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IBM Banned from Gov't Contracts

Big Blue probed over alleged insider info that led to fat EPA deals

By Zach Samalin,  Newser Staff

Posted Apr 1, 2008 8:36 AM CDT
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(Newser) – A US Attorney in Virginia has temporarily barred IBM from pursuing new government contracts while it investigates three 2006 IBM contracts with the EPA, MarketWatch reports. "The basic issue is whether certain information concerning a contract should have been provided to IBM employees by an EPA employee," said an IBM spokesman.

IBM allegedly gained sensitive info from an unwitting EPA employee that led to an $80 million contract in computer upgrades, reports the Wall Street Journal. Big Blue says it will contest the move while continuing work on contracts already in progress, but one industry expert underscored the rarity of a total ban in matters unrelated to national security and health care. IBM did $1.4 billion in business with the government last year, and $1.3 billion in 2006.

The US Attorney's Office has temporarily banned IBM from pursuing further government business, pending the outcome of an investigation into a $3 million contract with the EPA in 2006.
The US Attorney's Office has temporarily banned IBM from pursuing further government business, pending the outcome of an investigation into a $3 million contract with the EPA in 2006.   (AP Photo/Mark Lennihan, File)
The US Attorney's Office has temporarily banned IBM from pursuing further government business, pending the outcome of an investigation into a $3 million contract with the EPA in 2006.
The US Attorney's Office has temporarily banned IBM from pursuing further government business, pending the outcome of an investigation into a $3 million contract with the EPA in 2006.   (AP Photo/Joerg Sarbach)
The US Attorney's Office has temporarily banned IBM from pursuing further government business, pending the outcome of an investigation into a $3 million contract with the EPA in 2006.
The US Attorney's Office has temporarily banned IBM from pursuing further government business, pending the outcome of an investigation into a $3 million contract with the EPA in 2006.   (AP Photo/Karen Tam, file)
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