German software giant SAP and Virginia-based product reseller Carahsoft Technology are under investigation in the US for allegedly conspiring to overcharge government agencies, including the US military.
The longstanding investigation, which has been underway since 2022, is largely focused on SAP’s alleged price-fixing on software and other services it sells to the government.
US authorities could be looking into an estimated $2 billion in technology sales to the US government since 2014, highlighting the scale of the investigation.
SAP accused of overcharging the US government
The reason the investigation has hit the headlines this time is because of an FBI and military raid of Carahsoft’s offices in Reston, Virginia (via Bloomberg).
The company found itself in 45th place on the Forbes 2023 Largest Private Companies List after making $13 billion in revenue in 2022, however as a private company, the effects of the investigation and unknown.
SAP, Germany’s most valuable company, saw shares drop by 4% following the news, however this year alone they’re up 42%.
Federal prosecutors had also been brought on board to force Carahsoft to produce communications, contracts, staff lists and other information related to its sale of SAP software and it “obstinately refused to provide this basic information.”
TechRadar Pro has asked both companies to comment on the ongoing investigation, but neither responded immediately.
Carahsoft spokesperson Mary Lange told Bloomberg that the company is “fully cooperating on this matter.”
This isn’t the first time that the two companies have found themselves in hot water. Carahsoft has already paid out $75.5 million in a settlement relating to overcharging the government, while SAP agreed to a $220 million settlement with the US DOJ in January this year over bribery allegations with South African and Indonesian government officials.
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