US Sues Oracle Over Alleged Overcharging

CWmike writes "Oracle is being sued by the US government for allegedly overcharging it by millions of dollars, according to documents on file in US District Court for the Eastern District of Virginia. The US General Services Administration's Schedules are supposed to provide discounts that are as good as or better than that given to the vendor's most favored customers, the complaint states. However, Oracle employee Paul Frascella, who joins the government's action, learned that Oracle was finding ways around the GSA restrictions in order to give commercial customers even deeper discounts, according to the complaints. In one alleged practice Oracle was said to be '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,' the complaint states. Overall, Oracle's actions cost US taxpayers 'tens of millions of dollars,' it adds."

Comments

Wait a minute

[0racle]

They are suing Oracle because Oracle gave someone else a better price?

Re:Wait a minute

[Anonymous Coward]

No kidding. How much to GSA limits cost the end user, often taxpayers.

Re:Wait a minute

[ceejayoz]

They are suing Oracle because Oracle gave someone else a better price?

They are suing Oracle because Oracle gave someone else a better price despite being contractually bound not to.

Don't like it? Don't agree to it.

Re:Wait a minute

[Anonymous Coward]

American "free market" economics for the win!

Re:Wait a minute

[Anonymous Coward]

"The whole idea of GSA schedule discounts is that the government, in the aggregate, is likely to be one of the largest purchasers of a company's products, and is entitled to take advantage of the discounts that its large buying power should command," it adds.

So.... if you get together and make cozy discounts with your buds you cannot treat the taxpayers like a red-headed stepchild. (Now they get to hit Larry on the nose with a rolled up newspaper while shouting "Bad Larry!")

Re:Wait a minute

[CraftyJack]

Yes. One of the stipulations of having a GSA schedule contract is that the government gets Most Favored Customer pricing. Them's the rules, and you break them at your peril.

Re:Wait a minute

[nairnr]

Other way around... They were giving better discounts to other clients, without offering the Govt the same deal. They don't want others to pay more, but as a preferred customer they should be getting equivalent discounts.

Re:Wait a minute

[blair1q]

Yes.

There's a law called the "Truth in Negotiations Act", "TINA" for short, which essentially states that when bidding on a government contract, if you can do the job for less than you bid it for you have broken the law. The bid discloses estimated profits, and the government goes along with varying rates of profit, but if your profit is bigger than you disclose, and it's because you put in a cost item that your company (not just the department doing the bidding, to prevent firewalling to induce uncertainty) knew it could do cheaper (not that it was doing it cheaper), then you are deemed to have ripped off the government knowingly.

I'd love to see a similar law passed for consumer transactions.

Re:Wait a minute

[BlueBoxSW.com]

They demanded, and Oracle agreed. On paper.

Re:Wait a minute

[commodore64_love]

This is why most companies don't like dealing with the government - too many restrictions. Oracle wanted to give a great deal to attract a new customer(s), most probably at a loss (as is common practice), but they didn't want to share that same deal with the government since it would end-up costing them millions in losses.

In the future Oracle might decide government sales aren't worth it, and refuse future GSA deals.

Re:Wait a minute

[FrankSchwab]

I, as a customer, can be as demanding as I want.

I expect my government to be very demanding of the suppliers it uses.

The supplier is free to choose not to do business with a demanding customer.

Is it so hard to understand?

Re:Wait a minute

[ground.zero.612]

Who says the US government is a preferred customer? They just demand to be treated as a preferred customer.

The reason why they think they have the right to make such demands is beyond me though.

Who says they aren't? Oh, just you.

"You know the law: Bust a Deal; Face the Wheel."

Re:Wait a minute

[Anonymous Coward]

"This is why most companies don't like dealing with the government"

[citation needed]

Re:Wait a minute

[OpenGLFan]

I'd love to see a similar law passed for consumer transactions.

I can't see why this isn't the law for medical care. If a procedure costs $50 to do, and you charge $75 for insurance company X or $400 for an uninsured person, then you should go to jail.

Re:Wait a minute

[Anonymous Coward]

They charged me quite a bit for downloading Java. Said I was part of an "elite pilot program".

Re:Wait a minute

[Anonymous Coward]

If you were one of the largest buyers, if not the largest buyer, from any given corporation, then you would hopefully demand the exact same thing.

Oracle is a terrible company and I hope they get fined dramatically.

Re:Wait a minute

[mangu]

when bidding on a government contract, if you can do the job for less than you bid it for you have broken the law

WTF? The guiding principle in government contracts should be to get the lowest practical price, not the lowest theoretical price. Otherwise the result would be that many companies will not care to bid for the government.

My first job was in detailing cost estimates for a company that custom built heavy mechanical equipment. One rule there was that for any government job the cost would be higher. There's so much paperwork involved in government jobs that it's impossible to do it at the same price you charge private companies.

Re:Wait a minute

[fuzzyfuzzyfungus]

Don't you understand? Here is how it works:

Because the government is intrinsically evil, anything it does that a corporation doesn't like is communism. Therefore, their deal with Oracle couldn't possibly be legit, even if Oracle signed.

However, because the government is intrinsically wasteful, any example of it getting a poor deal is just further evidence of how evil and wasteful it is...

You can see how this, completely internally consistent, line of reasoning leads to governance that is both inefficient and grossly expensive. Pity most of the people who articulate it aren't joking...

Re:Wait a minute

[Anonymous Coward]

I'd love to see a similar law passed for consumer transactions.

It should be illegal to sell something for more than the lowest price anywhere. Fuck that, if you don't like the price, it must be "unfair" and therefore illegal, discrimination against not rich people.

Re:Wait a minute

[EdelFactor19]

where's my mod points when i need them? probably the most timely 'insightful' post i've ever read on /. in 6+ years

Re:Wait a minute

[claytonjr]

In order to get on the GSA sched's, you have to provide a price for your product, to the gov't that is considered fair. Otherwise, this happens.

Re:Wait a minute

[georgewilliamherbert]

[citation needed]

One of my parents was a government contracts attorney, who did it professionally and taught it part time at local law schools.

Nobody likes the US Government as a customer. It's by far the most annoying customer for any tech company. The contracts will be 2-10x as hard to administer, 2-10x as much overhead as commercial contracts, and you get sued a lot more (usually over the proposals/bidding, but it's still a suit).

Re:Wait a minute

[EdelFactor19]

ok so this is the second most insightful post in years...

preferred customer status is bullshit... everyone should be paying the same price for the same product (at the same time)....
treat it like the equity markets handle things.

that said, they could also argue they can't do the job for the government for a better price. They are only able to offer some small company a break because they can afford to eat that loss in exchange for service contracts and future sales... the government case is the future sale.

doesn't this mean the government shouldn't be able to 'buy' or have a GSA with anyone who at any point in times gives anything away for free?

Re:Wait a minute

[iceborer]

WTF? The guiding principle in government contracts should be to get the lowest practical price, not the lowest theoretical price. Otherwise the result would be that many companies will not care to bid for the government.

The guiding principle is that the government get the best combination of price, schedule, and quality. There is no theory in the TINA pricing. The company is required to say "our costs will be X and our profit Y to deliver Z to you when you want it." The government "allows" only a certain amount of profit on a contract. If you make more, perhaps a component's cost goes down hugely in the market, you are required to go back to the gov't and allow them a rebate on their cost. If you make more because you fudged the numbers, you get barred from federal contracts and may also end up behind bars. It is for these exact reasons that many companies don't do business with the government. I should also mention (having some experience in the process) that the companies still manage to hide an awful lot of "excess profit" and I don't feel the need to cry for them.

My first job was in detailing cost estimates for a company that custom built heavy mechanical equipment. One rule there was that for any government job the cost would be higher. There's so much paperwork involved in government jobs that it's impossible to do it at the same price you charge private companies.

Don't have a GSA Schedule Contract, then. Trust me, those vendors who have them are happy to have one, but not all vendors/products work well with them. I think you're confusing contracting with the government in general with having a Most Favored Customer agreement with them. Not all (not most?) government contracts have such a clause.

Re:Wait a minute

[Gilmoure]

Somalia wouldn't put up with this. They'd board Oracle's ships and hold them ransom for... one meelion dollars!

Re:Wait a minute

[Anonymous Coward]

The reason why they think they have the right to make such demands is beyond me though.

