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US Sues Oracle Over Alleged Overcharging

timothy posted more than 3 years ago | from the who-does-a-gorilla-sue? dept.

Government 164

CWmike writes "Oracle is being sued by the US government for allegedly overcharging it by millions of dollars, according to documents on file in US District Court for the Eastern District of Virginia. The US General Services Administration's Schedules are supposed to provide discounts that are as good as or better than that given to the vendor's most favored customers, the complaint states. However, Oracle employee Paul Frascella, who joins the government's action, learned that Oracle was finding ways around the GSA restrictions in order to give commercial customers even deeper discounts, according to the complaints. In one alleged practice Oracle was said to be 'selling to a reseller at a deep discount ... and having the reseller sell the product to the end user at a price below the written maximum allowable discounts,' the complaint states. Overall, Oracle's actions cost US taxpayers 'tens of millions of dollars,' it adds."

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Wait a minute (1)

0racle (667029) | more than 3 years ago | (#32594820)

They are suing Oracle because Oracle gave someone else a better price?

Re:Wait a minute (0)

Anonymous Coward | more than 3 years ago | (#32594930)

No kidding. How much to GSA limits cost the end user, often taxpayers.

Re:Wait a minute (0)

Anonymous Coward | more than 3 years ago | (#32595332)

They charged me quite a bit for downloading Java. Said I was part of an "elite pilot program".

Re:Wait a minute (5, Insightful)

ceejayoz (567949) | more than 3 years ago | (#32594950)

They are suing Oracle because Oracle gave someone else a better price?

They are suing Oracle because Oracle gave someone else a better price despite being contractually bound not to.

Don't like it? Don't agree to it.

Re:Wait a minute (2, Informative)

nairnr (314138) | more than 3 years ago | (#32595026)

Other way around... They were giving better discounts to other clients, without offering the Govt the same deal. They don't want others to pay more, but as a preferred customer they should be getting equivalent discounts.

Re:Wait a minute (-1, Troll)

mwvdlee (775178) | more than 3 years ago | (#32595130)

Who says the US government is a preferred customer? They just demand to be treated as a preferred customer.

The reason why they think they have the right to make such demands is beyond me though.

Re:Wait a minute (4, Insightful)

BlueBoxSW.com (745855) | more than 3 years ago | (#32595154)

They demanded, and Oracle agreed. On paper.

Re:Wait a minute (4, Interesting)

FrankSchwab (675585) | more than 3 years ago | (#32595202)

I, as a customer, can be as demanding as I want.

I expect my government to be very demanding of the suppliers it uses.

The supplier is free to choose not to do business with a demanding customer.

Is it so hard to understand?

Re:Wait a minute (5, Insightful)

fuzzyfuzzyfungus (1223518) | more than 3 years ago | (#32595416)

Don't you understand? Here is how it works:

Because the government is intrinsically evil, anything it does that a corporation doesn't like is communism. Therefore, their deal with Oracle couldn't possibly be legit, even if Oracle signed.

However, because the government is intrinsically wasteful, any example of it getting a poor deal is just further evidence of how evil and wasteful it is...

You can see how this, completely internally consistent, line of reasoning leads to governance that is both inefficient and grossly expensive. Pity most of the people who articulate it aren't joking...

Re:Wait a minute (0, Offtopic)

EdelFactor19 (732765) | more than 3 years ago | (#32595676)

where's my mod points when i need them? probably the most timely 'insightful' post i've ever read on /. in 6+ years

Re:Wait a minute (1)

Gilmoure (18428) | more than 3 years ago | (#32595880)

Somalia wouldn't put up with this. They'd board Oracle's ships and hold them ransom for... one meelion dollars!

Re:Wait a minute (1)

hairyfeet (841228) | more than 3 years ago | (#32596696)

Bingo! What we have here is a standard contract, where Company A (Oracle) gets contracts that are worth serious money and in return they agree to give their best price to the company (ultimately the US taxpayer) and instead decided to do an "end run" around the contract by using third parties as middlemen so they could artificially keep the price higher for the US than for other customers.

I personally hope they not only get busted but are barred from further contracts. Maybe they should go FLOSS? With the amount of money these contracts are worth they could afford to simply buy out the developers of a FLOSS RDBMS solution and have it built to spec. Upside is then We, The People could own the code and it could be used in other depts for minimal $$$.

Re:Wait a minute (0)

Anonymous Coward | more than 3 years ago | (#32597050)

I work for a government agency. Across the government everything is used. I personally have seen Oracle, Microsoft SQL, MySQL, and PostgreSQL. I have also seen PHP, C#, Java, on Apache and IIS (and even Netscape's old webserver, bleh). So just about everything is used, depends on where you are at. Personally these days I have been liking Oracle though I traditionally came from MySQL. I really need to do some research and see if there is a good open source answer to stuff like PL/SQL (I like how it is extremely strict, important for database-side stuff IMHO).

Re:Wait a minute (1)

ground.zero.612 (1563557) | more than 3 years ago | (#32595256)

Who says the US government is a preferred customer? They just demand to be treated as a preferred customer.

The reason why they think they have the right to make such demands is beyond me though.

Who says they aren't? Oh, just you.

"You know the law: Bust a Deal; Face the Wheel."

Re:Wait a minute (0)

Anonymous Coward | more than 3 years ago | (#32595348)

If you were one of the largest buyers, if not the largest buyer, from any given corporation, then you would hopefully demand the exact same thing.

Oracle is a terrible company and I hope they get fined dramatically.

Re:Wait a minute (1, Funny)

Anonymous Coward | more than 3 years ago | (#32596008)

The reason why they think they have the right to make such demands is beyond me though.

