Deception Tied with a Bow: Dell and Iron Bow Settle for $4.3M Over False Claims Act Allegations in Army Bidding Scheme
Dell Technologies, Inc. and Dell Federal Systems L.P. (“Dell”), based in Austin, Texas, have agreed to pay $2.3 million to settle allegations of violating the False Claims Act. The allegations stem from claims that Dell submitted, and caused the submission of, non-competitive bids to the U.S. Army, resulting in overcharges under the Army Desktop and Mobile Computing 3 (ADMC-3) contract. In addition, Iron Bow Technologies LLC (Iron Bow), headquartered in Herndon, Virginia, has agreed to pay $2.05 million for its involvement in the scheme.
The settlements resolve allegations that from May 2020 to April 2024, Dell operated a deal registration program that provided Iron Bow with preferential pricing to sell specific Dell computer hardware products to the Army in response to solicitations under the ADMC-3 contract. According to the U.S. government, Dell also submitted its own direct bids to the Army for the same solicitations, knowing that the prices would be higher than Iron Bow’s, thus giving the false impression of competition. The United States further alleged that Dell’s practice of submitting higher direct bids influenced the Army’s source selection process, ultimately allowing Iron Bow to overcharge the Army for specific Dell products.
Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division highlighted the importance of competition in government contracts, stating: “The United States relies on competition to get the best value and price for the American taxpayers. This settlement demonstrates the department’s commitment to hold accountable those who overcharge the government through collusion or other unlawful conduct.”
U.S. Attorney Prim F. Escalona for the Northern District of Alabama said, “Fraud in the government contracting process costs taxpayers untold dollars each year. We will continue to work with our federal law enforcement partners to investigate and pursue those who commit government contracting fraud.”
The Dell settlement also resolves a lawsuit filed under the whistleblower provisions of the False Claims Act, which allows private individuals to sue on behalf of the government if they believe a defendant has submitted false claims for government funds, and to receive a portion of any resulting recovery.
In this case, the settlement provides whistleblower Brent Lillard, an executive of another IT reseller, with a reward of $345,000 as his share of Dell’s recovery. The qui tam case is titled United States ex rel. Lillard v. Dell Technologies Inc., No. 5:20-CV-1613-HNJ (NDAL).
If you have any information about government contract fraud or if you would like to learn more about the False Claims Act or what it means to be a whistleblower, please don’t hesitate to contact us. We will connect you with an experienced member of our whistleblower team.
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