Accenture pays nearly $64M to settle kickback allegations

Justice announces resolutions of whistleblower lawsuit filed in connection with multiple federal IT contracts

Accenture LLP reportedly has agreed to pay a nearly $64 million fine to settle allegations that it accepted kickbacks, unfairly hiked its prices and conspired on bidding in connection with numerous federal IT contracts.  

The federal contractor was accused of “receiving kickbacks for its recommendations of hardware and software to the government, fraudulently inflated prices and rigged bids,” according to a Sept. 12 Justice Department news release.

Accenture officials said Sept. 12 that the company admitted no liability in the lawsuit and agreed to settle to avoid protracted litigation.

“The agreement is not an admission of liability by Accenture. Accenture continues to vigorously deny that there was any wrongdoing,” the company said in a statement.

According to Accenture’s statement, the lawsuit was based on Accenture’s receipt of payments and other benefits through alliance agreements with other vendors. The lawsuit alleged that the agreements were not sufficiently disclosed and should not have been allowed on federal contracts, the company said.

The charges were filed in a whistleblower lawsuit filed in the U.S. District Court for the Eastern District of Arkansas.

“Kickbacks and bid rigging undermine the integrity of the federal procurement process,” Tony West, assistant attorney general for the Justice Department’s Civil Division, said in a statement. “At a time when we're looking for ways to reduce our public spending, it is especially important to ensure that government contractors play by the rules and don’t waste precious taxpayer dollars.”

But Accenture defended the agreements. “The U.S. federal government was aware of alliance relationships in the IT industry and how they would benefit customers, vendors and the IT industry. The details of how alliances worked in the IT industry were widely reported in the industry press,” Accenture’s statement said.

Accenture also disclosed the agreements in proposals it made when bidding on work with federal agencies, the company said. "Accenture remains confident that our agreements and dealings with our alliance partners and vendors were appropriate and lawful," according to the statement.

The lawsuit was initially filed by Norman Rille and Neal Roberts under the whistleblower provisions of the federal False Claims Act. The law permits individuals to bring lawsuits on behalf of the federal government and to receive a share of the settlement. The distribution of the settlement has not been resolved, Justice officials said.

Assisting in the lawsuit were the inspectors general of the Energy, Education and State departments as well as the Tax Administration, General Services Administration and Transportation Security Administration.

Accenture said it included the settlement in its third-quarter financial statements and asserted that the settlement will not materially impact operating results or its financial position.

“This settlement will not restrict Accenture’s current or future business with the U.S. federal government in any way,” the company stated.

For example, the Justice Department selected Accenture as one of 20 contractors on a $1.1 billion IT contract vehicle in August.

Accenture, of Dublin, ranks No. 33 on Washington Technology's 2011 Top 100 list of the largest federal government contractors.

 

About the Author

Alice Lipowicz is a staff writer covering government 2.0, homeland security and other IT policies for Federal Computer Week.

Reader Comments

Mon, Sep 19, 2011

And they were not disbarred because?....

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