Last month, Science Applications International Corporation (SAIC) announced a settlement with the U.S. Attorney Office for the Southern District in New York and with the City of New York about the company's CityTime system. Terms of the settlement require SAIC to pay $500.4 million in restitution and penalties, and an independent monitor selected by the U.S. Attorney's Office will review certain policies and practices by SAIC for three years.
CityTime is an automated workforce management system used by about 163,000 New York City employees in 65 agencies. According to a press release (Adobe PDF) by the U.S. Attorney's Office:
"Under the agreement, SAIC will forfeit a total of $500,392,977 to the Department of Justice, and forgive more than $40 million still owed by the City to SAIC in connection with the CityTime project. In a Statement of Responsibility (the “Statement”) that was part of the agreement, SAIC acknowledged that it failed to properly investigate a 2005 ethics complaint filed by a whistleblower alleging, among other things, that the project’s Program Manager, Gerard Denault, had to be receiving kickbacks on the project from the single source subcontractor he had hired to perform the work. SAIC also accepted responsibility for the illegal conduct alleged against Denault and admitted to by Carl Bell, who served as Chief Systems Engineer in SAIC’s New York City office."
The City of New York had selected SAIC's CityTime system to modernize its timekeeping and payroll systems across City agencies. In 2000, SAIC became the lead contractor on the City's CityTime project, with a value then of approximately $73 million. The Washington Post reported recently:
"Last year, SAIC said it removed three top executives — Deborah Alderson, president of the company’s defense solutions group; John Lord, her deputy; and Peter Dube, general manager of the enterprise and mission solutions business — although the company said there was no evidence that any of the three were involved in the fraud."
SAIC, a Fortune 500 scientific, engineering and technology applications company employs about 41,000 people worldwide, and about 93% of its business is generated by government contracts. In 2011, SAIC was involved with a TRICARE data breach that exposed the sensitive personal data of 4.9 million active and retired military personnel and their families.