CA Technologies to pay $45 million to settle whistleblower charges
CA Technologies, formerly known as Computer Associates, in Islandia on May 10, 2012. The software company moved to Manhattan in 2014, but still leases its former 778,000-square-foot headquarters building in Islandia. Credit: Kevin P. Coughlin
CA Technologies has agreed to pay $45 million to settle charges initiated under a whistleblower lawsuit that it provided false information about pricing policies to a federal agency, the Department of Justice announced.
The software company, formerly known as Computer Associates, moved its headquarters from Islandia to Manhattan in 2014. More than 1,000 employees still work at CA’s 778,000-square-foot Islandia building.
Under the settlement announced Friday, CA did not admit liability.
In a statement, CA said the lawsuit stemmed “from a complicated contract the parties signed almost 15 years ago.
“We are pleased to have reached a settlement with all parties,” said the company, which has 11,000 employees worldwide. “Government agencies remain valued customers of CA Technologies.”
CA shares rose 20 cents Monday to close at $32.60. In the past 12 months they are up more than 6 percent.
A former employee of CA Software Israel LTD, Dani Shemesh, filed a lawsuit in U.S. District Court in Washington, D.C., in August 2010 under the federal False Claims Act and received a $10.2 million share of the settlement.
The settlement resolves charges that CA did not disclose the discounting policies it uses with commercial clients when it was negotiating a contract in 2002 with the federal General Services Administration. That contract was extended in 2007 and 2009.
A price reduction clause in the GSA contract required CA to provide government customers discounts in line with commercial customers.
The lawsuit by Shemesh quotes a November 2006 email by a CA executive saying that customers “do not know CA’s price list” and that in many cases the company discounts list prices by “around 90 percent without ever telling [the] customer.”
“GSA contractors must be honest and forthcoming when doing business with the federal government,” GSA Inspector General Carol Fortine Ochoa said in a statement. “American taxpayers deserve a fair deal.”
“This case illustrates that we will vigorously pursue federal contractors who fail to negotiate and perform their obligations with transparency and fairness,” U.S. Attorney for the District of Columbia Channing D. Phillips said in a statement.
Ken Schachter covers corporate news, including technology and aerospace, and other business topics for Newsday. He has also worked at The Miami Herald and The Jerusalem Post.
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