A Whistle Blows @ Oracle…

In a classic case of how can you let THAT happen, Oracle has recently been named in an U.S. Department of Justice lawsuit under the False Claims Act.  In the lawsuit, it is alleged that Oracle misrepresented its true commercial sales practices, which ultimately led government customers to receive deals inferior to those deals that Oracle’s commercial customers were receiving.

Specifically, the contract, which was in effect from 1998 to 2006, required Oracle to update the General Services Administration (GSA) whenever commercial discounts improved and extend those same, improved discounts to government customers.  The suit is expected to involve hundreds of millions of dollars in sales.

The suit was originally filed on by Paul Frascella, Senior Director of Contract Services at Oracle.  BTW – The False Claims Act allows private citizens with knowledge of fraud to file whistleblower suits on behalf of the United States and share in any recovery. If the United States intervenes in the action and proves that a defendant has knowingly submitted false claims, it is entitled to recover three times the damage that resulted and a penalty of $5,500 to $11,000 per claim.

#1 – How can a company such as Oracle let that happen?  A quick Google of: “Oracle AND Contract Management software” comes up with an immediate hit for Khameleon, an Oracle based contract management software solution where one of its benefits is: “Change your pricing, and Khameleon applies the new prices to customers according to their contract’s unique terms.”  I think I may know Oracle’s next acquisition target….    

#2 – How can Mr. Frascella be still going to work this week AND I wonder what his new title is?  I think I would be cashing in my PTO at this time and coming down with a new strain of the 24-hour flu that lasts a few months…….

And #3 – What are the odds this won’t go to trial?  I’m thinking 3:1.  Oracle will definitely not want to stretch this out, but they obviously do have the money if really needed.  I feel the corporate image hit will be too strong if it lingers for long, so I say a settlement will probably be in the works.

**Note to government**  Take the settlement (no less than $400 mil), get an infinite free contract for services and software from Oracle, and make Larry apologize on national TV.

TASCer