Exhibit 10.1

 

LOGO [g400068g95e79.jpg]    ADMINISTRATIVE AGREEMENT    LOGO [g400068g54v15.jpg]

This Administrative Agreement (“Agreement”) is made between the United States
Army (“Army”), acting through its Suspension & Debarment Official (“SDO”), on
behalf of the U.S. Government as the lead agency for determining the present
responsibility of the Contractor Science Applications International Corporation
(“SAIC” or the “Contractor”).

A. PREAMBLE

1. Science Applications International Corporation (SAIC) is a Fortune 500
scientific, engineering and technology applications company with approximately
41,000 employees worldwide. SAIC is publicly traded on the New York Stock
Exchange and approximately 93 percent of its business is generated by government
contracts.

2. The New York City (NYC) Office of Payroll Administration (OPA) entered into a
contract with SAIC to develop and implement CityTime, an initiative to modernize
the payroll system for NYC employees. The project was originally budgeted to
cost $63 million, but has cost more than $600 million. The cost of CityTime was
significantly increased by the fraud of SAIC’s former employees and others. The
cost of the project was also legitimately increased as a result of the changing
needs of the City. Mr. Gerard Denault served as SAIC’s Program Manager for
CityTime between 2003 to 2010, while Mr. Carl Bell worked as a Chief Systems
Engineer in the New York office of SAIC from 2003 to 2011. Mr. Denault was
responsible for selecting and overseeing subcontractors hired by SAIC to assist
with CityTime. Mr. Denault was also responsible for submitting bills to NYC
seeking payment for work performed by SAIC employees and subcontractors on
CityTime, developing proposed CityTime work orders, and developing contract
amendments seeking approval for SAIC to perform additional work on the project.
On June 17, 2011, a grand jury in the U.S. District Court for the Southern
District of New York indicted SAIC employee, Mr. Denault, among others, for
conspiracy, bribery, wire fraud, obstruction of justice, and money laundering in
violation 18 U.S.C. §§ 371, 666, 1343, 1346, 1349, 1512, 1952, and 1956.
Mr. Carl Bell has pleaded guilty to multiple charges based on his participation
in the scheme.

3. On March 8, 2012, SAIC entered a deferred prosecution agreement (DPA) with
the Department of Justice (DoJ) and the New York City Department of
Investigation (DoI). Under the DPA, SAIC agreed to pay a total of
$500,392,977.00 to the United States. These funds were forfeited to the United
States pursuant to a civil forfeiture complaint filed in the United States
District Court for the Southern District of New York. SAIC agreed that it would
not file a claim with the Court or otherwise contest this civil forfeiture
action and would not assist a third party in asserting any claim to the
Forfeited Funds. As part of the agreement, SAIC also acknowledged that it failed
to properly investigate a 2005 ethics complaint filed by a whistleblower
alleging, among other things, that Mr. Denault was receiving kickbacks on the
project from the single source subcontractor he had hired to perform the work.
SAIC also accepted responsibility for the illegal conduct alleged against
Mr. Denault and admitted to by Mr. Bell.

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4. SAIC accepted responsibility for the illegal conduct of its former employees,
and has cooperated fully with the Government’s investigation. SAIC voluntarily
implemented institutional reforms and terminated the employment of managers who
directly supervised Mr. Denault and the CityTime project. As part of the DPA,
SAIC agreed to continue cooperation with the Government and consented to the
appointment of an independent monitor (Monitor) to ensure its compliance with
both the agreement and with appropriate ethics and procurement policies. SAIC
also consented to the filing of a one-count felony Information, charging it with
conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349, and agreed
that it would be subject to prosecution under the Information if it fails to
satisfy the terms of the DPA at any time within the next three years. The
Government agreed under the terms of the DPA to seek dismissal of the
Information at the conclusion of the period set forth in the DPA if SAIC
complies with its terms.

5. In order to assure its present responsibility, SAIC agrees to execute and
take the remedial actions specified in this Agreement, including Section C,
Contractor Responsibility Program, subject to the terms and conditions described
in Section D, General Conditions, and Section E, Administration of this
Agreement.

6. The Army has determined that the terms and conditions of this Agreement, if
complied with, provide adequate assurance that the interests of the Government
will be sufficiently protected to preclude the debarment or suspension of
Science Applications International Corporation, pursuant to the current
disposition of facts and circumstances.

7. This Agreement is effective for a period of five years (60 months) from the
Effective Date. Upon the completion of the third year of this Agreement, SAIC
may request a review of its performance under the Agreement and ask that the SDO
determine if Contractor has fulfilled its obligations under this Agreement. The
decision concerning the fulfillment of these obligations shall be at the sole
discretion of the SDO. In addition, at any time after the completion of the
third year of the agreement, SAIC may present information for consideration by
the SDO regarding its performance under the Agreement and request a
reconsideration of the SDO’s decision to maintain the Agreement in force.

