On November 19, the U.S. Department of Justice (DOJ) announced that Dell Technologies Inc. and Dell Federal Systems L.P. (collectively Dell), located in Austin, Texas, agreed to pay $2,300,000 to resolve allegations that they violated the False Claims Act by submitting non-competitive bids to the U.S. Army. Iron Bow Technologies LLC (Iron Bow), located in Herndon, Virginia, also agreed to pay $2,051,000 for its role in the scheme.
The lawsuit was brought forth by qui tam whistleblower Brent Lillard, an executive of another IT reseller, who is set to receive a $345,000 share of the recovery from Dell for his service in bringing the fraud to light.
“Fraud in the government contracting process costs taxpayers untold dollars each year,” said U.S. Attorney Prim F. Escalona for the Northern District of Alabama. “We will continue to work with our federal law enforcement partners to investigate and pursue those who commit government contracting fraud.”
Dell allegedly operated a deal registration program that gave advantageous pricing to Iron Bow to sell Dell products to the Army. Dell also allegedly submitted its own higher bids which created a false appearance of competition and “enabled Iron Bow to overcharge the Army for certain Dell products”.
“The United States relies on competition to get the best value and price for the American taxpayers,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “This settlement demonstrates the department’s commitment to hold accountable those who overcharge the government through collusion or other unlawful conduct.”
Under the False Claims Act’s qui tam provisions, individuals may file lawsuits alleging government contracting fraud on behalf of the United States. In successful qui tam cases, whistleblowers are eligible to receive between 15 and 30% of the settlement.
In July 2023, a bipartisan group of senators introduced the False Claims Amendments Act of 2023, which address a few technical loopholes undermining the success of the FCA. The bill is widely supported by whistleblower advocates.
National Whistleblower Center (NWC) has issued an Action Alert calling on Congress to pass the bill.
Join NWC in Taking Action:
Demand that Congress strengthen the False Claims Act
Further Reading:
Bipartisan Legislation Unveiled to Strengthen False Claims Act
