Department of Justice Investigation into SAP and Carahsoft for Price-Fixing Allegations

The DOJ’s inquiry focuses on potential collusion between SAP and Carahsoft, a key player in federal technology procurement, which has secured over $3.5 billion in contracts since 2020. The investigation has raised concerns about inflated prices for government contracts, particularly as SAP’s technology has been a significant part of Carahsoft’s offerings, accounting for nearly $1 billion across more than 600 contracts. Both companies have faced legal scrutiny in the past, with Carahsoft previously settling overcharging claims and SAP recently resolving a bribery case involving multiple countries. As the investigation unfolds, SAP has stated its intention to cooperate fully with the DOJ.

Investigation Details

• Allegations: The DOJ is examining whether SAP and Carahsoft engaged in price-fixing that resulted in overcharges to U.S. military and government agencies.
• Ongoing Inquiry: The investigation has been active since at least 2022, shedding light on the practices surrounding federal contracts.

Impact on Companies

• Carahsoft’s Role: As a major reseller, Carahsoft has facilitated significant contracts for SAP technology, making the investigation particularly impactful for federal procurement processes.
• SAP’s Response: SAP has confirmed its cooperation with the DOJ, emphasizing that no criminal charges have been filed against it thus far.

Market Reaction

Following the news of the investigation, SAP’s stock experienced a decline, reflecting investor concerns over potential repercussions from the ongoing inquiry. The situation continues to evolve as the DOJ’s investigation progresses.