Deloitte coughs up $11m to end claims it ripped off US govt with IT work

Deloitte will pay $11m to settle allegations it overcharged the US government for IT services.

The US Department of Justice (DoJ) said on Tuesday it has struck a deal with Deloitte, which was accused of – and we're paraphrasing, here – treating Uncle Sam's General Services Administration (GSA) as a bottomless pit of cash.

The GSA is in charge of dishing out contracts to the private sector for the installation and support of hardware and services for federal agencies. The DoJ claimed that between 2006 and 2012, Deloitte failed to give the GSA a fair price for the IT services it had promised in a 2000 contract.

Part of that services contract, the DoJ said, was an assurance that Deloitte would charge the government the same rates it gives private companies, and lower the amount it bills the GSA to reflect discounts given in the private sector.

In other words, Deloitte was not allowed to treat taxpayers as an endless well of money – whatever it charged private biz, it had to invoice the US government the same. In charging the government agencies more than their private-sector counterparts, the DoJ said, Deloitte had violated the False Claims Act.

"Contractors are expected to deal fairly with federal agencies when receiving taxpayer funds," said Benjamin Mizer, Principal Deputy Assistant Attorney General and head of the Justice Department's civil division. "As this settlement demonstrates, we will take action against those who knowingly fail to live up to the terms of their government contracts."

Under the terms of the settlement, Deloitte will agree to pay the DoJ $11.38m. In exchange, the DoJ will drop its allegations and Deloitte will not have to admit to any liability in the case. Deloitte's revenue for 2015 was $35.2bn.

Deloitte is far from the first company to be accused of gouging the government on services contracts. In the past, industry heavyweights including NetApp, Oracle and the late Sun Microsystems have been accused of overcharging Uncle Sam for services rendered. ®