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US Sues Oracle Over Alleged Overcharging

Posted by timothy on from the who-does-a-gorilla-sue? dept.

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."

9 of 164 comments (clear)

  1. Good! by timeOday · · Score: 5, Insightful

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

    1. Re:Good! by COMON$ · · Score: 3, Insightful
      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.

      --
      CS: It is all sink or swim...oh and did I mention there are sharks in that water?
  2. Re:Wait a minute by ceejayoz · · Score: 5, Insightful

    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.

  3. Right.... by UrQUan3 · · Score: 5, Insightful

    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.

  4. Re:Wait a minute by BlueBoxSW.com · · Score: 4, Insightful

    They demanded, and Oracle agreed. On paper.

  5. Re:Wait a minute by Anonymous Coward · · Score: 5, Insightful

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

    [citation needed]

  6. Right... by N0Man74 · · Score: 4, Insightful

    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)

  7. Re:Wait a minute by fuzzyfuzzyfungus · · Score: 5, Insightful

    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...

  8. Re:Wait a minute by Bigjeff5 · · Score: 3, Insightful

    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.

    --
    Security is mostly a superstition... Avoiding danger is no safer in the long run than outright exposure. - Helen Keller