Clearly you don't understand enough about this topic to be intelligently commenting. But then, this is /. so go forth and multiply, young man.

Re:Wait a minute

[shutdown -p now]

Then why are all the companies which complain still taking those govt contracts?

Re:Wait a minute

[budgenator]

Insurance companies typically have a contractual agreement to pay the healthcare provider a percentage of the areas "Usual And Customary" fees. The insurance determines what the UAC should be by averaging the areas billed fees, so if I'm healthcare provider and I want to receive $80.00 for a procedure, I charge $100.00 for it to get the $80.00 paid to me. The magic word "accepted" mean the healthcare provider has to eat the $20.00 as a write-off, with out it the patient pays the $20.00. If your a cash patient ask for a discount, you'll be surprised how many times the provider will extend a 20% courtesy to you.

Re:Wait a minute

[Anonymous Coward]

The reason the uninsured is charged $400 is called transfer pricing. The insurance company negotiates a rate below the actual cost of the item as a way of controlling its costs, and the provider then charges much higher amounts to non-preferred networks to recoup the loss and make it's profit. Not that the $50 isn't rock bottom below cost loss leader like retail, but typically there are so many more insured that the transfer price is incredibly high for the providers trying to make a certain margin.

The only state I can name that this is not how it works is MD, which actually regulates a maximum price for each procedure based on cost surveys and forces providers and insurance companies to compete on internal cost controls and customer service.

Re:Wait a minute

[mangu]

Don't have a GSA Schedule Contract, then. Trust me, those vendors who have them are happy to have one, but not all vendors/products work well with them.

Of course they are. Who wouldn't be happy to sell a toilet seat for $500?

But if they were as honest as my former employer they would refrain from getting those contracts instead of doing whatever they do to sell stuff to the government. The fact is that this "Truth In Negotiations Act" is anything but. The way to circumvent it is to create new products, that are nearly identical to civilian products, but are sold only to the government. That way you can price it anyway you want.

Your taxpayer dollars would stretch much longer if the government simply deregulated everything and trust the market. Instead of forcing companies to hire a bunch of lawyers to read all those regulations and devise novel ways to falsify the truth, the government should try to get as many bidders as possible.

Re:Wait a minute

[Bigjeff5]

Who says the US government is a preferred customer?

My money is on the contract Oracle negotiated that said the US Government would get discounts that were as good or better than any other Oracle customer's discount.

This isn't the gov strong arming Oracle, this is Oracle signing a contract and then looking for every way they could to avoid doing what they agreed to do.

Generally we call that a "breech of contract", and there are serious legal ramifications whether the US government is involved in the contract or not.

Or, to put it more simply, fucking read you dumbass.

Re:Wait a minute

[Atomic Fro]

The problem is you have it backwards. If a procedure costs $50 to do, they want to charge the uninsured person $75 and insurance company X $400. But the insurance company cartels have successfully lobbied to make different pricing illegal. So now, everyone pays $400.

My experience is mostly in pharmacy, and in that business, your example is sorta true. Using your price example, a drug costs a pharmacy $50. The pharmacy wants to charge the uninsured person $75. If you are on welfare, the pharmacy only gets $15. So in an attempt to make some sort of profit despite the massive losses from all the people on welfare, the pharmacy charges insurance companies $400.

Again, the insurance cartels have made different pricing illegal at the federal level. So, for that same $50 medication, the pharmacy has to charge the uninsured person $400, and the insurance companies $400, and they only get $15 from welfare.

Here is where the corruption comes in. That same $50 medication only costs $5 to manufacture. In order for the $50 medication to be placed on Insurance Company X's formulary, the company making the medication has to give them rebates. After the rebates, how much of the $400 is Insurance Company X really out? $15. But wait, isn't that your copay? Funny how that works out.

Re:Wait a minute

[Anpheus]

The problem with the $500 toilet seat argument is that occasionally a contract over-runs cost, and they approach the government and say, "We ran over cost by $X, and behind schedule by Y days." The government and the supplier have to amend the contract's line items. But let's say your contract is to remodel an entire facility, including toilet seats. Any one component of that whole contract could have cost a $49,000 over-run. Maybe the whole contract was over $1,000,000 and $49,000 ain't that much (respectively), but they put the way it was itemized was a bit strange and they included a very specific item with a bunch of general or complex items. Like, they put in line items for the cost to remodel the entire cafeteria as "dining facility, $100,000", but they itemized the bathroom more specifically, with items like "toilet seat: $10" and "sink: $150" or whatever. And due to this weird use of line items, there are only 100 line items for the whole contract.

The government will ask the supplier for their total expenses in labor and items, which they have to provide per the contract, and then the government will apply the $490 over-run to every item on the contract.

Voila: $500 toilet set, $640 sink, and yet the cost of the whole dining facility only increased by $490 as well, or .49%.

Snopes has explained this in detail in the past. The government applies a straight increase to every item on the contract, because the many-to-many relationship between a supplier's costs and the items on a contract make it difficult or impossible to assign proportional increases. Result: $100 ballpoint pens, $500 hammers, and $1000 toilet seats. Yet on the same contract, vastly more expensive items were increased by the same amount.

Re:Wait a minute

[hairyfeet]

Bingo! What we have here is a standard contract, where Company A (Oracle) gets contracts that are worth serious money and in return they agree to give their best price to the company (ultimately the US taxpayer) and instead decided to do an "end run" around the contract by using third parties as middlemen so they could artificially keep the price higher for the US than for other customers.

I personally hope they not only get busted but are barred from further contracts. Maybe they should go FLOSS? With the amount of money these contracts are worth they could afford to simply buy out the developers of a FLOSS RDBMS solution and have it built to spec. Upside is then We, The People could own the code and it could be used in other depts for minimal $$$.

Re:Wait a minute

[Anonymous Coward]

How about you just rename that 'volume customer' then.

Re:Wait a minute

[blantonl]

I'd be willing bet big money that Oracle isn't the first. Being a former sales engineer in the enterprise software space, there are some big discounts that can be implemented for certain deals that can make or break a quarter.

Interesting how an Oracle employee is a whistleblower in this case.

Re:Wait a minute

[mangu]

occasionally a contract over-runs cost, and they approach the government and say, "We ran over cost by $X, and behind schedule by Y days."

I've been there, done that, and that's not the way it goes.

When a government contract is over cost and behind schedule it's because somenone found a regulation no one had realized it existed.

Something like "this should be painted in Munsell 55 grey". The part had been painted in exactly that color, but the paint supplier didn't have the paperwork proving that his paint was exactly that color, so we had to scrape the paint off and repaint it with paint from another supplier that had the same color, plus the required paperwork.

I'm not making this up, it actually happened.

Re:Wait a minute

[Rakishi]

I'd love to see a similar law passed for consumer transactions.

Apparently you don't understand capitalism, how sad. Ignoring various other problems, seriously I could go on for pages, you'd kill investment in any remotely risky company. Congratulations. Have fun learning Chinese in 20 years. High risk requires high profits in whatever investment actually succeeds.

Let's say a group of individuals invests in into twenty new cutting edge small companies with revolutionary products. Let's say it's startups. Of those twenty, nineteen fail miserably and they lose all investment. One succeeds. The profits for that one are, let's say, 100%. Nonetheless the product is so nifty people pay the premium. You might say the profit is excessive however it's there to make up for the high risk. The investors may only make a 10% return on investment overall due to the other 19 companies failing.

Re:Wait a minute

[blantonl]

preferred customer status is bullshit... everyone should be paying the same price for the same product (at the same time)....

Right, just like when you buy a car?

There is a reason why software companies employ armies of salesmen - their principle job to sell their widget for as much money as they can get for it. A salesman does not transact a product - he sells it just like a stock is traded on an exchange. Supply, demand, emotion all apply for sales transactions. You might find a better price elsewhere. You might find a better "stock" elsewhere. But most likely you've already got your product in mind. That leads me to this comment...

treat it like the equity markets handle things.

Ahh.. that's how software sales works. Supply, Demand, Emotion, and finally, negotiation. I guarantee that if you walk up to an Oracle salesman and demand to have his product, you will pay full price, plus 10%. That is why most large software purchases go through a huge dance of evaluations, bake-offs, and other meaningless activities. For the most part, the technical decisions were made long ago - it's the leverage building for the buyer that is needed for these transactions.

Re:Wait a minute

[geekoid]

You can make the same demands for any vendor you want. The vendor doesn't have to accept them and can take their business elsewhere.