Clearly you don't understand enough about this topic to be intelligently commenting. But then, this is /. so go forth and multiply, young man.

Re:Wait a minute (3, Insightful)

Bigjeff5 (1143585) | more than 3 years ago | (#32596454)

Who says the US government is a preferred customer?

My money is on the contract Oracle negotiated that said the US Government would get discounts that were as good or better than any other Oracle customer's discount.

This isn't the gov strong arming Oracle, this is Oracle signing a contract and then looking for every way they could to avoid doing what they agreed to do.

Generally we call that a "breech of contract", and there are serious legal ramifications whether the US government is involved in the contract or not.

Or, to put it more simply, fucking read you dumbass.

Re:Wait a minute (1, Interesting)

commodore64_love (1445365) | more than 3 years ago | (#32595168)

This is why most companies don't like dealing with the government - too many restrictions. Oracle wanted to give a great deal to attract a new customer(s), most probably at a loss (as is common practice), but they didn't want to share that same deal with the government since it would end-up costing them millions in losses.

In the future Oracle might decide government sales aren't worth it, and refuse future GSA deals.

Re:Wait a minute (5, Insightful)

Anonymous Coward | more than 3 years ago | (#32595284)

"This is why most companies don't like dealing with the government"

[citation needed]

Re:Wait a minute (1)

georgewilliamherbert (211790) | more than 3 years ago | (#32595720)

[citation needed]

One of my parents was a government contracts attorney, who did it professionally and taught it part time at local law schools.

Nobody likes the US Government as a customer. It's by far the most annoying customer for any tech company. The contracts will be 2-10x as hard to administer, 2-10x as much overhead as commercial contracts, and you get sued a lot more (usually over the proposals/bidding, but it's still a suit).

Re:Wait a minute (1)

shutdown -p now (807394) | more than 3 years ago | (#32596366)

Then why are all the companies which complain still taking those govt contracts?

Re:Wait a minute (0)

Anonymous Coward | more than 4 years ago | (#32597136)

Then why are all the companies which complain still taking those govt contracts?

They're obviously doing it for the greater good.

Right... (4, Insightful)

N0Man74 (1620447) | more than 3 years ago | (#32595314)

Because if Oracle had contracts with a private corporation to give them the best deals, and that private corporation found out that Oracle wasn't holding up to their end of the bargain, they would never sue, right?

It's only because they were dealing with the big evil government that they had to actually stick to their contractual obligations.

And if the government was found to be overcharged without doing anything about it, citizens would never object, right?

The government has the reputation for never being efficient or controlling costs. Whenever the government tries to become more efficient and more cost effective, we need to encourage that! (Assuming it doesn't mean taking away our rights)

Re:Right... (-1, Troll)

commodore64_love (1445365) | more than 3 years ago | (#32596640)

Not the same thing. Oracle doesn't have to offer a company "the lowest price". Oracle is free to charge XYZ Company twice as much as ABC Company, and XYZ can not sue Oracle because of it. It's just the way it is. But government can because government is not bound by contractual obligations. The paper means nothing.

BTW you're right. I don't know how you can study the last 3000 years of history, and conclude government is not evil. More citizens have been killed by their OWN government, than by foreign invasion, even inside Democracies.

Re:Right... (0)

Anonymous Coward | more than 3 years ago | (#32596746)

XYZ could sue Oracle if XYZ had a contract with Oracle with a "most favored customer" term.

Since Oracle made a contract with the government saying that Oracle would offer the government any terms that it offered to any other customer, and failed to abide by its contractual obligations, the government is suing Oracle for breach of contract. If you don't like it, you are left with arguing that that "most favored customer" terms should be illegal. Or, you could argue that the government shouldn't be allowed to negotiate with private companies, but that's stupid (see also the Medicare donut hole).

Re:Right... (2, Informative)

geekoid (135745) | more than 3 years ago | (#32596916)

Oracle is breaching a contract. It's really that simple. The government is doing right.

" More citizens have been killed by their OWN government, than by foreign invasion"

nonsense. Stop being stupid.

Re:Right... (1)

geekoid (135745) | more than 3 years ago | (#32596902)

The government controls cost very well, and is less wasteful then most corporation.

Spend time reading budgets reports for both of them for a while.

The government doesn't have near the wast any large corporation has.

This is simple breech of contract, and since Oracle can't make side contracts the the CEO to look the other way, they are getting sued.

 

Re:Wait a minute (1)

blantonl (784786) | more than 3 years ago | (#32596762)

I'd be willing bet big money that Oracle isn't the first. Being a former sales engineer in the enterprise software space, there are some big discounts that can be implemented for certain deals that can make or break a quarter.

Interesting how an Oracle employee is a whistleblower in this case.

Re:Wait a minute (0)

Anonymous Coward | more than 3 years ago | (#32594974)

American "free market" economics for the win!

Re:Wait a minute (0)

Anonymous Coward | more than 3 years ago | (#32595008)

"The whole idea of GSA schedule discounts is that the government, in the aggregate, is likely to be one of the largest purchasers of a company's products, and is entitled to take advantage of the discounts that its large buying power should command," it adds.

So.... if you get together and make cozy discounts with your buds you cannot treat the taxpayers like a red-headed stepchild. (Now they get to hit Larry on the nose with a rolled up newspaper while shouting "Bad Larry!")

Re:Wait a minute (4, Informative)

CraftyJack (1031736) | more than 3 years ago | (#32595020)

Yes. One of the stipulations of having a GSA schedule contract is that the government gets Most Favored Customer [wikipedia.org] pricing. Them's the rules, and you break them at your peril.

