Consumer Fraud

U.S. government joins whistleblower complaint against technology contractor

osha whistle U.S. government joins whistleblower complaint against technology contractorThe federal government has filed a complaint against information technology contractor CA. Inc. for violations of the False Claims Act, accusing the company of intentionally overcharging the government for its products and services over the course of several years. The government’s lawsuit was prompted by another complaint brought by a former CA employee who filed a lawsuit against the company under the whistleblower provisions of the False Claims Act.

The U.S. government contracted CA in September 2002 to provide software licenses, maintenance, training, and consulting services to the U.S. Departments of Defense, Energy, Health And Human Services, and Labor.

According to the lawsuit, CA withheld information from U.S. officials negotiating a General Services Administration (GSA) contract with the company that resulted in the government paying higher prices than CA’s commercial customers for the same services. The U.S. also alleges CA failed to give U.S. authorities information about discounts available to commercial customers, and in cases when such information was provided, failed to give complete and accurate details, effectively causing federal agencies to pay more than commercial customers. The U.S. says these practices began in 2002 and continued since.

“Too many federal contractors think they can get away with overcharging the government,” said U.S. Attorney for the District of Columbia Ronald C. Machen Jr. “Our complaint alleges that CA broke its promise to give the government the same prices it was giving commercial customers.  We look forward to vigorously pressing these claims in court and recovering every dollar that is owed to the American taxpayer.”

“Companies doing business with the federal government on a GSA schedule must disclose current, accurate, and complete commercial discounts, so that GSA can get the best prices on behalf of American taxpayers,” said GSA Acting Inspector General Robert C. Erickson.  “We will continue to investigate all allegations indicating that the federal government may have been overcharged by a contractor.”

According to the U.S. Justice Department, some of the U.S. government’s allegations stem from a whistleblower lawsuit brought by Dani Shemesh, a former employee of CA Israel Ltd. The federal False Claims Act allows individuals with knowledge and evidence of fraud and other wrongdoing targeting U.S. Agencies and programs to file a whistleblower lawsuit. In exchange, the U.S. awards whistleblowers up to 30 percent of any successful recovery.

The False Claims Act also authorizes the U.S. to intervene in the lawsuit and assume primary responsibility for the litigation of it. In this case, the U.S. government joined the whistleblower complaint and also filed its own lawsuit against the contractor.


U.S. Department of Justice