HP Settles Kickbacks Case for $55,000,000

By Jane McEntegart
published

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.

Jane McEntegart
20 Comments Comment from the forums
  • volt-aire
    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?
    Reply
  • So - is that money going back to taxpayers?
    Reply
  • rohitbaran
    Well, every corporate giant is found to be guilty of something sometime. Business is seldom clean.
    Reply
  • ikefu
    "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.
    Reply
  • IzzyCraft
    So they are getting rid of the kickback problem with kickbacks, but this time to the government.
    Reply
  • zaixionito
    "Oh, we admit to this. Now let's bribe the US goverment".
    Reply
  • danglang23
    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.
    Reply
  • danglang23
    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.
    ...prompting an audit which revealed the pricing was off.
    Reply
  • NotYetRated
    Holy crap. 55 million? And it took us this long to find it and solve the problem? Sad sad day.
    Reply
  • tayb
    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.
    Reply