Re:Wait a minute (5, Informative)

blair1q (305137) | more than 3 years ago | (#32595036)

Yes.

There's a law called the "Truth in Negotiations Act", "TINA" for short, which essentially states that when bidding on a government contract, if you can do the job for less than you bid it for you have broken the law. The bid discloses estimated profits, and the government goes along with varying rates of profit, but if your profit is bigger than you disclose, and it's because you put in a cost item that your company (not just the department doing the bidding, to prevent firewalling to induce uncertainty) knew it could do cheaper (not that it was doing it cheaper), then you are deemed to have ripped off the government knowingly.

I'd love to see a similar law passed for consumer transactions.

Re:Wait a minute (3, Interesting)

OpenGLFan (56206) | more than 3 years ago | (#32595290)

I'd love to see a similar law passed for consumer transactions.

I can't see why this isn't the law for medical care. If a procedure costs $50 to do, and you charge $75 for insurance company X or $400 for an uninsured person, then you should go to jail.

Re:Wait a minute (0)

Anonymous Coward | more than 3 years ago | (#32595650)

I'd love to see a similar law passed for consumer transactions.

It should be illegal to sell something for more than the lowest price anywhere. Fuck that, if you don't like the price, it must be "unfair" and therefore illegal, discrimination against not rich people.

Re:Wait a minute (1)

EdelFactor19 (732765) | more than 3 years ago | (#32595742)

ok so this is the second most insightful post in years...

preferred customer status is bullshit... everyone should be paying the same price for the same product (at the same time)....
treat it like the equity markets handle things.

that said, they could also argue they can't do the job for the government for a better price. They are only able to offer some small company a break because they can afford to eat that loss in exchange for service contracts and future sales... the government case is the future sale.

doesn't this mean the government shouldn't be able to 'buy' or have a GSA with anyone who at any point in times gives anything away for free?

Re:Wait a minute (0)

Anonymous Coward | more than 3 years ago | (#32596720)

How about you just rename that 'volume customer' then.

Re:Wait a minute (1)

blantonl (784786) | more than 3 years ago | (#32596896)

preferred customer status is bullshit... everyone should be paying the same price for the same product (at the same time)....

Right, just like when you buy a car?

There is a reason why software companies employ armies of salesmen - their principle job to sell their widget for as much money as they can get for it. A salesman does not transact a product - he sells it just like a stock is traded on an exchange. Supply, demand, emotion all apply for sales transactions. You might find a better price elsewhere. You might find a better "stock" elsewhere. But most likely you've already got your product in mind. That leads me to this comment...

treat it like the equity markets handle things.

Ahh.. that's how software sales works. Supply, Demand, Emotion, and finally, negotiation. I guarantee that if you walk up to an Oracle salesman and demand to have his product, you will pay full price, plus 10%. That is why most large software purchases go through a huge dance of evaluations, bake-offs, and other meaningless activities. For the most part, the technical decisions were made long ago - it's the leverage building for the buyer that is needed for these transactions.

Re:Wait a minute (2, Informative)

budgenator (254554) | more than 3 years ago | (#32596372)

Insurance companies typically have a contractual agreement to pay the healthcare provider a percentage of the areas "Usual And Customary" fees. The insurance determines what the UAC should be by averaging the areas billed fees, so if I'm healthcare provider and I want to receive $80.00 for a procedure, I charge $100.00 for it to get the $80.00 paid to me. The magic word "accepted" mean the healthcare provider has to eat the $20.00 as a write-off, with out it the patient pays the $20.00. If your a cash patient ask for a discount, you'll be surprised how many times the provider will extend a 20% courtesy to you.

Re:Wait a minute (0)

Anonymous Coward | more than 3 years ago | (#32596396)

The reason the uninsured is charged $400 is called transfer pricing. The insurance company negotiates a rate below the actual cost of the item as a way of controlling its costs, and the provider then charges much higher amounts to non-preferred networks to recoup the loss and make it's profit. Not that the $50 isn't rock bottom below cost loss leader like retail, but typically there are so many more insured that the transfer price is incredibly high for the providers trying to make a certain margin.

The only state I can name that this is not how it works is MD, which actually regulates a maximum price for each procedure based on cost surveys and forces providers and insurance companies to compete on internal cost controls and customer service.

Re:Wait a minute (1)

Atomic Fro (150394) | more than 3 years ago | (#32596570)

The problem is you have it backwards. If a procedure costs $50 to do, they want to charge the uninsured person $75 and insurance company X $400. But the insurance company cartels have successfully lobbied to make different pricing illegal. So now, everyone pays $400.

My experience is mostly in pharmacy, and in that business, your example is sorta true. Using your price example, a drug costs a pharmacy $50. The pharmacy wants to charge the uninsured person $75. If you are on welfare, the pharmacy only gets $15. So in an attempt to make some sort of profit despite the massive losses from all the people on welfare, the pharmacy charges insurance companies $400.

Again, the insurance cartels have made different pricing illegal at the federal level. So, for that same $50 medication, the pharmacy has to charge the uninsured person $400, and the insurance companies $400, and they only get $15 from welfare.

Here is where the corruption comes in. That same $50 medication only costs $5 to manufacture. In order for the $50 medication to be placed on Insurance Company X's formulary, the company making the medication has to give them rebates. After the rebates, how much of the $400 is Insurance Company X really out? $15. But wait, isn't that your copay? Funny how that works out.

Re:Wait a minute (2, Informative)

mangu (126918) | more than 3 years ago | (#32595358)

when bidding on a government contract, if you can do the job for less than you bid it for you have broken the law

WTF? The guiding principle in government contracts should be to get the lowest practical price, not the lowest theoretical price. Otherwise the result would be that many companies will not care to bid for the government.

