidding on new long-term contracts for the time being.

The group said that it has 30 days to appeal against the ruling, and that the suspension “can continue for an initial period of up to one year pending the completion of the investigation”.

IBM did not make any public comment on the affair until late Monday, after the reports had emerged about the case from the EPA.

A spokesman for the company said that IBM had not disclosed the matter earlier because it had been caught off-guard by the ban.

Executives pointed out that they had spent the day trying to learn more about the case from the federal agency and the US attorney’s office in the eastern district of Virginia, which is currently investigating the case.

Источник: Financial Times

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