IBM banned from federal contracts
Posted April 1st, 2008 by Alex Ion
A temporary ban has been issued to IBM Corp. (NYSE:IBM) until prosecutors will finish investigations regarding “special” relations between the company’s employees and the Environmental Protection Agency (EPA). IBM has been doing business with almost all the agencies and departments of the Government and last year they’ve signed deals for about $1.3 billion, which is about 1% of their 2007 revenue.
Though there are no real evidences, the suspension could be serious if it lasts a few months or a year, because no other federal agencies will award contracts to IBM until the problem is solved. “It’s potentially a big deal,” said Ray Bjorklund, a senior vice president at market research firm Federal Sources Inc.
The impact on stocks was extremely low: down $1.50 to $113.64.
