Oracle Corp. To Pay US $199.5 Million to Settle False Claims Act Allegations Against General Services Administration

On October 6, 2011 the Department of Justice announced the largest settlement ever obtained by General Services Administration (GSA) on behalf of the US government.  Oracle Corporation and its subsidiary Oracle America Inc. have agreed to pay $199.5  million plus interest to settle allegations brought against them under the False Claims Act.

The government and GSA-authorized buyers are given a simplified way to enter into contracts with various contractors through the GSA’s Multiple Award Schedule (MAS) program.   An MAS contract affords companies easy access to hundreds of government  buyers for a variety of goods and services under one centralized contract.  In order to receive an MAS contract, however, companies are required to disclose their pricing policies and practices, as well as abide by all of the terms set forth in the contract.

Oracle is a business hardware and software systems provider that had been awarded an MAS contract.  Under its MAS contract, the company was required to provide the GSA with information regarding its commercial sales practices and discounts offered to its commercial customers.  According to allegations in the Government’s lawsuit, Oracle intentionally failed to provide, and actively,
falsified this information, which resulted in the Government receiving lower discounts and paying more money to Oracle than it would have had Oracle submitted accurate information.

Oracle’s fraud was brought to the attention of the government by whistleblower Paul Frascella, a former Oracle employee.  As a reward for disclosing his employer’s fraud, he will receive $40 million from the settlement.  Mr. Frascella’s actions are incredibly commendable.  Perhaps the only way to significantly reduce fraud in government contracting is for brave individuals, such as Mr. Frascella, to do the hard (but right) thing and come forward with knowledge about what they perceive to be unlawful behavior.  Through his actions, Mr. Frascella may have saved millions of taxpayer dollars from being wasted on overpriced goods and services.

The type of fraud Oracle was alleged to have committed in this qui tam lawsuit is GSA Fraud.  Oracle allegedly failed to comply with “best pricing” requirements for government contracts and price reduction requirements.  This is but one type of GSA fraud.  For more information on other types of fraud perpetrated against the GSA, please visit our website at: http://www.fraudfighters.net/false-claims-act-fraud/gsa-fraud/.

Our firm represents qui tam whistleblowers.  If you have information regarding GSA fraud or other kinds of fraud upon the Government, please visit our website at http://www.fraudfighters.net/.  Or contact us directly.

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