My first job was in detailing cost estimates for a company that custom built heavy mechanical equipment. One rule there was that for any government job the cost would be higher. There's so much paperwork involved in government jobs that it's impossible to do it at the same price you charge private companies.

Re:Wait a minute (4, Interesting)

iceborer (684929) | more than 3 years ago | (#32595760)

WTF? The guiding principle in government contracts should be to get the lowest practical price, not the lowest theoretical price. Otherwise the result would be that many companies will not care to bid for the government.

The guiding principle is that the government get the best combination of price, schedule, and quality. There is no theory in the TINA pricing. The company is required to say "our costs will be X and our profit Y to deliver Z to you when you want it." The government "allows" only a certain amount of profit on a contract. If you make more, perhaps a component's cost goes down hugely in the market, you are required to go back to the gov't and allow them a rebate on their cost. If you make more because you fudged the numbers, you get barred from federal contracts and may also end up behind bars. It is for these exact reasons that many companies don't do business with the government. I should also mention (having some experience in the process) that the companies still manage to hide an awful lot of "excess profit" and I don't feel the need to cry for them.

My first job was in detailing cost estimates for a company that custom built heavy mechanical equipment. One rule there was that for any government job the cost would be higher. There's so much paperwork involved in government jobs that it's impossible to do it at the same price you charge private companies.

Don't have a GSA Schedule Contract [fedmarket.com] , then. Trust me, those vendors who have them are happy to have one, but not all vendors/products work well with them. I think you're confusing contracting with the government in general with having a Most Favored Customer agreement with them. Not all (not most?) government contracts have such a clause.

Re:Wait a minute (1)

mangu (126918) | more than 3 years ago | (#32596404)

Don't have a GSA Schedule Contract, then. Trust me, those vendors who have them are happy to have one, but not all vendors/products work well with them.

Of course they are. Who wouldn't be happy to sell a toilet seat for $500? [google.com]

But if they were as honest as my former employer they would refrain from getting those contracts instead of doing whatever they do to sell stuff to the government. The fact is that this "Truth In Negotiations Act" is anything but. The way to circumvent it is to create new products, that are nearly identical to civilian products, but are sold only to the government. That way you can price it anyway you want.

Your taxpayer dollars would stretch much longer if the government simply deregulated everything and trust the market. Instead of forcing companies to hire a bunch of lawyers to read all those regulations and devise novel ways to falsify the truth, the government should try to get as many bidders as possible.

Re:Wait a minute (2, Informative)

Anpheus (908711) | more than 3 years ago | (#32596652)

The problem with the $500 toilet seat argument is that occasionally a contract over-runs cost, and they approach the government and say, "We ran over cost by $X, and behind schedule by Y days." The government and the supplier have to amend the contract's line items. But let's say your contract is to remodel an entire facility, including toilet seats. Any one component of that whole contract could have cost a $49,000 over-run. Maybe the whole contract was over $1,000,000 and $49,000 ain't that much (respectively), but they put the way it was itemized was a bit strange and they included a very specific item with a bunch of general or complex items. Like, they put in line items for the cost to remodel the entire cafeteria as "dining facility, $100,000", but they itemized the bathroom more specifically, with items like "toilet seat: $10" and "sink: $150" or whatever. And due to this weird use of line items, there are only 100 line items for the whole contract.

The government will ask the supplier for their total expenses in labor and items, which they have to provide per the contract, and then the government will apply the $490 over-run to every item on the contract.

Voila: $500 toilet set, $640 sink, and yet the cost of the whole dining facility only increased by $490 as well, or .49%.

Snopes has explained this in detail in the past. The government applies a straight increase to every item on the contract, because the many-to-many relationship between a supplier's costs and the items on a contract make it difficult or impossible to assign proportional increases. Result: $100 ballpoint pens, $500 hammers, and $1000 toilet seats. Yet on the same contract, vastly more expensive items were increased by the same amount.

Re:Wait a minute (1)

mangu (126918) | more than 3 years ago | (#32596776)

occasionally a contract over-runs cost, and they approach the government and say, "We ran over cost by $X, and behind schedule by Y days."

I've been there, done that, and that's not the way it goes.

When a government contract is over cost and behind schedule it's because somenone found a regulation no one had realized it existed.

Something like "this should be painted in Munsell 55 grey" [wikipedia.org] . The part had been painted in exactly that color, but the paint supplier didn't have the paperwork proving that his paint was exactly that color, so we had to scrape the paint off and repaint it with paint from another supplier that had the same color, plus the required paperwork.

I'm not making this up, it actually happened.

Re:Wait a minute (1)

Rakishi (759894) | more than 3 years ago | (#32596848)

I'd love to see a similar law passed for consumer transactions.

Apparently you don't understand capitalism, how sad. Ignoring various other problems, seriously I could go on for pages, you'd kill investment in any remotely risky company. Congratulations. Have fun learning Chinese in 20 years. High risk requires high profits in whatever investment actually succeeds.

Let's say a group of individuals invests in into twenty new cutting edge small companies with revolutionary products. Let's say it's startups. Of those twenty, nineteen fail miserably and they lose all investment. One succeeds. The profits for that one are, let's say, 100%. Nonetheless the product is so nifty people pay the premium. You might say the profit is excessive however it's there to make up for the high risk. The investors may only make a 10% return on investment overall due to the other 19 companies failing.

Re:Wait a minute (1)

geekoid (135745) | more than 3 years ago | (#32596942)

You can make the same demands for any vendor you want. The vendor doesn't have to accept them and can take their business elsewhere.

