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Justice Department Joins Fraud Lawsuit Against Oracle

Soulskill posted more than 4 years ago | from the just-tell-them-it-was-for-national-security dept.

Government 100

suraj.sun writes with news that the US Department of Justice has joined a lawsuit alleging Oracle of overcharging the federal government for its software products. Quoting: "In a nutshell, the lawsuit argues that Oracle's government customers — a wide array of agencies, including the State Department, the Energy Department, and the Justice Department itself — got deals 'far inferior' to those the enterprise software giant gave to its commercial clients. The allegations stem from a software deal between Oracle and the federal General Services Administration that the Justice Department says involved 'hundreds of millions of dollars in sales' and that ran from 1998 to 2006. Under the contract, Oracle was required to inform the GSA when commercial discounts improved and to offer those same discounts to government buyers. Oracle misrepresented its true commercial sales practices and thus defrauded the US, the lawsuit contends.

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The first rule on playing against the house... (1)

nobodylocalhost (1343981) | more than 4 years ago | (#33090200)

The house makes the rules.

Re:The first rule on playing against the house... (3, Insightful)

Monkeedude1212 (1560403) | more than 4 years ago | (#33090220)

Problem is - who is the house?

Most people would say the government, and then other people tote in and say the government is run by corporations.

Re:The first rule on playing against the house... (1)

jd (1658) | more than 4 years ago | (#33090300)

Perry the Platypus.

Re:The first rule on playing against the house... (1)

hondo77 (324058) | more than 4 years ago | (#33090632)

Then again, he is a platypus and platypuses don't do much.

Re:The first rule on playing against the house... (0)

Anonymous Coward | more than 4 years ago | (#33090848)

All of a sudden the US government is concerned about how much it's paying for things...? I'm a tax payer and I'm going to get a job soon, that way my "elected" officials can stop the madness and go back to pissing away the %60 of my income I provide each year.

Yes, 60% is accurate for those of you nut-sacks that looked at your Turbo-Tax and it said 15% effective tax rate. Last year I paid 60% of my income out in taxes. Add up federal, local, medicare, social security, sales, property, cell phone, cable, utilities, etc...

 

Re:The first rule on playing against the house... (1)

similar_name (1164087) | more than 4 years ago | (#33091128)

cell phone, cable

What?

Re:The first rule on playing against the house... (1)

Anonymous Cowpat (788193) | more than 4 years ago | (#33091432)

some sort of a sales tax on cell phone or cable?

I'm just stabbing wildly - here in the UK there's a specific tax on insurance premiums (for instance)
(Favourite conversation from a friend who works in the industry: "This 'insurance tax', do I have to pay it?", "yes, it's a tax")

Re:The first rule on playing against the house... (1)

Coren22 (1625475) | more than 4 years ago | (#33109726)

Yes, the government charges taxes on Cell and Landline phone lines

From my most recent Verizon Bill:

Service 101.98
Taxes 1 2.06
    Fed Universal Service charge 1.07
    Regulatory Charge .16
    Administrative Charge .83
Taxes 2 3.72 (sales tax)

So I am paying $4.95 in taxes, and .83 for Verizon to collect this money.

Re:The first rule on playing against the house... (0)

Anonymous Coward | more than 4 years ago | (#33102642)

All of a sudden the US government is concerned about how much it's paying for things...? I'm a tax payer and I'm going to get a job soon, that way my "elected" officials can stop the madness and go back to pissing away the %60 of my income I provide each year.

Yes, 60% is accurate for those of you nut-sacks that looked at your Turbo-Tax and it said 15% effective tax rate. Last year I paid 60% of my income out in taxes. Add up federal, local, medicare, social security, sales, property, cell phone, cable, utilities, etc...

Well, nice rant, but nothing to back it up, so I guess there's nothing to see here. I'll move along, move along.

Re:The first rule on playing against the house... (1)

countSudoku() (1047544) | more than 4 years ago | (#33090314)

Both are true! Oracle just needs to hire a couple of fancy-pants lobbyists, pay some $6000 "Influence Incentives", not(!) bribes, and they're all set. Bob's your uncle!

Oracle was required to inform the GSA when commercial discounts improved and to offer those same discounts to government buyers

WTF?! That's not good for Oracle's bottom line, they are not open source anymore, Uncle Sam! They are TRYING to turn a nice profit in this economic downturn for crapping out loud! I can understand how Larry would be offended by this statement at a time when he was trying to purchase the Golden State Warriors basketball team. How rude!

Re:The first rule on playing against the house... (1)

ISoldat53 (977164) | more than 4 years ago | (#33090454)

This is a standard clause in the GSA contract any vendor must sign to do business with the gov. GSA gets the same deal you give your best customer. If you violate this clause the GSA can go back to the time of the violation and demand a refund for any product or service you've sold since the violation.

