Oracle will pay more than $199.5 million to settle accusations that it overbilled the federal government over a period of nine years. The settlement ends a lawsuit claiming that Oracle induced the General Services Administration to buy $1.08 billion in software from 1998 to 2006 by falsely promising the same discounts offered to favored commercial customers. The Justice Department joined the whistle-blower lawsuit and was involved in bringing about the settlement.
The settlement is the largest ever obtained by the General Services Administration under the False Claims Act. A former Oracle employee, Paul Frascella, filed the lawsuit in 2007. Tony West, an assistant Attorney General in the Justice Department’s civil division, had this to say in a statement:
Companies that engage in unlawful or fraudulent practices to secure government business undermine the integrity of the procurement process and create an unfair advantage.
The government joined the whistleblower’s case in federal court in Alexandria, Va., and filed its own Complaint last year. It claimed Oracle had given companies discounts of up to 92 percent, but the government’s discounts ranged from 25 to 40 percent. As is the usual “company line,” Oracle denied that it committed any fraud whatsoever. But this wasn’t Oracle’s first rodeo. Oracle paid $98.5 million in 2006 to settle a case over GSA pricing at PeopleSoft.
I have to wonder what it will take for our leaders in Washington to wake up. Over the years, corporations doing business with the government have been allowed to cheat and sometimes pay fines and then continue doing business with the government. If you doubt this, all you have to do is check the record. Does allowing this sort of thing to continue make sense?
Source: New York Times
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