back to article Deloitte coughs up $11m to end claims it ripped off US govt with IT work

Deloitte will pay $11m to settle allegations it overcharged the US government for IT services. The US Department of Justice (DoJ) said on Tuesday it has struck a deal with Deloitte, which was accused of – and we're paraphrasing, here – treating Uncle Sam's General Services Administration (GSA) as a bottomless pit of cash. The …

  1. Herby

    Gouging the government??

    While many contractors do take advantage of our wonderful government, it goes the other way as well. The many hoops and delays in the government procurement process can (and do) add up to real costs.

    Now I have no knowledge of what Deloitte did, I sometimes wonder if some of the added costa are brought on by the government itself.

    Good luck getting a government agency to admit it though!

    1. Crazy Operations Guy

      Re: Gouging the government??

      From what I heard, the problem was that when bills were calculated and sent out for the financial years, the government's bill was finalized and sent before some of the private sector customers got their discounts and bills sent to them. So when the bill was calculated the US Gov got the cheapest when they were billed, but then other customers ended up with discounts that made them cheaper.

      I can't really blame them as the government is a pain in the ass to deal with, especially when getting bills approved and paid. With some departments, you pretty much have to bill them 2 years in advance so you can make it through all the auditing stages and have the bill accepted on time...

      I swear, everyone at the GSA is just those old people in the grocery store checkout line that will argue for hours until the cashier accepts an expired coupon (from a different store) to reduce the bill by 3 cents.

  2. Anonymous Coward
    Anonymous Coward

    Deloitte allegedly overcharged the US government

    What was the exact amount Deloitte allegedly overcharged the US Government and was it more than $11m.

    1. Bakana

      Re: Deloitte allegedly overcharged the US government

      A Lot More.

      The DOJ pattern in this sort of "Settlement" is to settle for between 5 and 10 Percent of what was actually Stolen.

      Congress has cut the DOJ budget so severely that they can't afford to actually bring anyone to trial. Plus, their are no Federal Judges with any openings in their schedules any time in the next 4 or 5 years because Congress refuses to Confirm any of the Literally Hundreds of Judges nominated to fill the empty seats in the federal courts.

      It's not because of Political Considerations, no matter how they play that angle up.

      It's because Corporate America pays them to keep those seat vacant so they can continue to get "Deals" like this.

  3. Gene Cash Silver badge

    > Deloitte will agree to pay the DoJ $11.38m. In exchange, the DoJ will drop its allegations

    How the hell is this not bribery?

    1. Anonymous Coward

      because that'show it works. What you think corporation are not more powerful than government this days? You think government works for the people?

      Have you not read about or beloved HMRC being payed off?

      1. Anonymous Coward
        Anonymous Coward

        Eek, just re-read my mangled post. Apologies to all.

    2. blackjack00

      bribery? come on...

      Bribery is the exchange of something (like money) to get something else. Delloitte is simply paying a fine to settling it. This happens ALL the time, in private, commercial, and government cases. Is that news?

      Why would the government spend $10 million in lawyers to and tie up the courts for 5-10 years in order to get a slightly bigger settlement? Same for the company... why spend years and millions when you are going to lose the case? I'm assuming this is fairly simple case.

  4. Anonymous Coward
    Anonymous Coward

    No wonder they are having a problem..

    That's not a fine, $11M is a mere rounding error in Deloitte's book. It'll go under sundry expenses.

    If I'd had to let them off for such a pittance they would not have gotten away with not admitting liability to boot.

    1. blackjack00

      Re: No wonder they are having a problem..

      ... yeah and to force Delloitte to admit liability you would have to spend YEARS in court and lots of MONEY/TIME lawyers. aka wasting tax payer dollars just to get the emotional satisfaction?

      And, you are looking at the $11m as a small part of the whole Delloitte revenue but that is not the way internal accounting works. I bet the $11m shows up on someone's cost center and it has to put a big dent in their margin calculation this year. I've seen people get fired over much less.

  5. amanfromMars 1 Silver badge

    Unintended Dire Consequences are Just Desserts in a Changed Better Time and Otherly Space

    Deloitte coughs up $11m to end claims it ripped off US govt with IT work

    Consultancy giant opens wallet, pulls out some notes, tells Feds to go away

    And then do they wonder why SMART and SMARTRSysadmins consider the law an ass and justice corrupted in service of perverted systems and crooked partners in crime, with terror the resultant consequence and leading element and component for radical revolutionary change?

