US gov't removes IBM from IT contractor blacklist

But IBM still faces an investigation by the EPA

In a quick turnabout, the US Environmental Protection Agency has lifted a week-old suspension of IBM from seeking new federal IT work. But IBM still faces an investigation by the EPA as well as a federal grand jury probe over a bid for a contract at the agency in 2006.

The EPA's decision to end the temporary suspension came without explanation and was announced separately by IBM and the US General Services Administration, which oversees federal contracts and maintains a list of contractors that are excluded from government work. The action by the EPA means that IBM's status as a contractor is back on par with that of any other company approved to seek government contracts.

But IBM's problems may not be over. After the EPA put IBM on a list of excluded contractors on March 27, the vendor disclosed that the agency was investigating a March 2006 contract bid for possible violations of federal procurement integrity rules. In addition, IBM said that the US attorney's office for the eastern district of Virginia had launched a grand jury probe focusing on "interactions between employees" of the company and the EPA.

Today, IBM said that both of those investigations are ongoing, and reiterated that it is cooperating with the EPA and the US attorney's office. An IBM spokesman said that the company wasn't commenting on the matter beyond the statement it released this morning.

After putting IBM on the exclusion list, all the EPA would say about the suspension is that it was "a temporary measure while the agency reviews concerns raised about potential activities involving an EPA procurement." That came from a written statement issued earlier this week by a spokesman for the agency.

A GSA spokesman said that such suspensions are "not punitive" in nature but instead are "a prophylactic measure designed to protect the government."

The EPA's suspension also potentially could have barred IBM's extensive catalog of resellers as well as other government contractors from selling its equipment to federal agencies. But if a crack started to appear in the suspension, it came yesterday. According to the GSA spokesman, the EPA provided additional information about its action on Thursday and said that the suspension didn't relate to "the integrity of IBM products." Consequently, the suspension didn't apply to authorized resellers of IBM products, he said.

IBM is a major government contractor. According to USAspending.gov , a government Web site that provides information about federal contracts, the company received $1.4 billion worth of contracts from a spectrum of agencies during the government's 2007 fiscal year, which ended last September.

In its initial announcement of the suspension on Monday, IBM said it had been unaware that either the EPA or federal prosecutors were considering any actions against it until company officials learned of the suspension last Friday. The vendor added that it planned "to take all appropriate actions to challenge the suspension and limit its scope."

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