NOW THEREFORE, in consideration of the promises set forth herein and for good
and valuable consideration, the parties mutually agree as follows.

B. DEFINITIONS

1. “Army” refers to the United States Army. Specific points of contact for this
Agreement are the SDO and the United States Army Legal Services Agency, Contract
and Fiscal Law Division, Procurement Fraud Branch and their designees.

 

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2. “Attachment” refers to documents which are incorporated by reference into
this Agreement. Attachments contain material relevant to the basis for entering
into this Agreement or discuss specific aspects of its implementation.
Attachments may be modified after the entry of this Agreement into force without
altering the basic Agreement itself at the express agreement of the parties. As
executed, there are three “Attachments” to this Agreement: Attachment 1 –
Deferred Prosecution Agreement (and Exhibits A-D), dated March 8, 2012;
Attachment 2 – New York City Release, dated March 8, 2012; Attachment 3 – SAIC
Release, dated March 9, 2012.

3. “Appendix” or “Appendices” refer to modifications to the Agreement itself.
Appendices may be added at the agreement of the parties to address a new or
unforeseen issue related to the implementation of the Agreement.

4. “Contractor” refers to Science Applications International Corporation,
including SAIC’s divisions, operating units, and groups, as appropriate,
including its directors, officers, and employees, while acting in their
capacities as such. It does not refer to or include SAIC’s wholly-owned
subsidiaries.

5. “Days” refers to calendar days.

6. “Deferred Prosecution Agreement” refers to the agreement signed on March 8,
2012 between the United States Attorney’s Office for the Southern District of
New York and SAIC as described above in the Preamble. Attached to the Deferred
Prosecution Agreement are Exhibit A, a Board Resolution, Exhibit B, the
Information Charge, Exhibit C, Statement of Responsibility, and Exhibit D,
Mutual Releases.

7. “DFARS’ refers to the Defense Federal Acquisition Regulation Supplement.

8. “Effective Date” refers to the date on which the SDO signs this Agreement on
behalf of the Army.

9. “Employee” refers to officers, managers, and supervisors. All other full and
part-time workers, whose performance is under the direct supervision and control
of the Contractor, will be considered “employees” solely for training purposes.
Consultants and temporary workers shall be made aware of the compliance
agreement and the standing Contractor Responsibility Program, and, to the extent
engaged in the formation or administration of government contracts, furnished
copies of the Code of Corporate Conduct and the Government Contracting Policies
and Procedures.

10. “Chief Ethics & Compliance Officer” refers to a managerial officer of the
Contractor who will be the first point of contact for all questions regarding
the terms and conditions of this Agreement.

11. “FAR” refers to the Federal Acquisition Regulation.

 

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12. “Government” refers to any department, agency, division, independent
establishment, or wholly-owned corporation of the United States Government.

13. “Independent Cause for Suspension or Debarment” refers to a reason or basis
for such action not directly related to information set forth in the Preamble or
any document referred to in the Preamble.

14. “Ombudsperson” refers to an independent attorney, certified public
accountant, or other expert knowledgeable in the area of Federal Government
contracting policies and procedures who will act to ensure the Contractor’s
compliance with the terms of this Agreement. The “Monitor” refers to the
individual retained by Contractor and approved by the Office of the Deputy
Attorney General of the DoJ, whose principal powers, rights and responsibilities
are set forth in Section 15 of the DPA. With the approval of the Army SDO the
Monitor may perform the function of the Ombudsperson under this Administrative
Agreement. The Ombudsperson will act as an alternative channel of communication
for SAIC employees and other interested individuals who wish to report what they
consider to be infractions or violations of the Contractor’s Code of Conduct
involving violations of Government contract laws, rules and regulations, or
other matters that raise questions concerning the Contractor’s present
responsibility or ask questions regarding the Code with respect to the same
issues.

15. “U.S.C.” refers to the United States Code.

16. “Temporary workers” shall mean persons who have worked for the Contractor
for less than ninety (90) days.

C. CONTRACTOR RESPONSIBILITY PROGRAM

1. Existing Program Elements. The Contractor has a company-wide Ethics and
Compliance Program which provides the institutional means for achieving present
responsibility as a Government contractor. As of the Effective Date, the
Contractor has established the following elements of this program:

 

  a. Code of Corporate Conduct. The Contractor has established and continues to
have in place corporate compliance and ethics policies, programs, procedures and
training as part of its ongoing business practices. These include the Code of
Conduct setting forth the Contractor’s basic principles and standards for
ethical business conduct and integrity, and establishing the responsibility of
individual employees to comply with all applicable laws and regulations. All of
the Contractor’s employees must annually certify that they have reviewed the
Code of Conduct and understand that they are required to comply with its
provisions.

 

  b. Management Involvement and Overall Integration of Ethics and Compliance
Program.

 

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(i) The Contractor’s Board of Directors, directly or through committees,
assesses the activities and responsibilities of the Ethics and Compliance
Program, including the compliance activities of the Contractor. The Ethics and
Corporate Responsibility Committee of the Board of Directors reviews ethics
cases and trends and ethics and compliance policies, procedures and training
quarterly.