The government spends a lot of money, they can make demands like that. Just like any large organization
can.

Re:Wait a minute (1)

claytonjr (1142215) | more than 3 years ago | (#32595694)

In order to get on the GSA sched's, you have to provide a price for your product, to the gov't that is considered fair. Otherwise, this happens.

Don't sue, get EVEN !! (0)

Anonymous Coward | more than 3 years ago | (#32594830)

Get EVEN !!

Good! (5, Insightful)

timeOday (582209) | more than 3 years ago | (#32594836)

Glad to see the govt. fighting to get more for our tax dollars, not just sitting there getting bilked by dishonest vendors.

Re:Good! (-1, Offtopic)

Lunix Nutcase (1092239) | more than 3 years ago | (#32594932)

Yeah cause getting back a few million is definitely going to make a huge dent in that multi-trillion dollar debt. Hopefully you aren't thinking any of these savings are going to come back to you or any of us, either, as it'll just quickly get earmarked for pork projects.

Re:Good! (1)

rsborg (111459) | more than 3 years ago | (#32595030)

Yeah cause getting back a few million is definitely going to make a huge dent in that multi-trillion dollar debt. Hopefully you aren't thinking any of these savings are going to come back to you or any of us, either, as it'll just quickly get earmarked for pork projects.

And what makes you think this wasn't pork to begin with?

I agree with the GP commenter... you will only save money a few million at a time this way, but put a few of these kinds of efforts together and you will see a big change. Give credit where due, instead of whining about how it's not good enough. Here's a hint it'll never be good enough, so take what you can get.

Re:Good! (0, Offtopic)

Lunix Nutcase (1092239) | more than 3 years ago | (#32595126)

you will only save money a few million at a time this way, but put a few of these kinds of efforts together and you will see a big change.

Yeah, we're going to see some real big change. How cute and naive. Any such purported "savings" will just be funneled to other pork projects. Come back to me when you see something like the government cutting back on something and saving 10 billion dollars.

Give credit where due, instead of whining about how it's not good enough. Here's a hint it'll never be good enough, so take what you can get.

I'm sorry, but I'm never going to jizz in my pants over a couple million dollars when the government is spending upwards of 5+ billion dollars a day.

Re:Good! (0, Flamebait)

commodore64_love (1445365) | more than 3 years ago | (#32595414)

I agree with you 100%, but per usual Congress already spent the "millions saved" from this lawsuit. They just passed another healthcare bill costing 50 billion dollars to test and certify doctors as "doctors", and the Congressional Budget Office announced an "ooops" in their calculations. The deficit-neutral Pelosicare bill will now cost $110 billion more, per year, than originally projected. (In other words it won't save money as advertised; it will drive us deeper into debt.)

Maybe we can sue a few more Oracles to offset these extra expenditures. 160 billion / 100 million == 1600 companies need to be sued.

Yeah. That won't work. I'm glad I run my family budget better than Congress has run the last..... oh, 100 years of government budget.

Re:Good! (0)

Anonymous Coward | more than 3 years ago | (#32594966)

you know you can sue on behalf of the US government (technically tax payer) if you see fraud, waste, or abuse. It's called a qui tam action. So if you're upset the gov ain't going after fraudsters; you do it. The government will get an option to join in but doesn't have to.

Re:Good! (1)

wholestrawpenny (1809456) | more than 3 years ago | (#32595260)

They'll just spend any savings on some other bologna project. So what's the difference...

Re:Good! (2, Informative)

clarkkent09 (1104833) | more than 3 years ago | (#32595368)

I hope you are being sarcastic in your praise of the government. Yes of course they should fight to get more out of our tax dollars but we are talking about a few million here, when the federal government

- loses $25 billion (Yep, lost as in nobody knows what happened to it. Yep, $25 billion)- google "Unreconciled Transactions Affecting the Change in Net Position" section in the Treasury Dept financial report
- wastes $60 billion [senate.gov] annually on Medicare fraud. Just wait until Obamacare kicks in.
- spends at least $90 billion on programs that are "ineffective, marginally adequate, or operating under a flawed purpose" [googleusercontent.com] (partial audit by the white house)

..etc etc this is just the first 3 examples I found on google with easily linkable references. Here's some more [heritage.org] .

Even assuming that ALL of the hundreds of government agencies [usa.gov] and spending programs [aidpage.com] are necessary, there are 100s of billions wasted annually just through inefficiency and carelessness with which those programs are managed.

Re:Good! (0)

Anonymous Coward | more than 3 years ago | (#32595590)

Even assuming that ALL of the hundreds of government agencies and spending programs are necessary, there are 100s of billions wasted annually just through inefficiency and carelessness with which those programs are managed.

That's for sure. Like that approximately $1 trillion we mislaid in Iraq. Darn the luck.

Re:Good! (1)

TheNucleon (865817) | more than 3 years ago | (#32595814)

You had interesting information in your post, but when I saw the word "Obamacare", my Glenn Beck automated filter kicked in. Try to keep the useless talking points phrases out of it next time, and perhaps your information won't be lost in the noise.

Re:Good! (1)

clarkkent09 (1104833) | more than 3 years ago | (#32595898)

I don't watch Glenn Beck. I didn't realize Obamacare is a dirty word now, that's what a lot of people call it:

http://www.cbsnews.com/8301-503544_162-20007679-503544.html [cbsnews.com]
http://www.time.com/time/magazine/article/0,9171,1914973,00.html [time.com]
http://online.wsj.com/article/SB124208383695408513.html [wsj.com] ...

