Federal Contract Ban Stalls IBM Channel

Partners are likely to feel a significant impact from IBM’s suspension from seeking new federal contracts, according to government analysts and the General Services Administration.

IBM was banned by the Environmental Protection Agency from completing or signing any new or pending federal contacts. However, any ongoing contracts or contracts that have already been signed will remain intact.

The GSA confirmed that the suspension applied to all new indirect and direct sales by IBM. A GSA spokesperson said that the government cannot buy IBM products, regardless of source, unless there is a compelling need.

Ray Bjorklund, senior vice president and chief knowledge officer with FedSources, a government market intelligence firm, said that “compelling need” referred to a situation where a vendor had proprietary knowledge of a product or a service. He added that these situations most often applied in instances of national security.

“This is going to have a massive impact on IBM’s partners, who will also face the ban,” said Melissa Smith, director of research at Input. “Although in some cases partners may have relationships with more than one prime [vendor], it’s likely that some will just be with IBM.”

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