Re:The first rule on playing against the house... (0)

Anonymous Coward | more than 4 years ago | (#33090986)

Why would governments be ruled by corporations? Corporations can't stop representatives from voting whatever they want. That's why corporations need lobbists. But lobbists can't change a vote, they only can try to convince someone. And apparently they know how to do that. Why wouldn't they try, if the representatives are open to change their minds? But that doesn't means lobbists can run a nation.

Re:The first rule on playing against the house... (1)

KingMotley (944240) | more than 4 years ago | (#33091618)

I do believe he is referring to the house of congress.

Re:The first rule on playing against the house... (0)

Anonymous Coward | more than 4 years ago | (#33091732)

aren't corporations run by people? Circular reasoning lead me to thinking that human nature is the issue in all this.

Re:The first rule on playing against the house... (1)

GSV Eat Me Reality (1845852) | more than 4 years ago | (#33092614)

Most people would say the government, and then other people tote in and say the government is run by corporations.

  Both of those are true. Like Sony's subdivisions doing things that conflict with each other.

  This is hardly new. Large corporations with very diverse holdings have suffered from this particular syndrome for a very long time. It's one of the idiotic inefficiencies that come along with unfettered capitalistic greed. The people who are making obscene profits off of it are hardly going to care - if they did, they would correct the problem, no? (If they don't know it's happening within their corporation, then they are incompetent. Pick one or both of the two choices)

Glad I don't use Oracle! (3, Funny)

Anonymous Coward | more than 4 years ago | (#33090214)

It's crap like this that really makes me glad I stick with more reputable vendors like Sun.

Re:Glad I don't use Oracle! (1)

StakFallT (582631) | more than 4 years ago | (#33090734)

You do realize, Oracle bought Sun right? Though, I know where you're coming from. I wonder if Oracle will have to reimburse the govt back the difference of overcharge. Though... it's a shame that if it does go down that route, it wouldn't have happened before they bought Sun, because then with less money an acquistion would be less likely and Solaris and Java might still be owned by Sun.

Re:Glad I don't use Oracle! (1)

techsoldaten (309296) | more than 4 years ago | (#33090922)

*woosh* right over his head.

Hope that did not clip your do.

Re:Glad I don't use Oracle! (1)

cbraescu1 (180267) | more than 4 years ago | (#33091334)

You do realize, Oracle bought Sun right?

You do realize he was being ironic, right?

Re:Glad I don't use Oracle! (1)

StakFallT (582631) | more than 4 years ago | (#33091650)

Actually no I didn't. It didn't read sarcastic at all. Just read as just someone not informed *shrug*

Re:Glad I don't use Oracle! (1)

Frnknstn (663642) | more than 4 years ago | (#33094106)

I'm with the other guy. Didn't detect a hint of irony there.

Re:Glad I don't use Oracle! (1)

mabhatter654 (561290) | more than 4 years ago | (#33096824)

exactly, why wasn't the FTC involved to hold up the purchase of SUN until Oracle had settled with the government. Essentially Oracle "got away with it" because they got to use the extra money to buy out competition that might have scored one of those cushy government contracts because Oracle was too expensive and didn't keep their contracts.

Re:Glad I don't use Oracle! (1)

WrongSizeGlass (838941) | more than 4 years ago | (#33091118)

Maybe if Oracle had purchased a product that it could use to store their pricing tables and client commitments they could have avoided this mess. Is DBase still in business??

Re:Glad I don't use Oracle! (1)

rubycodez (864176) | more than 4 years ago | (#33091964)

I here you, I'm sticking with DEC gear for the same reason

Is IT the next industry.... (0, Troll)

nurb432 (527695) | more than 4 years ago | (#33090312)

....that the feds are going to take over?

Re:Is IT the next industry.... (1)

ISoldat53 (977164) | more than 4 years ago | (#33090476)

They already have they are the big customer in virtually any market.

The government can pay more (0)

Anonymous Coward | more than 4 years ago | (#33090322)

therefore they get charged more. This is true for any sales negotiation, private or government.

Re:The government can pay more (4, Insightful)

KarmaMB84 (743001) | more than 4 years ago | (#33090916)

Until you sign a contract that says it's not true.

Oracle was dumb... (1, Funny)

Anonymous Coward | more than 4 years ago | (#33090330)

Of all the people to try and rip off.. The government isn't the best to do it to.

Or in /. terms.. In soviet russia... The government still rips YOU off.

It's never the other way around.. :D

Re:Oracle was dumb... (1)

Yaur (1069446) | more than 4 years ago | (#33093486)

Pretty much everyone who does business with the government at that level rips them off.

Gov looking to save money? (1)

DigiShaman (671371) | more than 4 years ago | (#33090350)

Well, it's about damn time!

If our tax dollars are to be spent, they should be spent wisely. The idea that you can sell goods and services to the government at inflated prices needs to stop. Part of the problem is the government itself not doing their homework until after the fact. The other part is that everyone knows you can screw the government over. So naturally, crap like this happens.

So now that the tax revenue is less, the government is just *now* trying to save money. I'm pleased, and pissed at the same time.

