Compaq to Pay $4.5 Million to Settle Civil Case

Compaq Computer Corp. agreed to pay $4.5 million to settle civil claims that Digital Equipment Corp., which it acquired in 1998, inflated labor costs on a government contract, the U.S. Justice Department said. Digital had a contract with the Defense Department to install computer network equipment, the Justice Department said. In 1995, after working on the contract for four years, Digital allegedly submitted a report to the government admitting it had inflated labor charges on some work performed in Orlando, Fla., and Frankfurt, Germany. Federal investigators concluded that Digital’s overcharges extended beyond what had been reported by the company, the Justice Department said. Houston-based Compaq’s shares rose $1.19 to close at $29.25 on the New York Stock Exchange.