CA, Inc. settles defective pricing qui tam for $45 million

by Ben Vernia | March 12th, 2017

On March 10, the Department of Justice announced that the computer company CA, Inc., had agreed to pay $45 million to settle allegations, originally brought by a whistleblower, that the company made false statements during negotiations with the General Services Administration. According to DOJ’s press release:

CA Inc. (CA) has agreed to pay $45 million to resolve allegations under the False Claims Act that it made false statements and claims in the negotiation and administration of a General Services Administration (GSA) contract, the Department of Justice announced today.  CA is an information technology management software and services company headquartered in New York, New York.

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The settlement resolves allegations related to a GSA contract awarded to CA for software licenses and maintenance services.  Under Multiple Award Schedule (MAS) contracts like this one, GSA pre-negotiates prices and contract terms for subsequent orders by federal agencies.  At the time of CA’s contract, contractors were required to fully and accurately disclose to GSA how they conducted business in the commercial marketplace so that GSA could use that information to negotiate a fair price for government agencies using the GSA contract to purchase CA products and services.  The contract also contained a price reduction clause that set forth when the contractor had to reduce the prices it charged to the government if its prices to commercial customers improved.

This settlement resolves allegations that CA did not fully and accurately disclose its discounting practices to GSA contracting officers.  Specifically, the agreement resolves claims that CA provided false information about the discounts it gave commercial customers for its software licenses and maintenance services at the time the contract was negotiated in 2002 and was 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.

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The Government announced that the whistleblower, a former employee of CA’s Israeli subsidiary, will receive $10,195,000 of the settlement a (22.6% relator’s share).

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