Re:Gov looking to save money? (1)

clarkkent09 (1104833) | more than 4 years ago | (#33090420)

Let's not get carried away just yet. Ripping off the government is the standard practice in all industries (you know the saying "good enough for government work") because the customer who is spending other people's money is never as careful as when they are spending their own. This is just a tip of the iceberg.

Re:Gov looking to save money? (1)

timeOday (582209) | more than 4 years ago | (#33093104)

because the customer who is spending other people's money is never as careful as when they are spending their own

Explain how a govt. purchaser's job or accountability is any different than one at a private company.

Re:Gov looking to save money? (1)

sumdumass (711423) | more than 4 years ago | (#33093156)

Unions contracts that practically make it impossible to fire someone for job performance who isn't a political appointee or working in a politically appointed office and quotas that don't look for qualified people that are instead more worried about filling the spot with the X percentage required by law.

And yes, this boils down to bad management. Both in the past and present.

Re:Gov looking to save money? (1)

clarkkent09 (1104833) | more than 4 years ago | (#33093256)

a) Any kind of a large purchase order like this in a private company will have to be approved by senior management, in this case the head of IT who is at most one or two layers away from the board. So, very close to the people whose money he is spending and who hired him for that position. In addition, he is likely to be a large shareholder himself. By contrast a government agency has a fixed budget approved by a congressional committee and there is no sense of ownership or a reason to be extremely careful with it, other than to avoid screwing up in a major and public way which might get you a slap on the wrist since it is next to impossible to fire you.

b) Companies have to earn their money. When they run out, they go bust (recent bailouts notwithstanding). When the government runs out of money it keeps on spending, by printing more, borrowing more or taxing more. In all cases the money is obtained by force. Somebody who has to work hard to earn their money is always more careful with it than somebody who gets it regardless.

Re:Gov looking to save money? (1, Interesting)

garcia (6573) | more than 4 years ago | (#33090466)

If our tax dollars are to be spent, they should be spent wisely. The idea that you can sell goods and services to the government at inflated prices needs to stop. Part of the problem is the government itself not doing their homework until after the fact. The other part is that everyone knows you can screw the government over. So naturally, crap like this happens.

I am a tax watchdog for the county I live in. I study government tax dollar expenditures for tons of different things ranging from website upgrades/design to large arts centers run by third party management companies. Now, I am all for keeping taxes low and thus expenditures for changes, upgrades, and the running of money making enterprises low. I think that government entities should be working hard to do that but what I don't believe is that corporations are required to make their bidding lower to the government because they aren't as capable as private entities to ensure their contracts are reasonable.

Let's take the website and arts center management for example. A simple city website redesign is going to cost my hometown nearly $80,000 because they don't know any better. They seriously feel that this is a fair price and have been saving up for 10 years to cover the costs. For the changes they want and based on the costs incurred by surrounding cities (other government entities which happily provided me with their own costs!) it would appear that they are being charged at least by $20,000 more than the other cities who have recently underwent change and probably another $10,000 on top of that.

As for the arts center, several other government agencies have utilized the management company that another local city is using. All of those other outfits have been running at unacceptable losses for more than five years and now guess what? The city adjacent to mine is as well. Why did the city management and councils allow these things to happen?

Simple: because they're not able to make sound business decisions on their own and the real world sucks. Do I think that private companies should be able to take advantage of anyone who is stupid enough not to do their homework? Yup. That's how businesses make money.

Let's stop this happy fucking horseshit world we have suddenly found ourselves in where it's someone else's fault that the government got overcharged. Either hire competent people to oversee the bidding on expenditures such as these and allow those people the freedom to make tough choices to save money or suffer the consequences. Stop meddling in private business because you are inept when it comes to dealing in the real world.

Government wants to pretend its like the private world in so many ways, especially at reelection time, but then it goes off and does something like this. And they wonder why they get taken advantage of. Ugh.

Re:Gov looking to save money? (5, Informative)

edmudama (155475) | more than 4 years ago | (#33090606)

This isn't about the government paying more than a private entity.

This is about the government having a contract with oracle guaranteeing a price match with other parties for the duration of the contract, which oracle tried to get around by using obscure pricing practices with new private entity business. Oracle agreed to match the prices, and then lied about what they were charging. That's fraud.

Re:Gov looking to save money? (1)

garcia (6573) | more than 4 years ago | (#33091052)

As you can see I quoted the parent not the summary or the article itself and was responding to him so while I appreciate your duplication of effort from what I already knew about the topic, I am not sure how it applies to what I wrote.

Re:Gov looking to save money? (1)

WrongSizeGlass (838941) | more than 4 years ago | (#33091180)

I am not sure how it applies to what I wrote

He must have made the common mistake of clicking the reply button instead of the apply button. It happens a lot around here ;-)

Re:Gov looking to save money? (0)

Anonymous Coward | more than 4 years ago | (#33092356)

As you can see I quoted the parent not the summary or the article itself and was responding to him so while I appreciate your duplication of effort from what I already knew about the topic, I am not sure how it applies to what I wrote.

