According to an indictment unsealed today in a Washington federal court, CA Technologies Inc allegedly overcharged the federal government on its contracts, which had caused the complainant over a hundred million dollars in costs. The complaint said as a result of the fraud, the General Services Administration didn't get the price it should had for government clients, which include the departments of Defense, Labor, Energy and Health and Human Services.
"CA repeatedly certified to GSA that its discounting policies and practices had not changed, when in fact its discounts to commercial customers had increased," the Justice Department had said regarding the lawsuit in a statement.
Bloomberg said that according to the law, the federal government is entitled to negotiate with a contractor for the best price from the usual price it offers to large customers, and that the vendor should provide an explanation for any difference for how much it wants to charge the US.
The lawsuit said the software maker of information technology management usually provide discounts of 90% or higher to commercial buyers and smaller reductions to the GSA> For a software license, the government was charged $34,487, of which CA claimed is 50% off from the original price, while its private sector client Bank Leumi Le-Israel Ltd got a much discounted price at $3,400 per software license. The lawsuit claimed that the faulty pricing had started in 2006.
Bloomberg noted that some of the allegations against the Islandia, New York-based company were based on statements by former CA employee Dani Shemesh. Shemesh, who was previously installed in an Israeli unit of the company, said CA have violation the False Claims Act.
In an emailed statement, CA spokeswoman Jennifer Hallahan said, "Material aspects of the government's liability theories are unfounded. We've had numerous discussions with the government and continue to believe that dialogue in good faith will lead to a satisfactory outcome."
