EMC vows to fight GSA pricing allegations

In filings with the Securities and Exchange Commission, EMC Corp. said that it is cooperating with a Justice Department investigation of fee arrangements the storage maker has with system integrators in the federal market.

But the company also says that it “intend[s] to defend vigorously” if the case goes to litigation.

In its 10-K filing, EMC acknowledged the Justice investigation and said that it overlaps a General Services Administration audit into the company’s record-keeping and pricing practices.

EMC was on the GSA schedule from November 1999 to June 2007, when the contract expire. EMC had been negotiating with GSA over the pricing practices; when issues couldn’t be resolved, the company let its schedule contract expire.

Similar moves have been made in the last two years by companies such as Sun Microsystems, Cisco Systems Inc., and Canon USA, which have all stopped holding their own schedule contracts after negotiations with GSA broke down.

In its filing, EMC said, “We have cooperated with both the [GSA] audit and the DOJ investigation, voluntarily providing documents and information, and have engaged in discussions aimed at resolving this matter without any admission or finding of liability on the part of EMC.”

The company said it has “meritorious factual and legal defenses.”

If the investigation by the civil division of Justice proceeds to litigation, EMC risks damages, fines, penalties and other sanctions, “including suspension or debarment from sales to the federal government.”

About the Author

Nick Wakeman is the editor-in-chief of Washington Technology. Follow him on Twitter: @nick_wakeman.

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