DoJ Sues Oracle Claiming Contract Fraud

Oracle and CEO Larry Ellison are no strangers to controversy. This time around, it’s the U.S. Justice Department that has a bone to pick with the software juggernaut.

As Datamation reports, the DoJ has filed a lawsuit accusing Oracle of giving government customers “far inferior” pricing terms compared to its commercial customers, a claim that was first brought to the department’s attention by a former Oracle executive.

The contract, according to the DoJ complaint, required Oracle to update GSA when commercial discounts improved and extend the same improved discounts to government customers.

“We take seriously allegations that a government contractor has dealt dishonestly with the United States,” Tony West, Assistant Attorney General for the Civil Division of the Department of Justice, said in a statement. “When contractors misrepresent their business practices to the government, taxpayers suffer.”

The U.S. Justice Department on Thursday said it has filed a lawsuit against Oracle, accusing the database and business applications software titan of defrauding the federal government on a massive software contract worth hundreds of millions of dollars between 1998 and 2006.

In its lawsuit, the DoJ alleges Oracle (NASDAQ: ORCL) misrepresented its commercial sales practices, causing government customers to receive deals that were inferior to those Oracle gave to its commercial customers.

The DoJ brought the complaint under the False Claims Act and asserts that Oracle ripped off the federal government and U.S. taxpayers on a General Services Administration (GSA) software contract.

The contract, according to the DoJ complaint, required Oracle to update GSA when commercial discounts improved and extend the same improved discounts to government customers.

Read the full story at Datamation:


DoJ Sues Oracle Alleging Software Contract Fraud