HP settles with DOJ, will impact earnings by two cents

updated:

Hewlett Packard said today that it has reached a settlement with the U.S. Department of Justice over an investigation over its GSA Multiple Award Schedule contract, as well as a three-year-old lawsuit pending in Arkansas.

The company didn't provide many details but CNET reports that the Justice Department announced in 2007 that it had joined an investigation looking into concerns that HP, Sun Microsystems, and Accenture paid millions of dollars in unlawful kickbacks in federal purchases. The Justice Department's complaint alleged that the companies used affiliate relationships "to enrich themselves through a kickback scheme" in violation of the False Claims Act.

The CNET report notes that the agreement also settles a civil complaint filed in 2004 under the whistleblower provisions of the False Claims Act by Norman Rille, who was then a senior manager with Accenture, and Neal Roberts, a partner at PricewaterhouseCoopers.

HP said that the settlement would have a negative impact of two cents per share on its fiscal third quarter. However, the company did not update its guidance for the quarter or full year.

As part of the settlement, the company denies engaging in any illegal conduct related to the matters and offers no admission of wrongdoing. The settlement is subject to approval by the DOJ, as well as the courts and other agencies.