Headaches in Armonk but will green lose out?

No doubt the IBM top team will be passing around the Tylenol today in Armonk as they figure out what to do next after their temporary exclusion from further contracting with the US Federal government. Sadly it is not an April fool's joke - the US Attorney's office for the Eastern Division of Virginia has served subpoenas seeking documents and evidence relating to IBM's contracts with the US Environmental Protection Agency.

Reports today suggest the investigation centres around some form of alleged improper contact between IBM and EPA employees in the procurement process.  According to an email from the EPA:

The action was taken by the EPA suspending official as a temporary measure while the Agency reviews concerns raised about potential activities involving an EPA procurement.

FCW reports the contract in question is an $84 million financial management system bid which IBM previously lost but has since filed a protest on the matter with the General Accounting Office. 

 IBM has a long history of collaboration with the EPA over many years in helping to move forward the green agenda. IBM is a charter member of the EPA's Climate Leaders group - an initiative where leading corporations voluntarily publicly disclose their CO2 inventory and targets to the EPA. The EPA in turn provides up to 60 hours of free technical assistance to participating organisations. Under the programme IBM has pledged to reduce its CO2 by 7% to 2012. Similarly, IBM and the EPA also collaborate together in the WWF, Google and Intel led Climate Savers initiative.

These public programmes play an important role for external validation, assurance and benchmarking.  In the absence of hard regulatory standards such collaboration helps businesses more effectively set reasonable targets and measure progress.  Collaborative governance models like this come in many different hues and they are all critical to success in building a more effective coordinated response to the sustainability challenge from the public, private and civil society sectors. Allowing more flexibility within market place constraints to voluntarily reach targets without the chilling affect of blanket regulation is key. In turn, the experience gives agencies like the EPA a feel for what is achievable in the economy at large and so leads to better regulation when and where it becomes necessary.

But can such workaday relationships with a government agency lead to over familiarity and closer than arms length relationships? Does voluntarily engagement with any regulatory authority lead to increased risk when the church and state divide is breached? Maybe, but such collaboration is essential and in many cases the risks associated with a failure to engage with stakeholders are higher. 

However, public sector contracting relationships are particularly sensitive and penalties for improprieties can be severe, clearly the governance hurdles are higher. There is even an OECD convention dedicated to raising the regulatory bar on this worldwide.  And the local US Attorney's office handling this case has highlighted it as no less than one of its four main priorities.

We are committed to investigating and prosecuting public corruption at all levels of government, wherever it may exist, and to rooting out corruption in federal procurement processes.

But the despite the obvious risks, the private and public sector must continue to work together to build collaborative governance frameworks to manage sustainability. At least on the EPA side there continues to be a clear willingness for the important work on the environment with IBM to continue no matter what. In a conversation I had with EPA Press Secretary, Jonathan Shradar he commented:

I trust that IBM as a leader in the technology sector will continue to participate in important collaborative initiatives such as the Climate Leaders Group.