If you would use quote instead of italic, it would be obvious.

My quote of you was using quote. This paragraph is using italic.

Re:Gov looking to save money? (1)

garcia (6573) | more than 4 years ago | (#33092906)

Oh forgive me for doing things the way I have been on Slashdot for 13+ years. Old habits are hard to break. By bad.

Re:Gov looking to save money? (1)

drinkypoo (153816) | more than 4 years ago | (#33094028)

This is about the government having a contract with oracle guaranteeing a price match with other parties for the duration of the contract, which oracle tried to get around by using obscure pricing practices with new private entity business. Oracle agreed to match the prices, and then lied about what they were charging. That's fraud.

Defense contractors get around it by having separate arms. GE is a classic example. They sell all kinds of stuff to government. Like big fucking guns. And they don't pay taxes; indeed, they are sitting on massive cash reserves, which are stored internationally. This is not about money, because the federal government does not give one tenth of one fuck about how much of your money they spend: the people running it only pay taxes on a small percentage of their income, and their reported income is only a small percentage of their actual wealth. This is about forcing Oracle to do something that the government wants it to do.

Re:Gov looking to save money? (1)

jimnorcal (1732958) | more than 4 years ago | (#33099250)

I would so love to see Larry thrown into federal prison for fraud against the fed. OH wow that would make my day. Pay back for being an asshole to so many people over the years and thinking he's above everything and everyone else. That's the kind of guy I love to hate.

Re:Gov looking to save money? (1)

hondo77 (324058) | more than 4 years ago | (#33090684)

... but what I don't believe is that corporations are required to make their bidding lower to the government...

Isn't the whole point of the suit that Oracle was required by their contract "to make their bidding lower to the government"?

Re:Gov looking to save money? (1)

Jedi Alec (258881) | more than 4 years ago | (#33090832)

Let's stop this happy fucking horseshit world we have suddenly found ourselves in where it's someone else's fault that the government got overcharged. Either hire competent people to oversee the bidding on expenditures such as these and allow those people the freedom to make tough choices to save money or suffer the consequences. Stop meddling in private business because you are inept when it comes to dealing in the real world.

Government wants to pretend its like the private world in so many ways, especially at reelection time, but then it goes off and does something like this. And they wonder why they get taken advantage of. Ugh.

Except they didn't. They signed a contract stipulating the vendor was obliged to perform services X, Y and Z as part of the deal, and Oracle(willfully or not) did not do so, and the government is calling them out on it. Noone forced Oracle to do business with the government or to accept the the terms offered as part of the deal. They made their bed...and now they get to lie in it. The only difference is that in usual disagreements over a contract you're not dealing with a party that own stealth bombers.

The nature of GSA Contracts (1)

azrider (918631) | more than 4 years ago | (#33091514)

I think that government entities should be working hard to do that but what I don't believe is that corporations are required to make their bidding lower to the government because they aren't as capable as private entities to ensure their contracts are reasonable.

You obviously don't understand the reason for GSA contracts. It is not only to save money (though that is good for the government), it is also to streamline the purchasing process.

Once a company agrees to be bound by the terms of the GSA contract, it is no longer necessary to go through the bidding process for each unit purchase (which would require separate contracts for each purchase). It also gives that company a competitive advantage over any company that does not enter such an agreement.

If the Department of State needs additional licenses, they simply submit a purchase order. Same with the Department of Justice. It is not necessary to complete a request for quotation, submit it for review, get a sales manager out to negotiate etc.

Result: quick turnaround on orders at best possible price.

Re:Gov looking to save money? (1)

timeOday (582209) | more than 4 years ago | (#33093060)

Do I think that private companies should be able to take advantage of anyone who is stupid enough not to do their homework? Yup. That's how businesses make money... Let's stop this happy fucking horseshit world we have suddenly found ourselves in where it's someone else's fault that the government got overcharged.

So your argument is the seller should be allowed to defraud the buyer by violating the contract unless the buyer is canny enough to... what... notice they're being defrauded and sue? That's exactly what is happening.

When you eat dinner at a restaurant and they run your card for $10 more than what the receipt says do you applaud that too?

Expectations (1)

mcrbids (148650) | more than 4 years ago | (#33093906)

Government wants to pretend its like the private world in so many ways, especially at reelection time, but then it goes off and does something like this. And they wonder why they get taken advantage of. Ugh.

I am SOOOO goddamned sick of this attitude that government is somehow incompetent by its very nature. Governments are comprised of PEOPLE. Companies are comprised of PEOPLE. Both are equally competent at fucking up finances!

Private companies do it all the time - take a look at BP, Enron, and every other company that's managed to go out of business. Hey, even I managed to get in trouble with the IRS and my business is both highly profitable and growing fast!

