IBM suspended from receiving new government contracts

Big Blue is the subject of a federal grand jury investigation over possible procurement violations between employees of the EPA and IBM

IBM has received a grand jury summons from the U.S. Attorney's Office over possible procurement violations between employees of the U.S. Environmental Protection Agency (EPA) and certain IBM employees, the company said Monday.

IBM is cooperating with the investigation, it said.

The company made the announcement just days after the EPA said IBM had been temporarily suspended from receiving new Federal government contracts or assistance. A suspension from one U.S. government agency is respected by other agencies, meaning the ban is for all new Federal projects.

"The action was taken by the EPA suspending official as a temporary measure while the agency reviews concerns raised about potential activities involving an EPA procurement," said Jonathan Shrader, press secretary for the EPA, in an e-mailed statement. The agency declined further comment.

The EPA is investigating possible procurement violations by IBM with regard to a bid originally submitted in March, 2006, IBM said in a statement.

The company has 30 days to contest the temporary suspension on new contracts. Such a suspension can last up to a year pending completion of the investigation, IBM said. The company may continue to service contracts already awarded by the U.S. government, unless a particular agency directs otherwise.

"IBM intends to take all appropriate actions to challenge the suspension and limit its scope," the company said.