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Public Contract Kickback?

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Indiana574

Junior Member
(Indiana) City has a contract with an out-of-state company to provide ambulance billing services. City purchased software for $16,000 with the intent of terminating the contract and performing billing in-house. Prior to installing the software, City negotiated a deal with the billing service. City agreed to renew the billing contract for 5 years. In return, billing service agreed to "discount" City billing fees for 12 months, in the exact amount ($16,000) of the software purchase. Ownership of the software was not transferred to the billing service. Does this constitute an unlawful kickback under either state or federal law? The only apparent reason for the $16,000 "discount" was the renewal/extension of the billing contract. It is unknown which party initiated the offer or solicitation for a deal.What is the name of your state (only U.S. law)?
 
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HuAi

Member
From what you described, it doesnt sound underhanded at all. The company provided a discount to the city, making their offering more competitive. Apparently the cost of hiring and training a billing person, and purchasing and supporting the billing hardware and software is no longer worth the cost given the discount.

An example of a kickback would be if the company gave $16,000 to a decision maker within the city to select them as the contractor.
 

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