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IBM has been temporarily barred from bidding for new contracts with US Federal government agencies. The company blames the suspension on a dispute with the Environmental Protection Agency - of which it had no knowledge, until it read about the ban on a government website.

The US Attorney's Office for the Eastern District of Virginia has served IBM and some employees with grand jury subpoenas requesting testimony and documents regarding business between employees of the EPA and IBM employees.

IBM learned of its temporary banishment through a third-party source last Friday. Upon looking at the US General Services Administration website, the company found it was on the excluded parties list, along with minimal information.

"Prior to learning of the temporary suspension on March 28, 2008, IBM was not aware that the EPA or US Attorney’s office were considering any action against IBM," the company said today.

IBM declined to discuss specifics, but spokesman Fred McNeese said the company understands the issue is over whether it improperly received insider EPA information concerning a contract.

McNeese said IBM intends to fully co-operate with the investigation, and is trying to obtain additional information.

Under federal law, IBM has 30 days to contest the scope of the suspension — which the company intends to do. The ban can continue for an initial period of up to one year pending the completion of the investigation.

The disputed bid was originally submitted to the EPA in March 2006.

Last year, transaction-type business with the US government was about one per cent of IBM's total revenues. ®

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