Deloitte pays $16m to settle US IT contract dispute

Deloitte has agreed to pay the US Department of Justice US$11.4 million (A$15.7 million) to settle allegations it overcharged the government in an IT contract with the country's central procurement provider.

The department today said it had struck a deal with Deloitte to end a dispute over the consulting firm's alleged failure to comply with a price reductions clause within a contract with the General Services Administration awarded in 2000.

Justice claimed that between 2006 and 2012, Deloitte charged the department a higher price for the IT services than it had promised. The department argues the contract stipulated Deloitte would charge the government the same rate as it imposes on the private sector.

The agency said Deloitte had therefore violated the US False Claims Act.

"Contractors are expected to deal fairly with federal agencies when receiving taxpayer funds," head of the Justice Department's civil division Benjamin Mizer said in a statement.

"As this settlement demonstrates, we will take action against those who knowingly fail to live up to the terms of their government contracts."

The settlement states that Deloitte will hand over the US$11.4 million in exchange for Justice dropping its allegations. Deloitte is not required to admit liability.