Another GSA awardee pays a big fine $128 million for errant monitoring of their price reduction monitoring clause (see below). Again, unless you have big pockets, most firms paying a $128 million fine would be out of business, so ensure that you have firm/hard-coated business practices in-place in your internal GSA quoting/processing and bounce them against the class or classes of customers listed for price reduction monitoring clause from your Final Proposal Revision (basis for award).
NetApp settles GSA dispute for $128M
Washington Technology,
4-15-09
NetApp is one of several manufacturers that have had run-ins with the GSA’s inspector general over pricing on the GSA Schedule 70. Justice and the inspector general have been investigating the price-reduction clauses of manufacturers such as Cisco Systems Inc., Sun Microsystems Inc., EMC Corp. and Panasonic Corp.
In NetApp’s case, they were looking at sales that occurred between August 1997 and February 2005, NetApp said in a filing with the Securities and Exchange Commission.
The settlement is “neither an admission nor denial by NetApp of any of the claims alleged” by Justice, the filing states. The company settled as part of a compromise to avoid more litigation and more risk.
NetApp will pay the $128 million plus 3 percent on an annual rate, calculated from Feb. 18, 2009. The company is required to pay by April 27.
The investigation started as a fraud claim filed by Igor Kapuscinki, under the False Claims Act.Kapuscinski will be paid $19.2 million According to the agreement, out the settlement funds.