(ii) The Contractor has established an Employee Ethics Council and Ethics and
Audit Review Board. The Ethics and Audit Review Boards are supported by the
Internal Audit function, the Human Resources Department, Legal Department, and
Finance Department. The Chief Ethics and Compliance Officer is responsible for
ensuring that the Ethics and Compliance Program is a formal and documented
process for investigating potential violations of the Code of Conduct. The
Ethics Office also has the responsibility of assigning investigative teams to
address potential violations of the Code of Conduct after they are discovered
and reported. This process, as well as the responsibilities of the Employee
Ethics Council, is set forth in Corporate Policies EEC-1 and SG-1.

(iii) As set forth in the DPA, the U.S. Attorney’s Office has also appointed a
Monitor to receive and investigate reports of possible violations involving
Government contract laws, rules and regulations, or other matters that raise
questions concerning the Contractor’s present responsibility.

(iv) All issues involving violations of Government contract laws, rules and
regulations, or other matters that raise questions concerning the Contractor’s
present responsibility giving rise to an investigation by the Employee Ethics
Council will be registered and recorded in the Contractor’s Ethics and
Compliance database. The Contractor has developed a system used to track and
document all actions taken from the beginning of the investigation until issue
resolution. The system is available by electronic means and has a sufficient
level of security. The system is accessible to the Audit and Ethics Review
Boards, the Corporate Responsibility Committee of the Board of Directors, the
Legal Department, and the Chief Ethics & Compliance Officer, and will also be
made accessible to the Monitor.

 

  c. Ethics and Compliance Training.

(i) Code of Conduct. The Contractor will continue to require Ethics Awareness
training biennially, and for all employees regarding the Ethics and Compliance
Program and revisions thereto. After providing the training, the Contractor must
require that employees certify annually that they have reviewed the Code of
Conduct and understand that they are required to comply with its provisions.
Completion is verified in the Contractor’s Enterprise Learning Management
system.

(ii) Compliance Training. The Contractor will continue to provide employees with
Government contracting training opportunities. The training program should
include topics covering the more critical issues faced by the Contractor when
preparing for, entering into, and administering Government contracts. The
Contractor must target

 

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certain employees who are directly involved with formation and the performance
of Government contracts to receive specialized training in procurement laws,
regulations, and policies. Like the Ethics Awareness training, the materials are
available on the Contractor’s Enterprise Learning Management system and the
employees are required to certify that they received the training.

(iii) Frequency and Certification of Training. The Contractor conducts and
updates all Code of Conduct, Compliance training and employee certifications
annually. The Ethics Awareness training is required and completed biennially.
The Contractor requires that rosters of all employee certifications for Code of
Conduct and Compliance training be maintained.

 

  d. Government Contracting Policies and Procedures. The Contractor has
developed an updated set of Government contracting compliance policies and
procedures setting forth the Contractor’s compliance obligations under relevant
law and regulation. The Contractor will submit the policy and procedures to the
Army for review and, with respect to those portions of the policy and procedures
updated or issued after the Effective Date, in advance of promulgation unless
immediate promulgation is required by law. The Contractor annually will review
and update as necessary the policy and procedures. Contractor management shall
monitor employee compliance with the policy and procedures, and consider such
compliance when making decisions concerning personnel decisions, including
compensation.

 

  e. Employee Telephonic and Web-based Hotlines. In addition to the Employee
Ethics Council and Monitor, the Contractor maintains a toll-free compliance
telephonic hotline which is available to receive information 24 hours a day, 7
days a week.

Contractor’s hotline is available so that employees may report to the Ethics and
Compliance Department any violations of the Code of Conduct. In reporting any
alleged violation, employees are given the option to do so anonymously, in
accordance with local law and regulation. Information on how to use or access
the hotline is readily available to all employees in their work areas.
Information gathered and learned from the hotline is provided to the Employee
Ethics Council, which initiates investigations as appropriate.

In addition to the current system, the Contractor is in the process of selecting
an outside vendor as a third-party hotline manager. The vendor will provide a
worldwide toll-free compliance telephonic hotline and web portal for voicing
concerns, which will be available internally and externally to receive
information 24 hours a day, 7 days a week.

 

  f. Employee Ethics Newsletter. Contractor publishes a quarterly Ethics and
Compliance newsletter, which serves to inform employees of timely ethics and
compliance issues and related matters.

 

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  g. Management Training Program. As part of its management development program,
Contractor’s personnel must receive training regarding ethical behavior and
adherence to the corporate compliance program. In upcoming performance cycles
that evaluate performance (beginning with FY13 performance), the Contractor will
incorporate a factor reflecting each manager’s performance with regard to ethics
and compliance into decisions regarding the manager’s compensation.

