IBM disclosed Monday that it has been "temporarily suspended" from new business with US federal agencies, as well as being subject to a federal grand jury probe over a bid it submitted for work.
This development was revealed by Big Blue itself at close of financial markets. IBM said that the temporary suspension was issued by the US Environmental Protection Agency over an investigation by that agency into a bid for business two years ago this month in 2006.
Moreover, IBM said the US attorney's office for the Eastern District of Virginia is also involved and has served the company and "certain employees" with grand jury subpoenas for both testimony and documents. The focus concerns "interactions between employees" of the EPA and IBM.
IBM said it was unaware of US concern over its EPA bid until just a few days ago and is cooperating. But the company also intends to challenge the temporary suspension, which can continue for a period of up to one year.
The US government may be the largest IT buyer in the world, with an annual budget in excess of US$70 billion. IBM is a major supplier of federal agencies, providing a full range of IT equipment and services to the government, including the world's most powerful supercomputers.
IBM, in its statement, said it "has served the Federal agency community for many decades as a vendor in good standing and is committed to the highest standards of business ethics." The company said employees receive training in business conduct "to ensure compliance with all applicable Federal requirements."