Science Applications International Corp. will pay more than $500 million to the U.S. government to settle charges that the McLean, Va.-based company’s fraud resulted in cost overruns to implement CityTime, New York City’s computerized timekeeping system.
Mayor Michael Bloomberg, city Department of Investigation commissioner Rose Gill Hearn and Manhattan U.S. attorney Preet Bharara announced the settlement Wednesday at a City Hall press conference.
“For seven years, fraudsters working on CityTime had a field day at the city’s expense,” Bharara said.
The federal government will forward $466 million to the city to compensate for losses, and SAIC will waive more than $40 million the city owes.
Since 2000, when SAIC contracted with the city, New York has paid out roughly $589 million in connection with CityTime. Wednesday’s settlement, combined with funds already frozen or recouped, results in reimbursement to the city for most of the project expenses.
CityTime was intended to modernize timekeeping and payroll systems across city agencies.
The settlement “is a major victory for taxpayers, and just as importantly, it is a major victory for justice and public integrity,” Bloomberg said.
SAIC chief executive John Jumper added: “We welcome this settlement as an important step in our efforts to move forward as a better, stronger company.”
Under a deferred prosecution agreement, SAIC agreed to continue cooperating with the government and consented to the appointment of an independent monitor.
“This historic settlement brings a measure of restitution to our taxpayers,” said city Comptroller John Liu.
SAIC also consented to the filing of a one-count felony, charging it with conspiracy to commit wire fraud. The government agreed to dismiss the felony if the company is compliant for three years.