2. Required Program Elements. The following steps and procedures shall be
implemented as part of this Agreement:

 

  a. Code of Conduct.

(i) The Contractor maintains, and, as necessary, revises the Code of Conduct to
ensure that the Contractor maintains the business integrity and honesty required
of a Government contractor, and that the Contractor’s performance is in strict
compliance with the terms and conditions of its Government contracts.

(ii) The Code of Conduct requires employees to report any violation or suspected
violation of the Code of Conduct, corporate policies, laws or regulations, or
any ethics or conduct concerns, whether committed by the Contractor, a vendor, a
subcontractor, or a Government employee, using any one of eight disclosure
channels, including the Contractor’s hotline and Employee Ethics Council on the
Ethics Line.

(iii) Within 60 days of the Effective Date of this Agreement, Contractor shall
submit the latest edition of its Code of Conduct to the Army for review. If the
Army advises that any aspect of the Code of Conduct fails to meet the
requirements of this Agreement, Contractor shall promptly revise the Code of
Conduct to address the Army’s concerns and resubmit it for approval.

 

  b. Management Involvement and Overall Integration of Contractor Responsibility
Program.

(i) The Contractor has implemented a uniform system for reporting findings of
all complaints involving violations of Government contract laws, rules and
regulations, or other matters that raise questions concerning the Contractor’s
present responsibility that are submitted through the Employee Ethics Council,
hotline, or other disclosure channel. Within 90 days of the Effective Date of
this Agreement, the Contractor will enhance the system to include submissions
through the Monitor. The reporting system contains the following elements: 1)
identification of the accused individual (unless circumstances warrant
protecting the individual’s identity further) and business unit; 2) a
description of the allegations; 3) a listing of the investigating personnel; 4)
the date of the initial report/complaint; 5) the resolution of the issue; and 6)
recommendation regarding additional or preventative action to be taken. These
reports shall contain supporting documents collected during the course of the
investigation as attachments.

 

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(ii) The Contractor has updated its written corporate policies and procedures to
ensure uniform application of the Ethics and Compliance Program. These policies
and procedures shall be provided to the Monitor and the Army for review and will
be the basis for the development of training materials regarding the
implementation of the Ethics and Compliance Program.

 

  c. Ethics and Compliance Training.

(i) Army Approval of Training Plans. The Contractor shall provide the Army and
the Monitor a training plan with a detailed description of course materials it
intends to use in training classes within 30 days of the signing of this
agreement. If the Army rejects the plan, the Army will specify the reasons for
doing so and the Contractor will promptly propose another plan.

(ii) Notice of Training. Upon request, the Contractor will provide the Monitor
and/or the Army a schedule of upcoming ethics and Government contracting
training sessions so the Monitor and/or the Army may attend the training.

(iii) The Contractor shall complete Code of Conduct certification and Compliance
training for appropriate employees by January 31, 2013, and perform Ethics
Awareness training biennially. The completion of the training is tracked in the
Contractor’s Enterprise Learning Management system. Within 90 days of their
being hired, the Contractor shall ensure that those relevant employees involved
in the process receive Ethics Awareness training, Compliance training as
required, have access to the Code of Conduct, and certify that they have read
and will comply with the Code of Conduct. The Contractor requires that rosters
of all employee certifications for Code of Conduct and Compliance training be
maintained.

 

  d. Employee Hotline. The Chief Ethics & Compliance Officer shall ensure that a
record is maintained of all hotline submissions, or employee reports to the
Employee Ethics Council, or Monitor and will maintain the data for the Monitor
as directed, to include: date and time of call; identity of caller, if
disclosed; summary of allegation or inquiry; and general resolution or referral.
The Contractor shall require that each call is adequately investigated and
resolved. Access to this information will be granted to the Monitor solely to
facilitate the duties described in Section C.4(f) of this Agreement and, at its
request, the Army. The Contractor shall not assert an attorney-client or
work-product privilege with respect to the relevant contents.

 

  e. Notification to Employees of this Agreement. Within 60 days of the
Effective Date of this Agreement, Contractor’s Chief Executive Officer shall
prepare and display at all facilities in the United States, in places
sufficiently prominent to be accessible to all employees, a letter stating that
the Contractor has entered into this Agreement. A copy of the Chief Executive
Officer’s letter will be forwarded to the Army for approval prior to
distribution. The letter shall state:

 

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(i) The basis for this Agreement;

(ii) Contractor’s commitment to observe all applicable laws and regulations, and
to maintain the highest standards in conducting business with the United States
Government;

(iii) A brief description of the features of the ethics and compliance program;

(iv) The toll-free telephonic hotline, and contact information of the Monitor.

(v) The availability of the Chief Ethics & Compliance Officer or his designee
and the Monitor to answer questions concerning the Employee Ethics Council;

(vi) Employees’ ability to report matters to the Monitor, who will conduct an
investigation, including a recommendation of corrective action; and

(vii) That employees may make reports of violations of the ethics and compliance
program without revealing their identity, when such anonymity is possible
without violation of applicable local law or regulation.

