Cisco and one of its distributors have been ordered to pay $48 million to the US government to settle claims that they misrepresented pricing information to the General Services Administration and other federal agencies, according to the US Department of Justice. The distributor in question is Westcon.
Cisco and Westcon are charged with violating the False Claims Act by knowingly providing incomplete information to GSA contracting officers during negotiations, which resulted in "defective" pricing of Cisco products and submission of false claims to the US, the Justice Department said.
The defects in the pricing were overcharges. In the private sector, the defects are known as the Cisco Premium.
"Overcharging the government results in waste of taxpayer dollars," said Brian D. Miller, GSA Inspector General, in a statement. "Our auditors and special agents keep vigilant watch to ensure contractors stay honest."
As a part of this settlement, the US has agreed to dismiss a whistleblower lawsuit filed in 2004 in the United States District Court for the Eastern District of Arkansas, United States ex rel. Rille. v. Cisco Systems, Inc. That suit apparently charged Cisco with violating the federal False Claims Act, which allows private citizens to sue on behalf of the government and share in any settlement, according tothis report from Bloomberg.
The same whistleblowers also targeted HP, IBM, EMC, Computer Sciences Corp., Pricewaterhouse Coopers and others in the past, according to the Bloomberg report.