Dell settles charges that it overcharged the US Army on computing contracts

by DTM | Posted on
  • Dell and Iron Bow accused of violating the False Claims Act by overcharging the US Army
  • Together, the two firms will pay out $4.35 million in settlements
  • A Dell whistleblower will get 6.6% of Dell’s payout

Dell Technologies and Iron Bow Technologies have agreed to pay more than $2 million each to resolve allegations that they overcharged the US Army under a government computing contract.

The settlements, confirmed in an announcement by the US Department of Justice, address claims of “non-competitive bids” submitted by the companies to secure army contracts at overinflated charges.

Dell will pay out $2.3 million, with Virginia-based Iron Bow set to pay $2.05 million, to settle the claims.

Dell and Iron Bow settlements

According to the DOJ, Dell operated a deal registration program that gave Iron Bow preferential pricing for Dell computer hardware. This subsequently let Iron Bow offer lower bids to the Army, while Dell submitted higher bids to guide the army towards Iron Bow.

Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division, stated: “The United States relies on competition to get the best value and price for the American taxpayers.”

US Attorney Prim F. Escalona for the Northern District of Alabama added: “Fraud in the government contracting process costs taxpayers untold dollars each year… We will continue to work with our federal law enforcement partners to investigate and pursue those who commit government contracting fraud.”

The settlement also aims to resolve a whistleblower lawsuit filed by Brent Lillard, an executive of another IT reseller, under the False Claims Act. A $345,000 slice of Dell’s $2.3 million payout is destined for Lillard.

This isn’t the first time that software and hardware providers have been accused of overcharging the US government and its agencies. Earlier this month, the DOJ shared two instances of fraudulent IT contracts which resulted in six individuals being charged or indicted.

German company SAP was also raided by the FBI amid a longstanding investigation into allegations that the company had overcharged the US government and military for use of its software.

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