The government spends a lot of money, they can make demands like that. Just like any large organization
can.

Re:Wait a minute

[Anonymous Coward]

I work for a government agency. Across the government everything is used. I personally have seen Oracle, Microsoft SQL, MySQL, and PostgreSQL. I have also seen PHP, C#, Java, on Apache and IIS (and even Netscape's old webserver, bleh). So just about everything is used, depends on where you are at. Personally these days I have been liking Oracle though I traditionally came from MySQL. I really need to do some research and see if there is a good open source answer to stuff like PL/SQL (I like how it is extremely strict, important for database-side stuff IMHO).

Re:Wait a minute

[Anonymous Coward]

Then why are all the companies which complain still taking those govt contracts?

They're obviously doing it for the greater good.

Re:Wait a minute

[skids]

Two words: cash cow.

That's all the public sector is in the private sector's eyes.

Re:Wait a minute

[exomondo]

mod up!

Re:Wait a minute

[Runaway1956]

Loss leaders are unethical anyway. Even at Walmart. Sure, it's accepted practice these days, but what do loss leaders really do? They are tremendous aids in running the competition out of business. Walmart has lost suits to pharmacies all over the country - but they haven't been penalized enough to end the practice.

If Oracle is using loss leaders to attract business, be assured that they are unfairly undercutting the competition.

Re:Wait a minute

[maitas]

According to Safra Catz they did this out of stupidity ""Integrity matters... Don't be afraid to look stupid over integrity."

http://www.examiner.com/x-43195-SF-Technology-Examiner~y2010m5d11-Oracle-President-Safra-Catz-shares-wisdom-at-PBWC-Annual-Conference

Re:Wait a minute

[guruevi]

That however doesn't seem to apply for most companies though. Dell's systems are more expensive for government than list price for home users, Microsoft licensing is more expensive compared to enterprise customers. All of it is just a difference in the way they package the products and they simply won't offer the cheaper option to government customers and vice versa. Oracle just made a mistake in packaging their products for government customers.

And it's understandable that companies do this. If you sell something to government, you have to invest in lobbyist, sales people and bidding then when you do actually sell something you have to wait months if not years for payment being sent from office to office, waiting for signatures, getting lost, ... much like how Vogon's are described.

Re:Wait a minute

[Anonymous Coward]

You stupid retard, you replied to the wrong person.

Re:Wait a minute

[ls671]

Sorry, I just can't believe Oracle would overcharge anybody ;-)

Re:Wait a minute

[Anonymous Coward]

But then, this is /. so go forth and multiply, young man.

But since this is /., he'll actually just stay in his mother's basement and fantasize about going forth and^W^W^W multiplying...

Re:Wait a minute

[guyminuslife]

Generally we call that a "breech of contract"

Impromptu feghoot:

I found a pair of pants in a store that were very comfortable and stylish, and immediately appealed to my tastes. I took them to the front counter, where the shop owner was checking out the customers, and he said, "Okay, I'll sell you these pants very cheap, but you must agree to never, ever wear them on a Sunday." Without even really thinking about it, I signed the form, and took the pants home.

Well, I often wore them throughout the week, and I got a lot of compliments about the pants. They quickly became a staple of my wardrobe. But I hadn't worn them on a Sunday yet---so one day, figuring the old shopkeeper wasn't really going to hold me to it if I put the damn things on any day of the week I pleased, I pulled them out of my closet and got into them.

Just as soon as I had zipped up the zipper, suddenly, the pants started getting tighter. At first it was just uncomfortable, and I wondered if they had shrunk in the wash. But then it became painful, and I could barely move or breathe. My life flashed before my eyes. I felt like I was having the life literally squeezed out of me.

I stumbled over to the phone and called the store---which was fortunately open on Sundays. The owner picked up the phone. "Hello," he said.

"Pants...too...tight...." I wheezed.

"You're going to have to cut them off," he said flatly. "Don't expect me to help. It's Sunday."

"Why...are...pants...crushing....me."

"Well, you read the deal, didn't you? You're wearing them on a Sunday. It's a Breech of Contract."

Ba-dum-cha!

Re:Wait a minute

[MidnightBrewer]

Actually, most companies like dealing with the government just fine, because they combine just the right balance of gullibility and deep pockets. I remember when a university-affiliated production studio I worked at spent $42,000 on a RealMedia distance-learning system from Dell that involved about $10,000 in equipment, but they had to pay that price because we were locked into a contract with them.

Re:Wait a minute

[nahdude812]

My company sells a healthcare related product (my opinions are my own and not the company's, yadda yadda). We have a similar obligation to the government, we have agreed to give them the best possible price, and we may never sell it for less than that amount without discounting the price sold to the government as well.

A data entry error a few years ago led to a major distributor getting a trivially better price (somthing like $0.01) than the government. Two different promotions overlapped with each other because of a data entry error (a pricing promo ran a month longer than it was supposed to, and overlapped for a few weeks with a later promo). This ended up being a huge deal, the penalties we had to pay were phenomenal. Well more than the entire profit we had made on that product within two years.

As a result we wrote custom pricing validation for our SAP system which always checks the CDC's price whenever price promotions, quantity discounts, contract prices, or multi-product-discount data are entered, and won't let the user save the new data until either the CDC has had a better price entered for it as well.

Because of the way SAP pricing works (and because we want to run pricing the same way it runs when you place an order rather than trying to optimize it by trying to identify duplicate work and skip it), it basically has to price all affected products individually and in combination with each other at each discount tier for each day in the effective date range of the pricing records. It's very slow. But it's better to pay someone to watch a "Now checking pricing for Dec 12... Now checking pricing for Dec 13..." message scroll slowly by than to risk another two years worth of profit on a product.

Re:Wait a minute

[mcgrew]

If you live in the US or are a citizen, that's YOUR money Oracle is stealing and you're defending Oracle?

Re:Wait a minute

[Tekfactory]

Because if they say no, then ALL government agencies are not only free to choose any other database company on the GSA schedule, it'll become harder for them to buy Oracle at any price if its not on the Schedule.

We've already established the government market for Oracle or something like it is more than tens of millions of dollars.

Just to demonstrate I priced a monster server a few years back, on the vendor's website where I specced it out it cost $40k, using our Blanket Purchase Agreement with the same vendor, the same machine was only $28k.

Sometimes we paid more than we needed to for Desktops though as we were still buying the models on the contract when newer models were available for the same rate on their website. That mostly came as you replaced 1 or 2 machines out of cycle in the middle of the contract, not replacing 1/3rd of your desktops while the ink on the contract is still drying.

Re:Wait a minute

[truesaer]

You can price it any way you want, subject to competition from other companies. At my last job the government was a large customer of ours, and they got a price less than a third of what we were charing almost anyone else. The reason being most private companies were buying a tenth the quantity and there are a couple other companies that will manufacture a similar product so we had to cut our margin to the bone.

I'm sure the government wastes a lot of money, but I assure you that in many cases their purchasing methods get them AMAZING deals.

Re:Wait a minute

[mcgrew]

Did you actually read the books, or just watch the TV series? because if you were a reader you'd know that it isn't Vogon's, its Vogons. And yes, I know that the book was an adaptation of the radio play, but that's not important.

I wish more people would read more books. Too much internet gives you some bad habits.

Re:Wait a minute

[Anonymous Coward]

Generally we call that a "breech of contract"

It's 'BREACH of contract'.

Or, to put it more simply, fucking read you dumbass.

Fucking learn how to spell and punctuate, you dumbass.

Re:Wait a minute

[toriver]

... and high risk means having the balls to go bust when you fail instead of running to Mommy State for a corporate handout, like the financial industries. Or lobbying them for laws to protect your business model like the entertainment industries.

But it also means that someone else gets to do what you do but cheaper and out-compete you later on - except that is a feature the free market which is the antithesis to capitalism and profit because profits is a margin that you need to "justify" to your customer by making them choose you rather than a at-cost competitor.

I like free market better than capitalism.

Re:Wait a minute

[mandelbr0t]

Or for legal services.

Re:Wait a minute

[Rakishi]

You apparently are insane and have no knowledge of economics much less what capitalism and free market actually mean (hint: they're not mutually exclusive and pretty much tied together). Also, another hint, the United States is not a purely capitalistic society. So I don't see much reason to talk to you.

