By Tim Carpenter
The information technology company that signed a contract with Kansas to root out social service fraud settled a federal lawsuit for $63.6 million amid allegations the firm engaged in kickbacks and bid rigging on contracts with the federal government, officials said Tuesday.
The U.S. Department of Justice disclosed Accenture, which locked up a $135 million contract with the state in August, approved the settlement to end litigation in Arkansas involving whistle-blower claims of improper conduct by the company from 1996 to 2007.
“Kickbacks and bid rigging undermine the integrity of the federal procurement process,” said Tony West, assistant attorney general for the Justice Department’s civil division. “It is especially important to ensure that government contractors play by the rules and don’t waste precious taxpayer dollars.”
In Kansas, the administration of Gov. Sam Brownback entered into a contract with the Austin, Texas, computer consulting firm. The deal obligates Kansas to pay $85 million for technology acquisition and implementation and up to $50 million over five years to operate and maintain a database to integrate work of multiple state agencies involved in social services.
The system, expected to be operational in 2013, would serve as an electronic access point for Kansans seeking social services provided by the Kansas Department of Health and Environment and the Kansas Department of Social and Rehabilitation Services.
Ability to cross-reference information from applicants and evaluate claims for fraud was among Accenture's selling points to state officials.
Neither state agency had comment on the case, but Brownback spokeswoman Sherriene Jones-Sontag said the development wouldn't undermine Kansas' contract with Accenture.
"The state has a competitive bid process, and we hope to save millions of dollars," she said.
Jim McAvoy, spokesman for Accenture, released a statement saying the settlement would avoid expensive and inconvenient litigation.
"The agreement is not an admission of liability by Accenture," the statement said. "Accenture continues to vigorously deny that there was any wrongdoing."
The Justice Department concluded Accenture received kickbacks from International Business Machines Corp., data storage equipment maker EMC Corp. and Sun Microsystems Inc., which later was bought by Oracle Corp. Cash and other considerations were exchanged for recommending federal government agencies purchase those companies' products.
“Fraudulent business practices that steal hard-earned and much-needed tax dollars from appropriate use will not be tolerated," said Christopher Thyer, U.S. attorney in eastern Arkansas.
The federal government hired Accenture to advise agencies on how best to acquire hardware, software and other technology products that addressed individual agencies' needs.
The lawsuit was filed in 2006 by Norman Rille and Neal Roberts under a federal whistle-blower law permitting private individuals to bring suit on behalf of the United States and receive a portion of a settlement or judgment against a defendant. The portion of proceeds to be paid in this case hasn’t been resolved.
Tim Carpenter can be reached
at (785) 295-1158