Business

Feds allege HP stiffed them for millions over botched tech contract

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The beef between the U.S. Justice Department and HP shows no sign of abating.

Still reeling from the fallout of its admission to bribery and money laundering charges in April in which it agreed to pay the feds a $108 million fine, HP now faces charges that it allegedly stiffed the U.S. Postal Service on a government technology contract and has agreed to reimburse the feds $32.5 million for its supposed indiscretion.

The situation stems from the government’s contention under the False Claims Act that HP overcharged the postal service for products delivered between 2001 and 2010. Namely, that HP failed to comply with agreed on pricing terms for a contract called the “Acquisition of Desktop Extended Processing Technology.”

According to the feds:

“The United States alleged that under a contract between HP and the USPS, HP overcharged USPS by failing to comply with pricing terms of the contract, including a requirement that HP provide prices that were no greater than those offered to HP customers with comparable contracts.  The United States also alleged that HP made misrepresentations during the negotiation of the contract regarding its pricing and its plans to ensure it would provide the required most favored customer pricing.”

“Protecting the federal procurement process from false claims is central to the mission of the Department of Justice,” said Assistant Attorney General Stuart F. Delery for the Justice Department’s Civil Division in a statement to the press. “We will continue to ensure that when the government purchases commercial products, it receives the prices to which it is entitled.”

An HP spokeswoman said in an emailed statement to VentureBeat: “HP is happy to find a mutually acceptable resolution to this matter. HP values its ongoing relationship with the US Postal Service, and looks forward to continuing to deliver high-quality products and solutions to its valued customer.”

The U.S. Postal Service, Office of the Inspector General and the Department of Justice’s Civil Division all were involved in the investigation. It is worth noting, that, according to the feds in this case, “the claims resolved by the settlement are allegations only and there has been no determination of liability.”

The bribery and money-laundering charges in April, announced by the Justice Department and the Securities and Exchange Commission, were more serious. In that case, HP admitted to violating terms of the Foreign Corrupt Practices Act because, as they said, HP Russia was involved in bribery and money laundering operations.

According to the feds release at the time: “Hewlett-Packard subsidiaries created a slush fund for bribe payments, set up an intricate web of shell companies and bank accounts to launder money, employed two sets of books to track bribe recipients, and used anonymous email accounts and prepaid mobile telephones to arrange covert meetings to hand over bags of cash.”

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