 

  f. On an annual basis, the Monitor and the Contractor’s Board of Directors or
appropriate Subcommittee thereof, shall meet to discuss the implementation of
this Agreement, the status of ongoing investigations and other matters.

 

  g. The Contractor shall submit written reports at the request of the Monitor
for the purpose of preparing reports to the Army as specified in Section C.5 of
this Agreement.

3. Chief Ethics & Compliance Officer. The Contractor has appointed a Chief
Ethics & Compliance Officer to oversee its Ethics and Compliance Program. The
Chief Ethics & Compliance Officer has direct reporting responsibilities to the
Contractor’s Chief Executive Officer and to the Chair of the Ethics and
Corporate Responsibility Committee of the Board of Directors, and shall serve as
the Contractor’s first point of contact for all questions regarding the terms
and conditions of this Agreement and Contractor implementation of this
Agreement, investigate complaints concerning Contractor’s compliance with this
Agreement, and report to the Army concerning Contractor’s compliance with this
Agreement. If the Contractor needs to replace the Chief Ethics & Compliance
Officer for any reason (including death, incapacity, or resignation), the
Contractor must obtain the Army’s approval of the person proposed to fill that
position.

4. Monitor.

 

  a. General. The Monitor is responsible for monitoring and assessing the
Contractor’s compliance with the terms of this Agreement and ensuring that the
Contractor performs its obligations in a timely and satisfactory manner.

 

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  b. Appointment. Contractor Integrity Solutions LLC, Michael C. Eberhardt and
Richard J. Bednar, has been nominated to serve as a Monitor and Ombudsperson at
Contractor’s expense for the oversight of this Agreement. Mr. Eberhardt and
Mr. Bednar’s nomination has been approved by the DoJ and the Army.

 

  c. Removal of the Monitor. Any change of the Monitor appointed per this
Agreement requires prior Army approval. At any time, should the Army become
dissatisfied with the performance of the Monitor, the Army may require the
Contractor to nominate a different candidate to serve the role of Ombudsperson
subject to the Army’s approval.

 

  d. Nature of Employment. The Army intends for the Monitor to act as an
independent check upon the Contractor’s compliance with this Agreement. The
Monitor shall not be an agent of the Contractor, and his work shall not be
subject to the Contractor’s assertion of the attorney-client privilege or the
work-product doctrine. The Army also intends that the Monitor will work with the
Contractor’s management team in implementing this Agreement. The Monitor will be
consulted by both parties regarding questions concerning the terms and
conditions of this Agreement, and will, at his discretion, investigate
complaints concerning the Contractor’s compliance with this Agreement, and will
report to the Army concerning the Contractor’s compliance with this Agreement.
The Monitor may, as he reasonably requires, consult with other counsel, at
Contractor’s reasonable expense, in performing any of his responsibilities under
this Agreement.

 

  e. Annual Certification of Independence. Upon nomination, and upon each
anniversary of the Effective Date of this Agreement during its tenure, the
Monitor shall furnish the Army with an affidavit certifying that he has no
financial interest in, or other relationship with, the Contractor or its
affiliates, other than that arising from his appointment as the Monitor. The
affidavit must also certify that his representation of any other client will not
create a conflict of interest or appearance thereof in fulfilling his
responsibilities as Monitor. For purposes of this paragraph, the Monitor’s
duties to enforce the DPA will not be considered a conflict of interest. Any
change in relationships that would affect these certifications must be reported
to the Army before they occur or as soon as the Monitor or Contractor learns of
them.

 

  f. Duties. In addition to the duties set forth in the DPA, the Monitor’s
duties shall include:

(i) Verification of the implementation of the contractor responsibility program
described in Section C of this Agreement.

(ii) Investigation of allegations of violations of this Agreement and matters
arising under the contractor responsibility program involving violations of
Government contract laws, rules, and regulations, or other matters that raise
questions concerning the Contractor’s present responsibility. For this purpose,
the Monitor, at the conclusion of each of his investigations, shall provide a
written report to the Contractor’s Chief Ethics & Compliance Officer and to the
Army, detailing the substance of the allegations, evidence

 

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revealed by the investigation, and the findings and recommendations. The
Contractor shall take corrective actions where appropriate. The Monitor’s
complete investigative file shall be furnished to the Army. This provision does
not impact the Contractor’s responsibility pursuant to the Mandatory Disclosure
Program (73 Fed.Reg 67067 – 67093 (November 12, 2008)).

(iii) Review of investigations made by the Contractor in accordance with the
provisions of Section C.4 of this Agreement.

(iv) Preparation and submission of reports to the Army as specified in Section
C.5 of this Agreement.

(v) Attending and monitoring employee training on the Ethics and Compliance
program and Government contracting as he deems appropriate.