Re:Good! (1)

TheNucleon (865817) | more than 3 years ago | (#32596268)

Perhaps not a dirty word, but I've never heard it used in a positive or respectful fashion. Perhaps that's just my own bias from observation, I stand corrected. In any event, I did appreciate the information in your post...

Re:Good! (1)

Anpheus (908711) | more than 3 years ago | (#32596688)

Calling something Obamacare, Hillarycare, etc, is a method of critiquing it and assigning a name.

No one wants to fight "Universal Health Care". That sounds amazing! (That's not what we got in the bill, but sort of close enough.)

But hey, call something Obamacare, when your constituents and supporters already dislike Obama, and the transitive property of dislike transfers over. Of course, to people who support the health care reform, they don't know why it's called Obamacare, because so many different pieces of the passed bill came from different representatives and senators. But even so, they typically like Obama, so they don't see it as a negative, they're just confused.

But its purpose is exactly that, to polarize and split the population. Your position on federal health care proposals might be mixed and complex. Your position on any individual idea in any one of those proposals might differ from the next guy. But call a massive health care overhaul "Obamacare" and suddenly you've turned it into an "us versus them." It's purely a tool of dumbing down the debate.

If you don't believe me, watch Fox News coverage of "Obamacare" on youtube and the way in which they use the term to obfuscate and blur what it actually consists of, and the use of Obama's name to immediately turn republican and conservative opinion against it.

Re:Good! (1)

timeOday (582209) | more than 3 years ago | (#32596602)

- loses $25 billion (Yep, lost as in nobody knows what happened to it. Yep, $25 billion)- google "Unreconciled Transactions Affecting the Change in Net Position" section in the Treasury Dept financial report

That means the accounting did not add up, it probably does not mean that somebody got away with $25 billion in diamonds or something.

- wastes $60 billion annually on Medicare fraud. Just wait until Obamacare kicks in.

How much do private insurers lose to insurance fraud?

- spends at least $90 billion on programs that are "ineffective, marginally adequate, or operating under a flawed purpose" (partial audit by the white house)

Well, that's the hard part, isn't it. Getting everybody to agree what is pork.

Look, I'm not saying government is perfect, but right now I do think there's an unwarranted streak of paranoia that most tax money goes straight into a bonfire, which isn't true.

Re:Good! (3, Insightful)

COMON$ (806135) | more than 3 years ago | (#32595682)

LOL, this is a RARE occurance. When I worked for the state there was an agency DAS that would use the collective buying power of the state to supposedly negotiate contracts for lower prices. The problem? They would not renegotiate so when cat-5 cables would drop in price, the vendor would be obligated to sell it for the price when it was negotiated. I was forced to pay $15 for a 10 ft cable in 2006 from CDWG. How do they get away with it? They show a cost savings for every purchase because at the time they negotiated the prices, everything was $20 a cable. So every time my agency would order a cable in 2006 DAS would show a $5 savings.The agency had lost all purpose and had turned into a huge money pit, they were more interested in pulling a profit than serving the interests of the agencies they were to serve. Yes they are not allowed to pull a profit, but nonetheless they did, they were caught and magically no agency was billed for mainframe time for 6 months or so...

I am glad that there are some places where people are looking out for these kinds of things in the gov't though, it gives some bright hope that things can be done properly rather than as lazily as humanly possible.

Re:Good! (0)

Anonymous Coward | more than 3 years ago | (#32596956)

I'm familiar with government purchasing contracts, usually there is nothing wrong with a vendor selling items on contract at a lower price then the contract allows. You just may need to negotiate to get a market price for those cables. Also, you are generally not required to purchase off of a government contract if you have multiple bidders, as long as you pick the lowest bidder. Sure, there are bureaucratic hoops to jump through, but if you really want to save the government money, then that's what you have to do. The system itself is a big problem, but there are ways to work within it responsibly. Far too many people can't be bothered to go the extra mile, though.

Tens of Millions? (1)

ArhcAngel (247594) | more than 3 years ago | (#32594838)

That's still better than the tens of trillions of dollars US Politicians cost the taxpayer.

Re:Tens of Millions? (1)

DeadDecoy (877617) | more than 3 years ago | (#32594914)

I'd blame that on shoddy loans issued by investment bankers, while politicians are more or less in charge of covering up the mess. But your point still stands. Seriously, the amount of money lost on overpriced Oracle products is a drop in the bucket relative to everything else, and that money probably went towards paying engineers to actually do something.

Re:Tens of Millions? (1)

Lunix Nutcase (1092239) | more than 3 years ago | (#32594954)

I'd blame that on shoddy loans issued by investment bankers, while politicians are more or less in charge of covering up the mess.

The only flaw in that is that the US already owed the 10s of trillions long before the bailouts even started.

Re:Tens of Millions? (1)

alexborges (313924) | more than 3 years ago | (#32595016)

The real lost in this procurement contracts is that they are anticompetitive. How on earth are younger DB companies to compete with oracle if the government elevates the barrier of entry for them while it reduces them for the huge IT giants?

Really, govt. IT procurement needs to change and be more transparent worldwide.

Re:Tens of Millions? (1)

EdelFactor19 (732765) | more than 3 years ago | (#32595782)

The small db company doesn't start out by selling their product to the US government perhaps?

how does it lower the barrier of entry for the giants though?

Re:Tens of Millions? (1, Troll)

moosesocks (264553) | more than 3 years ago | (#32594976)

You're correct. Politicians are responsible for the allocation of the government's budget, the revenue from which is largely derived from taxes.

Your point?

