Contracting

IT contractor to pay $45 million to settle software overcharge

Shutterstock image: checking documents. 

Systems software vendor CA will pay $45 million to resolve allegations of overcharging the General Services Administration for software licenses and maintenance.

The settlement, announced by the Justice Department on March 10, resolves allegations that CA misrepresented its commercial pricing to GSA in a 2002 software license deal, which was extended in 2008 and 2009. 

The settlement "demonstrates our continuing vigilance to ensure that contractors deal forthrightly with federal agencies when seeking taxpayer funds," said Chad A. Readler, acting assistant attorney general in the Civil Division of the Justice Department. "We will take action against contractors who withhold information and cause the government to pay more than it should for commercially available items," Readler said in a statement.

CA allegedly provided false information to GSA about the discounts it gave commercial customers for its software licenses and maintenance services. Under its contract with GSA, CA's pricing was supposed to track with discounts available to commercial customers. Additionally, DOJ said the settlement resolves claims that CA violated the price reduction clause in the contract by not providing government customers with additional discounts when commercial discounts improved.

The case was spurred by a whistleblower complaint by a former CA employee. Under the whistleblower statute, the former employee Dani Shemesh receives over $10.1 million as part of the settlement.

About the Author

Mark Rockwell is a staff writer at FCW.

Before joining FCW, Rockwell was Washington correspondent for Government Security News, where he covered all aspects of homeland security from IT to detection dogs and border security. Over the last 25 years in Washington as a reporter, editor and correspondent, he has covered an increasingly wide array of high-tech issues for publications like Communications Week, Internet Week, Fiber Optics News, tele.com magazine and Wireless Week.

Rockwell received a Jesse H. Neal Award for his work covering telecommunications issues, and is a graduate of James Madison University.

Click here for previous articles by Rockwell. Contact him at mrockwell@fcw.com or follow him on Twitter at @MRockwell4.


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Reader comments

Mon, Mar 13, 2017 Dave Mischbuccha

This is a landmark case for those selling or reselling standard SW products. It should serve as a clear signal to vendors of what can happen if you lie to the government in the supporting material for catalog prices. Trump likes settlements like this, by the way

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