Software development company Informatica will pay $21.57 million to resolve allegations that it caused the government to be overcharged by providing misleading information about its commercial sales practices that was used in General Services Administration contract negotiations, the Department of Justice has announced.
“Companies that negotiate contracts with the government must make complete and accurate disclosures,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “We will continue to hold accountable those who harm taxpayers by withholding critical information from contracting agencies.”
Informatica allegedly knowingly provided false information concerning its commercial discounting practices for its products and services to resellers, who then used that false information in negotiations with GSA for government-wide contracts called “Multiple Award Schedule contracts.” Under these contracts, GSA uses commercial pricing disclosures to negotiate the maximum prices that a vendor can charge government agencies.
Here, Informatica’s allegedly false disclosures caused GSA to agree to less favorable pricing and, ultimately, government purchasers to be overcharged. The settlement also resolves allegations that Informatica caused sales to the United States in violation of the Trade Agreements Act, which restricts the country of origin for goods purchased by the government.
“Companies seeking to participate directly or indirectly in government contracts must adhere to applicable rules designed to promote the United States’ objective of prudently expending taxpayer funds by negotiating fair and reasonable pricing for the goods and services it purchases,” said Jessie Liu, U.S. attorney for the District of Columbia. “We will pursue recoveries from those that fail to live up to these obligations.”
The allegations resolved by this settlement arose from a whistleblower lawsuit filed under the False Claims Act. The act permits private citizens to sue on behalf of the government and share in any recovery. The whistleblower, who is a former employee of Informatica, will receive $4.3 million.