Why do we somehow assume that Government is like a 3 year old and that we can't expect anything more than "hold them accountable" when they inevitably fark it up? Why not just admit that if your local town is horking up the finances, that the people running the show maybe could use some training and education, and then, if that fails, fire them?

In the United States, governance is paralyzed and ineffective to the degree that it is because NOBODY is willing to work WITH their government and spend all their time trying to beat it up.

It's just sad one of the freest, wealthiest societies in human history, and a government truly designed to serve its population, and all the population does is sit around and whine about how horrible it would be if their government actually tried to make their life better and call it "socialism".

Sad...

There goes big chuck of that Oracle cash (1)

leftie (667677) | more than 4 years ago | (#33090356)

Guess they won't be so takeover happy for a while

It may be a bit ambiguous.... (2, Funny)

mark-t (151149) | more than 4 years ago | (#33090358)

... what "most favored customers" actually means.

Looking at things from a purely capitalistic perspective...

If they are charging less for a particular customer, then they are making less money on the sale, so the client probably *ISN'T* their most favorite customer - in fact, their favorite customers would probably be the ones that they could most easily *OVER*charge money to, rather than those they charge the least to.

The contract _should_ have said an equal or lower price than *ANY* of their customers. If it actually used the word "favored" then I think Oracle might be in the clear... legally, if not ethically.

Re:It may be a bit ambiguous.... (0)

Anonymous Coward | more than 4 years ago | (#33090440)

It comes from the most favoured nation clauses. The legal history is quite clear, oracle is in the wrong and will now be beaten mercilessly until they allow opium to be sold again... eh ok so maybe it will not go down quite like it did in history.

Re:It may be a bit ambiguous.... (2, Interesting)

Anonymous Coward | more than 4 years ago | (#33090482)

"most favored" != "favorite"
The generally accepted meaning of someone being "most favored" is that they are receiving the most favorable terms available.

Re:It may be a bit ambiguous.... (1)

mark-t (151149) | more than 4 years ago | (#33096802)

Charging more money can easily be Oracle's most favorable terms, from their own perspective, of course.

Re:It may be a bit ambiguous.... (1)

Ryanrule (1657199) | more than 4 years ago | (#33090552)

favored tends to mean largest, ie most recurring revenue and/or enough buying power to cause big problems if they leave.

Re:It may be a bit ambiguous.... (0)

Anonymous Coward | more than 4 years ago | (#33090996)

To actually make a statement that "tends" to be factual (insert sarcasm) ...

The English definitions of the word 'favored' as of 2009 from the American Heritage Dictionary (google power unite!):

1. Treated or thought of with great kindness or partiality: the favored child.
2. Endowed with special gifts, talents, or advantages.
3. Having an appearance of a specified kind. Often used in combination: ill-favored; well-favored.

Now, let's examine the first definition for giggles sake.

The word "thought" trumps that of "treated" due to past intent vs. past action. This is followed by ("great kindness" or "partiality") or (great "kindness" or "partiality"); this really could go either way no matter which version is grammatically correct, simply based on an individual's comprehension of English grammar. However, it will generally be the latter of the two when read in haste.

All in all this would apply to Oracle (and this is where the legal requirements come into play I would assume) where someone in a position of authorized to represent the corporation (most likely an executive with legal vested interest) had "thought" specifically directed towards either an individual entity or multiple entities where the thought consisted of one or more of either "great kindness", "great partiality" or "partiality". /* begin mad scientist rant */
With that being said, you get some pretty narrow minded or fairly unintelligent individuals (i say fairly as some seem to be able to maintain a hidden agenda for a good duration of time *cough* insert conspiracy theory xyz *cough*) in positions of power (ie. governmental departments, governmental branches and judiciary positions). However, I for example, am none of these, nor do I wield conventional powers per-say (yes I play way to many video games), I do have one thing going for me though, I make significantly more money than a large number of government and judiciary employees (and I don't mean those who's job requirements peak out at "high school diploma") who are supposedly intelligent, educated individuals. I do this by involving myself in corporate whore-ism... while maintaining a true 7th grade education (yes, I stopped going to school 3 months into eighth grade and I still apparently am perceived as bright and educated).

Best of all I'm a cynical narcissist and I have absolutely no problem admitting it.

Re:It may be a bit ambiguous.... (0)

Anonymous Coward | more than 4 years ago | (#33136212)

The American English definitions of the word 'favored' as of 2009 from the American Heritage Dictionary (google power unite!):

There, fixed that for you.

I would also have accepted Earthican.

Re:It may be a bit ambiguous.... (1)

mark-t (151149) | more than 4 years ago | (#33096838)

And the places that they charge less to they may not be doing so because they particularly value the relationship they have with them, but may be because they have less purchasing power in the first place, and to charge them what they would otherwise charge would be to lose out on the sales altogether. Some money is better than none.

