Oracle pays $200M settlement for overcharging the U.S. government

Oracle has paid out in excess of $199.5 million to settle a case with the U.S. government.

The case, which was brought to light by former Oracle senior director of contract services Paul Frascella in 2007 and was pursued by the Justice Department, claimed that Oracle had overcharged the U.S. government for nine years while giving steep discounts to corporate entities.

Claims included the allegation that Oracle had discounted goods and services by up to 92 percent for businesses while giving various United States government agencies around 25 percent to 40 percent discounts, all the while not telling the government what its pricing policies actually were, as it was contractually obliged to do.

Specific allegations included breach of contract, constructive fraud, fraud by omission, payment by mistake and unjust enrichment. The suit said these practices had been going on since at least May 2001.

Oracle maintains that it adhered to pricing as laid out in its contracts, and a spokesperson said the company only settled because “many of the witnesses are no longer available or do not clearly recall these events,” and pursuing litigation would be more costly than the $200 million settlement.

In a statement, General Services Administration Inspector General Brian Miller said, β€œIt’s more important now than ever before to make sure that taxpayer dollars are not wasted on higher prices. We will not let contractors victimize the taxpayers by hiding their best prices.”

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