CA, an information technology management software and services company, agreed to pay $45 million to resolve allegations under the False Claims Act that it made false statements and claims in the negotiation and administration of a General Services Administration contract, the Department of Justice announced.  

The settlement resolves allegations related to a GSA contract awarded to CA for software licenses and maintenance services.  Under Multiple Award Schedule (MAS) contracts like this one, GSA pre-negotiates prices and contract terms for subsequent orders by federal agencies.  

At the time of CA’s contract, contractors were required to fully and accurately disclose to GSA how they conducted business in the commercial marketplace so that GSA could use that information to negotiate a fair price for government agencies using the GSA contract to purchase CA products and services.  The contract also contained a price reduction clause that set forth when the contractor had to reduce the prices it charged to the government if its prices to commercial customers improved.  

This settlement resolves allegations that CA did not fully and accurately disclose its discounting practices to GSA contracting officers. “Specifically, the agreement resolves claims that CA provided false information about the discounts it gave commercial customers for its software licenses and maintenance services at the time the contract was negotiated in 2002 and was extended in 2007 and 2009,” the Justice Department stated.

“Additionally, 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 Justice Department added.

The allegations first arose in a whistleblower lawsuit, United States ex rel. Shemesh v. CA, filed by Dani Shemesh, a former employee of CA Software Israel.  Under the False Claims Act, private individuals can sue on behalf of the government and share in any recovery. It also allows the government to intervene and take over the action, as it did, in part, in this case. Shemesh will receive approximately $10.2 million under the settlement.  

This case was handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the District of Columbia, and the GSA Office of Inspector General.

“The claims resolved by the settlement are allegations only,” the Justice Department said. “There has been no determination of liability.”