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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."
Glad to see the govt. fighting to get more for our tax dollars, not just sitting there getting bilked by dishonest vendors.
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.
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.
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.
"This is why most companies don't like dealing with the government"
[citation needed]
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...