(vi) On an annual basis, the Monitor and the Contractor’s Board of Directors (or
designated Committee thereof) shall meet to discuss the implementation of this
Agreement, the status of ongoing investigations and other matters. In addition,
when necessary, but not less than semi-annually, the Monitor shall meet with the
management of any of the Contractor’s divisions, operating units, groups, value
centers and other subsidiaries, to discuss the progress of implementing the
contractor responsibility program described in Section C of this Agreement.
Notice of such meetings shall be provided to the Army by the Monitor not less
than 30 days in advance to allow for attendance by the Army.

(vii) Performance of other duties as described elsewhere in this Agreement, or
as deemed reasonably necessary by the Monitor, or the Army.

 

  g. Staff. The Contractor agrees that the Monitor shall:

(i) Have sufficient staff and resources, as reasonably determined by the
Monitor, to effectively monitor the Contractor’s compliance with this Agreement;
and

(ii) Have the right to select and hire outside expertise as reasonably necessary
to effectively monitor SAIC’s compliance with this Agreement.

 

  h. Fees and Expenses. The Contractor agrees to pay the reasonable fees and
expenses associated with the Monitor for this Agreement as negotiated between
the Contractor and the Monitor.

 

  i. Inspections. The Contractor agrees to reimburse the Army for the reasonable
fees and expenses associated with the Army Procurement Fraud Branch site
inspections for compliance with this Agreement.

 

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5. Reports to the Army.

 

  a. The Monitor shall provide the Army with copies of all reports prepared for
the U.S. Attorney’s Office and the Army shall determine whether the subject
matter covered therein requires additional review and/or investigation by the
Monitor. In addition, the Monitor shall submit a supplemental report not less
than every four months to the Army until this Agreement has expired. That
supplemental report shall include the items set forth below in subparagraphs
5(a)(i)-(iii) to the extent that they are not fully addressed in the reports
prepared for the U.S. Attorney’s Office :

(i) A description of the training conducted that is required by this Agreement
and the number of persons who attended, including a statement of the percentage
of total employees trained year to date as of the date of the report.

(ii) The total number of hotline calls and other contacts made or referred to
the Monitor involving violations of Government contract laws, rules and
regulations, or other matters that raise questions concerning the Contractor’s
present responsibility. This part of the report shall include:

(1) The means by which any alleged misconduct was reported (e.g., call, letter,
or drop-in visit, electronic means, etc.);

(2) The category of any alleged misconduct (e.g., product substitution,
mischarging, defective pricing, etc.) and a brief descriptive summary thereof;

(3) Whether the alleged misconduct was substantiated, in whole or in part;

(4) Whether disciplinary action was imposed and if so, a description of that
action;

(5) Whether corrective measures other than disciplinary actions were taken and
if so, a description of those actions. Matters pending resolution at the time of
a reporting period shall be included in each subsequent report until final
resolution of the matters are reported;

(iii) Whether any investigations utilizing third party resources have been
initiated and the status of previously reported investigations utilizing third
party resources as required by Section C.4(f) of this Agreement.

 

  b. In addition, the Contractor and the Monitor shall submit a report to the
Army that is postmarked no later than 14 days after the third anniversary date
of the Agreement reviewing the Contractor’s compliance with the Agreement and
the ethics environment within the company. The report shall be reviewed by the
Army and a review of the Contractor’s performance under this Agreement shall be
made to the SDO by the Monitor. This report, at a minimum, shall include a
discussion of the following:

 

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(i) The state of the Contractor’s compliance programs, including progress made
by the company during the term of the Administrative Agreement;

(ii) A discussion of Contractor’s training program and its compliance with this
requirement;

(iii) A summary of actions as Monitor;

(iv) A list of recommendations and/or “lessons learned”; and

(v) A discussion of any other topic relevant to the Agreement.

 

  c. At the conclusion of the Agreement, the Monitor shall prepare a report for
review by the Army SDO. This report shall include information regarding
investigations conducted by the Monitor, information regarding the Contractor’s
implementation of the contractor responsibility program, a summary of hotline
calls reviewed pursuant to this Agreement, and any other topics requested by the
Army relevant to the Contractor’s present responsibility.

D. GENERAL CONDITIONS

1. Unallowable Costs. All unallowable costs, as described in FAR 31.205-47,
incurred for or on behalf of Contractor in response to or in preparation of
Government civil, or administrative actions related to alleged violations
described in the Section A of this Agreement shall be deemed unallowable costs,
direct or indirect, for Government contract purposes. These unallowable amounts
shall be separately accounted for by the Contractor by identification of costs
incurred: a) through accounting records to the extent possible; b) through
memorandum records, including diaries and formal logs, regardless of whether
such records are part of official corporate documentation, where accounting
records are not available; and c) through good faith itemized estimates where no
other reasonable accounting basis is available.

2. Allowable Costs. The costs of all self-governance normally required under FAR
9.104-1 and DFARS 203.7001, including the compliance, or ethics programs,
activities and offices in existence as of the Effective Date and which are
continued by the terms of this Agreement shall be allowable costs to the extent
otherwise permitted by law and regulation.

