FBI raids Carahsoft offices as rumors of shady business practices swirl

A raid on Carahsoft headquarters by the U.S. Federal Bureau of Investigations was carried out as part of an investigation into illegal price-fixing for government contracts, Nextgov reports.

There is no indication that the investigation is related to contracts for biometrics or digital identity technology. But as a government supplier of these technologies and partner to numerous businesses that develop them, any impact on Carahsoft’s ability to win public sector contracts could impact the market.

The FBI and Defense Criminal Investigative Service served three subpoenas – two criminal and one civil – according to the Federal New Network.

Entrust chose Carahsoft as a public sector reseller for its digital identity, zero trust and biometrics capabilities in August. Nuggets, Intercede, Ping Identity, Incode, ID.me, Okta and Socure are all among Carahsoft’s portfolio of partners providing biometrics and digital ID tech. Client relationship employees have been told to reassure vendors, says Nextgov.

Carahsoft says it is “operating business as usual.”

These partners rely on Carahsoft’s status with contract vehicles like NASA Solutions for Enterprise-Wide Procurement and the General Services Administration’s Multiple Award Schedule to compete for public sector business. The company has won $960 million in contracts so far this year.

Carahsoft, SAP and Accenture are all under investigation for alleged violations of the False Claims Act, according to Nextgov, but a Carahsoft spokesperson told the Federal News Network that the subpoenas were not related to that investigation.

Court documents indicate that the Department of Justice has been seeking details from Carahsoft about quotes and tenders for some time. Newsweek reports that Carahsoft was served a Civil Investigative Demand in 2022 as part of an investigation into whether it conspired with SAP to fix prices for software, cloud storage, hardware and services sold to the Department of Defense.

Carahsoft President Craig Abod told employees in an email that the raid was related to an investigation into a company it had worked with previously.

The company and partner VMWare paid $75 million in 2015 to settle claims that they had concealed pricing arrangements to inflate charges to the U.S. government.

SAP paid a fine of more than $220 million earlier this year to settle bribery allegations.

Article Topics

Carahsoft  |  FBI  |  government purchasing  |  U.S. Government