EPA Lifts Ban on IBM Bids

IBM is back in favor with the U.S. government after the Environmental Protection Agency (EPA) lifted its ban on the vendor participating in new federal contracts.

In a statement released this morning, IBM announced that it had reached an agreement with the EPA to terminate the ban, which had been in place since March 27.

Effective immediately, IBM will resume participating in new federal business with all federal agencies,” said the vendor’s statement.

Despite today’s announcement, the EPA will continue to investigate possible violations of the Office of Federal Procurement Act regarding a bid submitted by IBM in March 2006. The U.S. Attorney's Office for the Eastern District of Virginia has already served IBM and some of its employees with grand jury subpoenas and requested testimony and documents regarding their interactions with the EPA.

In its statement this morning IBM confirmed that it will continue to cooperate with the EPA's ongoing investigation, as well as with the related probe by the U.S. Attorney’s Office for the Eastern District of Virginia.Media reports have also suggested that the dispute involves an $84 million contract to overhaul the EPA’s financial management system, which was eventually awarded to CGI, although IBM refused to comment on this when contacted by Byte and Switch earlier today.

IBM’s board will likely breathe a sigh of relief that the company can now bid for new federal business, particularly in an uncertain economic climate.

The agreement could also ease the technology pressures on many government CIOs and IT managers, who rely heavily on IBM gear.

IBM does not break out specific government sales figures, although analyst firm Goldman Sachs estimates that the vendor's federal business accounts for about 1 percent of total revenues, or $1 billion.

The EPA's suspension is not the first time that IBM has found itself embroiled in a dispute with a public sector organization, as evidenced by the high-profile clash with the state of North Carolina.Have a comment on this story? Please click "Discuss" below. If you'd like to contact Byte and Switch's editors directly, send us a message.