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DOJ Names Dozens of IT Vendors in Kickback Scheme
grantus writes "Today, the U.S. Department of Justice joined three whistleblower lawsuits against Hewlett-Packard, Sun Microsystems and Accenture alleging a massive kickback scheme on government contracts. Among the IT vendors listed in the lawsuit as Accenture partners are Microsoft, Cisco, IBM, Dell and Oracle."
A show of hands if you are surprised by kickbacks and corruption in the goverment.
Carbon based humanoid in training.
Some say "kickbacks and corruption", some say "rewarding loyalty and encouraging capitalist innovation". Tomayto, tomahto. It depends if you're honest, or a Republican.
Isn't Accenture the scumbags formerly formerly known as Arthur Anderson? I bet their next name begins with an 'A' too. Gotta keep that early listing in the directory.
I am a lawyer, but not yours. Anything I tell you might be a total lie intended to benefit my clients at your expense.
I guess you see only what you want to see.
...blah, blah, blah, OUTSIDE!, blah, blah...
Reminds me of that Far Side cartoon "What a dog hears"
My eyes reflect the stars and a smile lights up my face.
why does the entire industry feel the need to play dirty?
I waver between "old habits die hard" and "never change a running system".
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
As if. IBM's head intellectual property attorney once bragged (under an NDA'd room that included Vint Cerf and Dave Farber) that they'd spent all $60M of their DC lobbying budget to make sure no new tlds were created.
Need Mercedes parts ?
Imagine this being a normal person. Like, someone cheating at taxes. What does immediately follow a revelation like this? I mean, besides the lawsuit that strips him to his bones and beyond (though I doubt the same is gonna happen to Cisco, MS and the rest of the organized cri... I mean honorable corporations).
Right. New laws that should increase "transparency". Read: Make you more transparent for the powers that be, and any complaints from the ACLU would be shot down with reference to those crooks that dared to cheat Uncle Sam and his poor children (i.e. the citizens of the USA), how dare you be against laws protecting them?
So... I'm now waiting for the corresponding laws, or at least suggestions, to make corporations more transparent and make them better manageable and taxable.
Though... I think I better not hold my breath. Suffocating is one of the worst ways to die.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
It's popular to suggest government bureaucrats (employees) are getting cash kickbacks, but that rarely pans out as true. Sometimes is does workout to a favorable job after the bureaucrats time in government is over, but before that, cash rarely changes hands. It's almost an "urban legend".
If you want news from today, you have to come back tomorrow.
Giving other vendors discounts for work performed on certain types of high volume contracts might well be standard practice. The fact that one of those type of contracts was US Federal Government contracts just means that someone with guns feels they deserve the discount. I mean what right does the government have to deserve a certain price, the government puts a job up for competitive bid and they get whatever the best price they get, if someone outside these cartels can perform the same service at the same cost then they should be able to come in at under the other bids by not having to include the cross rebates in their pricing structure. If the outsider can't give that better price then the government can STFU and take the best deal available.
There are 4 boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order. Starting now.
And more importantly why does the entire industry feel the need to play dirty?
Because they're all greedy as fuck and "... everybody else was doing it!"
We live, as we dream -- alone....
Usually, governments don't order a dishwasher or a fridge. They order power plants and recycling centers. And there are only so many companies who can offer those.
Also, as the government you can't only take price and quality into consideration. There is a reason why the feds drive around in US built cars and not in BMWs. Simply 'cause one of their goals is to increase the own infrastructure and business power and rely as far as possible on goods built in the country.
Military hardware is even more complicated, since you have to trust the companies far further than with some ordinary civilian stuff.
So your choices become very, very narrow. You usually only have a handful of companies to pick from, if that. So it's easy for them to form a cartel, if only a "secret" one, by fixing prices and splitting the revenue. And that, in turn, is illegal.
So you can't simply assume there is someone "outside" the cartel. The company would have to be in your country, it would have to be large enough to be able to offer the service requested. And if it isn't part of the cartel, they would quickly find a way to acquire and split that competitor.
Business is a shark's world. Don't think they would accept a competitor without fighting him with claws and teeth.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Everyone doing it. You don't do it? File for bankrupcy.
High profile business is a dog eat dog world. Playing fair is no option. You either participate in the corruption and bribe the right people or you go under.