    Fools and the mad in charge of the asylum is always going to deliver mayhem and chaos with Clouds Hosting Advanced Operating Systems bearing witness to collapse and progress aplenty in Parallel AIMovements in Motion.

  6. blackjack00

    lots of assumptions here...

    Everybody assumes there is malfeasance on Delloite's part. I have worked in the managed services industry. A big company, with many contracts, and the federal services division is somewhat isolated from the rest of the company. It is entirely possible that the right hand did not know what the left hand was doing and this was not intentional. Maybe it was, maybe it wasn't but there is no way for us to tell based on the information given.

    We don't even see how much Delloitte billed, or what the gap was over time.

    When you actually understand managed services contracts, and I mean the normal terms and conditions, and how there are responsibilities on both customer and provider sides, then you may have some different assumptions. Frankly, I am a little tired of all the clueless jumping to conclusions in the press about every case of outsourcing questions.

    1. Anonymous Coward
      Anonymous Coward

      Re: lots of assumptions here...

      Everybody assumes there is malfeasance on Delloite's part.

      Having worked in consulting, I can see why that assumption comes naturally.

    2. Bakana

      Re: lots of assumptions here...

      Yep. Because, repeatedly over the years, the DOJ has gotten into the habit of "Settling" with corporate thieves for somewhere between 5 & 10 Percent of what they Stole.

      With, as noted, No Admission of Guilt.

      That last part is Very Important because US Law forbids corporations which have been guilty of Felonies from getting any New contracts. And, I believe that Current contracts are also in jeopardy when guilt is either admitted or determined at trial.

      What is really going on is that the US Congress refuses to Give the DOJ the money or the People necessary to pursue these cases. That's why Half the Federal Judgeships in the USA are Vacant: It keeps the Federal Courts from accomplishing much when looking at Corporate Criminals.

      If the DOJ actually had the People it Needs, the Fines they could levy would More than pay the cost of getting a Guilty Verdict because, guess what? the Cost of the Trial is part of the Fines they face.

  7. ma1010

    This isn't even a slap on the wrist

    The State of California got ripped off about $300 MILLION by this bunch. In my personal opinion, Deloitte are the Bechtel of software. Back in the mid-2000's, they were supposedly designing a new case management system to be used in all of California's courts. The project was obviously ill-conceived, because even just the scope -- many counties in California have 2 judges, while Los Angeles County has a court system larger than the U.S. Federal Court system -- make such a project's success unlikely, at best. But Deloitte made an absolute killing on it. They managed to get inexperienced people in state court administration to sign off on the system before it was even complete. "Oh, it doesn't work? Bummer! Well, for another $50 million or so, we could maybe take a look at it for you." The system was mostly useless, although parts of it were modified and are still used in some divisions of a few courts.

    Overall, Deloitte managed to do such a great job of stealing money from the court system that the California legislature, famous for squandering money, was infuriated at the court administrators for spending over $300 million on this crapware. They proceeded to punish everyone who worked for the courts by slashing the statewide court budget more than any other part of state government during the economic meltdown in '07-'08. Meanwhile, Deloitte was laughing all the way to the bank with their $300 million in hand.

    Personally, I wouldn't hire Deloitte to write a "Hello, world!" program. I expect it would cost several million dollars, take at least six months, and crash as soon as you started it.

  8. Crazy Operations Guy

    How dare they over-charge the taxpayers!

    That's the politicians' job, thank you very much.

  9. ecofeco Silver badge

    Business as usual

    See title.

  10. Anonymous Coward
    Anonymous Coward

    WHo Tou Calling Stupid?

    Being stupid should incur some sort of penalty.....

  11. Bakana

    It doesn't Always fail.

    One of the First Government contracts I ever worked on was Paid for by the money paid in Fines by the Previous contractor. It was a two year effort.

    The prior contractor not only Failed to deliver a working product, they were caught red handed trying to Sell software they didn't Own to other state's agencies. Software they had been Paid to develop for the State my contract was with.

    It never occurred to them that the Other States they were trying to sell the software to might just call and ask if it Really Worked as wonderfully as the company was claiming. And this was a firm which claimed to have an International client base.

    Really? No one ever before called to check the truth of your "Sales Pitch"?

    When the dust settled, the state got back All their money plus Fines and Legal Fees.

    It paid to restart the project from Scratch with a totally new team of contractors, all of whom were told Precisely where the money to pay for the project came from.

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