Re:It may be a bit ambiguous.... (3, Insightful)

rolfwind (528248) | more than 4 years ago | (#33090610)

The legal system, just like any profession, has it's own definitions and most-favored customer is one of them. If they didn't have accepted definitions, most contracts suits would go nowhere because the meaning of anything could be debated (ie depends on the meaning of the word "is" is)

http://www.businessdictionary.com/tips/22/the-most-favored-customer-clause.html [businessdictionary.com]

Re:It may be a bit ambiguous.... (0)

Anonymous Coward | more than 4 years ago | (#33090626)

favored - adjective
2. enjoying special advantages; privileged: to be born into the favored classes.

Re:It may be a bit ambiguous.... (1)

sjames (1099) | more than 4 years ago | (#33090994)

They may make less per sale, but as long as they make some per sale it can be made up in volume. Lets say govt will buy a million 'units' in a year. Would you like to sell them 100 units for full profit or 1 million units at half the profit each?

Re:It may be a bit ambiguous.... (1)

mabhatter654 (561290) | more than 4 years ago | (#33096942)

they're the government.... they also enforce your "right" to charge them per copy in the first place!!!

There is nothing stopping government agencies from installing as many copies as they want... what are you going to do? Sue them?

GSA contracts are a sweet deal. They make your product "industry standard" by default, more importantly, the government makes OTHER agencies use your software too. That's a pretty sweet deal, even if you have to lower your price from time-to-time

Re:It may be a bit ambiguous.... (1)

microbee (682094) | more than 4 years ago | (#33091018)

You forgot money = price * volume.

That can't happen! (-1, Troll)

Anonymous Coward | more than 4 years ago | (#33090408)

Everyone knows that whenever the federal government is involved the fraud waste and abuse is eliminated!

I don't understand (1, Funny)

multipartmixed (163409) | more than 4 years ago | (#33090418)

> US Department of Justice has joined a lawsuit alleging Oracle of overcharging the
> federal government for its software products.

I don't understand. Under what basis can they bring a lawsuit? It is not illegal to treat the federal government the same as all your other customers!

Re:I don't understand (2, Informative)

BradleyUffner (103496) | more than 4 years ago | (#33090488)

I don't understand. Under what basis can they bring a lawsuit? It is not illegal to treat the federal government the same as all your other customers!

Oracle had a contract to sell software to the government.
The contract said Oracle had to report to the government the discount prices they charged other companies.
Oracle agreed to, and signed this contract.
Oracle lied to the government when it reported these prices.
Oracle broke their contract.

Re:I don't understand (1)

John Hasler (414242) | more than 4 years ago | (#33091470)

> Oracle broke their contract.

No. The government alleges that Oracle broke their contract.

Re:I don't understand (1)

MightyMartian (840721) | more than 4 years ago | (#33090490)

Most governments have preferential pricing contracts with various suppliers, usually meaning they get deeper discounts. Without knowing the specifics here, I'm thinking that Oracle is accused of breaking the contract be deliberately deceiving the Feds about the discounts they were offering corporate customers.

Re:I don't understand (0)

Anonymous Coward | more than 4 years ago | (#33090494)

RTFA Oracle signed a contract saying nobody could get a lower price than the government. Oracle did this. They broke the contract.

Re:I don't understand (1)

NecroPuppy (222648) | more than 4 years ago | (#33090522)

True, but the government often sets purchasing rules where they get the same deal as the best customer.

That is, if some of the customers get 10% off, some get 15% off, and some get 20% off, then the government gets the 20% off deal.

It isn't retroactive, mind you. If the best deal the corporation had was 15% off when the government bought X amount of gear, and then goes to 20% off six weeks later, the government doesn't get the extra 5% back. But they would get that on any new purchases made while that applied.

Add to that government purchase requirements involving small / minority / women owned businesses, vendor rotation requirements, minimum/maximum purchase, etc, and it can be extremely hard to keep up with it all.

Re:I don't understand (0)

Anonymous Coward | more than 4 years ago | (#33093548)

Thats why you don't sell the same version of the product to the government and the private sector.

If only there were some incentive (0)

Anonymous Coward | more than 4 years ago | (#33090474)

...for government employees to practice due diligence.

Re:If only there were some incentive (1)

edmudama (155475) | more than 4 years ago | (#33090640)

How are they supposed to practice due diligence, when Oracle is lying in the data they provide?

Re:If only there were some incentive (0)

Anonymous Coward | more than 4 years ago | (#33092396)

Going back to the story,:

In a nutshell, the lawsuit argues that Oracle's government customers--a wide array of agencies, including the State Department, the Energy Department, and the Justice Department itself--got deals "far inferior" to those the enterprise software giant gave to its commercial clients.

The allegations stem from a software deal between Oracle and the federal General Services Administration that the Justice Department says involved "hundreds of millions of dollars in sales" and that ran from 1998 to 2006.

The question is, how was Oracle able to rip off hundreds of millions of dollars from the federal government, and what prevented it from doing so with its commercial clients? Remember, the government has the power to compel both buyers and sellers to release information that private industry does not, so they should have had a far clearer view of what was being offered to whom at what time.

