HP agrees to pay 'kickback' settlement of $55m
The Department of Justice has announced that HP has agreed to pay $55m (£35m) to settle allegations under the False Claims Act that the company paid unlawful kickbacks to secure federal government contracts, according to the Guardian.
On 3 August, HP announced that it was settling the case with the DoJ and that the move would impact the company's fiscal third-quarter revenue negatively by two cents per share, though it said that the decision did not equate to any admission of wrongdoing.
"HP denies engaging in any illegal conduct in connection with these matters," the company said in a statement announcing the settlement earlier in August. "HP has agreed to a settlement with the Department of Justice, without any admission of wrongdoing, in order to resolve the allegations in full."
Tuesday's settlement brings to conclusion a six-year case that began when Norman Rille (formerly of Accenture) and Neal Roberts filed a lawsuit in the U.S. District Court for the Eastern District of Arkansas in 2004 claiming that a kickback — or rebate — scheme was in place to help secure government contracts.
In 2007 the DoJ announced that it was joining the investigation into suggestions that HP, Accenture and Sun Microsystems (now a part of Oracle) used a discount scheme when working on contract projects to help secure further government contracts.
"As this case demonstrates, we will take action against those who seek to taint the government procurement process with illegal kickbacks" said Tony West, assistant attorney general for the civil division of the DoJ, quoted by the Guardian.
The move also brings to a close a previously unresolved second charge dating back to 2002 that alleged that HP had misled the General Services Administration (GSA) in the US over the pricing of hardware and software supplied to various federal agencies.
In June this year, HP agreed to pay BSkyB £318m after a court found that EDS — the company's IT services division — lied to British Sky Broadcasting in order to win an outsourcing contract. At the outset of the case in 2004, BSkyB was demanding £709m in compensation.
HP regularly referred to the case as a "legacy issue", as it only bought EDS — now HP Enterprise Services — in 2008.