HP settles US government kickbacks case

Posted by admin on Thu, 02/09/2010 - 09:32
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To settle accounts once and for all with Federal investigators, HP has paid the US Department of Justice $55m to close the case on alleged fiscal inducements it paid to secure US government contracts.

The case was brought under America's 'False Claims Act' and dates back to 2002 and grew to encompass possible generous discount projects by the computer giant as well as consulting firm Accenture and even the former Sun (now part of Oracle) in place to help secure millions of dollars of government work.

The basic idea was that HP would pay more to firms that used it as a sub-contractor to guarantee its sales pipeline.

Under the terms of the deal HP admits no wrongdoing and the issue is now officially closed. "HP denies engaging in any illegal conduct in connection with these matters," the company said in a statement. "We believe it is in the best interest of our stakeholders to resolve the matter and move beyond this issue."

At least some of the work involved was actually done by the former EDS, which HP bought two years ago and has renamed as HP Enterprise Services.

In a statement, government officials hailed the settlement as a victory over contractors who failed to deal fairly with the government. "As this case demonstrates, we will take action against those who seek to taint the government procurement process with illegal kickbacks," said Department of Justice official Tony West.

The firm originally announced the possible settlement back in April.