(CN) – NetApp Inc., a computer storage and date management giant, reached a settlement on Wednesday where it has agreed to pay the United States government $128 million following allegations of false claims and contract fraud, says the Justice Department.
The settlement relates to contracts entered by NetApp and the General Services Administration, and is the largest of its kind ever to be obtained by GSA.
The contracts provided for the sale of hardware and storage management services for computer network environments to the government through GSA’s Multiple Award Schedule program.
The program provides government purchasers with a streamlined process for buying commonly used commercial goods and services. To get a contract, contractors have to agree to disclose commercial pricing policies and practices. They must also agree to abide by contract terms when selling under MAS contracts.
The settlement resolves allegations that NetApp knowingly made false statements and failed to provide GSA with current, accurate, and complete information about its sales practices, including its discounts to other customers.
The settlement further resolves allegations that NetApp knowingly failed to comply with price reduction clauses in GSA contracts. NetApp allegedly did not inform GSA about discounts it gave to its commercial customers when they were higher then the discounts originally disclosed to GSA.
Government purchasers were subsequently denied those discounts allegedly causing the government to accept lower discounts and to pay far more than it should have for NetApp products.
The settlement came as a result of a lawsuit filed on behalf of the government by former NetApp employee, Igor Kapuscinski, who will receive a $19.2 million dollar share of the recovery