CA to pay $45M to settle allegations brought by whistleblower

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A New York-based technology-management software company will pay $45 million to settle allegations that it made false statements in relation to a General Services Administration contract, according to the Department of Justice.

CA Inc., now known as CA Technologies, is paying the settlement to resolve allegations brought in a whistleblower lawsuit filed by a former employee that the company “did not fully and accurately disclose its discounting practices” to GSA, federal prosecutors said in a news release issued Friday.

“This case illustrates that we will vigorously pursue federal contractors who fail to negotiate and perform their obligations with transparency and fairness,” said U.S. Attorney Channing D. Phillips for the District of Columbia, the office that co-handled the case.

The tech software company was awarded a Multiple Award Schedule contract with the GSA under which prices and contract terms were pre-negotiated, according to DOJ, for its software and maintenance licenses.

However, CA allegedly provided false information about discounts it gave for commercial customers for both the software and maintenance services both when the contract was negotiated in 2002 and extended in 2007 and 2009.

The contractor also allegedly did not provide government customers with additional discounts when commercial discounts improved, which would have violated the price reduction clause in the contract. CA was required to “fully and accurately” disclose to GSA commercial business updates so the administration could negotiate prices for agencies purchasing the company’s products and services.

Dani Shemesh, a former employee of CA Software Israel LTD, a subsidiary of CA, filed the whistleblower suit under the False Claims Act, which allows private individuals to sue on behalf of the government. Shemesh is receiving $10.92 million as a share of the settlement.

Chad Readler, acting assistant attorney general of the Justice Department’s Civil Division, said that the settlement helps ensure that contracts work “forthrightly” with the federal government.

“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.

CA had denied the allegations prior to the settlement, but did not have an official response on Monday.

The settlement is not CA’s first dealing with whistleblower allegations. In 2013, the company paid $11 million to settle allegations from another former employee claiming CA was fraudulently billing public agencies on software renewal contracts.

The GSA Office of Inspector General, the U.S. Attorney’s Office for the District of Columbia, and the Civil Division’s Commercial Litigation Branch handled the case settled this month.

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