I will leave you with one question, how did that other competing firm will acquire the initial money to enter the market? And why would anyone provide it to them?

Re:Wait a minute

[MozeeToby]

because the many-to-many relationship between a supplier's costs and the items on a contract make it difficult or impossible to assign proportional increases.

This is the part I don't follow. Using your example the overrun was 4.9%, why not just multiply every line item by 1.049 and be done with it. The dining facility would have a line item cost of $104,900, the toilet seat $10.49, a ballpoint pen $1.05. Prices look sane and the numbers come out fine (+/- a few pennies due to rounding).

Re:Wait a minute

[atomic-penguin]

Breech is a pun, dumbass!

Re:Wait a minute

[toriver]

The ideal free market is a theoretical construct where an infinite number of customers have perfect knowledge about the products of an infinite number of suppliers. In this though-scenario, all goods and services must be sold at cost simply because a profit margin is a margin a competitor can undercut.

Profit is therefore a sign of an imperfect market. Which basically is what we must have, since the perfect free market is merely a theoretical construct. Suppliers and customers are finite and information is imperfect.

In addition, interactions are constrained by laws, but the significant effect of these lead to a meta-game outside the normal market where actors try and influence lawgivers to create laws benefiting their role either as supplier or consumer, even though the laws are detrimental to other actors, as if economy is a zero-sum game. (Which Adam Smith showed it is not, back in 1776).

Case study: After pressure from American steel makers, G.W. Bush enacted tariffs on European steel. This meant American steel producers could sell their goods at higher prices to American steel consumers, leading to a net increase in threat to American jobs since the latter industries employed more people than the former, and now faced an increase in manufacturing costs.

Initial money traditionally came from saving up "profits" (e.g. disposable income from labor) which were then invested; as money accumulated some started to give money to others to start a business, commonly because they saw it as benefiting society at large - or themselves for that matter. Direct profits in lending (interest) was earlier banned as "usury", though that is no longer as much an issue.

What wrecked the economy was when the banks supplying a "common" cache of investable money to the real economy (goods and services) started to merge with the "false" economy of number tricking, "betting" (insurance, futures trading etc.), speculation (e.g. currencies) and balloons (stock trading where the prices rise in a race between people who try and desperately convince others to buy them for more than they paid, until it stops when people relaize the prices are not backed by any real value and the balloon pops).

If the banks had stuck to the real economy instead of joining the fantasy-league of the false economy, then that little world could have crashed with no effect on the rest of us. But no...

Re:Wait a minute

[Anonymous Coward]

Why on earth would the US state get a price quaranteed to be the lowest given to any customer?

Each customer is different, a customer pays in many different ways: in cash, by helping sell to another customer, by committing to buying more later, etc ...

It is so weird to see the US state act in a way so far from free trade!

Re:Wait a minute

[Anpheus]

Because the government realizes that each item didn't proportionally increase in price, etc, etc. It's just a dumb accounting thing. That's all. Accounting for large projects like this is always prone to issue, because of things like I said where, well, how finely grained do you sell the items and labor? Do you go down to the toilet seat level, or do you go up to the jet engine (or whole plane) level?

Re:Wait a minute

[EdelFactor19]

Apparently you have no idea how the stock market works. There's this glorious thing called REG-NMS not to mention liquidity and publication of quotes. I can see what the best offers to buy and sell X are market wide. I can then place a market order to get the best execution price at that moment, or I can place a limit order.
    I can quickly look and see that either you are indeed offering or matching the best offer or that you are full of it and take my business elsewhere.
    In either scenario it is pure supply and demand. This whole dance-off / negotiation thing you are infatuated with is non-existent. Not to mention it is wholly an attempt to subvert supply and demand by masking with emotion. In other words the entire BS part of the whole thing is gone. We have a transparent open market. I've never heard of negotiation on the floor of the exchange. That or some of the fastest dancers ever are working there to deal with high frequency traders. LOL do they do the microsecond mambo?

"That is why most large software purchases go through a huge dance of evaluations, bake-offs, and other meaningless activities."

Yeah you see this is the whole reason nothing gets done efficiently, quickly, or effectively anymore. Billions of dollars (in both time and money) are wasted every year on efforts that produce no value in and of themselves. (Yes I'm making that number up but it seems reasonable enough). Sounds a lot like corporate back scratching, and the whole lobbyist game.

Back to my point... If our financial markets worked anything like that do you honestly think they would still exist?
And we wonder why it takes so long for anything to actually get done and why things are never on budget lol.

Don't sue, get EVEN !!

[Anonymous Coward]

Get EVEN !!

Good!

[timeOday]

Glad to see the govt. fighting to get more for our tax dollars, not just sitting there getting bilked by dishonest vendors.

Re:Good!

[Anonymous Coward]

you know you can sue on behalf of the US government (technically tax payer) if you see fraud, waste, or abuse. It's called a qui tam action. So if you're upset the gov ain't going after fraudsters; you do it. The government will get an option to join in but doesn't have to.

Re:Good!

[rsborg]

Yeah cause getting back a few million is definitely going to make a huge dent in that multi-trillion dollar debt. Hopefully you aren't thinking any of these savings are going to come back to you or any of us, either, as it'll just quickly get earmarked for pork projects.

And what makes you think this wasn't pork to begin with?

I agree with the GP commenter... you will only save money a few million at a time this way, but put a few of these kinds of efforts together and you will see a big change. Give credit where due, instead of whining about how it's not good enough. Here's a hint it'll never be good enough, so take what you can get.

Re:Good!

[Lunix Nutcase]

you will only save money a few million at a time this way, but put a few of these kinds of efforts together and you will see a big change.

Yeah, we're going to see some real big change. How cute and naive. Any such purported "savings" will just be funneled to other pork projects. Come back to me when you see something like the government cutting back on something and saving 10 billion dollars.

Give credit where due, instead of whining about how it's not good enough. Here's a hint it'll never be good enough, so take what you can get.

I'm sorry, but I'm never going to jizz in my pants over a couple million dollars when the government is spending upwards of 5+ billion dollars a day.

Re:Good!

[wholestrawpenny]

They'll just spend any savings on some other bologna project. So what's the difference...

Re:Good!

[clarkkent09]

I hope you are being sarcastic in your praise of the government. Yes of course they should fight to get more out of our tax dollars but we are talking about a few million here, when the federal government

- loses $25 billion (Yep, lost as in nobody knows what happened to it. Yep, $25 billion)- google "Unreconciled Transactions Affecting the Change in Net Position" section in the Treasury Dept financial report
- wastes $60 billion annually on Medicare fraud. Just wait until Obamacare kicks in.
- spends at least $90 billion on programs that are "ineffective, marginally adequate, or operating under a flawed purpose" (partial audit by the white house)

..etc etc this is just the first 3 examples I found on google with easily linkable references. Here's some more.

Even assuming that ALL of the hundreds of government agencies and spending programs are necessary, there are 100s of billions wasted annually just through inefficiency and carelessness with which those programs are managed.

Re:Good!

[commodore64_love]

I agree with you 100%, but per usual Congress already spent the "millions saved" from this lawsuit. They just passed another healthcare bill costing 50 billion dollars to test and certify doctors as "doctors", and the Congressional Budget Office announced an "ooops" in their calculations. The deficit-neutral Pelosicare bill will now cost $110 billion more, per year, than originally projected. (In other words it won't save money as advertised; it will drive us deeper into debt.)

Maybe we can sue a few more Oracles to offset these extra expenditures. 160 billion / 100 million == 1600 companies need to be sued.

Yeah. That won't work. I'm glad I run my family budget better than Congress has run the last..... oh, 100 years of government budget.

Re:Good!

[Anonymous Coward]

Even assuming that ALL of the hundreds of government agencies and spending programs are necessary, there are 100s of billions wasted annually just through inefficiency and carelessness with which those programs are managed.

That's for sure. Like that approximately $1 trillion we mislaid in Iraq. Darn the luck.

Re:Good!

[COMON$]

LOL, this is a RARE occurance. When I worked for the state there was an agency DAS that would use the collective buying power of the state to supposedly negotiate contracts for lower prices. The problem? They would not renegotiate so when cat-5 cables would drop in price, the vendor would be obligated to sell it for the price when it was negotiated. I was forced to pay $15 for a 10 ft cable in 2006 from CDWG. How do they get away with it? They show a cost savings for every purchase because at the time they negotiated the prices, everything was $20 a cable. So every time my agency would order a cable in 2006 DAS would show a $5 savings.The agency had lost all purpose and had turned into a huge money pit, they were more interested in pulling a profit than serving the interests of the agencies they were to serve. Yes they are not allowed to pull a profit, but nonetheless they did, they were caught and magically no agency was billed for mainframe time for 6 months or so...

