IBM banned from doing business with US government

IBM has been hit with an unexpected trading ban, preventing it from entering into new business with US federal government agencies, as a result of an ongoing investigation by the Environmental Protection Agency (EPA).

The temporary suspension comes after the EPA alleged the computer giant violated procurement laws while negotiating a contract with the environmental organisation.

The company, as well as some individual employees were served with grand jury subpoenas to provide testimony and documents in the case. IBM executives were unaware of any potential action being taken against their company, and had no warning of the suspension until it was announced.

IBM has initiated talks with both the EPA and the US Attorney's office to acquire information about the suspension and the investigation that led up to it.

According to federal procurement procedures, the company will have 30 days to challenge the scope of the suspension. IBM announced it intends to contest the suspension, which could last for up to a year if the investigation continues that long.

During the suspension, IBM will be allowed to continue existing business dealings with federal agencies, but not bid for new business.

The company has vowed to comply with the investigation and maintains that it has served federal agencies "for many decades as a vendor in good standing," according to a statement put out by IBM.

"IBM provides training on its business conduct guidelines to all employees, with specialised training to those employees working on matters with the federal government," the company added in its statement.