US accuses Oracle of software contract fraud
The US Justice Department said Thursday it has filed a complaint against US business software giant Oracle
WASHINGTON (AFP) – The US Justice Department said Thursday it has filed a complaint against US business software giant Oracle accusing it of overcharging on a government software contract.
The suit alleges that Oracle Corp. and Oracle America Inc. defrauded the United States on a software contract with the General Services Administration (GSA) that involved hundreds of millions of dollars in sales.
“The contract required Oracle to update GSA when commercial discounts improved and extend the same improved discounts to government customers,” the Justice Department said in a statement.
“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,” it said.
The complaint involves a software contract with the GSA that was in effect from 1998 to 2006. The Justice Department did not say how much the government had been overcharged.
“We take seriously allegations that a government contractor has dealt dishonestly with the United States, US assistant attorney general Tony West said.
“When contractors misrepresent their business practices to the government, taxpayers suffer,” West said.
The suit was originally brought in 2007 as a “whistleblower” action by Paul Frascella, senior director of contract services at Oracle.
The False Claims Act act allows private citizens to file whistleblower suits on behalf of the US government and to share in any damages.
The Justice Department said that if it is proved that a defendant submitted false claims, it is entitled to recover three times the damage that resulted and a penalty of 5,500 dollars to 11,000 dollars per claim.
