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Sun burns US government contract over pricing controversy

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Amidst a scandal over alleged contracting abuses, Sun Microsystems has canceled its multiple awards schedule contract with the General Services Administration.

The GSA establishes long-term government-wide contracts to provide IT supplies at prices companies offer commercial customers.

For several months, Sun has been under heavy fire from both the GSA's inspector general and Sen. Chuck Grassley (R-Iowa), who claim the company has overcharged agencies by more than $25m on purchases dating back to 1997.

In August, Grassley called for the government to cancel the IT supplies contract with Sun when it didn't provide information needed for an audit requested by the Senator.

Sun has refuted Grassley's claims of being uncooperative to investigators, saying it responded to several demands by the GSA Inspector General and from officials at other agencies.

The company announced today the cancellation will be effective October 12, but offered no explanation for the move.

"We took this step reluctantly, as we have always valued our relationship with GSA and its team of committed professionals," Sun said in a statement. "Sun remains honored to be a federal contractor and, like other companies in our industry who do not have a GSA multi-award schedule, we look forward to continuing to serve our government customers."

Sun relies on the US government for a huge chunk of its sales. ®

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