Re:Tens of Millions? (0, Insightful)

Anonymous Coward | more than 3 years ago | (#32595080)

No, no, you don't understand! This is classic trickle-down economics at work. Larry Ellison's cash will eventually be spent on the hard-working American populace, so it's all coming back to the taxpayer.

Right, mr. Reagan?

Mr. Reagan?

Hello?

Re:Tens of Millions? (0)

Anonymous Coward | more than 3 years ago | (#32595336)

eh... you know he's dead, right?

Re:Tens of Millions? (1)

MaerD (954222) | more than 3 years ago | (#32595678)

When has that stopped anyone from running for office?

time to change to another Oracle product (3, Funny)

kubitus (927806) | more than 3 years ago | (#32594880)

get MySQL!

Re:time to change to another Oracle product (1)

alexborges (313924) | more than 3 years ago | (#32594940)

WHy would one depend on a company as terrible as Oracle if you can get MariaDB, the mySQL fork from the people that invented MySQL. Check: http://askmonty.org/wiki/Main_Page [askmonty.org]

Re:time to change to another Oracle product (1)

Lunix Nutcase (1092239) | more than 3 years ago | (#32594996)

Because it'll make Monty even more butthurt than he already?

Re:time to change to another Oracle product (1)

alexborges (313924) | more than 3 years ago | (#32595040)

HO!

Thats just about the only reasonable answer... Really, it makes no sense to use FOSS from oracle that is never going to be seriously mantained that way by oracle.

Re:time to change to another Oracle product (1)

John Hasler (414242) | more than 3 years ago | (#32596244)

Right. Use PostgreSQL.

Right.... (5, Insightful)

UrQUan3 (612520) | more than 3 years ago | (#32595014)

In working for the government, we are routinely forced to use GSA for purchases. GSA is often far higher than the open market price. As a GSA contract is often good for over a year, prices that were good for a Core2 system last year are painful today. Modern systems aren't even available without circumventing GSA. GSA was intended for cutting grass and painting buildings, not IT purchases.

Re:Right.... (1)

alfredos (1694270) | more than 3 years ago | (#32595516)

The driving cost in those kinds of activities, which is probably labor for the most part plus and a bit of machinery leasing, is way more inelastic (is that even a word?) than the cost of a software license. As everyone here knows, the cost of a software license is anything you want to put in the tag. Perhaps if GSA is useful for the things you quote, it'd also be fine for software development, but never for licensing.

Re:Right.... (0)

Anonymous Coward | more than 3 years ago | (#32595974)

Beeeee Essssss. Oracle are rip-off merchants, always have been. How many cores do you have today? Pay more. How many connections do you have today? Pay more. It's a slug database that isn't needed in the vast majority of the installed user base. Their days are numbers. 10 years from now, Oracle will be on Death's list and stagnant like mainframes, and stock will be way way down, unless they can reinvent themselves and come up with something beyond late 80s database ideology. Why do you think they bought Sun, InnoDB and MySQL? They're hoping to find a fit for their future. It should be possible, even Olympus managed it before the last person left the building. And that was going some. Maybe they'll hope Google buys them out.

Thorough Summary (1)

balbus000 (1793324) | more than 3 years ago | (#32595092)

The summary pretty much restates the entire article...except for listing the people who declined to comment on the situation.

Re:Thorough Summary (1)

Major Blud (789630) | more than 3 years ago | (#32595258)

I remember that right after the 9/11 attacks, Oracle was offereing their software to the federal government for free. Anyone else remember this? I know that this was just bait-and-switch on the part of Oracle, but it'd be awesome if they gave the software to the government for free and then discounted it FURTHER for other customers....I guess they were paying people to use Oracle ;-)

'tens of millions of dollars,' (2, Insightful)

HikingStick (878216) | more than 3 years ago | (#32595146)

Overall, Oracle's actions cost US taxpayers 'tens of millions of dollars,'...

And now, we can add $10m more for the costs associated with a long, protracted trial, and all the associated appeals.

Aside from Government Contracts (1)

nurb432 (527695) | more than 3 years ago | (#32595232)

Has oracle not screwed anyone they do business with?

No, not a simple troll. I have had dealings with them 4 times in my career ( thankfully been able to avoid them most of the time ) and they took advantage every single time.

Re:Aside from Government Contracts (2, Funny)

david_thornley (598059) | more than 3 years ago | (#32595432)

There's people who haven't done much business with Oracle. Some of them haven't been screwed yet.

Re:Aside from Government Contracts (1)

fuzzyfuzzyfungus (1223518) | more than 3 years ago | (#32595482)

One Rich Asshole Called Larry Ellison...

Re:Aside from Government Contracts (1)

ClaytonianG (512706) | more than 3 years ago | (#32595674)

My biggest beef with oracle is the fact they actually rely on license violations as part of their revenue.

It is way too easy to accidentally violate license terms.

Reality check (1)

gwayne (306174) | more than 3 years ago | (#32595346)

What this really appears to be about is a whistleblower getting a piece of the action. Since Oracle was overcharging the gubermint, this guy will get something like 15-25% of the settlement according to the False Claims Act.

Re:Reality check (1)

fuzzyfuzzyfungus (1223518) | more than 3 years ago | (#32595520)

In situations where you can't investigate everything yourself, doesn't it make sense to give the private sector an incentive to investigate for you? Seems wholly logical. If anything, because the False Claims Act applies to a lot of potential whistleblowers, it is far harder to buy off all of those than it is to corrupt a single investigative body...

