IBM Banned From New Government Contract Work

Two weeks ago, in the last edition of Ethisphere Magazine we rated and ranked the ethics programs of some of the largest U.S. government contractors. IBM was on the lower end of the rankings with a score of just over 50 (below standard).

And guess what? Yesterday the company was temporarily banned from any new government contracts because of possible violations with a “bid for business with the EPA originally submitted in March 2006,” according to a report by Market Watch. Specific details as to why the company was banned from new contracts weren’t immediately available, but some are reporting that it involved bid rigging.

In addition to the temporary ban, which could last up to a year, IBM is being investigated by the U.S. Attorney’s Office for the Eastern District of Virginia, according to the article.

According to USAspending.gov, IBM acquired $1.4 billion of government contracts last year. This is compared to the company’s $98.8 billion in total revenue for 2007.

Know who wins when IBM is banned from federal contracts? The answer is: EDS. We scored EDS’s government contracting ethics program two weeks ago. Care to know their score? It was ‘Excellent’, with a score of over 90.

Good ethics = good profit. The U.S. government appears to agree with us.