SAP is facing a Department of Justice (DOJ) probe into alleged questionable business practices involving price fixing in government contracts.
DOJ lawyers have been investigating the software giant since 2022, looking into whether or not the German company illegally colluded with Carahsoft Technology Corp. to fix prices for SAP technology utilized by the U.S. government. The DOJ is currently reviewing court records filed in Baltimore.
According to a Bloomberg report, the investigation is centered on more than $2 billion worth of SAP technology purchased by U.S. government agencies since 2014. Prosecutors are also examining the role of Carahsoft in potential market manipulation.
“All we can say is that there has been a civil investigation by the DOJ, and SAP has been cooperating with the investigation since the beginning,” SAP said in an email statement, adding that it was not aware of any criminal investigation.
Carahsoft headquarters raided in Virginia
Carahsoft received some windbreaker-clad visitors this week as the FBI reportedly raided the Reston, Va. headquarters of the IT, software, and cybersecurity services provider.
According to two NextGov sources, the raid was conducted sometime Tuesday morning. The FBI confirmed that there was “court-authorized law enforcement activity” where the Carahsoft headquarters are located. The company is a major distributor of technology products to government agencies, receiving more than 600 federal contracts for SAP technology worth more than $990 million and has facilitated as much as $1 billion more in additional sales.
“We can confirm that the FBI conducted court-authorized law enforcement activity on Sunset Hills Road [Tuesday] morning. We decline to comment further,” an FBI spokesperson said in a statement.
Additionally, CNN cybersecurity reporter Sean Lyngaas, confirmed that there were both FBI and DCIS agents on the scene conducting a search, and that Carahsoft employees were instructed to vacate the building.
Lyngaas also shared a statement from Carahsoft which stated:
“Representatives from the Department of Justice came to the Carahsoft office today as they are conducting an investigation into a company with which Carahsoft has done business in the past. Carahsoft is fully cooperating on this matter. We are operating business as usual.”
DOJ examination widens to others as probes continue
Other software resellers are also being examined by DOJ lawyers, as is Accenture Federal Services LLC, a unit of Accenture, Bloomberg reports. An Accenture spokesperson told Bloomberg that the unit “is responding to an administrative subpoena and is cooperating with the DOJ.”
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