3. Modifications of This Agreement. Any requirements imposed on Contractor by
this Agreement may be discontinued by the SDO at his sole discretion. Other
modifications to this Agreement may be made only in writing and upon mutual
consent of the parties to this Agreement.

4. Approvals. Where this Agreement requires approval by the Army, or other
action or response by the Army, the Chief, Procurement Fraud Branch or his/her
designee, will normally provide such action. This does not restrict the ability
of the SDO to take such action as he may elect.

 

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Science Applications International Corporation

 

5. Business Relationships with Suspended or Debarred Entities. Contractor shall
not knowingly subcontract or enter into any business relationship in support of
a U.S. Government prime contract with any individual or business entity that is
listed by the General Services Administration (GSA) as debarred, suspended, or
proposed for debarment. In order to implement this provision, the Contractor
shall make reasonable inquiry into the status of any such potential business
partner, to include, at a minimum, review of the GSA’s Excluded Parties List
System1.

6. Public Document. This Agreement is a public document. It, and any
attachments, appendices, addendums and/or modifications, will be posted on the
publicly assessable Army Fraud Fighter’s Website.2

7. Release of Liability. Contractor releases the United States, its
instrumentalities, agents, and employees in their official and personal
capacities, of any and all liability or claims, monetary or equitable, arising
out of the negotiation of, and entry into, this Agreement.

8. Legal Proceedings. Contractor will provide, within 30 days of the Effective
Date of this Agreement, a listing and status of all known ongoing criminal,
civil and administrative investigations and proceedings conducted by any
Government entity with regard to any allegation relating to the Contractor’s
violation of government contracts or regulation.

9. Information Sharing. The Contractor agrees that the Army and/or the Monitor,
at their sole discretion, may disclose to any Government department or agency
any information, testimony, document, record or other materials provided
pursuant to this Agreement. Such disclosures shall be subject to 18 U.S.C. §
1905 and other applicable exemptions to the Freedom of Information Act.

10. Scope of This Agreement – Suspension and Debarment for Independent Cause.
This Agreement in no way restricts the authority, responsibility, or legal duty
of the Army, or any other federal agency to consider and institute suspension or
debarment proceedings against the Contractor based upon information constituting
an independent cause for suspension or debarment concerning events related or
unrelated to the facts and circumstances set out herein, including, but not
restricted to, any substantive allegations of wrongdoing under any past,
present, or future hotline complaint or security program investigations. The
Army or any other federal agency may, in its sole discretion, initiate such
proceedings in accordance with the FAR Subpart 9.4.

 

1  Available at:

http://www.epls.gov/epls/servlet/EPLSSearchMain/1

 

2  Available at:

https://jagcnet.army.mil/JAGCNETPortals/Internet/Portals/AC/affportal.nsf

 

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ADMINISTRATIVE AGREEMENT

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  a. The Army reserves the right to require additional protective measures or
modifications of this Agreement if an independent cause for suspension or
debarment should arise. Failure to institute such proposed measures may
constitute an independent cause for debarment of the Contractor in accordance
with FAR Subpart 9.4.

 

  b. Suspension and/or debarment may be initiated at any time under the same
facts and circumstances underlying this Agreement should further information
become available that indicates such action is necessary to protect the
Government’s interests.

 

  c. Upon conclusive evidence that the Contractor has misrepresented any aspect
of its proffer in connection with this Agreement, the Army may take suspension
or debarment action as appropriate. Any such misrepresentation or material
breach of this Agreement will be regarded as cause for debarment.

11. Survival of This Agreement. This Agreement shall inure to the benefit of,
and be binding upon, the parties and their respective successors and assigns,
unless the new owners request and show good cause why it should not be
applicable to their operations. Bankruptcy proceedings shall not prevent or stay
the enforcement of this Agreement or any debarment proceedings the Army deems to
be appropriate should the parties fail to comply with the terms of this
Agreement, or engage in such other conduct that is a cause for suspension or
debarment.

12. Truth and Accuracy of Submissions. Contractor represents that all written
materials and other information supplied to the Army by its authorized
representatives during the course of discussion with the Army preceding this
Agreement are true and accurate in all material respects, to the best of the
Contractor’s information and belief, false statements are punishable under Title
18, United States Code, Section 1001.

13. Violations of this Agreement. Any material violation of this Agreement that
is not corrected within ten days from the date of receipt of notice from the
Army may constitute an independent cause for debarment. If correction is not
possible within ten days, the Contractor shall present an acceptable plan for
correction within that ten-day period. The Army may, at its sole discretion,
initiate suspension or debarment proceedings in accordance with FAR Subpart 9.4.
Alternatively, in the event of any noncompliance, the Army may in its sole
discretion extend this Agreement for a period equal to the period of
noncompliance. Contractor does not, by this Agreement or otherwise, waive its
right to oppose such action under FAR Subpart 9.4, or any other substantive,
procedural, or due process rights it may have under the Constitution or other
applicable laws or regulations of the United States.