I am glad that there are some places where people are looking out for these kinds of things in the gov't though, it gives some bright hope that things can be done properly rather than as lazily as humanly possible.

Re:Good!

[TheNucleon]

You had interesting information in your post, but when I saw the word "Obamacare", my Glenn Beck automated filter kicked in. Try to keep the useless talking points phrases out of it next time, and perhaps your information won't be lost in the noise.

Re:Good!

[clarkkent09]

I don't watch Glenn Beck. I didn't realize Obamacare is a dirty word now, that's what a lot of people call it:

http://www.cbsnews.com/8301-503544_162-20007679-503544.html
http://www.time.com/time/magazine/article/0,9171,1914973,00.html
http://online.wsj.com/article/SB124208383695408513.html ...

Re:Good!

[TheNucleon]

Perhaps not a dirty word, but I've never heard it used in a positive or respectful fashion. Perhaps that's just my own bias from observation, I stand corrected. In any event, I did appreciate the information in your post...

Re:Good!

[timeOday]

- loses $25 billion (Yep, lost as in nobody knows what happened to it. Yep, $25 billion)- google "Unreconciled Transactions Affecting the Change in Net Position" section in the Treasury Dept financial report

That means the accounting did not add up, it probably does not mean that somebody got away with $25 billion in diamonds or something.

- wastes $60 billion annually on Medicare fraud. Just wait until Obamacare kicks in.

How much do private insurers lose to insurance fraud?

- spends at least $90 billion on programs that are "ineffective, marginally adequate, or operating under a flawed purpose" (partial audit by the white house)

Well, that's the hard part, isn't it. Getting everybody to agree what is pork.

Look, I'm not saying government is perfect, but right now I do think there's an unwarranted streak of paranoia that most tax money goes straight into a bonfire, which isn't true.

Re:Good!

[Anpheus]

Calling something Obamacare, Hillarycare, etc, is a method of critiquing it and assigning a name.

No one wants to fight "Universal Health Care". That sounds amazing! (That's not what we got in the bill, but sort of close enough.)

But hey, call something Obamacare, when your constituents and supporters already dislike Obama, and the transitive property of dislike transfers over. Of course, to people who support the health care reform, they don't know why it's called Obamacare, because so many different pieces of the passed bill came from different representatives and senators. But even so, they typically like Obama, so they don't see it as a negative, they're just confused.

But its purpose is exactly that, to polarize and split the population. Your position on federal health care proposals might be mixed and complex. Your position on any individual idea in any one of those proposals might differ from the next guy. But call a massive health care overhaul "Obamacare" and suddenly you've turned it into an "us versus them." It's purely a tool of dumbing down the debate.

If you don't believe me, watch Fox News coverage of "Obamacare" on youtube and the way in which they use the term to obfuscate and blur what it actually consists of, and the use of Obama's name to immediately turn republican and conservative opinion against it.

Re:Good!

[Anonymous Coward]

I'm familiar with government purchasing contracts, usually there is nothing wrong with a vendor selling items on contract at a lower price then the contract allows. You just may need to negotiate to get a market price for those cables. Also, you are generally not required to purchase off of a government contract if you have multiple bidders, as long as you pick the lowest bidder. Sure, there are bureaucratic hoops to jump through, but if you really want to save the government money, then that's what you have to do. The system itself is a big problem, but there are ways to work within it responsibly. Far too many people can't be bothered to go the extra mile, though.

Re:Good!

[Idarubicin]

Note: I'm giving up the chance to mod in order to fact check.

wastes $60 billion annually on Medicare fraud.

I was surprised by that figure - losing $60 billion to fraud on $600 billion (roughly) total spending? That's damn scary, and would mean that one dollar out of every ten was being paid out for fraudulent claims.

Fortunately, I read the linked press release. The actual quote is:

Fraud, waste and abuse in our health care system account for three percent of our total health care spending, costing Americans more than $60 billion every year.

First, the $60 billion isn't solely from fraud. It's from the somewhat more nebulous "fraud, waste, and abuse". No breakdown is provided for those three categories. ("Waste" is a particularly difficult one - does that include the unnecessary blood tests or CT scans ordered by a physician who fears malpractice suits?)

Second, the $60 billion figure is linked to the "health care system", and identified as only three percent of "total health care spending". The wording is unclear, but it may be referring to fraud, waste, and abuse in health care in general, rather than simply confined to the Medicare program. What is the scope of programs covered by this claim?

Finally, the same press release also notes that

In 2008, better enforcement measures to fight fraud, waste and abuse in Medicare netted Americans more than $16 billion in savings.

This seems to suggest that there are steps being taken to reduce the size of the problem; in one year this "waste" was reduced by a quarter.

Re:Good!

[Anonymous Coward]

managing the budget for a nation of millions is much harder than managing your family budget

Re:Good!

[Anonymous Coward]

Pork projects are when Congress critters get federal dollars go to state and local initiatives. GSA manages vendors/products for federal agencies. By definition, it's not pork. But I agree with the rest of your comment. The waste in the federal government isn't from a single failed project, it's from smaller amounts of waste across numerous projects. It's also due to old inefficient business processes that even a small, targeted investment would fix. From the outside it's easy to say give generalizations, but from the inside we are all suffering. On the one hand, there is never any money to fix what's obviously broke. Then on the other hand, I hear on the news about these huge waste/fraud/abuse cases. It's ridiculous.

Re:Good!

[Anonymous Coward]

you are such a fucking dooshbag. go fuck a knob, cocksucker.

Re:Good!

[QuantumRiff]

You can't in one hand Bitch about government debt, and then in the next, go off about "its only 25 Million".. Seriously. Stop getting your math lessons from Politcal hacks on TV.

I really can't afford to purchase this widget, but really, its only $50, and between my mortgage and student loans and credit cards, I have a huge amount of debt. Oh well, I guess I really don't need to bother plucking that extra $50 towards my debts.. Its too small to count..

Re:Good!

[Xaositecte]

Back when I was in the Air Force, eliminating "Fraud Waste and Abuse" were popular buzzwords for about a year or two. It was a federal government-wide initiative to eliminate, well, Fraud Waste and Abuse. No-one could ever really define (except in the broadest terms) what that really meant, but it made them feel like they were doing something to reduce government spending.

It's entirely possible all the numbers cited in that article were pulled wholesale out of someone's ass.

Re:Good!

[Tekfactory]

Every government agency has an Inspector General who's job it is to seek out Fraud, Waste and Abuse. Of these folks that I have met, most are very sincere about their jobs.

Re:Good!

[COMON$]

Yes, it was funny, my bosses were sure I couldn't get a lower price, all I did was a quick search on Newegg and Tigerdirect found the exact same cable and brand for less than $5 and was allowed to purchase once I had the bids done. Hell just to buy a $50 Linksys router for a closed testlab I had to bid it out, have personnel from DAS review the purchase because it was a "router". Had to be shipped to them 6 miles away, picked it up. We calculated up that we spent about $100 in man hours just to order the $50 item. I understand how the system works for big purchases, or should, I have plenty of stories about 2 million dollar projects the state would spend $300K bidding out...

Re:Good!

[fotbr]

A proper budget for one person, a family, or a nation of hundreds of millions still boils down to one simple thing. Don't spend more than you have. If you fail at that, nothing else matters because it's a bad budget.

Re:Good!

[toriver]

Wonder what the opponents of "Obamacare" in the general public would say if it failed and they went to a private insurance company and got "Don't Care" instead... amazing how the Average Joe can be turned into a stooge for a lobby like that.

Re:Good!

[sznupi]

Uhm, in pork it doesn't matter only at what level the agency/etc. buys something, it matters also to whom that contract goes.

Re:Good!

[mcgrew]

I hope you are being sarcastic in your praise of the government.

I hope he's not, because this IS praiseworthy. Are you one of those people who scold their child when he does wrong, but refuses to praise him when he does right? You sound like one, because that's just what you're doing here. Yes, there are inefiencies, waste, fraud, etc in government just like in any large organization, and the bigger any company, government, or whatever is, the more waste and fraud there will be.

