DOJ sues Oracle over GSA contract

DOJ sues Oracle over GSA contract

Summary: The Department of Justice has sued Oracle for defrauding the government out of "hundreds of millions of dollars in sales."


The Department of Justice on Thursday said it has sued Oracle for defrauding the government out of "hundreds of millions of dollars in sales."

The complaint alleges Oracle defrauded the government under a General Services Administration (GSA) software contract from 1998 to 2006.

According to a DOJ statement:

Under the contract, GSA used Oracle’s disclosures about its commercial sales practices to negotiate the minimum discounts for government agencies who bought Oracle software. The contract required Oracle to update GSA when commercial discounts improved and extend the same improved discounts to government customers. The suit contends that Oracle misrepresented its true commercial sales practices, ultimately leading to government customers receiving deals far inferior to those Oracle gave commercial customers.

The lawsuit was originally filed by Paul Frascella, senior director of contract services at Oracle. Frascella was a whistleblower under The False Claims Act.

From the complaint (download PDF):

Defendants' false and fraudulent statements and conduct took several interconnected forms. First, Defendants provided false, incomplete, and inaccurate information to the Government regarding their commercial pricing practices during the negotiation of a Multiple Award Schedule (MAS) contract with GSA in 1997 and 1998. Second, during the performance of the contract Defendants breached their contractual obligations to 1) report to GSA that they had offered higher discounts to commercial customers than had been disclosed to GSA during the contract negotiations, and 2) provide these higher discounts to Government purchasers. Third, Defendants manipulated their commercial sales in order to avoid a contractual obligation to reduce the prices offered to Government agencies consistent with reduced prices given to commercial customers. Finally, in order to obtain modifications to the contract, Defendants reiterated and confirmed false statements that they had made during the contract negotiations and breached their affirmative duty to inform the Government of higher discounts that they were offering to commercial customers.

Topics: Government US, Enterprise Software, Government, Oracle

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  • Larry had to earn his $500M annually somehow

    Those racing yachts aren't cheap you know. <br>While other corporate IT leaders make a difference in the world, this guy goes advetising in his boat.
  • GSA Contracts are a racket

    I worked for two years for a company that sold to the government via GSA (not software). The whole thing is a huge racket since the government basically demands you to give them HUGE discounts on everything for quite literally, no other reason than they're the government. The way they refer to it is "better than your most favored customer" which means, literally, a lower price than you would offer to your best customer; a better discount than your regular discounts, in other words. Whether or not you can make an actual profit, they just want to force people to give them things as cheaply as possible under the guise of promised continued business.

    It's nothing but a scam and a racket.
    • RE: DOJ sues Oracle over GSA contract

      I have worked in government contracting too, and you dont make the best profit from them. But, on the other hand, you dont have to worry about whether the company will still be in business next year. And you can make quite a profit thru GSA, you just have to understand everything. How do you think those huge companies like CACI, SRA, BLackwater, etc make their huge money? They get most of their money from government contracts.
  • bere

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  • The problem is

    The GSA and US Gov is broken when it comes to technology because the money and focus changes every 2 years. I don't see anything that can be done about it with this political climate. Oracle will get a backdoor continued support contract just like nothing happened and there will be business as usual until there is a complete melt down.