REDWOOD SHORES (CBS SF) — Oracle Corp. and Oracle America Inc. have agreed to pay the General Services Administration $199.5 million plus interest for failing to meet their contractual obligations, the United States Department of Justice announced last week.

Authorities said the Redwood City-based technology company’s payment is the largest False Claims Act settlement ever won by the GSA.

In 1998, Oracle signed a contract with the GSA to sell software licenses and tech support to government organizations through a GSA program and under that contract, agreed to fully disclose their commercial pricing practices.

The settlement stemmed from allegations that Oracle knowingly failed to inform the GSA about its commercial sales practices and lied to the federal agency about sales practices and discounts offered to other customers, officials said.

“Companies that engage in unlawful or fraudulent practices to secure government business undermine the integrity of the procurement process and create an unfair advantage against the majority of companies that are playing by the rules,” said Tony West, assistant attorney general for the Department of Justice’s Civil Division.

West said the settlement with Oracle underscores the Department of Justice’s “commitment to ensure taxpayers are not overpaying for the products and services they receive.”

The resolution marks the end of coordinated efforts by the Department of Justice, the GSA and the U.S. Attorney’s Office for the Eastern District of Virginia.

(Copyright 2011 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)



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