A good example is my local power company, CWLP. It's owned by the city (population 110,000). We have the lowest electric bills in Illinois, and CWLP turns a profit that keeps local taxes down. Contrast it to Amerin, which supplies most of the rest of the state, who have abysmal customer service and rates as high as regulations allow. There's little waste at CWLP, LOTS of waste at Amerin, and that's mostly because of scale, although partly because Amerin customers have no recourse, while CWLP customers can (and have) vote the Mayor out of office if CWLP gets out of line.

Tens of Millions?

[ArhcAngel]

That's still better than the tens of trillions of dollars US Politicians cost the taxpayer.

Re:Tens of Millions?

[DeadDecoy]

I'd blame that on shoddy loans issued by investment bankers, while politicians are more or less in charge of covering up the mess. But your point still stands. Seriously, the amount of money lost on overpriced Oracle products is a drop in the bucket relative to everything else, and that money probably went towards paying engineers to actually do something.

Re:Tens of Millions?

[Lunix Nutcase]

I'd blame that on shoddy loans issued by investment bankers, while politicians are more or less in charge of covering up the mess.

The only flaw in that is that the US already owed the 10s of trillions long before the bailouts even started.

Re:Tens of Millions?

[moosesocks]

You're correct. Politicians are responsible for the allocation of the government's budget, the revenue from which is largely derived from taxes.

Your point?

Re:Tens of Millions?

[alexborges]

The real lost in this procurement contracts is that they are anticompetitive. How on earth are younger DB companies to compete with oracle if the government elevates the barrier of entry for them while it reduces them for the huge IT giants?

Really, govt. IT procurement needs to change and be more transparent worldwide.

Re:Tens of Millions?

[Anonymous Coward]

No, no, you don't understand! This is classic trickle-down economics at work. Larry Ellison's cash will eventually be spent on the hard-working American populace, so it's all coming back to the taxpayer.

Right, mr. Reagan?

Mr. Reagan?

Hello?

Re:Tens of Millions?

[Anonymous Coward]

eh... you know he's dead, right?

Re:Tens of Millions?

[MaerD]

When has that stopped anyone from running for office?

Re:Tens of Millions?

[EdelFactor19]

The small db company doesn't start out by selling their product to the US government perhaps?

how does it lower the barrier of entry for the giants though?

Re:Tens of Millions?

[Anonymous Coward]

you sir, can go fuck yourself.

time to change to another Oracle product

[kubitus]

get MySQL!

Re:time to change to another Oracle product

[alexborges]

WHy would one depend on a company as terrible as Oracle if you can get MariaDB, the mySQL fork from the people that invented MySQL. Check: http://askmonty.org/wiki/Main_Page

Re:time to change to another Oracle product

[Lunix Nutcase]

Because it'll make Monty even more butthurt than he already?

Re:time to change to another Oracle product

[alexborges]

HO!

Thats just about the only reasonable answer... Really, it makes no sense to use FOSS from oracle that is never going to be seriously mantained that way by oracle.

Re:time to change to another Oracle product

[John Hasler]

Right. Use PostgreSQL.

Re:time to change to another Oracle product

[alexborges]

I mean I love postgres, but why wouldnt one use MariaDB if one comes from mysql?

Its cheaper, freer and it has good people behind it for a price.

Right....

[UrQUan3]

In working for the government, we are routinely forced to use GSA for purchases. GSA is often far higher than the open market price. As a GSA contract is often good for over a year, prices that were good for a Core2 system last year are painful today. Modern systems aren't even available without circumventing GSA. GSA was intended for cutting grass and painting buildings, not IT purchases.

Re:Right....

[alfredos]

The driving cost in those kinds of activities, which is probably labor for the most part plus and a bit of machinery leasing, is way more inelastic (is that even a word?) than the cost of a software license. As everyone here knows, the cost of a software license is anything you want to put in the tag. Perhaps if GSA is useful for the things you quote, it'd also be fine for software development, but never for licensing.

Re:Right....

[Anonymous Coward]

Beeeee Essssss. Oracle are rip-off merchants, always have been. How many cores do you have today? Pay more. How many connections do you have today? Pay more. It's a slug database that isn't needed in the vast majority of the installed user base. Their days are numbers. 10 years from now, Oracle will be on Death's list and stagnant like mainframes, and stock will be way way down, unless they can reinvent themselves and come up with something beyond late 80s database ideology. Why do you think they bought Sun, InnoDB and MySQL? They're hoping to find a fit for their future. It should be possible, even Olympus managed it before the last person left the building. And that was going some. Maybe they'll hope Google buys them out.

Thorough Summary

[balbus000]

The summary pretty much restates the entire article...except for listing the people who declined to comment on the situation.

Re:Thorough Summary

[Major Blud]

I remember that right after the 9/11 attacks, Oracle was offereing their software to the federal government for free. Anyone else remember this? I know that this was just bait-and-switch on the part of Oracle, but it'd be awesome if they gave the software to the government for free and then discounted it FURTHER for other customers....I guess they were paying people to use Oracle ;-)

'tens of millions of dollars,'

[HikingStick]

Overall, Oracle's actions cost US taxpayers 'tens of millions of dollars,'...

And now, we can add $10m more for the costs associated with a long, protracted trial, and all the associated appeals.

Re:'tens of millions of dollars,'

[KonoWatakushi]

Better that, than demonstrating that the law has no teeth; that would just open the flood gates to further abuse.

Let's be clear: Oracle cheated the US. If the evidence is valid, they are not going to gain anything by dragging out the trial, if they are even allowed to. Hopefully the jugement will also include some hefty punitive damages as well, as this should be not be tolerated.

Aside from Government Contracts

[nurb432]

Has oracle not screwed anyone they do business with?

No, not a simple troll. I have had dealings with them 4 times in my career ( thankfully been able to avoid them most of the time ) and they took advantage every single time.

Re:Aside from Government Contracts

[david_thornley]

There's people who haven't done much business with Oracle. Some of them haven't been screwed yet.

Re:Aside from Government Contracts

[fuzzyfuzzyfungus]

One Rich Asshole Called Larry Ellison...

Re:Aside from Government Contracts

[ClaytonianG]

My biggest beef with oracle is the fact they actually rely on license violations as part of their revenue.

It is way too easy to accidentally violate license terms.

Re:Aside from Government Contracts

[Anonymous Coward]

My biggest beef with oracle is the fact they actually rely on license violations as part of their revenue.

It is way too easy to accidentally violate license terms.

Then IMHO it's even better for Oracle to be on the receiving end of this lawsuit, it quite clearly is a taste of their own medicine!

Right...

[N0Man74]

Because if Oracle had contracts with a private corporation to give them the best deals, and that private corporation found out that Oracle wasn't holding up to their end of the bargain, they would never sue, right?

It's only because they were dealing with the big evil government that they had to actually stick to their contractual obligations.

And if the government was found to be overcharged without doing anything about it, citizens would never object, right?

The government has the reputation for never being efficient or controlling costs. Whenever the government tries to become more efficient and more cost effective, we need to encourage that! (Assuming it doesn't mean taking away our rights)

Re:Right...

[Anonymous Coward]

XYZ could sue Oracle if XYZ had a contract with Oracle with a "most favored customer" term.

Since Oracle made a contract with the government saying that Oracle would offer the government any terms that it offered to any other customer, and failed to abide by its contractual obligations, the government is suing Oracle for breach of contract. If you don't like it, you are left with arguing that that "most favored customer" terms should be illegal. Or, you could argue that the government shouldn't be allowed to negotiate with private companies, but that's stupid (see also the Medicare donut hole).

Re:Right...

[geekoid]

The government controls cost very well, and is less wasteful then most corporation.

Spend time reading budgets reports for both of them for a while.

The government doesn't have near the wast any large corporation has.

This is simple breech of contract, and since Oracle can't make side contracts the the CEO to look the other way, they are getting sued.

 

Re:Right...

[geekoid]

Oracle is breaching a contract. It's really that simple. The government is doing right.

" More citizens have been killed by their OWN government, than by foreign invasion"

nonsense. Stop being stupid.

Re:Right...

[bsDaemon]

When you factor in wide-scale devastation from failed 5-year plans and "great leaps forward" and all that crap, you come with something in the neighborhood of 100 million dead from their own Communist regimes. When over 30 million Chinese starve due to poor planning by Mao's government, that's still 30 million Chinese that died because of their government, even if they weren't shot.

