Dell, Iron Bow Reach $4.3 Million Settlement Over Claims Firms Overcharged Army

Prosecutors said the technology companies ran a scheme to fix bids and overcharge the army through a computing contract.

The logo of Dell Technologies is pictured at the Mobile World Congress (MWC) in Barcelona, Spain, on Feb. 27, 2018. Pau Barrena/AFP via Getty Images

Dell Technologies and Iron Bow Technologies will pay more than $2 million each to settle claims by the U.S. government that the firms overcharged the Army on a computing contract, the Department of Justice (DOJ) announced on Tuesday.

Dell Technologies Inc. and Dell Federal Systems L.P. (collectively known as Dell) agreed to pay $2.3 million to resolve the allegations while Iron Bow Technologies will pay $2.05 million for its alleged role in the scheme, the DOJ said.

The payments resolve allegations that the two companies violated a federal law known as the False Claims Act through a scheme to fix bids and overcharge the Army under the Army Desktop and Mobile Computing 3 (ADMC-3) contract, according to a statement from the department.

That contract serves as one of the Army’s main vehicles for procuring mobile and computing hardware, software and other related services.

“The United States relies on competition to get the best value and price for the American taxpayers,” said Principal Deputy Assistant Attorney General Brian Boynton, head of the Justice Department’s Civil Division. “This settlement demonstrates the department’s commitment to hold accountable those who overcharge the government through collusion or other unlawful conduct.”

According to the DOJ, between May 2020 and April 2024, Austin, Texas-headquartered Dell operated a “deal registration program,” through which the tech firm gave “advantageous” pricing to Herndon, Virginia-based Iron Bow to sell certain Dell computer hardware products to the Army under the AMDC-3 contract.

At the same time, Dell submitted its own direct bids to the Army under the contract, knowing that its prices would be higher than Iron Bow’s, thus creating the illusion of competition, the DOJ said.

Dell’s scheme of providing higher direct bids “influenced” the Army’s source selection process while simultaneously allowing Iron Bow to overcharge the Army for certain Dell products, according to the DOJ.

The multi-million dollar settlement also resolves a lawsuit filed against Dell under the whistleblower provisions of the False Claims Act, which allows private citizens to file lawsuits on behalf of the government against those who submit false claims for government funds and receive a share of any financial compensation that is awarded.

The act also states that any individual who knowingly submits, or causes to submit, false claims to the government may be held liable for three times the government’s damages and a penalty that is tied to inflation.

According to the DOJ, Brent Lillard, an executive to a rival IT reseller, filed the lawsuit against Dell to receive a $345,000 share of the settlement money.

“Fraud in the government contracting process costs taxpayers untold dollars each year,” said U.S. Attorney Prim Escalona for the Northern District of Alabama. “We will continue to work with our federal law enforcement partners to investigate and pursue those who commit government contracting fraud.”

A spokesperson for Dell Technologies told The Epoch Times in an emailed statement that the tech firm has entered into a settlement agreement “because we believe it is in the best interest of Dell, our customers and partners.”

The spokesperson noted the settlement is not an admission of guilt or liability.

This report was updated with comment from Dell.