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IBM dragged to court, govt contracts suspended

Investigation over possible procurement violations

IBM has received a grand jury summons from the US Attorney's Office, just days after the US Environmental Protection Agency (EPA) suspended IBM from receiving new Federal government contracts or assistance.

IBM is being investigated over possible procurement violations between employees of the EPA and certain IBM employees, IBM said Monday. IBM is cooperating with the investigation, it said.

A suspension from one US government agency is respected by other agencies, meaning the EPA 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 emailed 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.

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