IBM and PWC settle federal kickback suit for $5.3M

After three years of litigation, IBM and PricewaterhouseCoopers (PWC) separately paid fines that added up to $5.3 million, in order to settle a broader set of DOJ lawsuits stemming from multiple whistle-blower allegations that systems integrators (like PWC) have been inappropriately diverting contracts to technology vendors (like IBM). But wait a minute…aren't IBM and PWC one and the same company? Didn't Big Blue buy the consulting arm of the venerable accounting firm in 2002 to strengthen the IBM Global Services presence and to create the type of "synergy" that would optimize the technology group's visibility, insight and access to clients, especially in the lucrative and recession-proof federal IT market? The answer, of course, is yes, so it should not come as a surprise that there are some intimate linkages among the parties concerned. Nevertheless, PWC-turned-IBM Global Services consultants are not supposed to cherry pick technology providers when they are ostensibly offering clients independent advice on how to build next generation IT infrastructures. But it is a complicated situation for all concerned. And the confusion is rooted in the fact that all large vendors view systems integrators as a channel into the federal IT sector. There are all kinds of alliances (most of them well documented and promoted) among systems integrators and technology providers who serve government agencies. If the government is going to outsource the management of these complex technology programs, then it must be aware that it is dealing with a web of business relationships that are already established in the market. Beyond IBM/PWC, the broader DOJ suit targets Accenture, HP and Sun. In settling, IBM denies any wrong-doing. 

Read coverage of the IBM/PWC development:   
- see the article Computerworld