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California to Cancel Oracle Deal

Posted by michael on from the golden-parachute dept.

ShaunC writes "Back in mid-April, the state of California bought $95M worth of Oracle software, which turned out to include more licenses than the state has employees, at a taxpayer cost of $41M more than necessary. Now, CNet is reporting that the contract is being cancelled. Oracle apparently made a $25K donation to governor Gray Davis' campaign fund after the sale was made, several state officials have been suspended, and a criminal investigation into the deal is already underway."

2 of 200 comments (clear)

  1. What? by delta407 · · Score: 4, Interesting

    How does one, exactly, "undo" a contract for millions of dollars worth of software licenses? Seems like a very sticky legal situtation. Especially since "There are some parts that have already moved forward."

    And how is CA doing this, when Oracle says "they must have been talking to themselves because we didn't know about it"?

  2. Sales Tax - OUCH! by phoenix26x · · Score: 5, Interesting
    $3 million in sales tax? Ouch! Wait a minute... a $95 million dollar deal, and only $3 million in sales tax? Since when did California's sales tax drop from 7.25% to ~3%?

    To be on topic: this deal was fishy on many fronts:
    • More Oracle licenses than state workers
    • Not just a third party (Logicon), but a fourth party (Koch Financial Services) was involved
    • The contract was signed last May, but the software is still not in use. You spent $95 million to sit on software licenses?
    • Finally, the sales tax issue already mentioned
    We can only hope that $95 million dollars worth of state officials are ousted.