Oracle fined USD 200 million for overcharging US govt

The department said yesterday that Oracle had agreed to pay the fine for failing to meet contractual obligations in the sale of software licenses and technical support to the government's huge General Services Administration under a 1998 contract.

"The (USD 199.5 million) settlement resolves allegations that, in contract negotiations and over the course of the contract's administration, Oracle knowingly failed to meet its
contractual obligations to provide GSA with current, accurate and complete information about its commercial sales practices, including discounts offered to other customers," the Justice Department said in a statement.

It added that Oracle "knowingly made false statements to GSA about its sales practices and discounts."

"Because of these allegedly fraudulent dealings, the United States alleges that it accepted lower discounts and ultimately paid far more than it should have for Oracle products," it said.

GSA inspector general Brian Miller said it was "more important now than ever before to make sure that taxpayer dollars are not wasted on higher prices."

"We will not let contractors victimize the taxpayers by hiding their best prices."
The settlement comes out of a 2007 lawsuit filed by an Oracle employee, Paul Frascella, that the company was defrauding the government on its contracts.

As an officially recognized whistleblower, Frascella will get USD 40 million from the settlement, the Justice Department said. Oracle had no immediate comment.