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7-Day Itch

The EPA's suspension of IBM was lifted on April 3rd--only a week after it was levied. IBM was suspended for receiving and using a competitor's proprietary bid information in order to increase its chance of winning a contract award. Like any suspension of a large contractor, IBM's suspension created a big stir in the contracting world. POGO supported the EPA's action because suspension and debarment are important tools to prevent risky contractors from receiving federal money. Moreover, IBM has had a questionable past, entering into at least seven settlements with the federal government since 2004. Others condemned the suspension because it was linked to grand jury subpoenas rather than proven misconduct, there was no advance notice provided to IBM, the suspension was company-wide (and therefore many innocent business divisions and individuals were wrongly impacted), and such decisions prevent commercial businesses from entering the government marketplace.

So after seven days, what have we learned? The EPA is now convinced that IBM is a responsible contractor. The government believes that public-private agreements (and the promises within them) go a long way in establishing contractor responsibility. The government's reliance on large contractors is a big factor in government decisions. And, the decision to lift IBM's suspension may have been different if this were a small business (see Ray Bjorklund's quote in today's AP story).

As many of you know, federal contracting is complex and imperfect. We are talking about big money, politics, profits, power, influence, "best value" and so many other factors--as recently witnessed in the Air Force tanker contract award, bid protest, and subsequent fallout. We hope that EPA's decisions were aimed at protecting taxpayers. Finally, we appreciate EPA's effort to hold a contractor and its employees accountable, however short-lived, as well as IBM's willingness to promise to do the right thing.