Yes, that's sad. Yes, that's business.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
I'm not encouraging this or claiming it should go unpunished, but I know if I'd been in a management position along the line I don't know how/why I could/should be stopping such things (defensibly).
The fact that a fish swims in water does not make it an expert in fluid dynamics. GogglesPisano (199483)
To make things clear (sorry to sound like a lecture, but some people appearantly got things wrong, judging from the comments), a bit about how this works:
Some company has a contract with the US feds. That company didn't do anything wrong (yet), they got the contract fairly. Let's assume that for a moment, because TFA doesn't mention anything different.
Some other company now paid the company above a sizable sum to be their "prefered partner". I.e. to get them to buy the things they need to fulfill the contract from them. This, by itself, is not yet illegal, but at the very least a bit smelly.
The first company (and here comes the allegedly illegal practice) now did not forward this "discount" to the government but decided to keep it for themselves. Furthermore, if there wasn't that "prefered partner" deal, they might have gotten the items bought from the second company cheaper with another company.
Why is this illegal.
Governments usually have a very narrow selection of companies to choose from when they hand out contracts. Said companies usually have to adhere to very specific standards, are closely monitored, they do have to have specific features (varies from type of contract to another, but usually includes things like transparency clauses, being in the country the government is and so on). In other words, there aren't many.
If now another company "buys their way" into being the supplyer of such a company, they can expect to be part of government contracts without going through the same ordeals and strict standards. Furthermore, they have the liberty to choose their price freely (in other words, make their products more expensive than they "should" be), because there is no competitor. In other words, they "buy" a monopoly position.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
for several US Attorneys to be fired for wholly unrelated reasons that the Attorney General had no involvement in.
It's not obvious to me that there is any corruption here. If, as is likely, these companies contracted with the government in a public bid process, their legal and ethical obligation is to deliver the stated project for the stated fee. These aren't defense contractors here, where the contracts are cost plus. These contracts are typically granted after lengthy bidding and contracting processes. If the companies violated the contracts, the remedy is in civil court, and should be straighthforward.
If the various partners contract between themselves, there is no obvious reason why that is unethical or dishonest. Accenture has had well publicized relationships with these companies for at least 15 years, and is a VAR for most of them (disclosure, I worked for Accenture for 10 years, back when it was Andersen Consulting). Accenture and Microsoft have a joint venture, Avenade. Accenture resells HP, Cisco, and IBM gear. It isn't clear that cash payments going back and forth in the context of projects indicates anything other than a business partner relationship, which no-one is denying. There may still be a law against what happened, but the putative illegal behavior might not actually be anything wrong.
This really smells like either some prosecutors trying to make a name for themselves, or, if you want to be paranoid, Gonzales trying to whip up another story for the papers to distract us from his butt reaming in Congress today.
I was taught to respect my elders. The trouble is, it's getting harder and harder to find some.
For many products the "developer studio" software is quite expensive, indeed these days with "zero foot print" web clients no user software is needed. Now then there is an attempt to monetize based on number of users of system, server flops, i/o etc but sometimes this can be blurry/hard to determine. Overall for a large installation it ends up being blended pricing in a bespoke negotiated contract.
:-(
The installation & software writing is often do by consultants/systems integrators - I work for one of the largets of these - we won't benefit from the product & also it suits the software companies to have us guys out there pushing their products. Thus software companies will give us free server & developer licenses. We'll use these for internal proof of concepts, training, evaluation before we even get near actual project work. So as a marketing effort it is quite valid to give us these licenses for free. But:
What if we use the software/package for our own internal business processes ?
or
Sometimes a very, very large software vendor (guess who) gets pretty pissed if we are recommending a competitor... even if the competitor's offering is more limited, specialized & regarded as the best available. So the very large software vendor instead of throwing chairs at us threatens to revoke all our developer licenses wordwide unless we ditch the competitor.
Like any area of business software is quite murky.
Government contracts aren't a free market. Since there is ONE consumer and a very small pool of vendors.
In this case, a company can pay to be a preferred supplier even though they are more expensive and perhaps of less quality or equal quality to other suppliers.
The big factor is the lack of competition that these paid and potentially secret "strategic alliances" create in this environment.