SAIC pays $500M to settle CityTime scandal

Single criminal count will be lifted in three years if SAIC complies with all terms of agreement.

Science Applications International Corp. will pay $500.4 million to settle criminal allegations involving its CityTime automated workforce management project with New York City.

The payment was announced today by the U.S. Attorney for the Southern District of New York and the City of New York. SAIC will pay $500.4 million in restitution and penalties, and an independent monitor will be appointed by the U.S. Attorney’s Office for three years to review certain company policies and practices, a March 14 company statement said.

“The United States Attorney’s Office has charged the company with a single criminal count related to CityTime, but will defer prosecution based upon, among other things, the company’s cooperation with the investigation, remediation efforts and acceptance of responsibility,” it said.

The government will dismiss the charge without prosecution in three years if SAIC complies with the terms of the deferred prosecution agreement.

“We welcome this settlement as an important step in our efforts to move forward as a better, stronger company dedicated to the highest standards of ethics and performance for our customers,” CEO John Jumper said in the statement.

“We have implemented strong improvements to our compliance program and have new leadership in place. Our financial position is solid, with a strong balance sheet and strong, predictable cash flow,” he said.

The SAIC statement concluded by explaining that “CityTime is an automated workforce management system that covers some 163,000 New York City employees in 65 agencies and that saves the city time and money every day."

SAIC last year  fired three key executives for alleged failures of proper management when the CityTime kickback scheme came to light.

The CityTime project, launched in 1998, was designed to update and streamline municipal employee records. But investigations by prosecutors, following a whistleblower’s tip, showed CityTime to be an international conspiracy with contractors earning kickbacks for inflated hours billed to the city. Two of those indicted in the scheme fled the country.

SAIC, of McLean, Va., ranks No. 6 on Washington Technology’s 2011 Top 100 list of the largest federal government contractors.