14. Press Releases. The Contractor agrees that it will cooperate in good faith
with the Army regarding any press release related to this Agreement. The
Contractor will not unilaterally release any press release related to this
Agreement without first obtaining Army approval, which the Army agrees to timely
review and not to unreasonably withhold.

 

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15. Agreement. This Agreement, and its attachments, constitute the entire
agreement between the Army and the Contractor, and supersedes all prior
agreements or understandings, oral or written, with respect to the subject
matter of this action.

E. ADMINISTRATION OF AGREEMENT

1. Addresses for Agreement Correspondence. All submissions required by this
Agreement shall be delivered to the following addresses, or such other addresses
as the parties may designate in writing.

If to the Army:

Procurement Fraud Branch

Contract and Fiscal Law Division

U.S. Army Legal Services Agency

ATTN: DAJA-PFB (Trevor B. A. Nelson)

9275 Gunston Road – Suite 2100

Fort Belvoir Virginia 22060-5546

If to the Contractor:

Laura K. Kennedy

Chief Ethics and Compliance Officer

Science Applications International Corporation

Mail Stop T1-14-2

1710 SAIC Drive

McLean, VA 22102

2. Certification of Compliance. Within 120 days of the Effective Date of this
Agreement, Contractor will provide the Army with a certification that all terms
and conditions of this Agreement have been implemented or will be satisfied
within the times specified in this Agreement.

3. Access to Books and Records.

a. During the term of this Agreement, the Army Procurement Fraud Branch (PFB),
the Monitor or any agency or office of the Department of Defense designated by
PFB for a particular inquiry, shall have the right to examine, audit, and
reproduce Contractor’s books, records,

 

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ADMINISTRATIVE AGREEMENT

Science Applications International Corporation

 

documents, and supporting materials related to any report, allegation or
complaint of suspected violation of law or regulation, whether criminal, civil,
administrative, or contractual and whether reported through the hotline program,
or by any other means, and any resulting inquiries or investigations related
thereto. Such hotline reports, inquiries, investigations, and all related books,
records, documents and supporting material are considered by Contractor to be
administrative and managerial and are not investigations, books, records,
documents, material, reports, or investigations protected as attorney
work-product, or by the attorney-client communications privilege or any other
privilege. Nothing herein shall be construed as a waiver by SAIC of the
attorney-client communications privilege. SAIC acknowledges and agrees that it
shall only make claims of attorney-client communications privilege in good
faith, and shall also negotiate any disputes concerning such claims in good
faith.

 

  b. PFB, the Monitor and/or their designees shall have the opportunity to
review the books, records, documents, materials, reports, and investigations
directly related to compliance with this Agreement.

 

  c. PFB, the Monitor and/or their designees shall also have the opportunity to
interview any Contractor employee for the purpose of evaluating: (1) compliance
with the terms of this Agreement; (2) future compliance with federal procurement
policies and regulations; and (3) maintenance of the high level of business
integrity and honesty required of a Government contractor.

 

  d. The interviews and materials described above shall be made available to
PFB, the Monitor and/or their designee(s) at company offices at reasonable
times. Contractor’s obligation under this Agreement with respect to employee
interviews is limited to making its employees available for an interview at
their place of employment during normal business hours. The individual employee
shall have the right to determine whether or not to submit to an interview. To
the extent it is permitted to do so by law, regulation, or policy, the Army
shall protect Contractor’s confidential and proprietary business information
from public disclosure.

 

  e. The materials described above shall be made available at Contractor’s
offices at reasonable times for inspection, audit, or reproduction. Neither PFB,
the Monitor nor their designees shall copy or remove Contractor’s technical or
other proprietary data without Contractor’s permission.

4. Corporate Officer List. Contractor shall provide the Army with a list of its
directors and officers and a copy of its organizational chart, which will be
updated, as changes occur.

5. Administrative Costs. Within ten days of the Effective Date of this
Agreement, Contractor shall deliver a check in the amount of $25,000.00 to the
Army, payable to Treasurer of the United States, in order to compensate the Army
for the cost of negotiating and administering this Agreement, to include costs
associated with Army visits to Contractor and any of its divisions or its
subsidiaries authorized under this Agreement.

 

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Science Applications International Corporation

 

6. Expiration. This Agreement shall expire at midnight not later than five years
after the Effective Date of this Agreement.

7. Governing Law. This Agreement shall be governed by the laws of the United
States with regard to all matters arising under and individuals located within
the United States.

 

/s/ JOHN P. JUMPER

    

/s/ ULDRIC L. FIORE, JR.

JOHN P. JUMPER      ULDRIC L. FIORE, JR.

Chairman, President and

Chief Executive Officer

Science Applications International Corporation

     Army Suspension and Debarment Official

21 August 2012

    

21 August 2012

DATE      DATE

 

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