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11/14/2008
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MPC/Gateway Suspended From Georgia Contracts

State officials are worried about the finances of the company, which filed Chapter 11 bankruptcy earlier this month.

State authorities in Georgia have suspended MPC Corp.'s Gateway unit from bidding on state contracts because of the tech vendor's shaky finances, InformationWeek has learned.

In a letter sent last week to MPC executives, Timothy Gibney, Georgia's assistant commissioner for purchasing, said the company would not be allowed to bid for state work and might be permanently barred from Georgia's contractor roles.

"MPC's current financial problems make uncertain MPC's ability to honor its various contractual obligations," wrote Gibney.

MPC filed for Chapter 11 bankruptcy protection on Nov. 7. At the time, the company said it expected operations to continue through the reorganization process. MPC blamed "unforeseen issues" related to its acquisition of Gateway's commercial PC division. MPC acquired the division last year for $90 million.

Gibney said MPC is suspended as a state supplier for 120 days, during which state officials will take a closer look at the company's finances and operations, with an eye to permanently barring it. "During this period of suspension and proposed debarment, MPC is required to honor any outstanding contracts or orders with state agencies," Gibney wrote.

The company "is prohibited from receiving and state agencies are prohibited from placing new orders with MPC," Gibney continued. The suspension applies to all state offices and agencies, as well as state universities in Georgia.

MPC/Gateway can request a hearing to protest the suspension within 10 days of receiving Gibney's letter. Company officials were not immediately available for comment.

MPC's stock was delisted from the New York Stock Exchange's Alternext market on Nov. 4. It has retained Focus Management Group to assist with the bankruptcy process.

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