CA settles software overcharge allegation for $45M

EDITOR's NOTE: This article first appeared on FCW.com

Systems software vendor CA will pay $45 million to resolve allegations of overcharging the General Services Administration for software licenses and maintenance.

The settlement, announced by the Justice Department on March 10, resolves allegations that CA misrepresented its commercial pricing to GSA in a 2002 software license deal, which was extended in 2008 and 2009. 

The settlement "demonstrates our continuing vigilance to ensure that contractors deal forthrightly with federal agencies when seeking taxpayer funds," said Chad A. Readler, acting assistant attorney general in the Civil Division of the Justice Department. "We will take action against contractors who withhold information and cause the government to pay more than it should for commercially available items," Readler said in a statement.

CA allegedly provided false information to GSA about the discounts it gave commercial customers for its software licenses and maintenance services. Under its contract with GSA, CA's pricing was supposed to track with discounts available to commercial customers. Additionally, DOJ said 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.

The case was spurred by a whistleblower complaint by a former CA employee. Under the whistleblower statute, the former employee Dani Shemesh receives over $10.1 million as part of the settlement.