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Whistleblower Details Alleged Oracle Contract Violations

Publication Date: 
August 01, 2010
San Jose Mercury News
Brandon Bailey

Professor David Freeman Engstrom is quoted in the San Jose Mercury on alleged Oracle contract violations that involved overcharging the government for the company's software. Brandon Bailey reports:

Oracle salespeople used a variety of questionable tactics to hide the fact they were overcharging the federal government for software, in a scheme that cost taxpayers millions of dollars from 1998 to 2006, according to a whistle-blower whose claims prompted a Justice Department lawsuit this week.

The giant Redwood City software maker had signed a contract promising to give the government its best prices. But former Oracle manager Paul Frascella claimed the company encouraged its salesforce to structure deals — and even use "white-out" to hide figures on printed contracts — so the government wouldn't learn about repeated violations of that agreement.


Since the law lets the government collect three times the amount of fraud proven in court, it's not unusual for contractors to negotiate substantial settlements without admitting wrongdoing. Stanford law professor David Freeman Engstrom said cases in which the government intervenes are rarely found groundless in court.

"They only intervene in a fraction of the cases that are filed" he said, "but intervention overwhelmingly gets to a settlement or some kind of judgment."