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Justice Dept. Alleges Kickbacks in IT Contracting

The Justice Department has joined whistleblower lawsuits accusing Accenture LLP, Hewlett Packard and Sun Microsystems of paying and receiving kickbacks from other companies in return for favorable treatment on government contracts.

The civil lawsuits touch dozens of IT vendors who allegedly paid the large systems integrators for access to contracts with numerous federal agencies since the 1990s.

“The core of the allegations, in which the United States has joined by filing its own complaints, is that the defendants have systematically solicited and/or made payments of money and other things of value, known as ‘alliance benefits,’ to a number of companies with whom they had global ‘alliance relationships’ or an agreement to work together,” Justice said in a statement. “The government’s complaints assert that these alliance relationships and the resulting alliance benefits amount to kickbacks and undisclosed conflict of interest relationships.”

“The Department of Justice is acting in this case to protect the integrity of the procurement process,” said Peter Keisler, assistant attorney general for the Civil Division.

Justice said Accenture alone received more than $20 million in illegal payments from alliance partners between 2000 and 2006.

The companies either denied wrongdoing or declined comment on the suit.

The suits were originally filed in federal court in Little Rock, AR, in 2004 under the “qui tam” or whistleblower provisions of the False Claims Act. That law allows a private individual to file suit on behalf of the government and receive a portion of any money that is recovered.

The whistleblowers are a former Accenture manager and a former partner in the accounting firm PriceWaterhouseCoopers. They alleged that “hundreds of millions of dollars” in kickbacks flowed between systems integrators and vendors since the late 1990s.

IDG News Service reported that the suits originally named other IT companies, but cases against some of the defendants have been dismissed. The Justice Department did not join suits against SAP and Science Applications International Corp.

Under the False Claims Act, the government may recover three times the amount of its losses plus civil penalties, Justice said.


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