Contract Watch: Big Consultants Put on Notice

IBM and EDS suffer potential setbacks; partners welcome new Symbol CEO.

It took Pete Rose 14 years to come clean and admit that he bet on baseball. Unlike Rose, IBM took a matter of months to uncover and admit its own wrongdoing.

Big Blue has fired three executives who were allegedly involved in a bribery scandal within IBMs Korea unit. The computing giant since November has been cooperating with Seoul investigators, who uncovered a bribery scandal that allowed IBM and several of its partners to win lucrative contracts with the Korean government.

Despite IBMs black eye, investors applauded Big Blues aggressive investigation of the scandal. Shares in the company are trading near a 52-week high.

Deal 2 – Who Stole EDSs Cheese?: Electronic Data Systems Corp. and Lockheed Martin Corp. are playing an expensive game of cat and mouse. The result could be an $860 million setback for EDS. It seems that Lockheed is protesting a Housing and Urban Development (HUD) contract won by EDS last year. Congressional auditors are pushing for the government to overturn the contract because Lockheed had provided a lower bid on the project. Subcontractors on the deal include AT&T Corp., Dell Inc. and Unisys Corp.

Insiders say HUD is leaning toward re-bidding the contract. If so, HUD will likely benefit from this process: EDS knows it has to lower its bid or provide compelling evidence that its higher price tag delivers unmatched value-added services.


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