12 September 2010 | Helen Gilbert
Cisco Systems and its distributor Westcon Group North America have agreed to pay $48 million to settle claims they overcharged the US government.
The US Department of Justice (DOJ) alleged Cisco and Westcon “knowingly” provided incomplete information to US procurement agency the General Services Administration (GSA) during contract negotiations.
In a statement, the DOJ said Westcon’s contract with the GSA resulted in “defective pricing of Cisco products and submission of false claims to the United States”.
Tony West, assistant attorney general for the civil division of the DOJ, said: “Contractors that do business with the United States must deal fairly with federal agencies. When contractors provide incomplete and untruthful information to the government, we will take action to restore the integrity of the procurement process and protect taxpayer dollars.”
Craig Librett, a Westcon spokesman, pointed out the allegations are associated with events that go back several years and “in no way reflect Westcon’s business practices”.
“As with any legal issue, items of this nature take some time to resolve. It is important to note this does not in any way affect our current government business – as Westcon maintains an active GSA contract – nor does it affect our strong relationship with Cisco,” he said. “We are pleased to have this issue behind us.”
Kristin Carvell, a spokeswoman for Cisco, said: “Cisco and Westcon have been working with the DOJ on this issue for years, and we are very pleased to resolve this matter. The settlement covers a small fraction of sales to the GSA from 1997-2009 and does not impact upon any current government business.”