Accenture settles false claims lawsuit for $64M

AP News
Posted: Sep 12, 2011 4:30 PM
Accenture settles false claims lawsuit for $64M

The Justice Department announced Monday it reached a $63.7 million settlement with Accenture LLP in a whistleblower lawsuit that accused the technology services company of rigging bids, taking kickbacks and inflating prices the government paid for computers and services.

New York-based Accenture said in a statement that it "vigorously" denies the accusations and that the settlement did not constitute an admission of guilt.

The lawsuit was originally filed in the Eastern District of Arkansas by Norman Rille and Neal Roberts under whistleblower provisions of the federal False Claims Act. The government in 2007 joined the suit, as it did in similar lawsuits against Hewlett-Packard Co. and Sun Microsystems Inc.

HP settled its lawsuit in August 2010, announcing it would impact earnings by about $50 million. The company also denied any wrongdoing.

The government accused Accenture of accepting kickbacks after it recommended certain hardware and software to the government. The Justice Department also accused Accenture of fraudulently jacking up prices and rigging bids for federal information technology contracts.

"Kickbacks and bid rigging undermine the integrity of the federal procurement process," said Assistant Attorney General Tony West of the Justice Department's Civil Division.

The U.S. attorney for the Eastern Arkansas District, Christopher R. Thayer, said Accenture was taking away much-needed revenue from the government.

""Fraudulent business practices that steal hard earned and much needed tax dollars from appropriate use will not be tolerated," Thayer said.

Under the whistleblower law, Rille and Roberts are to receive a portion of the settlement, but the Justice Department said the amount hasn't yet been determined.

Accenture's statement said the company chose to settle rather than engage in a lengthy court battle.

"The agreement is not an admission of liability by Accenture. Accenture continues to vigorously deny that there was any wrongdoing," the company said.

The company said the settlement amount "will not materially impact our results of operations or financial position."

Accenture noted that the settlement won't restrict its business with the federal government "in any way." The company announced on Aug. 11 that the Justice Department had selected Accenture as one of 20 businesses that are part of a $1.1 billion contract for information technology services.

The statement added that the federal government understood there were "alliance relationships" in the information technology industry, which the company said benefits customers and vendors.

The company said it disclosed its agreements with vendors in proposals made to clients in government agencies.

"Accenture remains confident that our agreements and dealings with our alliance partners and vendors were appropriate and lawful," the company said.

Accenture spokesman James E. McAvoy said in an email the company settled simply to save money.

"This settlement is a business decision _ not an admission of any wrongdoing. Considering the costs of litigation and the complexity of the case, Accenture and (the Justice Department) agreed to settle now and avoid the additional time, inconvenience and expenses that would come with protracted litigation," McAvoy said.

A spokesman for the Justice Department declined comment Monday.