DOJ files gov't contracting lawsuit against CA

CA 'knowingly overcharged' the US government for software licenses and maintenance, the DOJ says

Tech vendor CA has overcharged U.S. government agencies for software licenses and maintenance since 2006, according to a lawsuit filed by the Department of Justice Thursday.

The DOJ's lawsuit, alleging that CA violated the False Claims Act in connection with a U.S. General Services Administration contract, echoes similar lawsuits filed against several tech vendors in recent years.

CA, which has had a GSA contract since 2002, "knowingly overcharged" the U.S. government for software licenses and maintenance in various ways, the DOJ said in a press release.

CA denied the charges. "We believe that the material aspects of the government's liability theories are unfounded and will vigorously contest them," the company said in a statement.

The company is hopeful for a quick resolution, CA added. "We've had numerous discussions with the government and continue to believe that dialogue in good faith will lead to a satisfactory outcome for both parties," the company's statement said.

CA provided incomplete and inaccurate information to GSA contracting officers during the negotiation of contract extensions, despite being required to disclose its commercial contracting practices, the DOJ alleged. The disclosure is required to give GSA information needed to negotiate a fair price for government agencies, DOJ said.

CA also failed to update its discounting practices during the life of the GSA contract, the DOJ alleged. CA repeatedly certified to GSA that its discounting policies and practices had not changed, when it was offering larger discounts to commercial customers, the agency alleged.

The DOJ's complaint also alleges that, since 2002, CA failed to properly apply the GSA contract's price reduction clause. The contract required CA to monitor discounts to certain commercial customers, compare these discounts to the discounts given to the government and, if the commercial discounts were higher, pass on those higher discounts to the government, the DOJ said.

CA failed to make those comparisons, and when it did, failed to do so correctly, the DOJ alleged.

"We expect companies that do business with the government to comply with their contractual obligations," Stuart Delery, assistant attorney general in the DOJ's Civil Division, said in a statement. "As this case demonstrates, we will take action against those who seek to abuse the government's procurement process."

Some of the allegations in the DOJ's complaint came from a 2009 lawsuit brought by Dani Shemesh, a former employee of CA Israel, under the whistleblower provisions of the False Claims Act. The provisions permit whistleblowers to sue on behalf of the government and to share the recovery.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's email address is grant_gross@idg.com.

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Tags governmentlegalcaU.S. Department of JusticeCivil lawsuitsU.S. General Services AdministrationStuart DeleryDani Shemesh

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Grant Gross

IDG News Service
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