Ahhh, Government contracts.... (1)

XB-70 (812342) | more than 3 years ago | (#32595568)

This is not new. Here's an excerpt from Toronto Computer Leasing Inquire (Wiki): "On January 1, 1998, the Municipality of Metropolitan Toronto and its six lower-tier cities (Toronto, Scarborough, North York, Etobicoke, East York and York) were amalgamated into the single "megacity" of Toronto. In one of the new city's first official acts of business, computer equipment was leased for city councillors' offices from MFP Financial Services, at a value of $1,093,731. City staff have not been able to produce any documentation to prove that this contract was awarded through proper procedures. In May, 1999, the city issued a Request For Quotations for its new computer acquisition needs. MFP was one of the bidders, and was awarded the contract in July of that year. MFP was contracted to provide $43 million of computer equipment to the city on a three-year lease agreement. However, the final lease agreement was not signed until after the 90-day price guarantee had expired. That fall, the city sold its owned computer equipment to MFP, and then leased it back as well. Over the duration of the agreement, the city paid $85 million to MFP, rather than the original $43 million approved by city council. As well, many of the equipment schedules were for five-year leases rather than three. Some of these leases were later restructured to extend the lease terms even further, resulting in additional costs. In December of that year, the city acquired 10,000 Oracle database licenses, again through an MFP lease. This turned out to be a serious overestimate of the city's actual needs. These issues came to light in late 2001, after an investigation by Toronto city councillors David Miller and Bas Balkissoon. In February, 2002, the Toronto Computer Leasing Inquiry was established by city council. The commissioner of the inquiry is Madam Justice Denise Bellamy of the Ontario Superior Court of Justice."

But is it by law? (1)

prediff (1834106) | more than 3 years ago | (#32595602)

From the GSA Schedules FAQ @ http://www.gsa.gov/Portal/gsa/ep/contentView.do?faq=yes&pageTypeId=17112&contentId=8106&contentType=GSA_OVERVIEW#3 [gsa.gov]

How do I know I am getting the best price?

GSA's goal is to be the best value supplier of choice.

GSA Schedule contracts are negotiated with the intent of achieving the contractors' "most favored customer" pricing/discounts under similar conditions. In order to ensure that they receive the best value at the lowest overall cost when using GSA Schedule contracts, agencies are encouraged and empowered to seek price reductions, not only for orders over the maximum order threshold or when establishing Blanket Purchase Agreements (BPAs), but also when circumstances warrant (see FAR 8.405-4).

It doesnt exactly say that the vendors are *bound* to offer them the lowest cost. Only that the negotiations are made such that they reach the lowest price. Big difference.

Under what authority? (1)

Caerdwyn (829058) | more than 3 years ago | (#32595820)

So what happens if:

1. It's 2008. Oracle charges everyone else 600 per seat per year but Uncle Sam gets it at 500 per year; it's a 3-year contract. Oracle delivers, and receives 500 per seat.

2. In 2010, Oracle in response to competition cuts its global rate to 400 per seat. But Uncle Sam, under that 3-year contract, is paying 500 per seat until 2011.

Is Oracle therefore forbidden to reduce its prices? Is the contract with the government null and void, allowing the government to terminate the contract earlier than they otherwise would?

This whole bit about "you have to treat others worse than me; you have to charge others more than you charge me" is repugnant. Negotiate a price, and if it's acceptable, pay it and keep your nose out of other people's contracts. As long as Oracle is delivering what it said it would, what's the constitutional authority for the government interfering in private contracts? Why should what a company charges others be anybody else's legal balliwick in an industry that is not a regulated public utility?

Oh, wait, I forgot. ALL business is a public utility now, subject to nationalization and seizure. And Larry Ellison is a poopyhead, so his business doesn't get the same protections as others. Never mind.

Re:Under what authority? (1)

Red Flayer (890720) | more than 3 years ago | (#32596598)

Is Oracle therefore forbidden to reduce its prices? Is the contract with the government null and void, allowing the government to terminate the contract earlier than they otherwise would?

No, Oracle is then required to offer the same reduced prices to the government -- it's part of the hypothetical three-year contract that Oracle agreed to. Oracle is free to cut their prices as much as they want for any customer they want -- but they are operating under a contract that guarantees the government gets the best price Oracle offers anyone else.

So, to answer your question of "Under What Authority": The authority of a party to the agreement that Oracle and the government both signed and are required to meet the terms of.

The government is not "regulating" Oracle here, they are not nationalizing Oracle, they are not seizing Oracle -- they are pursuing their rights to force Oracle to meet the terms Oracle agreed to.

Take your bogeyman somewhere else... or at least RTFA before you drag him out from under your bed.

Re:Under what authority? (1)

h4rr4r (612664) | more than 3 years ago | (#32596708)

You give Uncle Sam a rebate.

All business is plenty free, feel free not to take on these kinds of contracts.

higher education...huge discount (0)

Anonymous Coward | more than 3 years ago | (#32596170)

Higher education has typically received a huge discount, and not just for educational use, but for the business-side of the universities.

choosing Oracle costs tax payers (1)

randallman (605329) | more than 3 years ago | (#32596178)

Most of the applications I see that use Oracle would work fine or better with an OSS database such as Postgresql or even SQLite. For some reason managers feel good about themselves when they spend gobs of money to run their app on Oracle. Sure there are apps that need Oracle's 24/7/365 top notch support, but most don't. In most situations, a catastrophe could be handled by importing yesterday's backup after a little downtime, saving bucks and DB management headaches.

Tens of Millions? (1)

clint999 (1277046) | more than 3 years ago | (#32596312)

They'll just spend any savings on some other bologna project. So what's the difference...

Software Companies Should... (1)

N8F8 (4562) | more than 3 years ago | (#32596354)

Be required to store all license info and be audited by any customers for the licenses they own. And provide free downloads for any software they own.

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