DOJ Joins Lawsuit Charging Oracle With Overcharging U.S. Government4:03 PM EST Thu. Jun. 17, 2010
The U.S. Department of Justice is suing Oracle for allegedly overcharging the federal government tens of millions of dollars.
The DOJ has joined a whistleblower lawsuit filed by an Oracle employee in 2007 that charges the software giant with failing to offer federal government agencies the same discounts the company offered its best customers. That suit was recently unsealed, according to an article in The Wall Street Journal.
Oracle has not commented on the allegations.
Under a contract with the General Services Administration, Oracle was required to offer the government the same or better discounts it offered its best commercial customers. The idea behind the GSA “schedule” or price list is that government agencies don’t have to negotiate prices for every acquisition contract.
But the suit charges that Oracle found ways to circumvent the GSA restrictions and offer its best commercial customers deeper discounts. According to a Bloomberg-Businessweek story, Oracle offered very deep discounts to resellers who, in turn, sold to commercial customers at prices below those allowed by the GSA schedules.
Published reports say the whistleblower suit was brought by Paul Frascella, a contract specialist at Oracle, who reportedly no longer works for the company. The suit, filed in the U.S. District Court for the Eastern District of Virginia, charges that Oracle’s practices cost U.S. taxpayers tens of millions of dollars.