It hasnt REALLY hit the fan (1)

alexborges (313924) | more than 4 years ago | (#33090484)

What comes next is looking for .gov buyers that knowingly bought Oracle's stuff at much more higher than market price... I mean, we in the IT industry KNOW how this deals are made and boy, its not that different from any other .gov market: bullying the competition, corrupting the buyer, thats standard practice in .gov IT, it seems, until now.

Way to go government! (-1, Troll)

bryan1945 (301828) | more than 4 years ago | (#33090504)

So you signed bad deals, so now you sue. Using our tax dollars. For a bad deal in the first place that used our tax dollars.

Hooray Government! (Seriously, is there nothing bad that happens that they don't at least try to blame on someone else anymore?)

Re:Way to go government! (1)

interval1066 (668936) | more than 4 years ago | (#33090580)

Indeed. Everyone overcharges the Gov; why? Because the Gov doesn't give a shit what they do WITH OUR MONEY. Why are the suddenly zeroing in on Oracle? If the gov. were serious about keeping track of OUR MONEY they would audit all their contracts.

Re:Way to go government! (1)

Digicaf (48857) | more than 4 years ago | (#33090720)

My guess: Not enough hookers and blow.

The reason Oracle is being singled out is because they don't have enough connections in this section of the Government (Read that as no one involved with this action on the Government side has an incentive to make this disappear). A government contractor should either:

1. Have someone on the purchasing side with an investment in the company who stands to profit if things go well.
2. Provide "incentive" to make sure things like this don't happen. Hookers and blow...

Re:Way to go government! (1)

Xeleema (453073) | more than 4 years ago | (#33095010)

Not enough hookers and blow

Whoa, wait a minute. Do you work for HP?

Re:Way to go government! (0)

Anonymous Coward | more than 4 years ago | (#33091566)

If the gov. were serious about keeping track of OUR MONEY they would audit all their contracts.

All of them? Do you know how many contracts the government has? A comprehensive audit of all of them would probably require even more effort than all of the existing fraud. Sorry, but while your goals may be noble, it's just not feasible for every single contract to be subject to enough scrutiny to know that everything is fine. It's far better to selectively audit the contracts to watch for patterns and then act.

It's like the police. They could put one on every street corner...or just have enough to make people behave.

Re:Way to go government! (2, Informative)

Aladrin (926209) | more than 4 years ago | (#33090586)

Actually, if you finish reading the summary, they signed a good deal after all. The contract said that Oracle must inform them of the other deals, and Oracle lied to them. Oracle breached the contract. -That- is why they are being sued.

Re:Way to go government! (1)

Anachragnome (1008495) | more than 4 years ago | (#33092934)

I was playing Baldur's Gate last night and just learned the Oracle spell on my Chaotic Evil Mage.

As far as I can tell, it does absolutely nothing. Not a god-damned thing.

I feel like suing too. I'd shoot the Orc Mage I got it from, right in the head with a crossbow, but I already did.

Re:Way to go government! (1)

Locke2005 (849178) | more than 4 years ago | (#33090652)

The question was, were the government employees that signed the deals getting hookers and blow from Oracle Marketing to influence their decisions? Having worked for Oracle Market, and seeing as how they had no ethical qualms with billing customers for work that was never done, I wouldn't put the practice of outright bribing decision makers above them. On the other hand, I have no actual evidence that bribery occurred.

Re:Way to go government! (1)

DragonWriter (970822) | more than 4 years ago | (#33091392)

So you signed bad deals, so now you sue.

I think you misunderstand.

The government signed extremely good deals (that is, deals that include a clause that says that you will notify us when you make new discounts available to any of your customers, and you will allow us to have those discounts.

The government is now suing, alleging that Oracle has broken those deals.

Re:Way to go government! (1)

bryan1945 (301828) | more than 4 years ago | (#33140842)

I wonder if this is the first post to get 'Troll' for bashing the government, regardless if I missed the part where Oracle did break the contract. Refreshing!

For nearly a decade?! (1)

SOULFLAYER (1865632) | more than 4 years ago | (#33090532)

It took the government almost a decade to figure out they were getting screwed? Well, at least their promptness is improving.

Re:For nearly a decade?! (1)

techsoldaten (309296) | more than 4 years ago | (#33090990)

Always suspected something was up with them.

I used to work for the government and had to buy a copy of Oracle 8i for a web application.

The web application had one sign up form and 130 people used it total. It took 2 weeks to build it.

They sold us a web license, under the premise that every user on the web site would be a unique user within Oracle. That was something like $50k. The agency I worked for was required to buy the largest installation of Oracle possible, which was a multiserver edition. That was over $100k.

They had a support contract that called for them to set up the server in our blade rack. The person who came in to install it charged us something like $300 an hour, because they scheduled the installation to happen overnight. There was no compelling reason for them to do it (I could have set it up, we had the disks). I don't remember what we paid for him, but the server did not work and they had to come back a second time to fix it. That was covered under a support contract, which cost us some ridiculous amount of money for a service we never used.

