SAN FRANCISCO - The Justice Department joined a whistleblower in accusing Oracle, the giant software company, defrauding the government by overcharging for software.
In a suit filed in Federal Court Thursday, the Ministry of Justice said that Oracle had failed to give the government the same discount on the software it has provided to commercial customers.
A contract in place with Oracle from 1998 to 2006 required that Oracle notify the government of fluctuations in the prices of its products and to match the discounts to commercial customers, according to the complaint. The software in question was valued at hundreds of millions of dollars, the Department of Justice.
"We take seriously the allegations that a contractor dishonest government treaty with the United States," Tony West, Assistant Attorney General for the Civil Division of the Ministry of Justice said in a statement.
Oracle declined to comment, a spokeswoman.
Paul Frascella, a former employee of Oracle, has acted as an informant in May 2007 by filing its own complaint against Oracle for similar reasons. In April, the government has provided notice that he would look into the matter. Now he has joined the complaint of Mr. Frascella.
Oracle internal communications, printed in the complaint of 44 pages of government employees to show Oracle haggling over the structure of certain software offerings and how they give discounts to commercial customers that may affect policies related to government contracts .
According to the complaint, Oracle sold $ 1.08 billion worth of software under the contract in question to a wide range of government agencies, including defense, education and justice and the army.
Over the years, Oracle has built a reputation as a hard-line negotiator with clients. "His reputation is that it costs too much," said Jonathan Eunice, Illuminata analyst technique. "But it is especially true of all large software vendors."
Oracle remains the dominant player in the market for database software used to store critical information. He also competes in the broader market of business software, primarily against IBM, Microsoft and SAP.
Many customers have complained to Oracle and SAP in recent years about the high fees charged for maintenance contracts lasting several years.
"Increasingly, people feel like they have already purchased the software and its capabilities and yet they continue bombing a large sum of money," said Eunice.
The charges were filed against Oracle under the Act false allegations. The government could receive up to three times the damages it has incurred and will continue the case by the Civil Division and U.S. Attorney's Office in the Eastern District of Virginia.
In a suit filed in Federal Court Thursday, the Ministry of Justice said that Oracle had failed to give the government the same discount on the software it has provided to commercial customers.
A contract in place with Oracle from 1998 to 2006 required that Oracle notify the government of fluctuations in the prices of its products and to match the discounts to commercial customers, according to the complaint. The software in question was valued at hundreds of millions of dollars, the Department of Justice.
"We take seriously the allegations that a contractor dishonest government treaty with the United States," Tony West, Assistant Attorney General for the Civil Division of the Ministry of Justice said in a statement.
Oracle declined to comment, a spokeswoman.
Paul Frascella, a former employee of Oracle, has acted as an informant in May 2007 by filing its own complaint against Oracle for similar reasons. In April, the government has provided notice that he would look into the matter. Now he has joined the complaint of Mr. Frascella.
Oracle internal communications, printed in the complaint of 44 pages of government employees to show Oracle haggling over the structure of certain software offerings and how they give discounts to commercial customers that may affect policies related to government contracts .
According to the complaint, Oracle sold $ 1.08 billion worth of software under the contract in question to a wide range of government agencies, including defense, education and justice and the army.
Over the years, Oracle has built a reputation as a hard-line negotiator with clients. "His reputation is that it costs too much," said Jonathan Eunice, Illuminata analyst technique. "But it is especially true of all large software vendors."
Oracle remains the dominant player in the market for database software used to store critical information. He also competes in the broader market of business software, primarily against IBM, Microsoft and SAP.
Many customers have complained to Oracle and SAP in recent years about the high fees charged for maintenance contracts lasting several years.
"Increasingly, people feel like they have already purchased the software and its capabilities and yet they continue bombing a large sum of money," said Eunice.
The charges were filed against Oracle under the Act false allegations. The government could receive up to three times the damages it has incurred and will continue the case by the Civil Division and U.S. Attorney's Office in the Eastern District of Virginia.
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