Also, when you count up ever execution, every criminal or innocent person shot-on-entry by door-storming SWAT teams or even just regular cops in the line of duty, etc, etc., then I'm pretty sure we're way past the GP's claim being nonsense. Just saying.

Re:Right...

[Runaway1956]

"" More citizens have been killed by their OWN government, than by foreign invasion""

I'm not about to sit down and start researching - but GP's statement is probably correct. Today, N. Korea seems to casually condemn it's villagers to starvation each winter, after ensuring that all the crops have been harvested for use by the government. Pol Pot. The Soviet. Idi Amin. Saddam Hussein. The list goes on and on.

The casualties due to both actively hunting down people, and due to gross neglect, added together, may very well outweigh the numbers of deaths due to foreign invasion. Maybe not in every country, but world wide, it would be interesting to see the statistics.

Granparent may or may not be exaggerating, but he isn't exactly being stupid.

Re:Right...

[JackieBrown]

The government controls cost very well, and is less wasteful then most corporation.

Spend time reading budgets reports for both of them for a while.

The government doesn't have near the wast any large corporation has.

This is simple breech of contract, and since Oracle can't make side contracts the the CEO to look the other way, they are getting sued.

The post office was loosing money while FedEx and UPS were not. Medicare and Social Security are not money makers, either, yet the company that does my 401K and my insurance are. (And my insurance covers me better than my mom's medicare covers her. I haven't retired yet so I can't compare her social security to my 401K.)

Re:Right...

[N0Man74]

I don't know how you can study the last 3000 years of history, and conclude government is not evil. More citizens have been killed by their OWN government, than by foreign invasion, even inside Democracies.

This might come as a bit of a shocker to you, but governments are run by humans.

Some humans are kind and benevolent. Some are ruthless, tyrannical, and evil. Some have good intentions but still manage to botch things along the way.

Of course governments have been responsible for some terrible things, but it's only when they are in the position to. The same thing has been true for individuals, warlords, cult leaders, churches, corporations, etc.

The good or evil that they produce has nothing intrinsically to do with the fact that they are governments.

The more centralized the power is, the more effective, and the less accountability for that power, the more potential for corruption (regardless of the type or organization it stems from).

It's not that governments are more evil than any other institution, it's that they frequently tend to be the most influential institution, and have the potential for doing the most harm when they are.

The important thing with governments are to ensure that there is accountability, the right to dissent, vigilance in maintaining one's rights, and preventing too much power from pooling in one place.

Governments don't kill people, their leaders and agents do, but only if they are allowed too. Without governments, murder would not go away... in fact, I suspect it would get worse.

Re:Right...

[N0Man74]

However, there are also little facts like FedEx and UPS aren't required to run offices in every city, regardless of them being extremely small population areas where they are losing money.

I'm not saying that USPS couldn't be run any better, but they are expected (and mandated) to meet certain requirements that the private shipping companies don't have to.

Re:Right...

[JackieBrown]

However, there are also little facts like FedEx and UPS aren't required to run offices in every city, regardless of them being extremely small population areas where they are losing money.

Wouldn't that be considered wasteful?

I know it sucks being in a small town that only gets a ups/fedex run once or twice a week, but you learn to plan around that.

Re:Right...

[Golddess]

But government can because government is not bound by contractual obligations. The paper means nothing.

You truly are a moron. Many people have said it before, including in reply to this post, but it bears repeating again.

Oracle broke the fucking contract. Oracle and the government both agreed to a contract, and Oracle ignored the terms of that contract. I'll bet you think it's acceptable when a corporation does that to an individual too.

Re:Right...

[N0Man74]

Is it wasteful? That's a matter of opinion. If you live in a normal sized city, then you probably think so. If you are one of the few people who are heavily reliant on a rural post office, then you probably do not.

You get less efficiency for the money when providing utilities, health services, and schools to very rural areas too, but I wouldn't call it wasteful.

Re:Right...

[toriver]

Medicare and Social Security should not be money makers but money givers. I heard one of Medicare or Medicaid had a 2% administrative overhead; given its purpose that is good. Please feel free to use private insurance if you want to sponsor CEO golf trips to Dubai.

Re:Right...

[JackieBrown]

As I mentioned, I have better coverage with my private insurance (and I am a call center employee, not someone in upper management) than my mom does with her medicare.

Reality check

[gwayne]

What this really appears to be about is a whistleblower getting a piece of the action. Since Oracle was overcharging the gubermint, this guy will get something like 15-25% of the settlement according to the False Claims Act.

Re:Reality check

[fuzzyfuzzyfungus]

In situations where you can't investigate everything yourself, doesn't it make sense to give the private sector an incentive to investigate for you? Seems wholly logical. If anything, because the False Claims Act applies to a lot of potential whistleblowers, it is far harder to buy off all of those than it is to corrupt a single investigative body...

Ahhh, Government contracts....

[XB-70]

This is not new. Here's an excerpt from Toronto Computer Leasing Inquire (Wiki): "On January 1, 1998, the Municipality of Metropolitan Toronto and its six lower-tier cities (Toronto, Scarborough, North York, Etobicoke, East York and York) were amalgamated into the single "megacity" of Toronto. In one of the new city's first official acts of business, computer equipment was leased for city councillors' offices from MFP Financial Services, at a value of $1,093,731. City staff have not been able to produce any documentation to prove that this contract was awarded through proper procedures. In May, 1999, the city issued a Request For Quotations for its new computer acquisition needs. MFP was one of the bidders, and was awarded the contract in July of that year. MFP was contracted to provide $43 million of computer equipment to the city on a three-year lease agreement. However, the final lease agreement was not signed until after the 90-day price guarantee had expired. That fall, the city sold its owned computer equipment to MFP, and then leased it back as well. Over the duration of the agreement, the city paid $85 million to MFP, rather than the original $43 million approved by city council. As well, many of the equipment schedules were for five-year leases rather than three. Some of these leases were later restructured to extend the lease terms even further, resulting in additional costs. In December of that year, the city acquired 10,000 Oracle database licenses, again through an MFP lease. This turned out to be a serious overestimate of the city's actual needs. These issues came to light in late 2001, after an investigation by Toronto city councillors David Miller and Bas Balkissoon. In February, 2002, the Toronto Computer Leasing Inquiry was established by city council. The commissioner of the inquiry is Madam Justice Denise Bellamy of the Ontario Superior Court of Justice."

But is it by law?

[prediff]

From the GSA Schedules FAQ @ http://www.gsa.gov/Portal/gsa/ep/contentView.do?faq=yes&pageTypeId=17112&contentId=8106&contentType=GSA_OVERVIEW#3

How do I know I am getting the best price?

GSA's goal is to be the best value supplier of choice.

GSA Schedule contracts are negotiated with the intent of achieving the contractors' "most favored customer" pricing/discounts under similar conditions. In order to ensure that they receive the best value at the lowest overall cost when using GSA Schedule contracts, agencies are encouraged and empowered to seek price reductions, not only for orders over the maximum order threshold or when establishing Blanket Purchase Agreements (BPAs), but also when circumstances warrant (see FAR 8.405-4).

It doesnt exactly say that the vendors are *bound* to offer them the lowest cost. Only that the negotiations are made such that they reach the lowest price. Big difference.

Under what authority?

[Caerdwyn]

So what happens if:

1. It's 2008. Oracle charges everyone else 600 per seat per year but Uncle Sam gets it at 500 per year; it's a 3-year contract. Oracle delivers, and receives 500 per seat.

2. In 2010, Oracle in response to competition cuts its global rate to 400 per seat. But Uncle Sam, under that 3-year contract, is paying 500 per seat until 2011.

Is Oracle therefore forbidden to reduce its prices? Is the contract with the government null and void, allowing the government to terminate the contract earlier than they otherwise would?

This whole bit about "you have to treat others worse than me; you have to charge others more than you charge me" is repugnant. Negotiate a price, and if it's acceptable, pay it and keep your nose out of other people's contracts. As long as Oracle is delivering what it said it would, what's the constitutional authority for the government interfering in private contracts? Why should what a company charges others be anybody else's legal balliwick in an industry that is not a regulated public utility?

