Oracle Settles Lawsuit with Federal Government

By Scott Ferguson  |  Posted 2006-10-11 Print this article Print

Updated: The federal lawsuit claimed that the General Services Administration overpaid for software it had purchased from PeopleSoft during an eight-year period.

Oracle has agreed to pay $98.5 million to settle a lawsuit that claimed PeopleSoft overcharged the federal government for software it purchased during an eight-year period, the Department of Justice announced Oct. 10.

The lawsuit, which was filed in federal court in Maryland, claimed that the GSA (General Services Administration) overpaid for PeopleSoft software from March 17, 1997, to Sept. 30, 2005.

Specifically, federal prosecutors claimed that PeopleSoft understated the discounts it gave to commercial customers when the company started negotiating a contract under the GSA's MAS (Multiple Award Schedule) program.

Under the MAS program, vendors disclose their commercial pricing policies and other practices in order to gain access to the lucrative market for federal contracts.

The GSA is an independent agency that helps buy equipment and supplies for federal agencies. The GSA oversees about $66 billion worth of federal purchases each year.

In 2004, Oracle began the long and bitter process to acquire PeopleSoft. Under the terms of the original GSA contract, the Redwood Shores, Calif., software marker inherited the responsibility for the lawsuit.

The settlement was the largest payment obtained under the federal False Claims Act involving the MAS program, according to the Justice Department.

Read the full story on eWEEK.com: Oracle Settles Lawsuit with Federal Government .


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