Menu
Oracle sued by US for alleged overcharging

Oracle sued by US for alleged overcharging

The government has joined a whistleblower's action, claiming Oracle failed to give it the best prices

Oracle is being sued by the U.S. government for allegedly overcharging it by millions of dollars, according to documents on file in U.S. District Court for the Eastern District of Virginia.

The government's action, filed in April, joined an earlier complaint filed by an Oracle employee, Paul Frascella, in May 2007. Frascella's complaint was unsealed as part of the government's move.

The U.S. General Services Administration (GSA) often works out "multiple award schedule" contracts with vendors such as Oracle, the suit states. Once in place, the MAS contract lets vendors list their products and prices in a catalog from which government agencies can make purchases without dealing with the usual red tape caused by procurement regulations.

But the contracts, known as "GSA 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.

"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.

However, Frascella learned that Oracle was finding ways around the GSA restrictions in order to give commercial customers even deeper discounts, according to the complaints. One alleged practice saw Oracle "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," it states.

Overall, Oracle's actions cost U.S. taxpayers "tens of millions of dollars," it adds.

Frascella's action was filed under the False Claims Act, which allows whistleblowers to sue parties they believe have committed fraud against the government. Whistleblowers typically stand to receive a portion of any damages obtained as a reward.

An attorney for Frascella, Christopher Mead, did not immediately return a call for comment.

Frascella had been hired by Oracle in 1997 as a contract specialist, according to his filing. Mead told Bloomberg News that Frascella no longer works for Oracle.

An Oracle spokeswoman declined comment.


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags Oracle

Events

Why experience is the new battleground for partners

Join us for an exclusive webinar, in association with Hewlett Packard Enterprise and Technology Services Industry Association (TSIA) and learn about the latest industry insights and how technology services continue to evolve to deliver differentiated value, and how partners can be successful in 2021 and beyond.

Featured

Slideshows

The Kiwi channel gathers for the 2020 Reseller News Women in ICT Awards

The Kiwi channel gathers for the 2020 Reseller News Women in ICT Awards

Hundreds of leaders from the New Zealand IT industry gathered at the Hilton in Auckland on 17 November to celebrate the finest female talent in the Kiwi channel and recognise the winners of the Reseller News Women in ICT Awards (WIICTA) 2020.

The Kiwi channel gathers for the 2020 Reseller News Women in ICT Awards
Leading female front runners honoured at the 2020 Reseller News Women in ICT Awards

Leading female front runners honoured at the 2020 Reseller News Women in ICT Awards

The leading female front runners of the New Zealand ICT industry joined together for the annual Reseller News Women in ICT Awards event at the Hilton in Auckland, during which hundreds of guests celebrated 13 outstanding individuals who won awards, chosen from more than 50 finalists representing over 30 organisations.

Leading female front runners honoured at the 2020 Reseller News Women in ICT Awards
Channel gathers to celebrate the Reseller News Innovation Awards 2020 winners

Channel gathers to celebrate the Reseller News Innovation Awards 2020 winners

More than 500 channel leaders gathered in Auckland on 21 October at the ​Reseller News Innovation Awards ​2020 to celebrate the achievements of the New Zealand technology industry's top partners, start-ups, vendors, distributors and individuals.

Channel gathers to celebrate the Reseller News Innovation Awards 2020 winners
Show Comments