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Monday, February 17, 2020

California software company to pay $75.5M for concealing pricing, overcharging government

By Shaun Zinck | Jul 2, 2015

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U.S. Deputy Assistant Attorney Benjamin Mizer said Tuesday software companies VMWare and Carahsoft Technology Corporation agreed to pay $75.5 million to settle a lawsuit that accused the companies of misrepresenting commercial pricing practices. | U.S. Department of Justice

WASHINGTON (Legal Newsline) - Two software companies will pay $75.5 million to the U.S. government to settle claims they misrepresented pricing practices from the government, said Benjamin Mizer, principal deputy assistant attorney general, on Tuesday.

VMware and Carahsoft Technology Corporation were also accused of overcharging the government for VMware software products and related services, Mizer said. VM specializes in computer virtualization software, and Carahsoft distributes information technology to all levels of government.

“Today’s settlement demonstrates our continuing vigilance to ensure that those doing business with the government give the taxpayers a fair deal,” Mizer said. “Government contractors who seek to profit improperly at the expense of taxpayers face serious consequences.”

The government accused VM of violating the False Claims Act by concealing its pricing practices under Carahsoft's contract with the government between 2007 and 2013, Mizer said. The lawsuit was filed under the country's whistleblower provision of the False Claims Act, and was filed by Dane Smith, a former vice president of the Americas VMware. Under the provision of the law Smith will share in the $75.5 million settlement. His share of the recovery hasn't been determined, Mizer said.

“Transparency by contractors in the disclosure of their discounts and prices offered to commercial customers is critical in the award of GSA Multiple Award Schedule contracts and the prices charged to government agency purchasers,” U.S. Attorney Dana J. Boente of the Eastern District of Virginia said.

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