US government to sue Oracle for fraud

It has come to light that the US government is suing Larry Ellison’s firm Oracle for overcharging it millions of dollars, and that could have cost US taxpayers tens of millions, it is alleged.

According to documents from the US District Court for the Eastern District of Virginia, the government’s miffed that Oracle has been holding out on discounts. Multiple award contracts are given to vendors like Oracle which lets companies list their products in catalogues that go out to government agencies, skipping over anything annoying like procurement regulations.

The complaint was brought up originally by an old Oracle employee, contract specialist Paul Frascella, back in 2007 – but it has been unsealed by the government. 

The problem is, the contracts are supposed to give discounts which match those of the vendor’s best customers, and it seems like Oracle forgot to knock off a few dollars. Oracle had allegedly been finding ways around the deal to give commercial customers better discounts than it was selling to the government.

The lawsuit claims Oracle had been “selling to a reseller at a deep discount and having the reseller sell the product to the end user at a price below the written maximum allowable discounts”. Perhaps they’d been saving their Nectar Card points.

Martin Mutch, CEO of Rocela, told TechEye the issue goes beyond the Oracle case:

“The US Government’s tough tone makes a strong political statement in a time when they need to be seen as cash-conscious. But actually, it’s something of a red herring when you bear in mind that the real savings are more likely to come from careful software management and doing more with the licenses they already have.  

“Too often, the public sector is happy to lay the blame on scapegoats like this rather than concentrating their efforts towards the careful management of areas in which they can reap the real rewards.

“In this instance, to put the blame on Oracle and resellers of Oracle is to not see the forest for the trees.”