“This settlement reflects the Department’s commitment to holding accountable those who pressure the government through collusion or other unlawful conduct,” Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division, said in a statement. Let’s put it.’
Over a period of four years Dell Technologies knowingly submitted high bids on U.S. Army hardware contracts to ensure that its reseller Iron Bow Technologies would win the deal with a lower bid, conduct that violated the False Claims Act and was prosecuted by the Department of Justice. Remains under investigation. , according to court filings.
“Dell submitted bids to the Army that Dell and Iron Bow knew would be higher than Iron Bow’s bid, creating a false appearance of competition,” the civil settlement with the US states. The Justice Department says. “The United States argues that this affected the Army’s source selection process and caused Iron Bow to charge the Army more.”
Dell Technologies and Iron Bow, No. 41 on the 2024 CRN Solution Provider 500Without admitting wrongdoing, it agreed for $4.3 million to settle civil claims that it violated the False Claims Act. Dell told CRN Wednesday morning that the settlement “is not an admission of guilt.”
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Iron Bow, which is majority-owned by private equity investment firm HIG Capital, did not immediately respond to a request for comment. The company, which is also listed on CRN’s 2024 Tech Elite and 2024 MSP 500 lists, won multiple awards from vendor partners including Dell Marketing Partner of the Year in 2023, Cisco Federal Breakaway Partner of the Year in 2023, and the Palo Alto Networks NextWave Diamond Are. Innovator Award.
Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division, said in a statement, “This settlement reflects the Department’s commitment to holding accountable those who overcharge the government through collusion or other unlawful conduct ”
On its website, Iron Bow claims to be “the only IT vendor” to have all four CHESS [Computer Hardware, Enterprise Software and Solutions] “Contract” – the primary source of acquiring commercial IT for the US military. CHESS contracts are mandatory for most US Army IT procurements.
Iron Bow also states on its website that it has “proudly served the U.S. Army and DOD [Department of Defense] For more than 30 years.
Iron Bow provided a statement to CRN saying it had not admitted any liability in the investigation.
“Iron Bow settled this case without admission of liability to avoid further delay, uncertainty, inconvenience, and expense of potential litigation. Iron Bow settled this case during Dell’s investigation during Dell’s investigation, according to a qui tam complaint filed by the Department of Justice. Cooperated with and maintained his position throughout the investigation,” the statement said.
As part of its settlement the government is requiring Dell to “fully cooperate” with its investigators as they look into a four-year pattern of conduct involving technology bids to win billions of dollars in sales contracts.
“Fraud in the government contracting process costs taxpayers countless dollars each year,” said Prime F. Escalona, U.S. Attorney for the Northern District of Alabama. “We will continue to work with our federal law enforcement partners to investigate and pursue government contract fraudsters.”
In the agreement, the government describes the upcoming investigation and the documents they are seeking to proceed. Dell is expected not to impair the cooperation of its “directors, officers and employees” and to “encourage the cooperation of former directors” for “interviews and testimony.”
“Dell agrees to furnish to the United States, upon request, complete and unredacted copies of all non-privileged documents, reports, memoranda of interviews, and records in its possession, custody, or control that relate to any of the covered conduct.” Also relating to the investigation done, or which is performed by someone else on his behalf.”
The “covered conduct” is the four-year period in which Dale and Iron Bow worked together on the Army’s accounts.
Asked by CRN, Dell did not respond to emailed questions about the investigation or the allegations. It sent this statement to CRN:
“Dell has entered into a settlement agreement because we believe it is in the best interests of Dell, our customers and partners. The settlement is not an admission of guilt or liability,” Dell’s statement read.
Government investigators began tracking Dell following a 2020 civil case filed by a solutions provider in Alabama. Federal investigators took interest in the case and took their own action as a result.
In the initial case, Brent Lillard, CEO and co-founder of Charlottesville, Virginia-based solutions provider GovSmart, alleged that Dell was violating the False Claims Act and had received an unfair pricing advantage when bidding on federal government contracts.
Lillard told CRN on Wednesday that although his initial lawsuit went nowhere, while auditing the facts he presented, investigators uncovered material in the settlement with Dell and Iron Bow.
“I hope that if anything comes out of this, it will be a more fair and equitable system for all of us who are competing in the federal marketplace,” Lillard told CRN.
Lillard said he doesn’t blame Dell. He said the government’s incredibly complex bidding process makes it difficult for businesses to operate fairly when competing for federal bids.
“It’s almost like they put a bunch of honey on the ground for the ants, and they’re just waiting there with the boots on,” he said.
The settlement in the case provides for Lillard to receive a $345,000 share of the recovery from Dell as a whistleblower, court documents said.
