Government Intervenes in False Claims Act Lawsuit Against Software Contractor

June 19, 2014 — The U.S. government has intervened in a whistleblower lawsuit alleging that CA Inc. (CA), a federal contractor, violated provisions of the False Claims Act in relation to a contract with the General Services Administration (GSA). CA, headquartered in Islandia, New York, is the manufacturer of information technology products. The government has also filed its own lawsuit against the software contractor.
The original government contract fraud lawsuit was filed by Dani Shemesh, who previously worked for CA Israel Ltd., and became aware of CA’s alleged violations. Shemesh brought whistleblower claims under the qui tam provisions of the False Claims Act, which allow private individuals willing to collaborate with the government to share in any recovery. When the CA lawsuit is resolved, Shemesh’s portion of the settlement or judgment will be determined.

CA Inc. Allegedly Violated False Claims Act on GSA Contract

CA contracted with the GSA in September 2002 to provide several government agencies with software licenses, maintenance and consulting services as well training. The contract was awarded under the Multiple Award Schedule (MAS) program which allows the GSA to negotiate pre-set pricing and terms for later orders by federal agencies. Such contracts are quite lucrative for government contractors, who, under the terms of the program, must disclose and match the pricing provided to commercial customers. In this way, the government ensures that it obtains the best possible pricing in exchange for taxpayer dollars.
Since 2006, however, CA reportedly gave GSA contracting officers inaccurate and incomplete information about its commercial contracts and failed to inform the government of increased discounts to commercial customers when they occurred. In addition, since 2002, CA failed to track the discounts it provided to commercial customers, though such monitoring was required under its MAS contract. The result was that when commercial discounts increased, CA was purportedly unable to provide the government with such information — or with the corresponding discount to which the government was entitled. As a result of these violations, the government allegedly overpaid for CA’s information technology.

False Claims Act Lawsuits Redress Waste and Abuse

Government investigators do not have the resources to catch every abuse of the system. But inside employees like the one in this case frequently have first-hand information about fraudulent billing right from the start. The qui tam attorneys with Waters Kraus Paul & Siegel, like Michael Armitage and Louisa Kirakosian has in the firm’s Los Angeles office, are devoted to protecting whistleblowers’ interests. Contact us by email or call us at 855. 784. 0268 to learn how we can work together to notify the government about fraud and abuse.

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