VMware’s over $6 billion in revenue makes it one of the world’s largest software companies. Not surprisingly, one of its biggest customers is the United States government. What many Georgia readers may not have known until recently is that the General Services Administration (GSA), which handles federal office space and logistics, filed business litigation against the company back in 2010.
The GSA alleged that WMware committed fraud against the federal government. The agency believed that the company was charging the federal government more for its services than it was charging private companies. The discount for services given to the government was 12 percent. The GSA says this is far below discounts offered to anyone else. This supposedly includes foreign governments that are also clients of the company.
The lawsuit was kept confidential until the details of a recently reached settlement agreement were finalized. VMware insists that it did not defraud the government, but chose to settle the lawsuit rather than continue with the costly and time-consuming litigation. Not all of the details regarding the settlement were released, but it was reported that the company will pay $75.5 million to the federal government. The settlement is being touted as one of the largest negotiated under the False Claims Act.
Anytime a Georgia business offers its services to a client, it is assumed that the company is dealing fairly with it. If the customer believes that is not the case, business litigation may be filed. As was the case here, a company may decide to settle the claim even if it did nothing wrong in order to avoid protracted litigation.
Source: businessinsider.com, “VMware will pay the government $75.5 million to settle an overcharging lawsuit“, Matt Weinberger, June 30, 2015