By Maria Armental
New York software vendor CA Inc. (CA) is being sued by the U.S.
Justice Department for allegedly overcharging the government for
software licenses and maintenance.
The Justice Department alleges CA, formerly known as Computer
Associates International Inc., gave government contracting officers
incomplete and inaccurate information during contract extension
negotiations, including failing to disclose higher discounts it was
offering to commercial customers. The federal complaint also
alleges CA failed since 2002 to pass on those discounts to the
government or erred on calculations, resulting in the government's
overpaying.
Under the terms of the contract, the Justice Department said CA
was required to monitor those discounts and apply them to the
government's contract.
The company challenged the allegations in a statement saying,
"We believe that the material aspects of the government's liability
theories are unfounded and will vigorously contest them."
Negotiations are ongoing, a company spokeswoman said.
Based in Islandia, N.Y., CA makes software for mainframe
computers and other hardware.
Among the federal agencies that are part of the contract are the
Department of Defense, the Department of Energy, the Department of
Health and Human Services and the Department of Labor.
"Too many federal contractors think they can get away with
overcharging the government," Ronald C. Machen Jr., U.S. attorney
for the District of Columbia, said Thursday in a statement.
Some of the allegations were filed in a lawsuit originally
brought by Dani Shemesh, a former employee of CA Israel Ltd., under
the whistleblower provisions of the False Claims Act, which permit
private parties to sue on behalf of the government and to share in
any recovery, the Justice Department said.
The government, which had previously notified the court it
intended to join in the lawsuit, will litigate the case.
Write to Maria Armental at maria.armental@wsj.com
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