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Looks like LEH and IBM will lead us down tomorrow. I will be hiding in the bushes waiting to jump in at my buy points when the dust settles on market :)




IBM temporarily barred from government business
By John Letzing, MarketWatch
Last update: 7:51 p.m. EDT March 31, 2008
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SAN FRANCISCO (MarketWatch) -- International Business Machines Corp. has been temporarily banned from new business with the federal government and is being investigated by the U.S. Attorney's Office for the Eastern District of Virginia over a contract awarded by the Environmental Protection Agency, the company said Monday.
The suspension and investigations are related to possible violations of procurement rules as part of a "bid for business with the EPA originally submitted in March 2006," IBM said in a statement. The EPA is also conducting its own investigation, IBM (IBM:
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IBM 115.14, +0.57, +0.5%) added.
The reasons for the ban and investigations weren't immediately clear.
While the contract in question relates solely to the EPA, the contracting ban applies to all federal agencies, according to IBM.
Big Blue did roughly $1.4 billion in business with the federal government in 2007, up from $1.3 billion in 2006, according to the online Office of Management and Budget database USAspending.gov.
IBM reported $98.8 billion in total revenue for 2007, and $91.4 billion for 2006.
The EPA awarded just more than $3 million across three contracts to IBM in 2006 for software maintenance, data processing and hardware, according to the USAspending.gov database.
The company said that it first learned of the suspension and investigations on Friday, adding that it's being allowed to continue work on government contracts already in progress.
Shares of IBM fell more than 1% to $113.40 in after-hours trading.
An EPA spokesman did not immediately respond to a request for comment. A representative of the U.S. Attorney's Office for the Eastern District of Virginia did not respond to a request for comment.
IBM said that the U.S. attorney's office served "IBM and certain employees with grand-jury subpoenas requesting testimony and documents" related to interaction between EPA and company employees. IBM said it plans to contest the suspension, which can continue for an initial period of up to one year. End of Story
John Letzing is a MarketWatch reporter based in San Francisco.