LARGO, Fla. — Paradyne Corp. has been suspended from receiving further U.S. government contracts because of federal fraud allegations involving a $115-million computer system for the Social Security Administration, a company official said Monday.
"We received a letter late last week from the Health and Human Services Department suspending us from further federal contracts as a result of the indictment," said James L. Slattery, vice president and general counsel. The letter was dated Dec. 16.
Slattery said that, overall, Paradyne expects an estimated 5% of its revenue to be affected.
The corporation reported $290 million in gross revenue last year.
Currently, about 10% of Paradyne's business involves federal contracts, he said, but half of that is an existing agreement with Social Security that the company believes will remain intact.
"To the best of our belief, it applies to new business, not to existing contracts, unless the agency decides to terminate," Slattery said.