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CA Technologies Settles False Claims Allegations for $45 Million

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  • Posted on: Mar 22 2017

The Department of Justice (“DOJ”) recently announced that CA Technologies (“CA”) has agreed to pay $45 million to resolve allegations under the False Claims Act related to a General Services Administration (“GSA”) contract awarded to the company for software licenses and maintenance services.

CA is an international information technology management software and services company with headquarters on Long Island, New York.  The government alleged that CA made false statements and claims in connection with the negotiation and administration of the GSA contract.

Under Multiple Award Schedule contracts, like the one at issue, prices and contract terms for subsequent orders by federal agencies are pre-negotiated. In order to negotiate a fair price, the GSA required CA to fully and accurately disclose how it conducted business in the commercial marketplace. In addition, the contract included a price reduction provision that required CA to reduce the prices charged to the government if prices charged to commercial customers fell.

The settlement resolves allegations that CA did not fully and accurately disclose its discounting practices to GSA contracting officers. In particular, the agreement resolves claims that CA provided false information about discounts given to commercial customers when the contract was first negotiated in 2002, as well as when it was subsequently extended in 2007 and 2009. Additionally, 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 allegations initially surfaced in a whistleblower lawsuit brought by a former employee of CA Software Israel.

“Today’s settlement demonstrates our continuing vigilance to ensure that contractors deal forthrightly with federal agencies when seeking taxpayer funds,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division.  “We will take action against contractors who withhold information and cause the government to pay more than it should for commercially available items.”

What is the False Claims Act?

The False Claims Act (“FCA”) is a federal law that prohibits businesses or individuals from knowingly submitting false or fraudulent claims to the federal government for payment. The FCA also rewards whistleblowers, referred to as “relators,” who successfully recover funds on behalf of the government.

In this case, the CA whistleblower is set to receive about $10.2 million under the settlement. In addition, the FCA includes an anti-retaliation provision that protects whistleblowers from workplace retaliation, including acts such as termination, suspension, demotion, and discrimination. If you are aware of a violation under the False Claims Act, an experienced attorney can help you understand and explore your options in blowing the whistle on fraud.

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