Oh, wait, I forgot. ALL business is a public utility now, subject to nationalization and seizure. And Larry Ellison is a poopyhead, so his business doesn't get the same protections as others. Never mind.

Re:Under what authority?

[Red Flayer]

Is Oracle therefore forbidden to reduce its prices? Is the contract with the government null and void, allowing the government to terminate the contract earlier than they otherwise would?

No, Oracle is then required to offer the same reduced prices to the government -- it's part of the hypothetical three-year contract that Oracle agreed to. Oracle is free to cut their prices as much as they want for any customer they want -- but they are operating under a contract that guarantees the government gets the best price Oracle offers anyone else.

So, to answer your question of "Under What Authority": The authority of a party to the agreement that Oracle and the government both signed and are required to meet the terms of.

The government is not "regulating" Oracle here, they are not nationalizing Oracle, they are not seizing Oracle -- they are pursuing their rights to force Oracle to meet the terms Oracle agreed to.

Take your bogeyman somewhere else... or at least RTFA before you drag him out from under your bed.

Re:Under what authority?

[h4rr4r]

You give Uncle Sam a rebate.

All business is plenty free, feel free not to take on these kinds of contracts.

higher education...huge discount

[Anonymous Coward]

Higher education has typically received a huge discount, and not just for educational use, but for the business-side of the universities.

choosing Oracle costs tax payers

[randallman]

Most of the applications I see that use Oracle would work fine or better with an OSS database such as Postgresql or even SQLite. For some reason managers feel good about themselves when they spend gobs of money to run their app on Oracle. Sure there are apps that need Oracle's 24/7/365 top notch support, but most don't. In most situations, a catastrophe could be handled by importing yesterday's backup after a little downtime, saving bucks and DB management headaches.

Re:choosing Oracle costs tax payers

[dfetter]

If you've experienced Oracle's "24/7/365 top-notch support," as you phrase it, you know there are certain problems it will not help you with. For example, there are known bugs, some of which cause what in Oracle jargon are called "600 errors," which means, "you're screwed, and you've lost data irretrievably." These bugs have remained unfixed for years, and no matter what kind of support you buy from Oracle, they will not fix them. Their green-eyeshade people have decreed that the cost of fixing them is not worth it.

Re:choosing Oracle costs tax payers

[Anonymous Coward]

Not disagreeing with your overall point, but you miss a key driver. Besides Oracle's intrinsic features that might be needed, probably the majority of Oracle installs are because $RANDOM_VITAL_VERTICAL_APP only supports Oracle. There are vast oceans of apps that only support, say, Oracle and SQL Server. I don't mean general accounting systems - I mean something like an aircraft maintenance parts database that is used by everyone because it's the standard. If you want to use it, you must the platforms they require.

There are tens, perhaps hundreds of thousands of niche applications like this and every large organization I've worked at has several. I've seen companies buy AS/400s because that's the only platform that ran $RANDOM_VITAL_VERTICAL_APP, or setup DB/2 or Sybase when everything else is Oracle or MySQL, or lay down a Websphere layer, etc.

Re:choosing Oracle costs tax payers

[Anonymous Coward]

Look at the licensing costs when you have an 8-cpu system(not 8 core but 8 cpu or similar). Just going to M$ SQL Server saves you tens(if not hundreds) of thousands of dollars.

Re:choosing Oracle costs tax payers

[durdur]

Oracle's very first customer was a government agency (CIA). Many of these government customers have extremely large databases and take advantage of many features that competing databases lack or that are vendor proprietary and thus hard to replace (PL/SQL, data analytics, Oracle Text, XML support, etc). Not all Oracle applications are like this. But many are.

Software Companies Should...

[N8F8]

Be required to store all license info and be audited by any customers for the licenses they own. And provide free downloads for any software they own.

Re:Software Companies Should...

[Anonymous Coward]

Did you know that Oracle already allows free downloading of any software the customer licensed, and a lot of Oracle's software can be downloaded by anybody for use in development and testing? That's the full version, not a crippled or time-bombed version.

I don't know about the auditing - I'm not an Oracle customer. I'm an Oracle employee, posting AC because I'm not authorized to speak on behalf of the company.

It's all proportional

[symbolset]

It's all proportional.

Oracle is a very complex product and its licensing is appropriately complex. There's a form that your Oracle Guidance Counsellor (OGC) helps you fill out with various metrics like the number of processors and cores, megabytes of RAM, network connections, sizes of datastores and their bandwidth, and related customer metrics. They then use a set of finely honed matrix pricing tools, in the use of which they are meticulously trained, to produce the ideal licensing structure for each use, to maximize customer ROI. In this matrix, customer specific discounts are applied last, and of course the GSA is the Most Favored Customer, and so gets the greatest discount.

The problem lies before that, with the "CDP" metric, or "Customer Depth of Pocket". This one metric scores 94% of the subtotal, and since the US Federal government has deeper pockets than anyone else of course they're going to max the scale here. Naturally this is going to skew the outcome somewhat, but not unfairly so. The GSA's OGC just needs to get back up there and explain it again the way they covered it in the year 3 course in OGC Acadamy. Pricing 328: Value pricing for large government customers.

alleged? How about always overcharge?

[cenobyte40k]

US Sues Oracle Over Alleged Overcharging? Allegedly? Really? Have you seen the price for their software? They always overcharge, nothing they sell is worth the money. Over charge is the sticker price. I realize the govt is upset because they where charged more than the sticker price, but they should have turned their nose up when they saw the sticker.

been there, done that

[Anonymous Coward]

CA tried to pull this stupid stunt (more or less similar) and was laughed out of court. Tax payers lost when a decision was made to buy Oracle/DB2/MSSQL etc not when Oracle did what the state claims.
Yes Virginia, there are Open Source alternatives to Commercial DBMS, try a few instead of wasting Tax payers money in courts again.

Wasting tax dollars

[twoblink]

When Oracle wastes a few million tax dollars; it's a crime. When Obama spend a few trillion, it's a blessing in disguise..

Huh?

[symbolset]

The quote that you refute with "nonsense. Stop being stupid.": " More citizens have been killed by their OWN government, than by foreign invasion"

You're probably wrong here. Lysenkoism killed many, as did some failed Lysenko inspired farming practices under Mao, and Pol Pot killed many too. If you include poor civil management which could have been avoided given the science of the day that caused famine, plague and war, it's an easy case to make. Consider that citizens of captured countries usually are considered citizens of the vassal states and so have some claim to citizenship and it's a slam dunk.

This is off topic and I expect it to be moderated that way - but I didn't want you to to get away with calling BS on well documented history without at least a rebuttal. The US founding fathers knew that the greatest danger to the life, liberty and happiness of the people wasn't a foreign enemy: it was a government run amok. Read up.

The only thing worse than a despot that despises his people and kills them with tyranny and mismanagement is an educated and insightful democratic government that provides a great environment of freedom for the common man, but fails to provide for the common defense and so submits their people to the subjugation, rapine and pillaging of barbarians. See: ancient Greece.

As for my karma points, I'll get them back elsewhere in the thread educating people about Oracle's licensing practices. If you're moderating that's an easy bulletproof "off topic" mod so knock yourself out - I'll add some points to it so a few of you can have a whack.

application specific licensing

[Anonymous Coward]

Oracle does allow application vendors to sell Oracle "application specific" licenses at *really* deep discounts, but these are limited to use with the application -- for instance, if I write an accounting application that uses the Oracle database, and my prospective customers want to buy my app, but don't want to fork out for an Oracle license, as a workaround, I can sign an agreement with Oracle that will allow me to sell the necessary Oracle license to my prospective customer for comparatively little $ - I can even put the Oracle salespeople to shame with my discount - the drawback is that my customer can only use that Oracle license with my application - not other stuff.

Who knows the facts of this case, but it's possible that the gov't has identified a few cases of these application-specific license discounts and assumed they were in violation of the most-favored clause, when in fact, they probably wouldn't be, assuming that the gov't has general use licenses. Speculation? You bet, but seems like it could be a possibility.

Low-tech

[Anonymous Coward]

Would like to express my supreme disappointment (along with a few other posters) that our federal government is Oracle-powered.

Oracle Is Not Worth Any Price

[kraffay]

In this day and age, it is hard to justify any price for Oracle. It still has a 30-character limit for object names, which leads to all sorts of cryptic naming conventions. Plus, is seems to take five times the amount of staff to administer, compared to SQL-Server.