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HP Settles Kickbacks Case for $55,000,000

By - Source: Tom's Hardware US | B 20 comments

The United States Department of Justice has announced that HP has agreed to settle over claims that the computer maker defrauded the U.S. government.

The Department of Justice yesterday announced that HP will pay the government $55 million to settle allegations that it defrauded the General Service Administration by offering systems integrators 'influencer fees' in exchange for recommendations that agencies purchase HP machines.

Also resolved by the settlement are claims that HP's contract with the GSA, signed in 2002, was defectively priced because HP gave the GSA contracting officers incomplete information during negotiations. HP was required to give the GSA information on how it did business in the commercial marketplace so that the GSA could be sure it was getting a good deal. Five years later, in 2007, HP admitted that it may not have abided by all provisions of its contract, prompting an audit which revealed the pricing was off.

"Americans deserve the best deal possible when their hard-earned tax dollars are used," GSA Inspector General Brian Miller is quoted as saying by IDG. "We will aggressively pursue companies that overcharge the government."

The HP suit is part of a bigger kickbacks investigation brought about by a 2004 lawsuit alleging that Sun Microsystems and several Accenture partners, including Cisco Systems, Microsoft, IBM, Dell and Oracle, were all offering or receiving kickbacks.

Read the full story here.

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  • 0 Hide
    volt-aire , September 1, 2010 12:07 AM
    It's always good to know, amidst all the constant skepticism about the government, that at least they try to keep it clean now and again.

    They should have suspected kickbacks as soon as they saw an agency using HP machines. Why else would they buy them?
  • 2 Hide
    Anonymous , September 1, 2010 12:19 AM
    So - is that money going back to taxpayers?
  • 4 Hide
    rohitbaran , September 1, 2010 12:45 AM
    Well, every corporate giant is found to be guilty of something sometime. Business is seldom clean.
  • -2 Hide
    ikefu , September 1, 2010 1:00 AM
    Quote:
    "Americans deserve the best deal possible when their hard-earned tax dollars are used," GSA Inspector General Brian Miller is quoted as saying by IDG. "We will aggressively pursue companies that overcharge the government."


    In other words: We want special treatment to not pay what other companies have to pay for the same thing.

    Not saying what HP did was right, but I still think its bogus that they tax the hell out of companies which in turn makes the goods for the common citizen more expensive and then use their power as gov't to not have to pay the same prices.

    Companies don't pay taxes, all they do is pass the taxes on to their customers which means we get screwed.
  • -1 Hide
    IzzyCraft , September 1, 2010 2:55 AM
    So they are getting rid of the kickback problem with kickbacks, but this time to the government.
  • 0 Hide
    zaixionito , September 1, 2010 3:18 AM
    "Oh, we admit to this. Now let's bribe the US goverment".
  • 0 Hide
    danglang23 , September 1, 2010 4:09 AM
    The entire GSA program is a joke and should be axed. GSA does not prevent corruption and EVERYTHING costs more. Plus, purchasing through GSA is a pain in the ass. Try to shop at their website, I dare you. I'd hyperlink it but I'm afraid to get my post blocked as spam - just search GSA advantage and check it out.

    This is why we don't want our government running anything that they absolutely don't have to.
  • 1 Hide
    danglang23 , September 1, 2010 4:12 AM
    IzzyCraftSo they are getting rid of the kickback problem with kickbacks, but this time to the government.

    zaixionito"Oh, we admit to this. Now let's bribe the US goverment".


    I'm pretty sure the 55 mil was to compensate for overcharging the US Gov't for computers. That's kind of what the article says.
    Quote:
    ...prompting an audit which revealed the pricing was off.
  • 0 Hide
    NotYetRated , September 1, 2010 4:31 AM
    Holy crap. 55 million? And it took us this long to find it and solve the problem? Sad sad day.
  • 3 Hide
    tayb , September 1, 2010 5:17 AM
    Great. So whenever HP pays we can just reduce this $55,000,000 from our current national debt.

    We used to owe $13,400,000,000,000 but now we only owe $13,399,945,000,000.

    Hooray.
  • 0 Hide
    dEAne , September 1, 2010 7:36 AM
    Hp is not the only one.
  • 0 Hide
    neiroatopelcc , September 1, 2010 9:25 AM
    volt-aireIt's always good to know, amidst all the constant skepticism about the government, that at least they try to keep it clean now and again. They should have suspected kickbacks as soon as they saw an agency using HP machines. Why else would they buy them?


    HP systems aren't that bad you know. They have excellent warranty cover, and they're reliable (if you ignore 2009 and 2010 laptop models that is).

    You do pay more than you would for building your own, but you also get better warranty. I expect the same to be true with other vendors, but since our company's been using HP exclusively since 2004 I can't tell. I just know from another company that dell isn't the way to go, and that siemens laptops are even more unreliable than hp ones.
  • 1 Hide
    d-block , September 1, 2010 11:50 AM
    Taxpayers won't see a dime.
  • 1 Hide
    Stifle , September 1, 2010 12:20 PM
    "Let the buyer beware" just doesn't seem to cut it anymore...
  • 0 Hide
    duanes1967 , September 1, 2010 12:54 PM
    HP used to be the absolute cream of the hardware crop. Top notch equipment, top notch quality. The have not devolved into something barely better than Packard-Bell. Heck, they haven't even updated their calculator designs since I was in college 30 years ago!

    How come no one makes a cool graphing calc with an e-ink screen?
  • 1 Hide
    madeux , September 1, 2010 1:56 PM
    Just as long as I get my share... I was promised a huge cut on this settlement!
  • 0 Hide
    hellwig , September 1, 2010 3:45 PM
    This is what's wrong with a "free market". Imagine where companies like Intel, IBM, Microsoft, Oracle, Cisco would be if there wasn't some (however inept) management by the government. It scares me to think that I'd be typing this right now on my $10,000 IBM personal computer connected to the "Cisco Worldwide Network" using Internet Explorer 5.0.

    duanes1967How come no one makes a cool graphing calc with an e-ink screen?

    Cause paying $100 for a TI-82 is bad enough, add on another $50-$100 for the screen and we're talking a semester's worth of Ramen.
  • 0 Hide
    Camikazi , September 1, 2010 7:07 PM
    stonedflySo - is that money going back to taxpayers?

    hahaha that's funny, money going back to taxpayers...
  • 0 Hide
    Camikazi , September 1, 2010 7:27 PM
    danglang23I'm pretty sure the 55 mil was to compensate for overcharging the US Gov't for computers. That's kind of what the article says.

    Ha the government is NOW worried about companies overcharging them? They never seemed to care before what's so different now? :p 
  • 0 Hide
    danglang23 , September 3, 2010 3:10 AM
    CamikaziHa the government is NOW worried about companies overcharging them? They never seemed to care before what's so different now?


    Even a blind squirrel finds a nut every now and again..