Dell Technologies Inc. and Dell Federal Systems L.P. (collectively Dell) and Iron Bow Technologies LLC (Iron Bow) are set to pay millions of dollars to settle allegations they both overcharged the Army under the Army Desktop and Mobile Computing 3 (ADMC-3) contract.
Dell has agreed to pay $2,300,000, and Iron Bow will part ways with $2,051,000 for their role in the scheme to defraud the United States Army.
“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.
Dell and Iron Bow pay millions to quell fraud claims
The payments will resolve the allegations that both parties violated the False Claims Act by orchestrating a scheme to fix bids and allow certain bids to be viewed as non-competitive on the U.S. Army’s computer procurement framework.
“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.”
Documents submitted by the Justice Department show that from May 2020 to April 2024, Dell and Iron Bow took advantage of submissions under the AMDC-3 contract. Dell owned a “deal registration program, whereby it gave advantageous pricing to Iron Bow to sell certain Dell computer hardware products to the Army in response to solicitations.”
This resulted in the Army being limited to affordable materials and computer hardware prices, with Iron Bow the more favorable option. Little did the Army know at that time that “Dell’s practice of providing higher direct bids influenced the Army’s source selection process and enabled Iron Bow to overcharge the Army for certain Dell products.”
Dell reportedly overpriced its own independent submissions on the AMDC-3 contract, knowingly inflating its charges and creating what the court states was a “false appearance of competition.”
This settlement resolves a corresponding whistleblower case, where Brent Lillard, an executive to a rival IT reseller made statements as part of a case against Dell for a violation of the False Claims Act (Lillard v. Dell Technologies Inc., No. 5:20-CV-1613-HNJ (NDAL) Lillard will receive $345,000 in compensation from the settlement.
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