Oracle overcharged US government, lawsuit alleges
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Having won contracts on the understanding that the government would receive the best possible discounts, Oracle offered commercial customers even better rates, suit claims
The US government has filed a lawsuit against Oracle alleging that the enterprise systems and software vendor overcharged it millions of dollars for a number of contracts.
According to a complaint filed at a district court in the US state of Virginia in April this year, Oracle is accused by US authorities of failing to provide it with full details on the discounts it gives to its most favoured customers.
The contracts were awarded to the company under so-called 'General Services Administration schedules', under which the government expects to receive the highest possible discount offered by the supplier.
In 2007, Oracle employee turned whistleblower Paul Frascella sued the company on behalf of the government, claiming that it had offered other customers even better discounts. Under the US False Claims Act, Frascella would be entitled to a proportion of any damages won by US authorities.
The government has now lent its support to the complaint.
"Oracle knowingly and recklessly employed these techniques to offer commercial customers deeper discounts without offering those deeper discounts to the US government," it reads, adding that the vendor's allegedactions cost taxpayers "tens of millions of dollars".
An Oracle representative was not available to comment.
