Failure to comply with the False Claims Act has resulted in another large IT company, CA, Inc. paying $45 million in claims. The Department of Justice found that CA, Inc. neither disclosed all key commercial discounting practices nor offered them to GSA customers while negotiating its GSA Schedule contract.
The allegations against CA were brought to the Department of Justice through a whistleblower lawsuit filed by an employee of CA Software Israel, LTD; Dani Shemesh. The DOJ took the case over and pursued the claim.
CA, Inc. is resolving the allegations through a settlement; there has been no determination of liability.
The CA case highlights the importance of understanding and ensuring compliance in all Federal contracts, specifically the GSA schedule program.
In all previous and nearly all current GSA and VA FSS contracts (see TDR discussion on new policies), vendors agree that GSA will receive better than or equal to the vendor’s “Most Favored Customer” pricing. If any deviation from that discount relationship for same or similar circumstances occurs with the MFC, the vendor must disclose the deviation and, potentially, provide the same discount to GSA customers. Failure to do so may result in a violation of the Price Reduction Clause, which could be tried under the False Claims Act.
If you have concerns regarding GSA contract compliance and need to request an experienced advisor to review your situation, contact Coley GCS today.