Oracle makes me sick.

M

Re:For nearly a decade?! (0)

Anonymous Coward | more than 4 years ago | (#33093762)

I worked in a government office with Oracle, and we did not purchase the maximum package, or whatever it was, so were were not supposed to click and download certain links from Oracle or we would be fined something like $10,000 or $100,000 (I can't remember exactly, but it seemed like an insane amount at the time). Why not just disable the links to the software we were not eligible to download? What if some intern accidentally clicks the wrong link? I think Oracle wants screw-ups like that to happen, it's probably 10-20% of their revenue stream. Evil bastards.

They also should be sued for ... (1)

xclay (924789) | more than 4 years ago | (#33091050)

...making the open source landscape inferior by doing a piss poor job of merely maintaining java code and its community.

Duh?! (0)

Anonymous Coward | more than 4 years ago | (#33091304)

I don't know what it is about the government that screems please rip me off. Somehow PPL in government just don't seem to care the same way about money normal businesses do. In every job I've ever been in sales universally tends to get glittering $$$ looks in their eyes when they talk to potential government customers. Breaching contracts is inexcusable and Oracle deserves to be fined for not living up to them but more generally the sentiment that government pays more than normal corporations seems to be spot on in my experience.

My general assumption is that businesses at some level tend to operate in "reality" where you are either profitable or you die (go out of business). Government units even with good management just are not exposed to the environment.

Re:Duh?! (1)

darth dickinson (169021) | more than 4 years ago | (#33092860)

My general assumption is that businesses at some level tend to operate in "reality" where you are either profitable or you die (go out of business). Government units even with good management just are not exposed to the environment.

That's exactly it. Private businesses have to watch the books or go out of business. The government...well, if they run out of money, they just initiate more "deficit spending". Wish my checkbook worked that way... "Oh, I'm out of money already? Guess I'll just write more checks."

"joined a lawsuit alleging Oracle of overcharging" (1)

John Hasler (414242) | more than 4 years ago | (#33091418)

For the doubting Europeans over in the poll discussion: here's evidence that not all Americans speak English.

Oracle must have been getting greedy... (1)

albinobluerhino (935977) | more than 4 years ago | (#33091530)

...and not providing large enough kickbacks.

is it possible in private industry? (0)

Anonymous Coward | more than 4 years ago | (#33092104)

i ANAL, yeah that's how who i phrase it. but seriously could a private corp. put this in a contract and have it stick? can't they set a fee and then if the cost of service gets lower say fuck you?

Re:is it possible in private industry? (1)

InfiniteWisdom (530090) | more than 4 years ago | (#33093158)

Why wouldn't such a contract be enforceable? Whether a private entity could get Oracle to sign such an agreement is an entirely different question, the point is they signed the contract here and then tried to weasel their way around it.

No protection for consumers (1)

cypherdtraitor (1448243) | more than 4 years ago | (#33092520)

Really? Is this new? Comcast does this to consumers all the time, but I can't go out and fine anyone. And can you really get a fair day in court against the fed? I don't think so. Shame on Oracle for taking advantage of the blind bureaucracy, and shame on the federal government for expecting special treatment.

Re:No protection for consumers (1)

spikeb (966663) | more than 4 years ago | (#33092654)

they expected the treatment of their contract. that is not special. so shame on you for misrepresenting the facts.

Re:No protection for consumers (1)

InfiniteWisdom (530090) | more than 4 years ago | (#33093170)

Comcast does not offer their consumers a contract promising to offer them the same discounts they offer other consumers. Oracle did sign such a contract here.

As the saying goes... (1)

darth dickinson (169021) | more than 4 years ago | (#33092852)

Don't steal, the government hates competition...

Not really about the contract (0)

Anonymous Coward | more than 4 years ago | (#33097228)

Choosing to bring a lawsuit is purely discretionary for the U.S. Government. Clearly, somebody in the White House or DoJ has decided that Mr. Ellison has spent too much money on his yachts and not enough on Democratic Party campaigns. Once he gets his priorities straight I'm sure the Feds will lose interest in carrying on the lawsuit.

And no, it's not blackmail when the government does it, by definition.

Special Treatment for Government? (1)

CodeBuster (516420) | more than 4 years ago | (#33101724)

In the business world, the vendor is not required to inform you of what deals they may have closed with other clients and whether those customers got a better deal than you did. Why should the government expect that firms act against their own self interest merely because they government tells them that they should? If government agencies feel that they haven't gotten a good enough deal then maybe the people in charge of negotiating in those agencies need to be a bit more assertive and demand a better price next time; the squeaky wheel gets the grease after all. Laws like this just enable government negotiators to be lazy because they can alter the deal, "darth vader" style, after the fact when they realize that someone else just got a better deal than they did. The government should quit whining and negotiate better next time. It seems that Oracle delivered exactly what they said they would at the agreed upon price. If the government didn't like that price, why did they agree to the purchase in the first place?
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