IBM agrees to pay $14.8 million to settle False Claims Act allegations

Posted at 12:56 PM, Jun 14, 2019
and last updated 2019-06-14 14:09:14-04

WASHINGTON — The International Business Machines Corporation (IBM) and Cúram Software have agreed to pay $14.8 million to settle the False Claims Act alleged violations.

According to the Department of Justice, this came from the material misrepresentations to the State of Maryland during the Maryland Health Benefit Exchange contract award process for the development of Maryland's Health Insurance Exchange (HIX) website and IT platform.

Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division commented on the resolution, stating that making misleading statements to win contract awards violates the fundamentals and harms the government and taxpayers as well.

“When companies misrepresent their products and capabilities in order to win government contracts, they enrich themselves at taxpayers’ expense,” said U.S. Attorney Robert K. Hur. “Today’s resolution demonstrates our continuing commitment to hold companies accountable for their actions.”

In December 2011, IBM acquired Cúram and on the same day the acquisition was completed, a proposal was submitted to the state to support the HIX, which was drafted in part by Cúram. On January 5, 2012, as part of the evaluation process and with IBM's knowledge, the company participated in a presentation to the state that illustrated their software conducting eligibility determinations.

In February 2012, the State awarded the contract for development of Maryland’s HIX website and IT platform. Cúram-IBM served as a subcontractor on the project.

The settlement covers the time period between January 1, 2011 through May 31, 2014 and resolves allegations against Cúram-IBM regarding material misrepresentations made to the State during the contract procurement process. After repeated problems following the launch of the HIX website in October 2013, Maryland terminated the contract and replaced the HIX website and IT platform, including the Cúram software.