Dell Technologies’ federal contracts grow amid repeated U.S. sanctions
BOSTON — There’s no limit to the number of U.S. sanctions Dell Technologies Inc. is allowed to accrue as it receives federal contracts worth hundreds of millions per year, officials said.
The Texas-based technology giant settled a discrimination case in late September with a $7 million payment to the U.S. Department of Labor. The deal came just 16 months after Dell settled another discrimination case involving black and female employees in North Carolina. That settlement involved back wages amounting to nearly $3 million.
Such violations and subsequent settlements are just the latest for Dell. Since 2000, the company has been cited for 21 violations, resulting in payoffs worth more than $285 million, according to the Good Jobs First website’s violation tracker.
The sanctions include violations of the False Claims Act, accounting fraud, and offenses related to employment discrimination and consumer protection.
Dell, which in 2018 collected federal contracts worth $782.5 million, ranked № 32 on the list of the U.S. government’s largest contractors, Washington Technology news reported.
Except for largely token settlement amounts, Dell has suffered few consequences for its repeated transgressions. And federal agencies have no established parameters regarding violation limits. Theoretically, a federal contractor could be the subject of an unlimited number of sanctions, a DOL spokesman said Oct. 31.
TRUTH OR CONSEQUENCES
Dell Technologies, which was founded in 1984, employed 157,000 workers in early 2019, according to a filing with the U.S. Securities and Exchange Commission. It acquired the floundering Massachusetts-based EMC Inc. for $67 billion in 2016.
Dell has always had a spotty record in terms of the truth, and its thin-skinned executives have displayed a measure of sensitivity to criticism. For example, in 2010, Dell was fined $100 million by the SEC for using rebates from semiconductor supplier Intel Corp. to inflate Dell’s quarterly revenue levels in an effort to make itself appear more attractive to investors.
A lengthy, multi-bylined exposé about Dell by Bloomberg News in 2011 or 2012 has vanished from the Web. In 2014, its chief marketing officer wrote a prickly response after the Austin Business Journal accurately reported that Dell’s annual users conference would lack a star keynote name such a Bill Clinton or Elon Musk of previous events.
In early 2018, the New York Times reported that CEO Michael Dell buys his Twitter followers. It’s an approach that some could take to appear more relative than what was realistic.
Such concern for its image has done little to offset a spate of discrimination lawsuits and federal sanctions. In 2009, Dell settled for $9.1 million a federal gender discrimination suit involving a former human resources manager.
Dell Technologies, which vies for federal contracts under several different subsidiaries, continues to generate massive business. Contractor names include Dell Federal Systems LP, Dell Services Federal Government Inc. and Dell EMC, FederalSpending.org reports.
WORLD STAGE
Dell’s regard for the truth was highlighted in a very public way earlier this year.
In January, Michael Dell was corrected by an MIT economist at the World Economic Forum at Davos regarding a comment on the effect of a 70 percent marginal tax rate on the wealthy. Dell confidently rejected the idea and challenged the panel moderator to cite instances when such a tax had ever produced advantageous results.
“… I don’t think it will help the growth of the U.S. economy,” he said. “Name a country where that’s worked.”
Erik Brynjolfsson, director of the MIT Center for Digital Business who was seated to Dell’s immediate left, quickly responded in a startlingly refreshing fashion. He informed Dell that the proposed marginal tax rate worked quite well in the United States after WWII. Dell later attempted to downplay his gaff via Twitter.
Meanwhile, federal money kept flowing amid more sanctions. In March, the U.S. Navy announced awarding a four-year $231 million software and data center contract to Dell Technologies.
In July, NPR reported that several LGBTQ workers at Dell Technologies have alleged discrimination. One worker filed a complaint with New York City’s Commission on Human Rights alleging that co-workers marginalized her and was professionally stymied because of her appearance.
One worker undergoing a gender transition process said she was advised by another trans co-worker: “Don’t tell these people that you’re transgender. It’s a career ender.”
Two weeks later, the U.S. Army awarded eight companies, including Dell Technologies, a 10-year $5 billion contract to provide desktop computers and mobile systems.
Edward Snowden, the American whistleblower and fugitive, was a Dell employee when he worked on highly classified networking and data storage systems for the Central Intelligence Agency.
During an October appearance on a Joe Rogan podcast, Snowden said he had been “a senior technical official” on Dell’s CIA sales account. He said he attempted to get CIA executives to adopt Dell’s expensive private-cloud storage system.
“It’s my job to pitch them a system … and the whole thing is how much money can you get out of the government,” Snowden said. “That’s the whole goal.”