Oracle has agreed to cut a check for $199.5 million plus interest to the U.S. General Services Administration for "failing to meet contractual obligations," the U.S. Justice Department announced. For the GSA, this will be the largest False Claims Act settlement it has ever received to date, a record Oracle undoubtedly wishes it wasn't a part of.
According to the DoJ , Oracle entered into a contract in 1998 to sell software licenses and technical support to government agencies though GSA's Multiple Award Schedule. In order to be awarded such a contract, contractors must disclose commercial pricing policies and practices, and of course live up to the contract's terms.
The DoJ says "Oracle knowingly failed to meet its contractual obligations to provide GSA with current, accurate, and complete information about it commercial sales practices, including discounts offered to other custoemrs, and that Oracle knowingly made false statements to GSA about its sales practices and discounts." What it boils down to is Oracle giving its commercial customers bigger discounts than what the GSA received.
"To get access to hundreds of government purchasers, companies participating in the Multiple Award Schedule program must disclose their best prices," said Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia. "Today’s agreement shows that we are committed to protecting taxpayer money by ensuring that these companies live up to their end of the bargain."
Former Oracle employee Paul Fascella will receive $40 million of the settlement money, or about 20 percent. Why? Whistleblower provisions of the False Claims Act allow private citizens to bring lawsuits on behalf of the U.S. and share in any recovery obtained, the DoJ explains.